Royal Bancshares of Pennsylvania Inc. (RBPAA, Financial) filed Quarterly Report for the period ended 2009-03-31.
Royal Bancshares of Pennsylvania Inc. is a bank holding company. Royal Bancshares of Pennsylvania Inc. has a market cap of $23.8 million; its shares were traded at around $2.1 with and P/S ratio of 0.4.
Interest income earned by the Community Banking segment related to the Other Segment was approximately $524,000 and $780,000 for the three month periods ended March 31, 2009 and 2008, respectively.
The AFS portfolio had gross unrealized losses of $37.6 million at March 31, 2009, which slightly declined from gross unrealized losses of $37.8 million at December 31, 2008. During the first quarter of 2009, the Company recorded a $4.2 million impairment charge related to preferred and common stocks. For the three months ended March 31, 2009, gross unrealized losses increased for collateralized debt obligations, corporate bonds, trust preferred securities and other securities which was offset by the impairment charge for preferred and common stocks and recoveries in collateralized mortgage obligations. The gross unrealized losses are primarily related to the turbulent credit and financial markets coupled with the current economic environment. As a result many of the investment securities are expected to increase in value once the markets become normalized and the resulting fair market values recover. Management expects full collection of cash flows on the non impaired investments in the AFS portfolio.
Preferred and common stock had gross unrealized losses of $6.3 million and $8.9 million at March 31, 2009 and December 31, 2008, respectively. The investments in marketable equity securities consist primarily of six separate diversified managed accounts of large cap, small cap and mid-cap stocks. As a result of the length of time some of the equity securities have been in a loss position and/or the severity of the loss position, management has deemed that individual stocks within these separate managed accounts have unrealized losses that are other than temporary at March 31, 2009. Consequently the Company recorded an impairment charge to earnings of $3.1 million in the first quarter of 2009. One of the preferred stock investments within the financial services industry, which is currently not rated by the rating agencies, was deemed impaired in the amount of $1.1 million at March 31, 2009, and the Company recorded a charge to earnings in this amount for the first quarter of 2009. However, the Company continues to receive dividend payments on the preferred stock. The severity of the unrealized loss is correlated to the decline of the stock market that started in the fall of 2007, but is primarily due to the decline that has occurred during the past year as a result of the current economic recession. Because the Company has the ability and intent to hold the remainder of the preferred and common stock investments until a recovery of fair value, it does not consider the impairment to be other than temporary on the remainder of these investments. Of the $6.3 million in gross unrealized losses for this investment category, $1.0 million has occurred for more than twelve months and $5.3 million has occurred for less than twelve months.
The collateralized mortgage obligations (CMOs) within the AFS portfolio had gross unrealized losses of $4.8 million at March 31, 2009 as compared to unrealized losses of $6.3 million at December 31, 2008. The unrealized losses in CMOs relate to lack of market liquidity and changes in market credit spreads. The credit ratings for these investments have experienced some ratings declines; however, the unrealized loss has improved due to the stabilization of delinquenc
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Royal Bancshares of Pennsylvania Inc. is a bank holding company. Royal Bancshares of Pennsylvania Inc. has a market cap of $23.8 million; its shares were traded at around $2.1 with and P/S ratio of 0.4.
Highlight of Business Operations:
Interest income earned by the Community Banking segment related to the Tax Lien Operation was approximately $928,000 and $907,000 for the three month periods ended March 31, 2009 and 2008, respectively.Interest income earned by the Community Banking segment related to the Other Segment was approximately $524,000 and $780,000 for the three month periods ended March 31, 2009 and 2008, respectively.
The AFS portfolio had gross unrealized losses of $37.6 million at March 31, 2009, which slightly declined from gross unrealized losses of $37.8 million at December 31, 2008. During the first quarter of 2009, the Company recorded a $4.2 million impairment charge related to preferred and common stocks. For the three months ended March 31, 2009, gross unrealized losses increased for collateralized debt obligations, corporate bonds, trust preferred securities and other securities which was offset by the impairment charge for preferred and common stocks and recoveries in collateralized mortgage obligations. The gross unrealized losses are primarily related to the turbulent credit and financial markets coupled with the current economic environment. As a result many of the investment securities are expected to increase in value once the markets become normalized and the resulting fair market values recover. Management expects full collection of cash flows on the non impaired investments in the AFS portfolio.
Preferred and common stock had gross unrealized losses of $6.3 million and $8.9 million at March 31, 2009 and December 31, 2008, respectively. The investments in marketable equity securities consist primarily of six separate diversified managed accounts of large cap, small cap and mid-cap stocks. As a result of the length of time some of the equity securities have been in a loss position and/or the severity of the loss position, management has deemed that individual stocks within these separate managed accounts have unrealized losses that are other than temporary at March 31, 2009. Consequently the Company recorded an impairment charge to earnings of $3.1 million in the first quarter of 2009. One of the preferred stock investments within the financial services industry, which is currently not rated by the rating agencies, was deemed impaired in the amount of $1.1 million at March 31, 2009, and the Company recorded a charge to earnings in this amount for the first quarter of 2009. However, the Company continues to receive dividend payments on the preferred stock. The severity of the unrealized loss is correlated to the decline of the stock market that started in the fall of 2007, but is primarily due to the decline that has occurred during the past year as a result of the current economic recession. Because the Company has the ability and intent to hold the remainder of the preferred and common stock investments until a recovery of fair value, it does not consider the impairment to be other than temporary on the remainder of these investments. Of the $6.3 million in gross unrealized losses for this investment category, $1.0 million has occurred for more than twelve months and $5.3 million has occurred for less than twelve months.
The collateralized mortgage obligations (CMOs) within the AFS portfolio had gross unrealized losses of $4.8 million at March 31, 2009 as compared to unrealized losses of $6.3 million at December 31, 2008. The unrealized losses in CMOs relate to lack of market liquidity and changes in market credit spreads. The credit ratings for these investments have experienced some ratings declines; however, the unrealized loss has improved due to the stabilization of delinquenc
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