BALA CYNWYD, PA--(Marketwired - Jul 21, 2015) - Royal Bancshares of Pennsylvania, Inc. ("Company") (
Kevin Tylus, the Company's President and Chief Executive Officer, noted, "Loan and customer growth, coupled with the continuing trend in improved credit quality, positively contributed to second quarter and 2015 year to date earnings. Portfolio growth from our leasing subsidiary also added to earnings. Our multi-faceted retail plan to attract and retain consumer deposits continued with the relocation from Jenkintown to the bustling new Willow Grove branch site. And upon regulatory approval of our entry into contiguous Delaware County, PA, the acquisition of our new branch in the county seat of Media will add approximately $38 million, or 7%, to our deposit base and $10 million, or 2%, in commercial loans."
The Company continues its focus on modernizing the ways customers can access its products and services. A new custom branded "smart phone" application is now available and provides a simpler on-line banking experience, while on-line loan applications are increasing. The suite of cash management products, together with improved physical locations and the Princeton, NJ loan production office, are helping to drive the growth within the Company's attractive geography.
Highlights for the three and six months ended June 30, 2015 included:
- Total loans were $447.6 million at June 30, 2015, an increase of $29.0 million, or 6.9%, from $418.7 million at March 31, 2015, and an increase of $32.5 million, or 7.8%, from $415.1 million at December 31, 2014. The majority of the increase was in the commercial real estate portfolio which grew $25.6 million, or 11.1%, from $230.5 million at March 31, 2015 to $256.1 million at June 30, 2015.
- Non-performing loans of $5.4 million at June 30, 2015 decreased $3.0 million, or 35.5%, from $8.4 million at March 31, 2015 and decreased $4.4 million, or 45.1% from $9.8 million at December 31, 2014. The ratio of non-performing loans to total loans was 1.20%, 1.99%, and 2.36% at June 30, 2015, March 31, 2015, and December 31, 2014, respectively. Excluding tax liens, the ratio of non-performing loans to total loans was 0.99%, 1.82%, and 1.99% at June 30, 2015, March 31, 2015 and December 31, 2014, respectively.
- Non-performing assets of $15.9 million at June 30, 2015 decreased $3.0 million, or 15.8%, from $18.9 million at March 31, 2015 and decreased $3.7 million, or 18.8%, from December 31, 2014. The ratio of non-performing assets to total assets was 2.19%, 2.61%, and 2.67% at June 30, 2015, March 31, 2015, and December 31, 2014, respectively. Excluding tax liens, the ratio of nonperforming assets to total assets was 0.67%, 1.11%, and 1.19% at June 30, 2015, March 31, 2015, and December 31, 2014, respectively. The purposeful downsizing of the tax lien business, which is not core to Royal Bank's strategy, has seen a favorable reduction from a high of over $100 million in tax lien assets in 2009 to less than $18.0 million in assets at June 30, 2015.
- The return on average assets for the three and six months ended June 30, 2015 was 0.81% and 0.85%, respectively, compared to 0.75% and 0.79% for the three and six months ended June 30, 2014.
- The return on average equity for the three and six months ended June 30, 2015 was 9.03% and 9.56%, respectively, compared to 10.35% and 11.13% for the three and six months ended June 30, 2014. The return on average equity was impacted by the increase in average common equity as a result of the private placement and shareholders' rights offering which closed in the third quarter of 2014.
- At June 30, 2015, the Company's Tier 1 leverage and Total Risk Based Capital ratios were 12.5% and 18.8%, respectively, compared to 11.9% and 19.2%, respectively, at December 31, 2014. The Common Equity Tier 1 ratio was 9.2% at June 30, 2015.
- Net interest income increased $76,000, or 0.7%, from $11.1 million for the six months ended June 30, 2014 to $11.2 million for the six months ended June 30, 2015, but declined $107,000, or 1.9%, from $5.6 million for the three months ended June 30, 2014 to $5.5 million for the three months ended June 30, 2015. The decrease in the quarterly net interest income was related to a decline in the average yields earned on average investment securities and average loans, which was partially offset by an increase in the average loan balances.
- The net interest margin was 3.26% for the second quarter of 2015 compared to 3.25% for the comparable period in 2014 and was 3.33% for the six months ended June 30, 2015 compared to 3.24% for the six months ended June 30, 2014. The six month increase of 9 basis points was directly related to an increase in the yield on average interest-earning assets.
- Non-interest income for the quarter ended June 30, 2015 was $1.3 million and increased $467,000, or 57.2%, from $816,000 for the quarter ended June 30, 2014. Non-interest income for the six months ended June 30, 2015 was $2.1 million and increased $542,000, or 34.1%, from $1.6 million for the six months ended June 30, 2014. The increases for the three and six month periods ended June 30, 2015 were related to increases of $293,000 and $480,000, respectively, in net gains on the sale of investment securities. During 2015, the Company sold investment securities to fund the loan growth.
- Non-interest expense for the quarter ended June 30, 2015 was $5.7 million and increased $706,000, or 14.0%, from $5.0 million for the quarter ended June 30, 2014. Non-interest expense for the six months ended June 30, 2015 was $11.1 million and increased $759,000, or 7.3%, from $10.4 million for the six months ended June 30, 2014. The increases for the three and six month periods ended June 30, 2015 were related to increases of $138,000 and $369,000, respectively, in employee salaries and benefits and increases of $311,000 and $359,000, respectively, in the provision for unfunded loan commitments due to the growth in such commitments.
About Royal Bancshares of Pennsylvania, Inc.
Royal Bancshares of Pennsylvania, Inc., headquartered in Bala Cynwyd, Pennsylvania, is the parent company of Royal Bank America, which is headquartered in Narberth, Pennsylvania. Royal Bank serves growing small and middle market businesses, commercial real estate investors, consumers, and depositors principally in Montgomery, Delaware, Chester, Bucks, Philadelphia and Berks counties in Pennsylvania, central and southern New Jersey, and Delaware. Established in 1963, Royal Bank provides an array of financial products and services through a comprehensive suite of cash management services and thirteen branches and two loan production offices. More information on Royal Bancshares of Pennsylvania, Inc., Royal Bank America, and its subsidiaries can be found at www.royalbankamerica.com.
Forward-Looking Statements
The foregoing material may contain forward-looking statements. We caution that such statements may be subject to a number of uncertainties, and actual results could differ materially; therefore, readers should not place undue reliance on any forward-looking statements. Royal Bancshares of Pennsylvania, Inc. does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. For a discussion of the factors that could cause actual results to differ from the results discussed in any such forward-looking statements, see the filings made by Royal Bancshares of Pennsylvania, Inc. with the Securities and Exchange Commission, including its Annual Report -- Form 10-K for the year ended December 31, 2014.
| ROYAL BANCSHARES OF PENNSYLVANIA, INC. | |||||||||||||||||
| CONSOLIDATED INCOME STATEMENTS | |||||||||||||||||
| (Unaudited, dollars in thousands, except per share data) | |||||||||||||||||
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For the three months ended June 30, |
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For the six months ended June 30, |
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| 2015 | 2014 | 2015 | 2014 | ||||||||||||||
| Interest income | $ | 7,071 | $ | 7,209 | $ | 14,351 | $ | 14,360 | |||||||||
| Interest expense | 1,591 | 1,622 | 3,162 | 3,247 | |||||||||||||
| Net Interest Income | 5,480 | 5,587 | 11,189 | 11,113 | |||||||||||||
| Credit for loan and lease losses | (586 | ) | (75 | ) | (1,166 | ) | (714 | ) | |||||||||
| Net interest income after credit for loan and lease losses | 6,066 | 5,662 | 12,355 | 11,827 | |||||||||||||
| Non-interest income | 1,283 | 816 | 2,130 | 1,588 | |||||||||||||
| Non-interest expense | 5,737 | 5,031 | 11,112 | 10,353 | |||||||||||||
| Income before taxes | 1,612 | 1,447 | 3,373 | 3,062 | |||||||||||||
| Income tax expense | - | - | - | - | |||||||||||||
| Net Income | 1,612 | 1,447 | 3,373 | 3,062 | |||||||||||||
| Less net income attributable to noncontrolling interest | 151 | 69 | 321 | 187 | |||||||||||||
| Net Income Attributable to Royal Bancshares | $ | 1,461 | $ | 1,378 | $ | 3,052 | $ | 2,875 | |||||||||
| Less Preferred stock Series A accumulated dividend and accretion | $ | 429 | $ | 829 | $ | 853 | $ | 1,493 | |||||||||
| Net income to common shareholders | $ | 1,032 | $ | 549 | $ | 2,199 | $ | 1,382 | |||||||||
| Income Per Common Share - Basic and Diluted | $ | 0.03 | $ | 0.04 | $ | 0.07 | $ | 0.10 | |||||||||
| SELECTED PERFORMANCE RATIOS: | ||||||||||||||||
| For the three months ended June 30, |
For the six months ended June 30, |
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| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Return on Average Assets | 0.81 | % | 0.75 | % | 0.85 | % | 0.79 | % | ||||||||
| Return on Average Equity | 9.03 | % | 10.35 | % | 9.56 | % | 11.13 | % | ||||||||
| Average Equity to Average Assets | 9.00 | % | 7.22 | % | 8.89 | % | 7.07 | % | ||||||||
| Book Value Per Share | $ | 1.53 | $ | 1.84 | $ | 1.53 | $ | 1.84 | ||||||||
| At June 30, | At December 31, | |||||||||||||||
| Capital ratios (US GAAP): | 2015 | 2014 | ||||||||||||||
| Company Tier 1 Leverage | 12.5 | % | 11.9 | % | ||||||||||||
| Company Total Risk Based Capital | 18.8 | % | 19.2 | % | ||||||||||||
| Company Common Equity Tier 1 | 9.2 | % | NA | |||||||||||||
| ROYAL BANCSHARES OF PENNSYLVANIA, INC. | ||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||
| (Unaudited, in thousands) | ||||||||||
| At June 30, 2015 | At December 31, 2014 | |||||||||
| Cash and cash equivalents | $ | 28,015 | $ | 30,790 | ||||||
| Investment securities, at fair value | 212,022 | 250,368 | ||||||||
| Other investment, at cost | 2,250 | 2,250 | ||||||||
| Federal Home Loan Bank stock | 2,585 | 2,622 | ||||||||
| Loans and leases | ||||||||||
| Commercial real estate and multi-family | 222,311 | 188,861 | ||||||||
| Construction and land development | 33,786 | 45,662 | ||||||||
| Commercial and industrial | 83,825 | 76,489 | ||||||||
| Residential real estate | 42,166 | 42,992 | ||||||||
| Leases | 58,090 | 51,583 | ||||||||
| Tax certificates | 4,804 | 7,191 | ||||||||
| Consumer | 2,665 | 2,354 | ||||||||
| Loans and leases | 447,647 | 415,132 | ||||||||
| Allowance for loan and lease losses | (10,036 | ) | (11,708 | ) | ||||||
| Loans and leases, net | 437,611 | 403,424 | ||||||||
| Bank owned life insurance | 15,884 | 15,636 | ||||||||
| Other real estate owned, net | 10,531 | 9,779 | ||||||||
| Premises and equipment, net | 5,279 | 5,201 | ||||||||
| Accrued interest receivable | 4,459 | 5,270 | ||||||||
| Other assets | 8,568 | 7,213 | ||||||||
| Total Assets | $ | 727,204 | $ | 732,553 | ||||||
| Deposits | $ | 531,510 | $ | 530,425 | ||||||
| Borrowings | 82,198 | 92,426 | ||||||||
| Other liabilities | 22,435 | 21,322 | ||||||||
| Subordinated debentures | 25,774 | 25,774 | ||||||||
| Royal Bancshares shareholders' equity | 64,869 | 62,219 | ||||||||
| Noncontrolling interest | 418 | 387 | ||||||||
| Total Equity | 65,287 | 62,606 | ||||||||
| Total Liabilities and Equity | $ | 727,204 | $ | 732,553 | ||||||
| ROYAL BANCSHARES OF PENNSYLVANIA, INC. | ||||||||||||||||||||
| NET INTEREST INCOME AND MARGIN | ||||||||||||||||||||
| (Unaudited, in thousands, except percentages) | ||||||||||||||||||||
| For the three months ended | For the three months ended | |||||||||||||||||||
| June 30, 2015 | June 30, 2014 | |||||||||||||||||||
| Average Balance | Interest | Yield | Average Balance | Interest | Yield | |||||||||||||||
| Cash and cash equivalents | $ | 20,278 | $ | 8 | 0.16 | % | $ | 8,284 | $ | 5 | 0.24 | % | ||||||||
| Investment securities | 223,012 | 1,340 | 2.41 | % | 312,118 | 1,954 | 2.51 | % | ||||||||||||
| Loans | 431,957 | 5,723 | 5.31 | % | 370,116 | 5,250 | 5.69 | % | ||||||||||||
| Total interest-earning assets | 675,247 | 7,071 | 4.20 | % | 690,518 | 7,209 | 4.19 | % | ||||||||||||
| Non-interest earning assets | 46,056 | 49,365 | ||||||||||||||||||
| Total average assets | $ | 721,303 | $ | 739,883 | ||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||
| NOW and money markets | $ | 201,292 | $ | 168 | 0.33 | % | $ | 211,381 | $ | 166 | 0.31 | % | ||||||||
| Savings | 22,268 | 10 | 0.18 | % | 18,520 | 7 | 0.15 | % | ||||||||||||
| Certificates of deposit | 220,376 | 742 | 1.35 | % | 229,906 | 726 | 1.27 | % | ||||||||||||
| Total interest-bearing deposits | 443,936 | 920 | 0.83 | % | 459,807 | 899 | 0.78 | % | ||||||||||||
| Borrowings | 117,493 | 671 | 2.29 | % | 137,441 | 723 | 2.11 | % | ||||||||||||
| Total interest-bearing liabilities | 561,429 | 1,591 | 1.14 | % | 597,248 | 1,622 | 1.09 | % | ||||||||||||
| Non-interest bearing deposits | 73,831 | 64,702 | ||||||||||||||||||
| Other liabilities | 21,135 | 24,517 | ||||||||||||||||||
| Shareholders' equity | 64,908 | 53,416 | ||||||||||||||||||
| Total average liabilities and equity | $ | 721,303 | $ | 739,883 | ||||||||||||||||
| Net interest income | $ | 5,480 | $ | 5,587 | ||||||||||||||||
| Net interest margin | 3.26 | % | 3.25 | % | ||||||||||||||||
| ROYAL BANCSHARES OF PENNSYLVANIA, INC. | ||||||||||||||||||||
| NET INTEREST INCOME AND MARGIN | ||||||||||||||||||||
| (Unaudited, in thousands, except percentages) | ||||||||||||||||||||
| For the six months ended | For the six months ended | |||||||||||||||||||
| June 30, 2015 | June 30, 2014 | |||||||||||||||||||
| Average Balance | Interest | Yield | Average Balance | Interest | Yield | |||||||||||||||
| Cash and cash equivalents | $ | 16,028 | $ | 13 | 0.16 | % | $ | 7,344 | $ | 10 | 0.27 | % | ||||||||
| Investment securities | 236,253 | 2,916 | 2.49 | % | 315,128 | 3,876 | 2.48 | % | ||||||||||||
| Loans | 425,826 | 11,422 | 5.41 | % | 368,152 | 10,474 | 5.74 | % | ||||||||||||
| Total interest-earning assets | 678,107 | 14,351 | 4.27 | % | 690,624 | 14,360 | 4.19 | % | ||||||||||||
| Non-interest earning assets | 45,971 | 46,014 | ||||||||||||||||||
| Total average assets | $ | 724,078 | $ | 736,638 | ||||||||||||||||
| Interest-bearing deposits | ||||||||||||||||||||
| NOW and money markets | $ | 203,102 | $ | 326 | 0.32 | % | $ | 210,810 | $ | 333 | 0.32 | % | ||||||||
| Savings | 20,788 | 18 | 0.17 | % | 18,199 | 16 | 0.18 | % | ||||||||||||
| Time deposits | 222,552 | 1,484 | 1.34 | % | 233,233 | 1,463 | 1.26 | % | ||||||||||||
| Total interest-bearing deposits | 446,442 | 1,828 | 0.83 | % | 462,242 | 1,812 | 0.79 | % | ||||||||||||
| Borrowings | 117,823 | 1,334 | 2.28 | % | 133,863 | 1,435 | 2.16 | % | ||||||||||||
| Total interest-bearing liabilities | 564,265 | 3,162 | 1.13 | % | 596,105 | 3,247 | 1.10 | % | ||||||||||||
| Non-interest bearing deposits | 73,413 | 64,310 | ||||||||||||||||||
| Other liabilities | 22,031 | 24,137 | ||||||||||||||||||
| Shareholders' equity | 64,369 | 52,086 | ||||||||||||||||||
| Total average liabilities and equity | $ | 724,078 | $ | 736,638 | ||||||||||||||||
| Net interest income | $ | 11,189 | $ | 11,113 | ||||||||||||||||
| Net interest margin | 3.33 | % | 3.24 | % | ||||||||||||||||
| ASSET QUALITY TRENDS | ||||||||||||
| (Unaudited, in thousands, except percentages) | ||||||||||||
| At June 30, 2015 | At March 31, 2015 | At December 31, 2014 | ||||||||||
| Non-performing loans | $ | 4,371 | $ | 7,518 | $ | 8,113 | ||||||
| Non-performing tax certificates | 1,013 | 834 | 1,700 | |||||||||
| Total nonperforming loans | 5,384 | 8,352 | 9,813 | |||||||||
| Other real estate owned-loans | 356 | 328 | 349 | |||||||||
| Other real estate owned-tax certificates | 10,175 | 10,213 | 9,430 | |||||||||
| Total other real estate owned | 10,531 | 10,541 | 9,779 | |||||||||
| Total nonperforming assets | $ | 15,915 | $ | 18,893 | $ | 19,592 | ||||||
| Ratio of non-performing loans to total loans | 1.20 | % | 1.99 | % | 2.36 | % | ||||||
| Ratio of non-performing assets to total assets | 2.19 | % | 2.61 | % | 2.67 | % | ||||||
| Ratio of allowance for loan and lease losses to total loans | 2.24 | % | 2.60 | % | 2.82 | % | ||||||
| Ratio of allowance for loan and lease losses to non-performing loans | 186.40 | % | 130.47 | % | 119.31 | % | ||||||
Contact Information:
Contact:
Michael S. Thompson
CFO
mthompson@royalbankamerica.com