EX-99.1 2 w33911exv99w1.htm PRESS RELEASE DATED APRIL 20, 2007 exv99w1
 

Exhibit 99.1
Royal Bank America Media
Alert
For additional information:
Marc Sanders, Director of Marketing
610-668-4700 x269 — marcsanders@royalbankamerica.com
ROYAL BANK AMERICA PARENT CO. ISSUES 48th CONSECUTIVE QUARTERLY
CASH DIVIDEND; REPORTS EARNINGS FOR THE 1st QUARTER
NARBERTH, PA — April 20, 2007 — Royal Bank America President/CEO Joseph P. Campbell announced that the Board of Directors for the Bank’s holding company, Royal Bancshares of Pennsylvania, Inc. (NASDAQ-GM: RBPAA), declared its 48th consecutive quarterly cash dividend on April 18, 2007. This dividend will be twenty-eight and seventy-five hundredths cents ($.2875) per share for holders of Class A common stock and thirty-three and six hundred twenty-five ten thousandths cents ($.330625) per share for holders of Class B common stock of Royal Bancshares of Pennsylvania, Inc. The record date is May 2, 2007, and the payment date is May 16, 2007.
Net income for the three months ended March 31, 2007 was $3.9 million or $0.29 basic earnings per share, compared to $5.3 million or $0.40 basic earnings per share for the same period in 2006.
The lower earnings experienced during the first quarter of 2007, compared to the first quarter of 2006, was the result of a $780,000 reduction in interest income related to transferring two loans to non-accrual status during the quarter and also reflects a $1.3 million one-time gain from the sale of other real estate owned. The aforementioned loans are well collateralized and the bank expects to recover principal in full.
For the first quarter of 2007, interest income was $22.2 million compared to $21.4 million for the same quarter in 2006, an increase of $800 thousand. This increase is primarily due to growth in average loan balances. Net loans and leases increased 5.9% or $34.5 million from March 31, 2006 to a balance of $617.5 million at March 31, 2007.
Interest expense increased $3.4 million to $13.5 million for the quarter ended March 31, 2007 compared to the same period in 2006. The increase in interest expense was due to the growth in the average balance of deposits, higher interest rates paid on deposits and an increase of $1.1 million in interest expense related to variable interest entities. Total deposits increased 24.5% to $895.0 million at March 31, 2007 from March 31, 2006, primarily due to a $208.5 million increase in certificates of deposit. The growth in certificates of deposit was partially offset by a $161.5 million reduction in Federal Home Loan Bank advances.
The net interest margin (excluding variable interest entities) in the first quarter of 2007 was negatively impacted by the $780,000 non-accrual loan adjustment to interest income mentioned above and the continued pressures on funding costs. The 1st quarter 2007 net interest margin was 3.47% compared to 4.17% for the first quarter of 2006.
During the first quarter of 2007, $212 thousand of provisions were recorded to increase the allowance for loan losses. This additional provision was related to loan growth. Included in the reserve calculations are

 

 

mezzanine loans, which generally provide higher yields but which management has determined to have a higher level of risk compared to the remainder of the loan portfolio.
Consolidated total assets ended March 31, 2007 at $1.34 billion, $22.6 million higher than March 31, 2006. The three-month period ended March 31, 2007 return on average assets and return on average equity were 1.2% and 9.7%, respectively.
About Royal Bancshares of Pennsylvania, Inc.
Royal Bancshares of Pennsylvania, Inc., headquartered in Narberth, Pennsylvania, operates seventeen full-service branch offices throughout southeastern Pennsylvania and New Jersey under the name Royal Bank America and five locations under the name Royal Asian Bank. Together, Royal Bank America and Royal Asian Bank, along with Royal’s other affiliates, offer a wide variety of products and services, including commercial real estate loans, asset based lending, structured financing, equipment leasing, equity/mezzanine lending, high-yielding CDs & MMAs and Internet Banking solutions at www.royalbankamerica.com and www.royalasianbank.com.
The foregoing material is unaudited and 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.
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
CONDENSED INCOME STATEMENT
                 
    Three Months  
    Ended March 31st  
(dollars in thousands, except for earnings per share)   2007     2006  
    (Unaudited)     (Unaudited)  
Interest Income
   $ 22,195     $ 21,413  
Interest Expense
     13,526       10,079  
 
            
Net Interest Income
     8,669       11,334  
Provision for Loan Losses
     212       335  
 
            
Net Interest Income after Provision
     8,457       10,999  
 
                
Non Interest Income
     5,942       2,998  
Non Interest Expense
     8,708       6,186  
 
            
Income before Taxes
     5,691       7,811  
Income Taxes
     1,789       2,465  
 
            
Net Income
     3,902       5,346  
 
            
 
                
Earnings per share — basic
   $ 0.29     $ 0.40  
 
                
SELECTED RATIOS:
                
Return on Average Assets
     1.2 %     1.7 %
Return on Average Equity
     9.7 %     13.9 %
Average Equity to Assets
     12.2 %     12.0 %
Book Value Per Share
   $ 12.18     $ 11.59  

 

 

CONDENSED BALANCE SHEET
                         
    March 31,     Dec. 31,     March 31,  
(in thousands)   2007     2006     2006  
    (unaudited)             (unaudited)  
Cash and Cash Equivalents
   $ 42,672     $ 82,436     $ 20,279  
Investment Securities
     563,204       568,742       577,959  
Loans Held for Sale
     —       1,959       1,291  
Loans & Leases (net)
     617,536       589,545       583,075  
Premises and Equipment (net)
     49,554       50,280       66,918  
Accrued Interest receivable
     17,553       16,494       15,850  
Other Assets
     48,818       46,855       51,401  
 
                  
Total Assets
   $ 1,339,337     $ 1,356,311     $ 1,316,773  
 
                  
 
                        
Deposits
   $ 894,999     $ 859,457     $ 718,890  
Borrowings
     218,029       275,429       396,415  
Other Liabilities
     32,297       29,247       17,723  
Subordinated debentures
     25,774       25,774       25,774  
Minority Interest
     3,839       3,150       2,150  
Shareholders’ Equity
     164,399       163,254       155,821  
 
                  
Total Liabilities and Shareholders’ Equity
   $ 1,339,337     $ 1,356,311     $ 1,316,773  
 
                  
The above condensed financial information includes consolidation of a Equity Real Estate Investment, owned by Royal Bancshares of Pennsylvania, Inc., which are required as a result of FIN 46(R) “Variable Interest Entities.”