Pennsylvania
|
0-26366
|
23-2812193
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Ident. No.)
|
732 Montgomery Avenue, Narberth, Pennsylvania
|
|
19072
|
(Address of principal executive offices)
|
|
(Zip Code)
|
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c)) |
Item 8.01 | Other Events |
Item 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits: |
99.1 | Press release, dated July 22, 2014, regarding financial results for the period ended June 30, 2014. |
|
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
|
|
Dated: July 22, 2014
|
|
|
|
By:
|
/s/ Michael S. Thompson
|
|
|
Michael S. Thompson
|
|
|
Chief Financial Officer
|
· | Improvement in net income of $2.2 million from the comparable 2013 period. |
· | Net interest margin grew 12% from the comparable period in 2013. |
· | Return on average assets and return on average equity were 0.75% and 10.34%, respectively. |
· | Increase in net interest income of 13% from the comparable 2013 period. |
· | Non-interest expense reduction of 34% from the equivalent period in 2013. |
· | Loan growth was 6% from March 31, 2014. |
· | Improvement in net income of $3.6 million from the comparable 2013 period. |
· | Net interest margin grew 15% from the comparable period in 2013. |
· | Return on average assets and return on average equity were 0.79% and 11.13%, respectively. |
· | Increase in net interest income of 14% from the comparable 2013 period. |
· | Non-interest expense reduction of 24% from the equivalent period in 2013. |
· | Loan growth was 3% from December 31, 2013. |
· | Net interest income grew $641,000, or 13%. |
· | Professional and legal fees dropped $419,000, or 52%. |
· | Credit related expenses decreased $153,000, or 21%. |
· | Salaries and benefits declined $241,000, or 9%. |
· | The 2013 quarter included a legal settlement expense related to a tax lien subsidiary, of which the Company’s share was $990,000. |
· | Net interest income grew $1.4 million, or 14%. |
· | Professional and legal fees dropped $476,000, or 32%. |
· | Salaries and benefits declined $650,000, or 12%. |
· | Credit related expenses decreased $433,000, or 33%. |
· | Credit for loan and lease losses improved $300,000 due to the continued positive progress in loan credit quality. |
· | As mentioned previously, 2013 included a legal settlement expense related to a tax lien subsidiary, of which the Company’s share was $990,000. |
|
Three months
|
Six months
|
||||||||||||||
|
ended Jun. 30th
|
ended Jun. 30th
|
||||||||||||||
(in thousands, except per share data)
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
(Unaudited)
|
||||||||||||
Interest income
|
$
|
7,209
|
$
|
6,743
|
$
|
14,360
|
$
|
13,495
|
||||||||
Interest expense
|
1,622
|
1,797
|
3,247
|
3,777
|
||||||||||||
Net Interest Income
|
5,587
|
4,946
|
11,113
|
9,718
|
||||||||||||
Credit for loan and lease losses
|
(75
|
)
|
(163
|
)
|
(714
|
)
|
(414
|
)
|
||||||||
Net interest income after provision
|
5,662
|
5,109
|
11,827
|
10,132
|
||||||||||||
Non-interest income
|
816
|
961
|
1,588
|
2,369
|
||||||||||||
Non-interest expense
|
5,031
|
7,567
|
10,353
|
13,707
|
||||||||||||
Income (loss) before taxes
|
1,447
|
(1,497
|
)
|
3,062
|
(1,206
|
)
|
||||||||||
Income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Net Income (Loss)
|
1,447
|
(1,497
|
)
|
3,062
|
(1,206
|
)
|
||||||||||
Less net income (loss) attributable to noncontrolling interest
|
69
|
(694
|
)
|
186
|
(521
|
)
|
||||||||||
Net Income (Loss) Attributable to Royal Bancshares
|
$
|
1,378
|
$
|
(803
|
)
|
$
|
2,876
|
$
|
(685
|
)
|
||||||
Less Preferred stock Series A accumulated dividend and accretion
|
$
|
829
|
$
|
518
|
$
|
1,493
|
$
|
1,033
|
||||||||
Net income (loss) to common shareholders
|
$
|
549
|
$
|
(1,321
|
)
|
$
|
1,383
|
$
|
(1,718
|
)
|
||||||
Income (Loss) Per Common Share – Basic and Diluted
|
$
|
0.04
|
$
|
(0.10
|
)
|
$
|
0.10
|
$
|
(0.13
|
)
|
|
Three months
|
Six months
|
||||||||||||||
|
ended Jun. 30th
|
ended Jun. 30th
|
||||||||||||||
|
2014
|
2013
|
2014
|
2013
|
||||||||||||
Return on Average Assets
|
0.75
|
%
|
-0.44
|
%
|
0.79
|
%
|
-0.18
|
%
|
||||||||
Return on Average Equity
|
10.34
|
%
|
-6.13
|
%
|
11.13
|
%
|
-2.60
|
%
|
||||||||
Average Equity to Assets
|
7.22
|
%
|
7.11
|
%
|
7.07
|
%
|
7.11
|
%
|
||||||||
Book Value Per Share
|
$
|
1.84
|
$
|
1.48
|
$
|
1.84
|
$
|
1.48
|
|
At Jun. 30,
|
At Dec. 31,
|
||||||
Capital ratios (US GAAP):
|
2014
|
2013
|
||||||
Royal Bank Tier I Leverage
|
10.0
|
%
|
9.8
|
%
|
||||
Royal Bank Total Risk Basked Capital
|
16.9
|
%
|
16.6
|
%
|
||||
Company Tier I Leverage
|
10.2
|
%
|
9.9
|
%
|
||||
Company Total Risk Basked Capital
|
18.4
|
%
|
18.2
|
%
|
(in thousands)
|
At Jun. 30, 2014
|
At Dec. 31, 2013
|
||||||
|
(unaudited)
|
|||||||
Cash and cash equivalents
|
$
|
28,132
|
$
|
16,844
|
||||
Investment securities
|
283,358
|
310,977
|
||||||
Federal Home Loan Bank stock
|
3,878
|
4,204
|
||||||
Loans and leases held for sale
|
1,396
|
1,446
|
||||||
Loans and leases
|
||||||||
Commercial real estate
|
167,846
|
160,030
|
||||||
Construction and land development
|
41,180
|
45,261
|
||||||
Commercial and industrial
|
71,759
|
79,589
|
||||||
Residential real estate
|
40,223
|
25,535
|
||||||
Leases
|
45,925
|
42,524
|
||||||
Tax certificates
|
9,631
|
12,716
|
||||||
Other
|
1,227
|
826
|
||||||
Loans and leases
|
377,791
|
366,481
|
||||||
Allowance for loan and lease losses
|
(11,569
|
)
|
(13,671
|
)
|
||||
Loans and leases (net)
|
366,222
|
352,810
|
||||||
Premises and equipment (net)
|
4,752
|
4,475
|
||||||
Other real estate owned (net)
|
9,811
|
9,617
|
||||||
Accrued interest receivable
|
6,195
|
7,054
|
||||||
Other assets
|
23,468
|
24,827
|
||||||
Total Assets
|
$
|
727,212
|
$
|
732,254
|
||||
|
||||||||
Deposits
|
$
|
526,917
|
$
|
528,964
|
||||
Borrowings
|
97,654
|
107,881
|
||||||
Other liabilities
|
21,555
|
21,830
|
||||||
Subordinated debentures
|
25,774
|
25,774
|
||||||
Royal Bancshares shareholders’ equity
|
54,991
|
47,534
|
||||||
Noncontrolling interest
|
321
|
271
|
||||||
Total Equity
|
55,312
|
47,805
|
||||||
Total Liabilities and Equity
|
$
|
727,212
|
$
|
732,254
|
|
For the three months ended
|
For the three months ended
|
||||||||||||||||||||||
|
June 30, 2014
|
June 30, 2013
|
||||||||||||||||||||||
(In thousands, except percentages)
|
Average
Balance
|
Interest
|
Yield
|
Average
Balance
|
Interest
|
Yield
|
||||||||||||||||||
Cash equivalents
|
$
|
8,284
|
$
|
5
|
0.24
|
%
|
$
|
14,774
|
$
|
8
|
0.22
|
%
|
||||||||||||
Investment securities
|
312,118
|
1,954
|
2.51
|
%
|
307,216
|
1,291
|
1.69
|
%
|
||||||||||||||||
Loans
|
370,116
|
5,250
|
5.69
|
%
|
363,183
|
5,444
|
6.01
|
%
|
||||||||||||||||
Total interest-earning assets
|
690,518
|
7,209
|
4.19
|
%
|
685,173
|
6,743
|
3.95
|
%
|
||||||||||||||||
Non-earning assets
|
49,365
|
55,017
|
||||||||||||||||||||||
Total average assets
|
$
|
739,883
|
$
|
740,190
|
||||||||||||||||||||
Interest-bearing deposits
|
||||||||||||||||||||||||
NOW and money markets
|
$
|
211,381
|
$
|
166
|
0.31
|
%
|
$
|
210,778
|
$
|
153
|
0.29
|
%
|
||||||||||||
Savings
|
18,520
|
7
|
0.15
|
%
|
18,189
|
10
|
0.22
|
%
|
||||||||||||||||
Time deposits
|
229,906
|
726
|
1.27
|
%
|
235,508
|
842
|
1.43
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
459,807
|
899
|
0.78
|
%
|
464,475
|
1,005
|
0.87
|
%
|
||||||||||||||||
Borrowings
|
137,441
|
723
|
2.11
|
%
|
133,952
|
792
|
2.37
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
597,248
|
1,622
|
1.09
|
%
|
598,427
|
1,797
|
1.20
|
%
|
||||||||||||||||
Non-interest bearing deposits
|
64,702
|
58,865
|
||||||||||||||||||||||
Other liabilities
|
24,517
|
30,310
|
||||||||||||||||||||||
Shareholders' equity
|
53,416
|
52,588
|
||||||||||||||||||||||
Total average liabilities and equity
|
$
|
739,883
|
$
|
740,190
|
||||||||||||||||||||
Net interest margin
|
$
|
5,587
|
3.25
|
%
|
$
|
4,946
|
2.90
|
%
|
|
For the six months ended
|
For the six months ended
|
||||||||||||||||||||||
|
June 30, 2014
|
June 30, 2013
|
||||||||||||||||||||||
(In thousands, except percentages)
|
Average
Balance
|
Interest
|
Yield
|
Average
Balance
|
Interest
|
Yield
|
||||||||||||||||||
Cash equivalents
|
$
|
7,344
|
$
|
10
|
0.27
|
%
|
$
|
15,139
|
$
|
15
|
0.20
|
%
|
||||||||||||
Investment securities
|
315,128
|
3,876
|
2.48
|
%
|
322,229
|
2,575
|
1.61
|
%
|
||||||||||||||||
Loans
|
368,152
|
10,474
|
5.74
|
%
|
358,058
|
10,905
|
6.14
|
%
|
||||||||||||||||
Total interest-earning assets
|
690,624
|
14,360
|
4.19
|
%
|
695,426
|
13,495
|
3.91
|
%
|
||||||||||||||||
Non-earning assets
|
46,014
|
53,128
|
||||||||||||||||||||||
Total average assets
|
$
|
736,638
|
$
|
748,554
|
||||||||||||||||||||
Interest-bearing deposits
|
||||||||||||||||||||||||
NOW and money markets
|
$
|
210,810
|
$
|
333
|
0.32
|
%
|
$
|
215,768
|
$
|
315
|
0.29
|
%
|
||||||||||||
Savings
|
18,199
|
16
|
0.18
|
%
|
17,887
|
19
|
0.21
|
%
|
||||||||||||||||
Time deposits
|
233,233
|
1,463
|
1.26
|
%
|
240,361
|
1,744
|
1.46
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
462,242
|
1,812
|
0.79
|
%
|
474,016
|
2,078
|
0.88
|
%
|
||||||||||||||||
Borrowings
|
133,863
|
1,435
|
2.16
|
%
|
134,008
|
1,699
|
2.56
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
596,105
|
3,247
|
1.10
|
%
|
608,024
|
3,777
|
1.25
|
%
|
||||||||||||||||
Non-interest bearing deposits
|
64,310
|
58,620
|
||||||||||||||||||||||
Other liabilities
|
24,137
|
28,704
|
||||||||||||||||||||||
Shareholders' equity
|
52,086
|
53,206
|
||||||||||||||||||||||
Total average liabilities and equity
|
$
|
736,638
|
$
|
748,554
|
||||||||||||||||||||
Net interest margin
|
$
|
11,113
|
3.24
|
%
|
$
|
9,718
|
2.82
|
%
|