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 9.01 | Financial Statements and Exhibits. |
(d) | Exhibits: |
99.1 | Press release, dated October 22, 2014, regarding financial results for the period ended September 30, 2014. |
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
|
||
Dated: October 22, 2014
|
||
By:
|
/s/ Michael S. Thompson
|
|
Michael S. Thompson
|
||
Chief Financial Officer
|
● | Net income improved $1.1 million from the comparable 2013 period. |
● | Net interest margin grew 31 basis points from the comparable period in 2013. |
● | Return on average assets and return on average equity were 0.78% and 9.67%, respectively. |
● | Net interest income increased 10% from the comparable 2013 period. |
● | Non-interest expenses declined 15% from the equivalent period in 2013. |
● | Loan growth was 5% from June 30, 2014. |
● | Net income improved $4.6 million from the comparable 2013 period. |
● | Net interest margin grew 39 basis points from the comparable period in 2013. |
● | Return on average assets and return on average equity were 0.78% and 10.60%, respectively. |
● | Net interest income increased 13% from the comparable 2013 period. |
● | Non-interest expenses declined 21% from the equivalent period in 2013. |
● | Loan growth was 8% from December 31, 2013. |
● | Net interest income grew $498,000, or 10%. |
● | Due to the improvement in overall credit quality, the Company was able to record a credit for loan and lease losses of $51,000 compared to a provision for loan and lease losses of $218,000 for the comparable period in 2013. |
● | Other real estate owned (“OREO”) expenses and impairment decreased $690,000, or 82%. |
● | Problem loan expenses declined $60,000, or 46%. |
● | The 2014 third quarter included $238,000 in net gains on the sale of investment securities. |
● | Net interest income grew $1.9 million, or 13%. |
● | The credit for loan and lease losses improved $569,000 (from a credit of $196,000 to a credit of $765,000) due to the continued positive progress in loan credit quality. |
● | Salaries and benefits declined $493,000, or 6%. |
● | OREO expenses and impairment fell $849,000, or 49%. |
● | Professional and legal fees dropped $475,000, or 23%. |
● | Problem loan expenses declined $334,000, or 60%. |
● | The first nine months of 2013 included a legal settlement expense related to a tax lien subsidiary, of which the Company’s share was $990,000 and $230,000 in restructuring charges. |
Three months
|
Nine months
|
|||||||||||||||
ended September 30th
|
ended September 30th
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Interest income
|
$
|
7,191
|
$
|
6,960
|
$
|
21,551
|
$
|
20,455
|
||||||||
Interest expense
|
1,623
|
1,890
|
4,870
|
5,667
|
||||||||||||
Net Interest Income
|
5,568
|
5,070
|
16,681
|
14,788
|
||||||||||||
(Credit) provision for loan and lease losses
|
(51
|
)
|
218
|
(765
|
)
|
(196
|
)
|
|||||||||
Net interest income after provision
|
5,619
|
4,852
|
17,446
|
14,984
|
||||||||||||
Non-interest income
|
1,204
|
1,937
|
2,792
|
4,306
|
||||||||||||
Non-interest expense
|
5,375
|
6,290
|
15,728
|
19,997
|
||||||||||||
Income (loss) before taxes
|
1,448
|
499
|
4,510
|
(707
|
)
|
|||||||||||
Income taxes
|
-
|
-
|
-
|
-
|
||||||||||||
Net Income (Loss)
|
1,448
|
499
|
4,510
|
(707
|
)
|
|||||||||||
Less net income (loss) attributable to noncontrolling interest
|
25
|
157
|
212
|
(364
|
)
|
|||||||||||
Net Income (Loss) Attributable to Royal Bancshares
|
$
|
1,423
|
$
|
342
|
$
|
4,298
|
$
|
(343
|
)
|
|||||||
Less Preferred stock Series A accumulated dividend and accretion
|
$
|
152
|
$
|
520
|
$
|
1,644
|
$
|
1,553
|
||||||||
Net income (loss) to common shareholders
|
$
|
1,271
|
$
|
(178
|
)
|
$
|
2,654
|
$
|
(1,896
|
)
|
||||||
Income (Loss) Per Common Share – Basic and Diluted
|
$
|
0.05
|
$
|
(0.01
|
)
|
$
|
0.15
|
$
|
(0.14
|
)
|
Three months
|
Nine months
|
|||||||||||||||
ended September 30th
|
ended September 30th
|
|||||||||||||||
2014
|
2013
|
2014
|
2013
|
|||||||||||||
Return on Average Assets
|
0.78
|
%
|
0.18
|
%
|
0.78
|
%
|
-0.06
|
%
|
||||||||
Return on Average Equity
|
9.67
|
%
|
2.60
|
%
|
10.60
|
%
|
-0.82
|
%
|
||||||||
Average Equity to Assets
|
8.06
|
%
|
7.09
|
%
|
7.40
|
%
|
7.49
|
%
|
||||||||
Book Value Per Share
|
$
|
1.45
|
$
|
1.38
|
$
|
1.45
|
$
|
1.38
|
At
|
At
|
|||||||
September 30,
|
December 31,
|
|||||||
Capital ratios (US GAAP):
|
2014
|
2013
|
||||||
Royal Bank Tier I Leverage
|
10.4
|
%
|
9.8
|
%
|
||||
Royal Bank Total Risk Based Capital
|
16.6
|
%
|
16.6
|
%
|
||||
Company Tier I Leverage
|
11.8
|
%
|
9.9
|
%
|
||||
Company Total Risk Based Capital
|
19.4
|
%
|
18.2
|
%
|
At September 30,
2014
|
At December 31,
2013
|
|||||||
Cash and cash equivalents
|
$
|
21,933
|
$
|
16,844
|
||||
Investment securities, at fair value
|
265,390
|
308,727
|
||||||
Other investment, at cost
|
2,250
|
2,250
|
||||||
Federal Home Loan Bank stock
|
3,678
|
4,204
|
||||||
Loans and leases held for sale
|
1,018
|
1,446
|
||||||
Loans and leases
|
||||||||
Commercial real estate
|
181,415
|
160,030
|
||||||
Construction and land development
|
41,676
|
45,261
|
||||||
Commercial and industrial
|
70,743
|
79,589
|
||||||
Residential real estate
|
44,261
|
25,535
|
||||||
Leases
|
48,588
|
42,524
|
||||||
Tax certificates
|
8,230
|
12,716
|
||||||
Consumer
|
2,263
|
826
|
||||||
Loans and leases
|
397,176
|
366,481
|
||||||
Allowance for loan and lease losses
|
(11,482
|
)
|
(13,671
|
)
|
||||
Loans and leases (net)
|
385,694
|
352,810
|
||||||
Premises and equipment (net)
|
4,803
|
4,475
|
||||||
Other real estate owned (net)
|
9,593
|
9,617
|
||||||
Accrued interest receivable
|
5,554
|
7,054
|
||||||
Other assets
|
23,556
|
24,827
|
||||||
Total Assets
|
$
|
723,469
|
$
|
732,254
|
||||
Deposits
|
$
|
515,786
|
$
|
528,964
|
||||
Borrowings
|
97,540
|
107,881
|
||||||
Other liabilities
|
21,836
|
21,830
|
||||||
Subordinated debentures
|
25,774
|
25,774
|
||||||
Royal Bancshares shareholders’ equity
|
62,258
|
47,534
|
||||||
Noncontrolling interest
|
275
|
271
|
||||||
Total Equity
|
62,533
|
47,805
|
||||||
Total Liabilities and Equity
|
$
|
723,469
|
$
|
732,254
|
For the three months ended
|
For the three months ended
|
|||||||||||||||||||||||
September 30, 2014
|
September 30, 2013
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Yield
|
Average
Balance
|
Interest
|
Yield
|
|||||||||||||||||||
Cash equivalents
|
$
|
12,152
|
$
|
6
|
0.20
|
%
|
$
|
6,072
|
$
|
6
|
0.39
|
%
|
||||||||||||
Investment securities
|
280,579
|
1,734
|
2.45
|
%
|
305,152
|
1,528
|
1.99
|
%
|
||||||||||||||||
Loans
|
386,308
|
5,451
|
5.60
|
%
|
373,722
|
5,426
|
5.76
|
%
|
||||||||||||||||
Total interest-earning assets
|
679,039
|
7,191
|
4.20
|
%
|
684,946
|
6,960
|
4.03
|
%
|
||||||||||||||||
Non-interest earning assets
|
45,335
|
52,532
|
||||||||||||||||||||||
Total average assets
|
$
|
724,374
|
$
|
737,478
|
||||||||||||||||||||
Interest-bearing deposits
|
||||||||||||||||||||||||
NOW and money markets
|
$
|
207,731
|
$
|
161
|
0.31
|
%
|
$
|
203,189
|
$
|
149
|
0.29
|
%
|
||||||||||||
Savings
|
19,449
|
8
|
0.16
|
%
|
17,958
|
9
|
0.20
|
%
|
||||||||||||||||
Time deposits
|
225,679
|
731
|
1.29
|
%
|
237,689
|
825
|
1.38
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
452,859
|
900
|
0.79
|
%
|
458,836
|
983
|
0.85
|
%
|
||||||||||||||||
Borrowings
|
123,743
|
723
|
2.32
|
%
|
134,186
|
907
|
2.68
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
576,602
|
1,623
|
1.12
|
%
|
593,022
|
1,890
|
1.26
|
%
|
||||||||||||||||
Non-interest bearing deposits
|
66,251
|
61,513
|
||||||||||||||||||||||
Other liabilities
|
23,150
|
30,669
|
||||||||||||||||||||||
Shareholders' equity
|
58,371
|
52,274
|
||||||||||||||||||||||
Total average liabilities and equity
|
$
|
724,374
|
$
|
737,478
|
||||||||||||||||||||
Net interest margin
|
$
|
5,568
|
3.25
|
%
|
$
|
5,070
|
2.94
|
%
|
For the nine months ended
|
For the nine months ended
|
|||||||||||||||||||||||
September 30, 2014
|
September 30, 2013
|
|||||||||||||||||||||||
Average
Balance
|
Interest
|
Yield
|
Average
Balance
|
Interest
|
Yield
|
|||||||||||||||||||
Cash equivalents
|
$
|
8,964
|
$
|
16
|
0.24
|
%
|
$
|
12,083
|
$
|
21
|
0.23
|
%
|
||||||||||||
Investment securities
|
303,485
|
5,610
|
2.47
|
%
|
316,474
|
4,103
|
1.73
|
%
|
||||||||||||||||
Loans
|
374,270
|
15,925
|
5.69
|
%
|
363,909
|
16,331
|
6.00
|
%
|
||||||||||||||||
Total interest-earning assets
|
686,719
|
21,551
|
4.20
|
%
|
692,466
|
20,455
|
3.95
|
%
|
||||||||||||||||
Non-interest earning assets
|
46,165
|
55,782
|
||||||||||||||||||||||
Total average assets
|
$
|
732,884
|
$
|
748,248
|
||||||||||||||||||||
Interest-bearing deposits
|
||||||||||||||||||||||||
NOW and money markets
|
$
|
209,772
|
$
|
494
|
0.31
|
%
|
$
|
211,529
|
$
|
464
|
0.29
|
%
|
||||||||||||
Savings
|
18,620
|
24
|
0.17
|
%
|
17,911
|
28
|
0.21
|
%
|
||||||||||||||||
Time deposits
|
230,688
|
2,194
|
1.27
|
%
|
239,460
|
2,569
|
1.43
|
%
|
||||||||||||||||
Total interest-bearing deposits
|
459,080
|
2,712
|
0.79
|
%
|
468,900
|
3,061
|
0.87
|
%
|
||||||||||||||||
Borrowings
|
130,452
|
2,158
|
2.21
|
%
|
134,068
|
2,606
|
2.60
|
%
|
||||||||||||||||
Total interest-bearing liabilities
|
589,532
|
4,870
|
1.10
|
%
|
602,968
|
5,667
|
1.26
|
%
|
||||||||||||||||
Non-interest bearing deposits
|
64,832
|
59,595
|
||||||||||||||||||||||
Other liabilities
|
24,316
|
29,579
|
||||||||||||||||||||||
Shareholders' equity
|
54,204
|
56,106
|
||||||||||||||||||||||
Total average liabilities and equity
|
$
|
732,884
|
$
|
748,248
|
||||||||||||||||||||
Net interest margin
|
$
|
16,681
|
3.25
|
%
|
$
|
14,788
|
2.86
|
%
|