Royal Bancshares of Pennsylvania, Inc. Reports Profit for Full Year and Fourth Quarter 2016
Quality Loan Growth Boosts Earnings; Balance of "TARP" Shares Retired
BALA CYNWYD, PA--(Marketwired - January 30, 2017) - Royal Bancshares of Pennsylvania, Inc. ("the Company") (NASDAQ: RBPAA), parent company of Royal Bank America ("Royal Bank"), is pleased to report net income attributable to the Company of $4.1 million, or $0.13 per diluted share, and $10.4 million, or $0.31 per diluted share, for the three and twelve months ended December 31, 2016, respectively. Comparatively, net income was $6.4 million, or $0.20 per diluted share, and $11.0 million, or $0.31 per diluted share, for the three and twelve months ended December 31, 2015, respectively. During the fourth quarter of 2016, the Company reversed $1.9 million of the valuation allowance related to net deferred tax assets which contributed to a net tax benefit of $1.8 million. This transaction positively affected both the fourth quarter and full year 2016 results.
Excluding the net tax benefit of $1.9 million, net income attributable to the Company was $2.2 million, or $0.07 per diluted share, for the three months ended December 31, 2016, and excluding the net tax benefit of $1.8 million, net income attributable to the Company was $8.6 million, or $0.25 per diluted share, for the full year 2016. In 2015, the Company reversed $5.4 million of the valuation allowance related to net deferred tax assets, which contributed to a net tax benefit of $5.1 million.
The Company's President and Chief Executive Officer, Kevin Tylus, noted, "Quality loan growth and expense discipline drove our increase in earnings for 2016. Throughout the year, as we received regulatory approval, we repurchased all of the remaining Series A Preferred stock ("TARP"). We have fully retired the $30.4 million in original principal and avoid future dividends at a rate of 9%. During 2016, to meet the needs of our growing customer base, we broadened our online customer technologies, implemented enhancements to our website, and added residential mortgages to our suite of products. Recently, we completed extensive renovations of our Narberth retail location, which brings a modern experience to our customers."
Highlights for the three months and year ended December 31, 2016 included:
Balance Sheet Trends:
At December 31, 2016, total assets were $832.5 million and grew $21.1 million, or 2.6%, from $811.4 million at September 30, 2016, and increased $44.2 million, or 5.6%, from $788.3 million at December 31, 2015.
Total loans were $602.0 million at December 31, 2016, an increase of $26.2 million, or 4.5%, from $575.8 million at September 30, 2016. In 2016, total loans grew $102.9 million, or 20.6%, from $499.1 million at December 31, 2015. Increases were recognized in multiple commercial loan portfolio classes.
Total deposits were $629.5 million at December 31, 2016 and increased $37.3 million, or 6.3%, from $592.2 million at September 30, 2016. In 2016, total deposits increased $51.6 million, or 8.9%, from $577.9 million at December 31, 2015.
Total Company equity was $51.6 million at December 31, 2016, a decrease of $17.7 million, or 25.5%, from $69.3 million at September 30, 2016 and declined $20.3 million, or 28.2%, from $71.9 million at December 31, 2015. The Company repurchased or redeemed the remaining 18,856 shares of Series A preferred stock from time to time during 2016 as shares became available for purchase and the Company received the required regulatory approvals to repurchase such shares. The Company paid $29.5 million to repurchase the outstanding shares and eliminated future dividends on these shares.
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