Royal Bancshares Posts First Quarterly Profit Since 2008

Royal Bancshares of Pennsylvania (RBPAA) in Narbeth has ended a string of 18 straight quarterly losses.

The $751 million-asset company said Wednesday that it earned $118,000 in the first quarter, compared to a $869,000 loss a year earlier.

Cost-cutting efforts helped lower noninterest expenses by 24% from a year earlier, to $6.1 million. Royal said in March that it had begun an aggressive program of expense reduction that included staffing cuts, a branch closing and the elimination of some employee benefits. Foreclosure-related costs also declined by $435,000 compared to the first quarter of 2012.

Net interest income fell 20% from a year earlier, to $4.8 million. The net interest margin compressed by 36 basis points from a year earlier, to 2.73%, because of lower yields and a decrease in the average loan balance.

Noninterest income more than doubled from a year earlier, to $1.4 million, partially because of a $676,000 gain from the sale of two properties.

Nonperforming loans fell 66% from a year earlier, to $17.6 million. The company recorded a $251,000 credit for loan recoveries, compared to recording a $84,000 loan-loss provision for loan losses a year earlier.

Royal recently introduced new online banking features, including remote check capture and online loan applications, as part of a strategic shift, the company said in a press release.

The company recently shuffled its executive team, promoting three executives in October and naming former PNC Financial (PNC) executive F. Kevin Tylus as its president and chief executive two months later.