SUMMARY OF QUARTERLY RESULTS (UNAUDITED)

12 Months Ended

Dec. 31, 2011

SUMMARY OF QUARTERLY RESULTS (UNAUDITED) [Abstract]

SUMMARY OF QUARTERLY RESULTS (UNAUDITED)

NOTE 23 - SUMMARY OF QUARTERLY RESULTS (UNAUDITED)

The following summarizes the consolidated results of operations during 2011 and 2010, on a quarterly basis, for the Company:

	For the year ended December 31, 2011
(In thousands, except per share data)	Fourth Quarter			Third Quarter			Second Quarter			First  Quarter
Interest income	$	8,754		$	10,049		$	10,000		$	10,574
Net interest income		5,744			6,832			6,160			6,555
Provision for loan and lease losses		2,160			428			3,056			2,084
Net interest income after provision		3,584			6,404			3,104			4,471
Other  income		2,594			73			2,787			1,364
Other expenses		7,206			8,109			9,785			6,969
Loss before income tax	$	(1,028	)	$	(1,632	)	$	(3,894	)	$	(1,134	)
Net loss	$	(1,028	)	$	(1,632	)	$	(3,894	)	$	(1,134	)
Less net (loss) income attributable to noncontrolling interest		(94	)		261			331			377
Net loss attributable to Royal Bancshares of Pennsylavania, Inc.	$	(934	)	$	(1,893	)	$	(4,225	)	$	(1,511	)
Net loss available to common shareholders	$	(1,438	)	$	(2,395	)	$	(4,724	)	$	(2,009	)
Net loss per common share
Basic and diluted	$	(0.11	)	$	(0.18	)	$	(0.36	)	$	(0.15	)

Operating results for the fourth quarter of 2011 amounted to a loss of $934,000, which resulted in a decrease of $14.8 million from the loss recorded in the fourth quarter of 2010. The year over year improvement in the quarterly results was primarily related to a decline in the provision for loan and lease losses of $11.6 million coupled with a decline in other expenses of $5.1 million. The decline in the provision was almost entirely related to an increase in the provision of $11.4 million in the fourth quarter of 2010 associated with a mark to market at fair value of classified loans within a bulk asset sale. The Company had signed a letter of intent in the first quarter of 2011 to sell a pool of $54.1 million of classified assets ($30.3 million of non-performing loans, $10.8 million of classified accruing loans and $13.0 million of OREO properties) in a bulk sale, which were marked to market at the fair market value (projected sale price) at year end 2010. The decline in other expenses was principally related to a reduction in the OREO valuation allowance of $2.7 million and a reduction in expenses for the VIE related to real estate owned via equity investments associated with reduced impairment and lower investment partnership losses amounting to $926,000. The VIE was deconsolidated in 2011.  Reduced FDIC and state assessments of $236,000 related to a decline in deposit balances due to the sale of Royal Asian and redemption of brokered CDs, lower professional and legal fees of $479,000 and reduced loan collection expenses of $347,000 also contributed to the favorable change year over year in the fourth quarter. The bulk asset sale previously noted required a valuation allowance of the OREO properties of $2.8 million in the fourth quarter of 2010 to reflect their fair market value based upon the projected sale price and accounted for the year over year change.

Partially offsetting the favorable change in the 2011 fourth quarter operating results were a decline in net interest income of $1.6 million and a decline in other income of $603,000. The decline in quarterly net interest income year over year was attributed to the decline in average loan balances related to the sale of Royal Asian and loan payoffs, pay-downs, loan sales and charge-offs coupled with lower yields on both loans and investments in the current lower rate environment. The overall decline was partially mitigated by the continued reduction in interest expense associated primarily with the redemption of brokered CDs, FHLB advances and declining rates on maturing retail CDs. The decline in other income of $603,000 from the previous year's comparable quarter was mostly attributed to the deconsolidation of the VIE. Included in other income in 2010 was a non-recurring gain on the sale of the Company's LBSF claim in a pending lawsuit for $1.7 million related to the collateral for an interest rate swap with LBSF, which had previously been written off in 2008 in the amount of $5.0 million shortly after Lehman Brothers Holdings, Inc. declared bankruptcy. Included in other income in 2011 was a non-recurring recovery of $1.5 million from a guarantor of a real estate joint venture that was fully impaired in 2007. If the operating results in 2010 were adjusted for the loss of $14.2 million associated with the asset sale, the fourth quarter loss for 2010 would have been $1.5 million and the fourth quarter loss in 2011 would have amounted to an improvement of $560,000 above the 2010 results.  

	For the year ended December 31, 2010
(In thousands, except per share data)	Fourth Quarter			Third Quarter			Second Quarter			First  Quarter
Interest income	$	12,747		$	13,719		$	15,173		$	15,623
Net interest income		7,352			7,562			8,334			8,020
Provision for loan and lease losses		13,753			2,194			4,290			1,903
Net interest income (loss) after provision		(6,401	)		5,368			4,044			6,117
Other  income		2,919			1,823			1,718			1,305
Other expenses		12,316			10,333			10,041			8,053
Loss before income tax	$	(15,798	)	$	(3,142	)	$	(4,279	)	$	(631	)
Net loss	$	(15,798	)	$	(3,142	)	$	(4,279	)	$	(631	)
Less net (loss) income attributable to noncontrolling interest		(111	)		(347	)		259			442
Net loss attributable to Royal Bancshares of Pennsylavania, Inc.	$	(15,687	)	$	(2,795	)	$	(4,538	)	$	(1,073	)
Net loss available to common shareholders	$	(16,182	)	$	(3,289	)	$	(5,029	)	$	(1,563	)
Net loss per common share
Basic and diluted	$	(1.22	)	$	(0.25	)	$	(0.38	)	$	(0.12	)