CHICAGO, Aug. 9, 2011 /PRNewswire/ -- Royal Financial, Inc. (OTC Bulletin Board: RYFL.OB) (the "Company") and Royal Savings Bank (the "Bank"), a wholly owned subsidiary of the Company, today announced the termination of the Royal Financial, Inc. Employee Stock Ownership Plan (the "ESOP"), prior to its fiscal year end of June 30, 2011.
Royal Financial President and CEO, Leonard Szwajkowski, said the Company "determined that the benefits of the ESOP were not sufficient to justify the ongoing annual expense incurred to maintain the plan. The costs savings we will achieve in future periods will more than compensate for the one-time charges incurred to terminate the ESOP".
The Company estimates expense reductions in the range of $40,000 to $45,000 per year. The Company anticipates it will incur one-time termination expenses of $47,000, related to attorney and professional assistance to terminate the plan, during fiscal year 2011.
At the point of termination, prior to fiscal year end 2011, no further contributions were made on the outstanding plan loan and therefore no further participant distributions were made on June 30, 2011. The Company plans to implement a 401(k) profit sharing plan on January 1, 2012, as a replacement benefit.
In connection with the termination of the ESOP, the plan trustee transferred 84,640 shares to the Company in satisfaction of the ESOP loan. The Company treated the returned shares as treasury stock. A total of 91,356 allocated and previously earned shares were distributed to plan participants. In accordance with participant elections, the Plan Trustee rolled over nearly 90% of the distributed ESOP shares to Individual Retirement Accounts and distributed the remainder in cash. As of this release, there were 2,477,966 shares of the Company Common Stock outstanding.
Royal Financial, Inc. is the holding company for Royal Savings Bank which offers a range of checking and savings products, a full line of home loans, and commercial lending solutions. Royal Savings Bank, with two locations, has been operating continuously in the south and southeast communities of Chicago since 1887.
Contact: Mr. Leonard Szwajkowski
President and CEO
Telephone: (773) 382-2111
SOURCE Royal Financial, Inc.