Royal Financial, Inc. Announces FY13 Earnings for the Nine Months Ended March 31, 2013

CHICAGO, May 22, 2013 /PRNewswire/ -- Royal Financial, Inc. (the "Company") (OTCBB: RYFL.OB), incorporated under the laws of Delaware on December 15, 2004, for the purpose of serving as the holding company of Royal Savings Bank (the "Bank"), announced earnings for the nine months ended March 31, 2013.

For the nine months ended March 31, 2013, the Company reported net income of $417,000, or $0.17 per common share, compared to a net loss of $342,000, or $0.14 loss per common share, for the nine months ended March 31, 2012.  The net income for the nine months ended March 31, 2013 was an increase of $760,000 from the same period in 2012.  The increase in income was due to an increase in non-interest income of $363,000 and net interest income of $260,000 and a decrease in noninterest expense of $656,000, partially offset by an increase in the provision for loan losses of $570,000. The increase in noninterest income was primarily the result of a gain of $291,000 on the sale of securities from the investment portfolio. The decrease in noninterest expense was primarily the result of a decrease in salaries and employee benefits of $273,000 and a decrease in foreclosed assets expense of $460,000, partially offset by increases in various operating expenses. The increase in the provision for loan losses was primarily due to the recognition of a credit provision of $425,000 in the second quarter of fiscal 2012, which was directly related to a recovery of previously charged off bad debt.  

Comparison of Financial Condition at March 31, 2013 and June 30, 2012

The Company's total assets decreased $853,000, or 0.74%, to $114.6 million at March 31, 2013, from $115.4 million at June 30, 2012.

Securities available for sale decreased $20.3 million, or 36.96%, to $34.5 million at March 31, 2013 from $54.8 million at June 30, 2012.  The decrease in the securities portfolio was due to securities sold to provide liquidity to fund loan growth.

Loans, net of allowance, increased $19.3 million, or 40.31%, to $67.2 million at March 31, 2013, from $47.9 million at June 30, 2012.  The increase in loans was primarily a result of locally originated commercial loan growth, consisting of commercial real estate and multi-family properties.

Other real estate owned decreased $1.3 million to $2.5 million at March 31, 2013, from $3.8 million at June 30, 2012. The decrease was primarily due to the sale of a $1.6 million residential property in the western suburbs of Chicago, partially offset by a newly obtained residential property with a carrying value of $475,000.

Total deposits reflect a slight decrease of $292,000, or 0.42%, to $69.2 million at March 31, 2013 from $69.5 million at June 30, 2012.

Federal Home Loan Bank advances decreased $1.3 million, or 4.60%, to $25.9 million at March 31, 2013 from $27.2 million at June 30, 2012. FHLB advances were reduced using proceeds of investment securities sold during the period, in accordance with management's liquidity strategy.  

Total stockholders' equity increased $227,000, or 1.27%, to $18.0 million at March 31, 2013 from $17.8 million at June 30, 2012. The increase is primarily a result of net income of $417,000 for the period partially offset by a decrease in accumulated other comprehensive income of $209,000, net of deferred taxes.

The allowance for loan losses was $1.6 million, or 2.32% of total loans, at March 31, 2013, as compared to $1.8 million, or 3.66% of total loans, at June 30, 2012.  The Company believes, as of March 31, 2013, its allowance for loan losses was adequate to cover probable incurred losses. Nonperforming assets were $4.2 million, or 3.64%, at March 31, 2013 compared to $7.1 million, or 6.13%, at June 30, 2012.

The Bank is required to maintain regulatory capital sufficient to meet Tier 1 leverage, Tier 1 risk-based and total risk-based capital ratios of at least 4.0%, 4.0%, and 8.0%, respectively.  At March 31, 2013, the Bank exceeded each of its capital requirements with ratios of 14.49%, 24.57%, and 25.83%, respectively.  At March 31, 2013, the book value per common share, shares outstanding 2,493,430, was $7.43 compared to the book value per common share, shares outstanding 2,487,756, was $7.16 at June 30, 2012.

Submission of Matters to a Vote of Security Holders

At the Company's Annual Meeting of Stockholders held on February 19, 2013, the following matters were submitted to and approved by a vote of stockholders:

1)         The election of two Class II directors for a three-year term expiring at the Annual Meeting of Stockholders to be held in 2015:

The following directors continue to serve after the Annual Meeting:

2)         Ratification of the appointment of Crowe Horwath LLP as the Company's independent accountants for the fiscal year ending June 30, 2013:

         

    

Contact: Mr. Leonard Szwajkowski
President and CEO
Telephone: (773) 382-2111
E-mail: [email protected]

SOURCE Royal Financial, Inc.