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Royal Financial, Inc. Announces FY13 Earnings for the Six Months Ended December 31, 2012

CHICAGO, Feb. 18, 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 six months ended December 31, 2012.

For the six months ended December 31, 2012, the Company reported net income of $247,000, or $0.10 per common share, compared to net income of $79,000, or $0.03 per common share, for the six months ended December 31, 2011.  The net income for the six months ended December 31, 2012 was an increase of $168,000 from the same period in 2011.  The increase in income was due to an increase in non-interest income of $369,000 and net interest income of $22,000 and a decrease in noninterest expense of $289,000, partially offset by an increase in the provision for loan losses of $500,000. 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 $110,000 and a decrease in foreclosed assets expense of $292,000, 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 December 2011, which was directly related to a recovery of previously charged off bad debt.  

Comparison of Financial Condition at December 31, 2012 and June 30, 2012

The Company's total assets decreased $1.4 million, or 1.20%, to $114.0 million at December 31, 2012, from $115.4 million at June 30, 2012.

Securities available for sale decreased $20.3 million, or 37.05%, to $34.5 million at December 31, 2012 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 $18.2 million, or 37.92%, to $66.1 million at December 31, 2012, 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 $1.1 million to $2.6 million at December 31, 2012, 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 increase of $435,000, or 0.63%, to $69.9 million at December 31, 2012 from $69.5 million at June 30, 2012.

Federal Home Loan Bank advances decreased $3.2 million, or 12.00%, to $24.0 million at December 31, 2012 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 $429,000, or 2.40%, to $18.3 million at December 31, 2012 from $17.8 million at June 30, 2012. The increase is primarily a result of net income of $247,000 for the period and an increase in accumulated other comprehensive income of $169,000, net of deferred taxes.

The allowance for loan losses was $1.8 million, or 2.70% of total loans, at December 31, 2012, as compared to $1.8 million, or 3.66% of total loans, at June 30, 2012.  The Company believes, as of December 31, 2012, its allowance for loan losses was adequate to cover probable incurred losses.  Nonperforming assets were $5.6 million, or 4.95%, at December 31, 2012 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 December 31, 2012, the Bank exceeded each of its capital requirements with ratios of 13.40%, 24.63%, and 25.90%, respectively.  At December 31, 2012, the book value per common share, shares outstanding 2,490,930, was $7.33 compared to June 30, 2012, the book value per common share, shares outstanding 2,487,756 was $7.16.

 

Consolidated Statements of Financial Condition

December 31, 2012 and June 30, 2012

(Unaudited)





December 31, 2012


June 30, 2012

Assets




Cash and non-interest bearing balances in financial institutions

$                 900,115


$        898,993

Interest bearing balances in financial institutions

2,933,472


1,108,376

Federal funds sold

-


19,988

     Total cash and cash equivalents

3,833,587


2,027,357





Securities available for sale

34,493,447


54,796,381





Loans receivable, net of allowance for loan losses

66,087,944


47,917,818

Federal Home Loan Bank stock

1,750,000


1,357,500

Premises & equipment, net

4,303,576


4,426,150

Land available for sale, net of valuation allowance

265,000


433,350

Accrued interest receivable

496,717


499,354

Other real estate owned

2,647,811


3,797,105

Other assets

170,035


166,418

     Total assets

$          114,048,116


$ 115,421,433





Liabilities & Stockholders' Equity




Deposits

$            69,896,735


$   69,461,669

Advances from borrowers for taxes and insurance

723,987


452,686

Federal funds purchased

29,856


-

Federal Home Loan Bank advances and other borrowings

24,000,000


27,150,000

Accrued interest payable and other liabilities

1,146,840


534,901

     Total liabilities

95,797,418


97,599,256





Stockholders' equity




     Preferred stock $0.01 par value per share, authorized




      1,000,000 shares, no issues are outstanding

-


-

     Common stock $0.01 par value per share, authorized




       5,000,000 shares, 2,645,000 shares issued at




       December 31, 2012 and June 30, 2012

26,450


26,450

     Additional paid-in capital

23,987,444


24,021,570

     Retained deficit

(5,800,766)


(6,047,643)

     Treasury stock, 154,070 and 159,744 shares, at cost

(1,251,856)


(1,298,672)

     Accumulated other comprehensive income (loss), net of tax

1,289,425


1,120,472

          Total stockholders' equity

18,250,698


17,822,177





               Total liabilities and stockholders' equity

$          114,048,116


$ 115,421,433

















This report has not been prepared in accordance with Securities and Exchange Commission ("SEC")

rules applicable to SEC registrant companies and is not intended to comply with such rules.

 

 

Consolidated Statements of Operations

Six months ended December 31, 2012 and 2011

(Unaudited)













Six Months Ended



December 31,








2012


2011






Interest income





     Loans


$ 1,514,816


$ 1,709,194

     Securities


594,828


428,126

     Federal funds sold and other


3,368


2,485

          Total interest income


2,113,012


2,139,805






Interest expense





     Deposits


75,601


147,772

     Borrowings


26,227


2,817

          Total interest expense


101,828


150,589






Net interest income


2,011,185


1,989,216






Provision/(Credit) provision for loan losses


75,000


(425,011)

Net interest income after provision for loan loss


1,936,185


2,414,227






Non-interest income





     Service charges on deposit accounts


84,856


113,223

     Secondary mortgage market fees


94,550


47,027

     Income on other real estate owned


97,524


39,191

     Gain on sale of investment securities


290,816


-

     Other


501


13

          Total non-interest income


568,247


199,454






Non-interest expense





     Salaries and employee benefits


852,864


963,330

     Occupancy and equipment


360,825


332,200

     Data processing


176,686


141,259

     Professional services


271,618


240,969

     Director fees


29,850


66,200

     Marketing


5,404


9,586

     FDIC insurance expense


73,505


53,277

     Insurance premiums


33,430


32,656

     Foreclosed asset expense


107,866


399,643

     Loss valuation on land available for sale


168,350


142,650

     Other


165,157


152,771

          Total non-interest expense


2,245,555


2,534,541






Income before income taxes


258,877


79,140

Provision for income taxes


12,000


-






     Net income


$    246,877


$      79,140





















This report has not been prepared in accordance with Securities and Exchange Commission ("SEC")

rules applicable to SEC registrant companies and is not intended to comply with such rules.

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

SOURCE Royal Financial, Inc.

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