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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


December 31, 2012

June 30, 2012


Cash and non-interest bearing balances in financial institutions

$                 900,115

$        898,993

Interest bearing balances in financial institutions



Federal funds sold



     Total cash and cash equivalents



Securities available for sale



Loans receivable, net of allowance for loan losses



Federal Home Loan Bank stock



Premises & equipment, net



Land available for sale, net of valuation allowance



Accrued interest receivable



Other real estate owned



Other assets



     Total assets

$          114,048,116

$ 115,421,433

Liabilities & Stockholders' Equity


$            69,896,735

$   69,461,669

Advances from borrowers for taxes and insurance



Federal funds purchased



Federal Home Loan Bank advances and other borrowings



Accrued interest payable and other liabilities



     Total liabilities



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



     Additional paid-in capital



     Retained deficit



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



     Accumulated other comprehensive income (loss), net of tax



          Total stockholders' equity



               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


Six Months Ended

December 31,



Interest income


$ 1,514,816

$ 1,709,194




     Federal funds sold and other



          Total interest income



Interest expense







          Total interest expense



Net interest income



Provision/(Credit) provision for loan losses



Net interest income after provision for loan loss



Non-interest income

     Service charges on deposit accounts



     Secondary mortgage market fees



     Income on other real estate owned



     Gain on sale of investment securities






          Total non-interest income



Non-interest expense

     Salaries and employee benefits



     Occupancy and equipment



     Data processing



     Professional services



     Director fees






     FDIC insurance expense



     Insurance premiums



     Foreclosed asset expense



     Loss valuation on land available for sale






          Total non-interest expense



Income before income taxes



Provision for income taxes



     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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