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SOURCE Royal Financial, Inc.
CHICAGO, Nov. 1, 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 the financial results for the first quarter end of fiscal year 2014.
For the first quarter ended September 30, 2013, the Company reported net income of $7.2 million, or $2.87 per common share, after a $6.9 million benefit from the reversal of the valuation against deferred tax assets. Income before taxes for the quarter, reflecting the benefit of a $370,000 reversal in loan loss reserve, totaled $614,000.
The Company reported income of $614,000 for the first three months of fiscal 2014 (excluding the reversal of the valuation allowance against the deferred tax assets, net of the tax accrual for the current quarter), compared to $140,000 in the same period of fiscal 2013. The increase in income was due to an increase in net interest income of $152,000 and a credit provision for loan losses of $370,000, partially offset by a decrease in non-interest income of $22,000 and an increase in non-interest expense of $34,000. The decrease in non-interest income is primarily due to a decrease of $20,000 in secondary mortgage market fees. The increase in noninterest expense is primarily the result of an increase in professional services of $52,000, partially offset by a decrease in occupancy expense of $33,000 and foreclosed asset expense of $14,000. The decrease in the provision for loan losses was related to the recognition of a credit provision of $370,000, which was directly related to a recovery of previously charged off bad debt.
Comparison of Financial Condition at September 30, 2013 and June 30, 2013
The Company's total assets increased $10.4 million, or 10.12%, to $113.6 million at September 30, 2013, from $103.2 million at June 30, 2013.
Securities available for sale increased $1.8 million, or 7.78%, to $24.4 million at September 30, 2013 from $22.6 million at June 30, 2013. The increase in the securities portfolio was due to the purchase of an additional government sponsored agency bond.
Loans, net of allowance, increased $1.8 million, or 2.55%, to $70.7 million at September 30, 2013, from $68.9 million at June 30, 2013. The increase in loans was primarily a result of locally originated commercial loan growth, consisting of commercial real estate and multi-family properties.
The Company recorded a $6.9 million reversal of the valuation allowance against the deferred tax assets, partially offset by estimated current taxes due of $267,000, resulting in an increase in assets of $6.6 million for the period.
Total deposits increased $4.8 million, or 4.80%, to $73.6 million at September 30, 2013 from $68.9 million at June 30, 2013.
Federal Home Loan Bank advances decreased $1.0 million, or 6.71%, to $13.9 million at September 30, 2013 from $14.9 million at June 30, 2013.
Total stockholders' equity increased $6.9 million, or 37.96%, to $25.0 million at September 30, 2013 from $18.1 million at June 30, 2013. The increase is primarily a result of the $6.9 million reversal of the valuation allowance against the deferred tax assets, net income of $347,000, partially offset by a decrease in accumulated other comprehensive income of $342,000, net of deferred taxes.
The allowance for loan losses was $1.3 million, or 1.86% of total loans, at September 30, 2013, as compared to $1.5 million, or 2.13% of total loans, at June 30, 2013. The Company believes, as of September 30, 2013, its allowance for loan losses was adequate to cover probable incurred losses. Nonperforming assets were $3.7 million, or 3.16%, at September 30, 2013 compared to $3.6 million, or 3.48%, at June 30, 2013.
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 September 30, 2013, the Bank exceeded each of its capital requirements with ratios of 18.41%, 27.90%, and 29.16%, respectively. At September 30, 2013, the book value per common share, shares outstanding 2,507,112, was $9.96 compared to the book value per common share, shares outstanding 2,507,112, was $7.22 at June 30, 2013.
The complete audited consolidated financial statements for 2013 and 2012 remain available at www.royal-bank.us.
Submission of Matters to a Vote of Security Holders
At the Company's Annual Meeting of Stockholders held on October 29, 2013, the following matters were submitted to and approved by a vote of stockholders:
1) The election of two Class III directors for a three-year term expiring at the Annual Meeting of Stockholders to be held in 2016:
John T. Dempsey
The following directors continue to serve after the Annual Meeting:
C. Michael McLaren
Philip J. Timyan
James A. Fitch, Jr.
Roger L. Hupe
John T. Dempsey
2) Ratification of the appointment of Crowe Horwath LLP as the Company's independent accountants for the fiscal year ending June 30, 2014: