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 $68.9million 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 June30, 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 October29, 2013, the following matters were submitted to and approved by a vote of stockholders:
1) The election of two ClassIII directors for a three-year term expiring at the Annual Meeting of Stockholders to be held in 2016:
Directors | Votes For | Votes Withheld |
John T. Dempsey | 1,471,129 | 26,727 |
Leonard Szwajkowski | 1,471,030 | 26,826 |
The following directors continue to serve after the Annual Meeting:
Continuing Director | Term Expires |
C. Michael McLaren | 2014 |
Philip J. Timyan | 2014 |
James A. Fitch, Jr. | 2015 |
Roger L. Hupe | 2015 |
John T. Dempsey | 2016 |
Leonard Szwajkowski | 2016 |
2)Ratification of the appointment of Crowe Horwath LLP as the Company's independent accountants for the fiscal year ending June30, 2014:
Total votes for | 2,010,500 |
Total votes against | 63,981 |
Total votes abstaining | 16,412 |
Contact: Mr. Leonard Szwajkowski
President and CEO
Telephone: (773) 382-2111
E-mail: lszwajkowski@royal-bank.us
Consolidated Statements of Financial Condition | |||
September 30, 2013 and June 30, 2013 | |||
(Unaudited) | |||
September 30, 2013 | June 30, 2013 | ||
Assets | |||
Cash and non-interest bearing balances in financial institutions | $ 1,008,689 | $ 893,499 | |
Interest bearing balances in financial institutions | 2,525,927 | 2,274,266 | |
Federal funds sold | 79,699 | 97,148 | |
Total cash and cash equivalents | 3,614,315 | 3,264,913 | |
Securities available for sale | 24,352,739 | 22,594,623 | |
Loans receivable, net of allowance for loan losses of | |||
$1,345,380 at September 30, 2013, $1,508,966 at June 30, 2013 | 70,706,695 | 68,945,527 | |
Federal Home Loan Bank stock, at cost | 1,295,000 | 1,295,000 | |
Premises & equipment, net | 4,277,320 | 4,217,182 | |
Land held for sale | 265,000 | 265,000 | |
Accrued interest receivable | 450,928 | 447,888 | |
Other real estate owned | 1,895,000 | 1,895,000 | |
Deferred tax asset | 6,586,820 | - | |
Other assets | 174,261 | 249,592 | |
Total assets | $ 113,618,079 | $ 103,174,725 | |
Liabilities & Stockholders' Equity | |||
Deposits | $ 73,648,888 | $ 68,886,926 | |
Advances from borrowers for taxes and insurance | 617,569 | 866,913 | |
Federal Home Loan Bank advances | 13,900,000 | 14,900,000 | |
Accrued interest payable and other liabilities | 478,443 | 419,710 | |
Total liabilities | 88,644,900 | 85,073,549 | |
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 | 26,450 | 26,450 | |
Additional paid-in capital | 23,773,360 | 23,759,673 | |
Retained earnings (deficit) | 2,012,863 | (5,187,593) | |
Treasury stock, 137,888, at cost | (1,012,924) | (1,012,924) | |
Accumulated other comprehensive income | 173,431 | 515,570 | |
Total stockholders' equity | 24,973,180 | 18,101,176 | |
Total liabilities and stockholders' equity | $ 113,618,079 | $ 103,174,725 | |
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 | |||
Three Months Ended September 30, 2013 and 2012 | |||
(Unaudited) | |||
Three Months Ended | |||
September 30 | |||
2013 | 2012 | ||
Interest income | |||
Loans | $ 1,003,718 | $718,855 | |
Securities | 162,619 | 305,087 | |
Federal funds sold and other | 1,761 | 1,333 | |
Total interest income | 1,168,098 | 1,025,275 | |
Interest expense | |||
Deposits | 36,664 | 39,638 | |
Borrowings | 5,797 | 11,581 | |
Total interest expense | 42,461 | 51,219 | |
Net interest income | 1,125,637 | 974,056 | |
Provision/(Credit) for loan losses | (369,785) | - | |
Net interest income after provision/ (credit) for loan losses | 1,495,422 | 974,056 | |
Non-interest income | |||
Service charges on deposit accounts | 42,869 | 41,713 | |
Secondary mortgage market fees | 33,428 | 53,651 | |
Income on other real estate owned | 43,251 | 46,277 | |
Gain on sale of investment securities | - | - | |
Other | 227 | 277 | |
Total non-interest income | 119,775 | 141,918 | |
Non-interest expense | |||
Salaries and employee benefits | 417,095 | 414,450 | |
Occupancy and equipment | 147,600 | 180,246 | |
Data processing | 86,015 | 87,908 | |
Professional services | 146,783 | 93,928 | |
Director fees | 28,800 | 15,800 | |
Marketing | 4,675 | 4,717 | |
FDIC insurance expense | 32,759 | 31,291 | |
Insurance premiums | 17,457 | 16,548 | |
Foreclosed asset expense | 20,460 | 34,688 | |
Other | 99,917 | 88,304 | |
Total non-interest expense | 1,001,561 | 967,880 | |
Income before income taxes | 613,636 | 148,094 | |
Provision (Benefit) for income taxes | (6,586,820) | 8,000 | |
Net income | $ 7,200,456 | $ 140,094 | |
Basic and diluted earnings per share | $ 2.87 | $ 0.06 | |
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. | |||
SOURCE Royal Financial, Inc.
