CHICAGO, July 31, 2016 (GLOBE NEWSWIRE) — Royal Financial, Inc. (the “Companyâ€) (OTCQX:RYFL), incorporated under the laws of Delaware on December 15, 2004, for the purpose of serving as the holding company of Royal Savings Bank (the “Bankâ€), announced earnings for the fiscal year ended 2016.
For the fiscal year ended June 30, 2016, the Company reported net income of $6.4 million, or $2.55 per common share, compared to $941,000, or $.38 per common share, for the fiscal year ended June 30, 2015. Â The increase in net income for the fiscal year ended June 30, 2016 was primarily the result of two acquisitions that were completed within the fiscal year. The acquisition of PNA Bank and Park Federal Bancorp and Park Federal Savings Bank were finalized on September 30, 2015 and April 29, 2016, respectively.
Comparison of Financial Condition at June 30, 2016 and June 30, 2015
The Company’s total assets increased $186.5 million, or 157.5%, to $305.3 million at June 30, 2016, from $118.5 million at June 30, 2015.
Securities available for sale increased $54.9 million, or 377.5%, to $69.4 million at June 30, 2016 from $14.5 million at June 30, 2015. Â The increase in the securities portfolio was primarily due to the bank acquisitions in the fiscal year, in addition, $33.0 million of government sponsored non-callable U.S. Government Agency bonds purchased to adequately build the maturity cash flow ladder.
Loans, net of allowance, increased $111.6 million, or 126.7%, to $199.6 million at June 30, 2016, from $88.1Â million at June 30, 2015.
Premises and equipment increased $7.6 million, or 162.3%, to $12.2 million at June 30, 2016 from $4.7 million at June 30, 2015. As a result of the acquisitions, six additional branch locations, located in Chicago, Niles and Westmont, Illinois, with a fair value of $9.2 million, were integrated into the Bank’s branch network, partially offset by the sale of the Bank owned three-story office building located in Homewood, Illinois, with a book value of $792,000 which was included in the bulk asset sale of September 30, 2015 and the sale of one branch location in Chicago on May 3, 2016, with a book value of $1.2 million. The Bank continues to retain a leased space in the Homewood property to serve as a lending center and disaster recovery site.
Total deposits increased $171.3 million, or 189.7%, to $261.5 million at June 30, 2016 from $90.3 million at June 30, 2015. The increase is primarily a result of the two bank acquisitions completed during the fiscal year.
Federal Home Loan Bank advances increased $500,000, an increase of $500,000 as there were no advances outstanding as of June 30, 2015. The Company borrows short term advances when necessary.
Total stockholders’ equity increased $6.7 million, or 25.3%, to $33.1 million at June 30, 2016 from $26.5 million at June 30, 2015. The increase is primarily a result of net income of $6.4 million.
For the fiscal year ended June 30, 2016, the Bank has paid cash dividends of $1,485,000 to the Company. The upstream of funds has enabled the Company to pay merger and acquisition costs associated with the two acquisitions that were completed during the fiscal year.
The allowance for loan losses was $1.4 million, or 0.70% of total loans, at June 30, 2016, as compared to $1.4 million, or 1.60% of total loans, at June 30, 2015.  The acquired loans included in the loan portfolio as of June 30, 2016 were recorded at the fair value, and accordingly have a satisfactory rating. Excluding the newly acquired loans, the allowance for loan losses, was at 1.30%. The Company believes, as of June 30, 2016, its allowance for loan losses was adequate to cover probable incurred losses.Nonperforming assets, including restructured loans, were $751,000, or 0.25%, at June 30, 2016 compared to $2.9 million, or 2.46%, at June 30, 2015.
The Bank is required to maintain regulatory capital sufficient to meet the Tier 1 capital leverage ratio, and the risk-based ratios for Common Equity Tier 1 capital, Tier 1 capital and Total capital of at least 4.0%, 4.5%, 6.0% and 8.0%, respectively.At June 30, 2016, the Bank exceeded each of its capital requirements with ratios of 8.25%, 15.05%, 15.05% and 15.90%, respectively.
 At June 30, 2016, the book value per common share, shares outstanding 2,507,112, was $13.22 compared to the book value per common share, shares outstanding 2,507,112, of $10.55 at June 30, 2015. The tangible book value was $12.81 at June 30, 2016.
Upon the completion of the fiscal year-end audit, the audited consolidated financial statements for 2016 and 2015 will be available at www.royal-bank.us.Â
Comparison of Results of Operations for the Fiscal Years EndedJune 30, 2016 and 2015
