Royal Financial, Inc. and Royal Savings Bank Announce Agreement With FLC Holding Company

CHICAGO, Nov. 14, 2014 (GLOBE NEWSWIRE) -- On November 13, 2014, Royal Financial, Inc. ("Royal") (OTCBB:RYFL) entered into an Asset Purchase Agreement with FLC Holding Company ("FLC"), an Illinois corporation and bank holding company, to acquire FLC's wholly-owned subsidiary, PNA Bank, a federal savings bank with banking offices in Chicago and Niles, Illinois. Royal will acquire from FLC all of the issued and outstanding shares of common stock of PNA Bank for a cash purchase price of $1.2 million. Immediately following the acquisition, Royal intends to merge PNA Bank with and into its bank subsidiary, Royal Savings Bank.

FLC previously filed a voluntary bankruptcy petition under Chapter 11 of the United States Bankruptcy Code (Case No. 13-24125). The transaction is subject to the terms and conditions set forth in the Agreement, the provisions of Section 363 of the Bankruptcy Code, approval of the United States Bankruptcy Court for the Northern District of Illinois, Eastern Division, state and federal banking regulators and performance in all material respects by each party of its obligations under the Agreement. Under the provisions of Section 363 of the Bankruptcy Code, Royal will purchase the acquired assets free and clear of all liens, claims and encumbrances and will assume no liability of FLC. PNA Bank was not included in the Chapter 11 filing and its operations have not been affected by the filing.

The acquisition will be subject to bidding procedures established by the Bankruptcy Court, including designation of Royal as a "stalking horse" bidder for PNA Bank at an auction. The Agreement calls for FLC to pay a break-up fee under certain circumstances. Royal expects the acquisition to close in the second quarter of 2015 following the Bankruptcy Court's approval of a final sale order and Royal's receipt of necessary bank regulatory approvals.

"We are excited about this opportunity to expand our footprint in the greater Chicago region," said Jim Fitch, Chairman of Royal, "and to expand our services to PNA Bank's customers and communities. The customers of the merged Royal Savings Bank will have access to four banking locations in the Chicagoland marketplace and to loan centers in Homewood and St. Charles." "We will continue to provide the highest quality customer service to our new and existing customers throughout the combined service area", added Leonard Szwajkowski, President and CEO of Royal.

Lawrence H. Chlum, President of FLC Holding Company and PNA Bank, stated, "We believe PNA Bank customers and the communities we serve will greatly benefit from this merger with Royal and being a part of Royal Savings Bank. By integrating PNA Bank with the capital strength and resources of Royal Savings Bank, we believe the transaction represents a win-win for both PNA Bank and Royal Savings Bank customers."

Royal was advised in the transaction by RP Financial, LC. as financial advisor, and Vedder Price P.C. as legal counsel. FLC was advised by Adelman & Gettleman, Ltd, as legal counsel. A copy of the Agreement is available on Royal's website, under "Royal Financial", at www.royal-bank.us, from the OTC Markets' website at www.otcmarkets.com under the ticker RYFL, or the Clerk of the U.S. Bankruptcy Court.

Royal Savings Bank offers a range of checking and savings products and a full line of home and commercial lending solutions. Royal Savings Bank has been operating continuously in the south and southeast communities of Chicago since 1887, and currently has three branches in Chicago, with lending centers in Homewood and St. Charles, Illinois. Visit Royal Financial, Inc. and Royal Savings Bank at www.royal-bank.us.

Forward Looking Statements: This press release may include forward-looking statements. These forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, can generally be identified by use of the words "believe," "expect," "intend," "anticipate," "estimate," "project," or similar expressions. Our ability to predict results or the actual effect of future plans or strategies is inherently uncertain and actual results may differ materially from those predicted in such forward-looking statements. Factors that could have a material adverse effect on the operations and future prospects of the Company and the Bank include, but are not limited to, changes in interest rates; the economic health of the local real estate market; general economic conditions; continued credit deterioration in our loan portfolio that would cause us to further increase our allowance for loan losses; legislative/regulatory changes; monetary and fiscal policies of the U.S. government, including policies of the U.S. Treasury and the Federal Reserve Board; the quality or composition of the loan and securities portfolios; demand for loan products in our market areas; deposit flows; competition; demand for financial services in our market areas; our ability to integrate the operations of PNA Bank successfully and cost-effectively; and changes in accounting principles, policies, and guidelines. These risks and uncertainties should be considered in evaluating forward-looking statements, and undue reliance should not be placed on such statements.

CONTACT: Mr. Leonard Szwajkowski President and CEO Royal Financial, Inc. Telephone: (773) 382-2111 E-mail: lszwajkowski@royal-bank.usSource:Royal Financial, Inc.