Royal Financial in Chicago has agreed to sell $25.8 million of distressed assets associated with its pending purchase of Park Bancorp in Chicago.

The $205 million-asset Royal said in a press release Friday that it had reached an agreement with an unnamed asset management firm in New York to sell single-family, multifamily and commercial real estate loans that are held by the $146 million-asset Park. The assets, which also included other real estate owned, are being sold at a 30.1% discount to their total unpaid principle balance.

The sale satisfies a condition tied to Royal’s January agreement to buy Park. Royal said it expects to complete the Park acquisition in May.

Royal, which plans to close one of its branches a month after buying Park, said it has an agreement to sell the building for $1 million. The sale should save Royal $450,000 a year.

“The sale of Park’s distressed assets … will enable Royal to maintain its clean balance sheet as it continues to grow through acquisition and organic means,” Leonard Szwajkowski, Royal’s president and chief executive, said in the release. “We are pleased that the controlled auction attracted the interest of multiple potential buyers, which gives us confidence that we obtained the best value for these substandard assets.”

Royal was advised by Howard and Howard and RP Financial.

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