8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 8-K

CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934

Date of Report (Date of earliest event report) April 20, 2007.

ROYAL BANCSHARES OF PENNSYLVANIA, INC.

(Exact name of registrant as specified in its charter)

PENNSYLVANIA

(State or Other Jurisdiction of Incorporation)

0-26366	23-2812193
(Commission File Number)	(IRS Employer Identification Number)

732 Montgomery Avenue, Narberth, Pennsylvania	19072
(Address of Principal Executive Office)	(Zip Code)

610-668-4700
(Issuer’s telephone number, including area code)

N/A
(Former Name or Former Address, if Change Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Section 2 — Financial Information

Item 2.02 Results of Operations and Financial Condition.

Royal Bancshares of Pennsylvania, Inc. announced net income for three months ended March 31, 2007 and the declaration of a cash dividend as detailed in the Press Release attached as Exhibit 99.1.

Section 9 — Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits

     (d.) Exhibits

Exhibit Number		Description of Document
	99.1	Press Release dated April 20, 2007.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Royal Bancshares of Pennsylvania, Inc.
Dated: April 20, 2007	/s/ Gregg J. Wagner
	Gregg J. Wagner
	Chief Financial Officer

EX-99.1

Exhibit 99.1

Royal Bank America Media
Alert

For additional information:
Marc Sanders, Director of Marketing
610-668-4700 x269 — marcsanders@royalbankamerica.com

ROYAL BANK AMERICA PARENT CO. ISSUES 48^th CONSECUTIVE QUARTERLY

CASH DIVIDEND; REPORTS EARNINGS FOR THE 1^st QUARTER

NARBERTH, PA — April 20, 2007 — Royal Bank America President/CEO Joseph P. Campbell announced that the Board of Directors for the Bank’s holding company, Royal Bancshares of Pennsylvania, Inc. (NASDAQ-GM: RBPAA), declared its 48^th consecutive quarterly cash dividend on April 18, 2007. This dividend will be twenty-eight and seventy-five hundredths cents ($.2875) per share for holders of Class A common stock and thirty-three and six hundred twenty-five ten thousandths cents ($.330625) per share for holders of Class B common stock of Royal Bancshares of Pennsylvania, Inc. The record date is May 2, 2007, and the payment date is May 16, 2007.

Net income for the three months ended March 31, 2007 was $3.9 million or $0.29 basic earnings per share, compared to $5.3 million or $0.40 basic earnings per share for the same period in 2006.

The lower earnings experienced during the first quarter of 2007, compared to the first quarter of 2006, was the result of a $780,000 reduction in interest income related to transferring two loans to non-accrual status during the quarter and also reflects a $1.3 million one-time gain from the sale of other real estate owned. The aforementioned loans are well collateralized and the bank expects to recover principal in full.

For the first quarter of 2007, interest income was $22.2 million compared to $21.4 million for the same quarter in 2006, an increase of $800 thousand. This increase is primarily due to growth in average loan balances. Net loans and leases increased 5.9% or $34.5 million from March 31, 2006 to a balance of $617.5 million at March 31, 2007.

Interest expense increased $3.4 million to $13.5 million for the quarter ended March 31, 2007 compared to the same period in 2006. The increase in interest expense was due to the growth in the average balance of deposits, higher interest rates paid on deposits and an increase of $1.1 million in interest expense related to variable interest entities. Total deposits increased 24.5% to $895.0 million at March 31, 2007 from March 31, 2006, primarily due to a $208.5 million increase in certificates of deposit. The growth in certificates of deposit was partially offset by a $161.5 million reduction in Federal Home Loan Bank advances.

The net interest margin (excluding variable interest entities) in the first quarter of 2007 was negatively impacted by the $780,000 non-accrual loan adjustment to interest income mentioned above and the continued pressures on funding costs. The 1^st quarter 2007 net interest margin was 3.47% compared to 4.17% for the first quarter of 2006.

During the first quarter of 2007, $212 thousand of provisions were recorded to increase the allowance for loan losses. This additional provision was related to loan growth. Included in the reserve calculations are

mezzanine loans, which generally provide higher yields but which management has determined to have a higher level of risk compared to the remainder of the loan portfolio.

Consolidated total assets ended March 31, 2007 at $1.34 billion, $22.6 million higher than March 31, 2006. The three-month period ended March 31, 2007 return on average assets and return on average equity were 1.2% and 9.7%, respectively.

About Royal Bancshares of Pennsylvania, Inc.

Royal Bancshares of Pennsylvania, Inc., headquartered in Narberth, Pennsylvania, operates seventeen full-service branch offices throughout southeastern Pennsylvania and New Jersey under the name Royal Bank America and five locations under the name Royal Asian Bank. Together, Royal Bank America and Royal Asian Bank, along with Royal’s other affiliates, offer a wide variety of products and services, including commercial real estate loans, asset based lending, structured financing, equipment leasing, equity/mezzanine lending, high-yielding CDs & MMAs and Internet Banking solutions at www.royalbankamerica.com and www.royalasianbank.com.

The foregoing material is unaudited and may contain forward-looking statements. We caution that such statements may be subject to a number of uncertainties, and actual results could differ materially; therefore, readers should not place undue reliance on any forward-looking statements. Royal Bancshares of Pennsylvania, Inc. does not undertake, and specifically disclaims, any obligation to publicly release the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

ROYAL BANCSHARES OF PENNSYLVANIA, INC.
CONDENSED INCOME STATEMENT

	Three Months
	Ended March 31st
(dollars in thousands, except for earnings per share)	2007			2006
	(Unaudited)			(Unaudited)
Interest Income	$	22,195		$	21,413
Interest Expense		13,526			10,079
Net Interest Income		8,669			11,334
Provision for Loan Losses		212			335
Net Interest Income after Provision		8,457			10,999
Non Interest Income		5,942			2,998
Non Interest Expense		8,708			6,186
Income before Taxes		5,691			7,811
Income Taxes		1,789			2,465
Net Income		3,902			5,346
Earnings per share — basic	$	0.29		$	0.40
SELECTED RATIOS:
Return on Average Assets		1.2	%		1.7	%
Return on Average Equity		9.7	%		13.9	%
Average Equity to Assets		12.2	%		12.0	%
Book Value Per Share	$	12.18		$	11.59

CONDENSED BALANCE SHEET

	March 31,		Dec. 31,		March 31,
(in thousands)	2007		2006		2006
	(unaudited)				(unaudited)
Cash and Cash Equivalents	$	42,672	$	82,436	$	20,279
Investment Securities		563,204		568,742		577,959
Loans Held for Sale		—		1,959		1,291
Loans & Leases (net)		617,536		589,545		583,075
Premises and Equipment (net)		49,554		50,280		66,918
Accrued Interest receivable		17,553		16,494		15,850
Other Assets		48,818		46,855		51,401
Total Assets	$	1,339,337	$	1,356,311	$	1,316,773
Deposits	$	894,999	$	859,457	$	718,890
Borrowings		218,029		275,429		396,415
Other Liabilities		32,297		29,247		17,723
Subordinated debentures		25,774		25,774		25,774
Minority Interest		3,839		3,150		2,150
Shareholders’ Equity		164,399		163,254		155,821
Total Liabilities and Shareholders’ Equity	$	1,339,337	$	1,356,311	$	1,316,773

The above condensed financial information includes consolidation of a Equity Real Estate Investment, owned by Royal Bancshares of Pennsylvania, Inc., which are required as a result of FIN 46(R) “Variable Interest Entities.”