8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

May 15, 2009
Date of Report (Date of earliest event reported)

ROYAL BANCSHARES OF PENNSYLVANIA, INC.

(Exact name of registrant as specified in its charter)

Pennsylvania
(State or other jurisdiction
of incorporation) 0-26366
(Commission
File Number) 23-2812193
(IRS Employer
Ident. No.)

732 Montgomery Avenue, Narberth, Pennsylvania
(Address of principal executive offices) 19072
(Zip Code)

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

N/A
(Former name or former address, if changed 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))

Item 2.02 Results of Operation and Financial Condition.

     On May 15, 2009, Royal Bancshares of Pennsylvania, Inc. issued a press release announcing its financial results for the period ended March 31, 2009. A copy of the press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits:
99.1	Press release dated May 15, 2009.

SIGNATURES

     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: May 19, 2009
	By:	/s/ James J. McSwiggan, Jr.
		James J. McSwiggan, Jr.
		President and Chief Operating Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated May 15, 2009

EX-99.1

Exhibit 99.1

Royal Bancshares of Pennsylvania, Inc. Reports First Quarter Results; Notes $21 Million in Loan Growth

NARBERTH, PA—(Marketwire — May 15, 2009) — Royal Bancshares of Pennsylvania, Inc. (NASDAQ: RBPAA) (“Royal”), announced results for the first quarter of 2009.

Royal Bank America, the largest subsidiary of Royal, reported a net loss for the quarter of $2.3 million after adding an additional $2.8 million pre-tax in the provision for loan losses.

Royal Investments of Delaware, a wholly owned subsidiary of the holding company, reported a non-cash charge of $4.2 million due to an impairment charge related to certain equity securities held in its available-for-sale (AFS) investment portfolio, which contributed to a $4.4 million loss for the quarter. This impairment does not impact capital ratios at Royal Bank America or Royal Asian Bank, both of which remain above the levels required to be considered “well-capitalized” according to regulatory standards at March 31, 2009.

Overall, on a consolidated basis Royal reported a net loss for the three months ended March 31, 2009 of $6.8 million or $0.53 basic and diluted loss per share, compared to net income of $1.0 million, or $0.08 basic and diluted earnings per share, for the same period in 2008.

Gross loans and leases for the quarter increased $21 million, a 12% annualized increase, to $721.7 million before adjustments for the transfer of loans to ORE and charge-offs.

Comments from Robert R. Tabas, Chairman and CEO regarding results for the quarter:

“We continue to be disappointed by our earnings and it remains clear we are still feeling the effects of this extreme recessionary environment. Positive signs are beginning to appear in our core business and especially in lending. Our plan to move the bank forward is gaining traction and we are confident that once the economy begins to show signs of life we will be well positioned.”

Comments from Robert R. Tabas, Chairman and CEO regarding increase in lending activity:

“Lending continues to be the engine that drives our bank and we noted a $21 million increase in gross loans and leases since year-end. A significant portion of this growth has been due to the momentum we have gained from the launch of our small business lending campaign, Spur The Economy, and its associated micro-site www.SpurTheEconomy.com.”

Comments from Robert R. Tabas, Chairman and CEO regarding loan quality:

“Significant changes made in our lending and credit policies have to date proven effective in shielding us from many of the perils still inherent in our economy. In fact, the quality of loans we are approving in 2008 and 2009 are such that to date not a single one has become impaired.”

About Royal Bancshares of Pennsylvania, Inc.

Royal Bancshares of Pennsylvania, Inc., headquartered in Narberth, Pennsylvania, is a two-bank holding company operating the Royal Bank America and Royal Asian Bank brands throughout Pennsylvania, New Jersey and New York. As “The Region’s Premier Commercial Lender,” Royal Bank America has played a lead role in the growth and development of our area for the past 40+ years. Royal Asian Bank enjoys a distinctive niche serving the financing and banking needs of the growing Asian-American population. More information on Royal Bancshares of Pennsylvania, our banks and subsidiaries is available at www.royalbankamerica.com.

The foregoing material 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. For a discussion of the factors that could cause actual results to differ from the results discussed in any such forward-looking statements, see the filings made by Royal Bancshares of Pennsylvania, Inc. with the Securities and Exchange Commission, including its Annual Report - Form 10-K for the year ended December 31, 2008.

ROYAL BANCSHARES OF PENNSYLVANIA, INC.
CONDENSED INCOME STATEMENT

	Three Months
	Ended Mar. 31st
	2009			2008
(in thousands, except for earnings per share)	(Unaudited)			(Unaudited)
Interest Income	$	16,354		$	20,072
Interest Expense		9,285			10,173
Net Interest Income		7,069			9,899
Provision for Loan Losses		2,797			3,281
Net Interest Income after Provision		4,272			6,618
Non Interest (Loss)/Income		(3,583	)		1,292
Non Interest Expense		7,226			6,604
(Loss)/Income before Taxes		(6,537	)		1,306
Income Tax Expense (Benefit)		0			116
Net (Loss)/Income		(6,537	)		1,190
Less Net Income attributable to noncontrolling interest		216			147
Net (Loss)/Income attributable to Royal Bancshares	$	(6,753	)	$	1,043
(Loss) Earnings per share — basic	$	(0.53	)	$	0.08
SELECTED RATIOS:
Return on Average Assets		-2.3	%		0.3	%
Return on Average Equity		-28.6	%		2.9	%
Average Equity to Assets		7.9	%		12.0	%
Book Value Per Share	$	5.72		$	10.83

CONDENSED BALANCE SHEET

	Mar. 31, 2009		Dec. 31, 2008
(in thousands)	(unaudited)		(unaudited)
Cash and Cash Equivalents	$	41,355	$	14,259
Investment Securities		388,111		361,254
Loans & Leases (net)		680,144		672,081
Premises and Equipment (net)		25,954		25,853
Accrued Interest receivable		14,332		13,580
Other Assets		103,078		88,559
Total Assets	$	1,252,974	$	1,175,586
Deposits		812,140		760,068
Borrowings		286,444		288,031
Other Liabilities		22,336		20,128
Subordinated debentures		25,774		25,774
Royal Bancshares Shareholders’ Equity		104,166		79,687
Noncontrolling Interest		2,114		1,898
Total Equity		106,280		81,585
Total Liabilities and Equity	$	1,252,974	$	1,175,586

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