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

December 21, 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 1.02 Termination of a Material Definitive Agreement.

     On December 21, 2009, Royal Bancshares of Pennsylvania, Inc. (the “Company”) delivered a notice of termination of the stock purchase agreement, dated as of September 25, 2009, as amended by amendment to stock purchase agreement, dated as of November 16, 2009 (collectively, the “Agreement”), with Royal Asian Bancshares, Inc. (“Buyer”). The Agreement related to the purchase by Buyer of all of the common stock of Royal Asian Bank, a banking subsidiary of the Company, owned by the Company. The Agreement required, among other things, Buyer to raise by December 15, 2009 proceeds in a private placement transaction in an amount necessary to fund payment of the purchase price. The Agreement also permitted the Company to terminate the Agreement on or after December 16, 2009 if the Company did not receive evidence satisfactory to it that Buyer had received such net proceeds in the Buyer private placement. The Company terminated the Agreement under this provision by notice dated December 21, 2009. As a result of the Company’s termination of the Agreement, the $250,000 escrow amount previously deposited by Buyer, which was to be credited toward payment of the purchase price, will be retained by the Company as liquidated damages.

     A copy of the Company’s press release, dated December 21, 2009, relating to termination of the Agreement is attached hereto as Exhibit 99.1.

Item 9.01 Financial Statements and Exhibits.

(d)	Exhibits:
10.1	Stock Purchase Agreement, dated as of September 24, 2009, between Royal Bancshares of Pennsylvania, Inc. and Royal Asian Bancshares, Inc. (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated September 24, 2009).
10.2	Amendment to Stock Purchase Agreement, dated as of November 16, 2009 (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K dated November 20, 2009).
99.1	Press release dated December 21, 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: December 28, 2009	By:	/s/ James J. McSwiggan
		James J. McSwiggan
		President and Chief Operating Officer

EXHIBIT INDEX

Exhibit Number	Description
99.1	Press release dated December 21, 2009

EX-99.1

Exhibit 99.1

Royal Bancshares Updates Investors On Sale Of Royal Asian Bank

NARBERTH, PA — (MARKET WIRE) — 12/21/09 — Royal Bancshares of Pennsylvania, Inc. (NASDAQ: RBPAA) today announced that it has terminated the agreement relating to the sale of Royal Asian Bank, which was previously announced to investors in September 2009. Despite raising a significant amount of capital, the Korean-American investor group pursuing the buyout was unable to raise sufficient capital to meet the terms of the agreement and ensure all regulatory approvals necessary to complete the transaction would be obtained.

The investor group was led by Edward Shin, Royal Asian Bank’s President and CEO, who will remain with the bank and continue to manage its day-to-day operations.

In commenting on today’s announcement, Mr. Shin stated, “I appreciate the support of the entire Royal Bancshares management team. As we worked to execute this transaction, they clearly demonstrated to me that the best interests of Royal’s shareholders and customers were paramount in the decision making process.”

Robert Tabas, Chairman and CEO of Royal Bancshares of Pennsylvania, Inc., added, “While we believe that Royal Asian Bank has matured to the point where it can stand on its own in service to the Asian-American community, the capital-raising environment today remains challenging. Our Royal Asian Bank division is a valuable franchise, with assets of $110 million; a strong capital base; operations in Pennsylvania, New York and New Jersey; and strong brand recognition with customers. We continue to believe that the Royal Asian franchise can generate shareholder value and we will work with its management team to continue to grow the bank and meet the needs of our customers.”

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. 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.

Forward-Looking Statements

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.

Media Contact:
Joseph Crivelli
Senior Vice President
Gregory FCA Communications
Office: 610-228-2100
Cell: 610-299-6700

Company Contact:
Marc Sanders
Director of Marketing
Royal Bank America
Office: 610-668-4700
Cell: 484-802-1944