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 17, 2010
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 17, 2010, Royal Bancshares of Pennsylvania, Inc. (“Royal”) issued a press release announcing its financial results for the period ending March 31, 2010. A copy of the press release is furnished as Exhibit 99.1 hereto.

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers

     (d) On May 19, 2010, the board of directors of Royal appointed Jay H. Shah to the board of directors as a Class III director with a term expiring at the annual meeting of shareholders in 2011. Mr. Shah has been appointed to serve on the compensation committee of Royal’s board of directors. He has also been appointed a director of Royal Bank America, a wholly owned banking subsidiary of Royal (the “Bank”), and Royal Investments America, LLC, a wholly owned investment subsidiary of Royal.

     On May 19, 2010, the board of directors of Royal also appointed Michael J. Piracci to the board of directors as a Class III director with a term expiring at the annual meeting of shareholders in 2011. Mr. Piracci has been appointed to serve on the audit committee and the nominating and governance committee of Royal’s board of directors. He has also been appointed a director of the Bank.

     Messrs. Shah and Piracci will be compensated for their services as a director on the same basis as other non-employee directors of Royal and the Bank, including annual retainers, fees for attending board and committee meetings, and eligibility to receive stock-based awards under Royal’s equity incentive plan. There have been no transactions within the last fiscal year, or any currently proposed transactions, in which Royal or the Bank was or is to be a participant and in which Messrs. Shah or Piracci have or had a direct or indirect material interest which would be required to be reported under Item 404(a) of Regulation S-K.

     On May 20, 2010, Royal issued a press release announcing the appointments of Messrs. Shah and Piracci to Royal’s board of directors. A copy of the press release is attached as Exhibit 99.2 hereto.

Item 5.07 Submission of Matters to a Vote of Security Holders.

     On May 19, 2010, Royal held its 2010 Annual Meeting of Shareholders (the “Annual Meeting”) for which the board of directors solicited proxies. At the Annual Meeting, the shareholders of Royal voted on the following proposals described in the Proxy Statement dated April 9, 2010.

     The proposals voted on and approved by the shareholders of Royal at the Annual Meeting were as follows:

Proposal No. 1. Royal’s shareholders elected three individuals to serve as Class II members of the board of directors, as set forth below:

	Votes		Votes		Broker
Name	For		Withheld		Non-Votes
Anthony J. Micale		20,948,455		665,242		3,274,087
Gregory T. Reardon		21,544,656		69,041		3,274,087
Robert R. Tabas		20,945,657		668,040		3,274,087

Proposal No. 2. Royal’s shareholders ratified the appointment of ParenteBeard LLC, of Malvern, Pennsylvania, as Royal’s independent registered public accounting firm for the year ending December 31, 2010, as set forth below:

Votes	Votes				Broker
For	Against		Abstentions		Non-Votes
24,519,672		365,357		2,755	—

Proposal No. 3. Royal’s shareholders ratified a non-binding proposal to approve the executive compensation, as

described in the Compensation Discussion and Analysis and the tabular disclosure (together with the accompanying narrative disclosure) regarding the named executive officers in Royal’s proxy statement, as set forth below:

Votes	Votes				Broker
For	Against		Abstentions		Non-Votes
24,438,311		428,244		21,229	—

Item 9.01 Financial Statements and Exhibits.

     (d) Exhibits:

99.1	Press release dated May 17, 2010 regarding financial results for the period ending March 31, 2010.
99.2	Press release dated May 20, 2010 regarding the appointment of directors.

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 21, 2010	By:	/s/ James J. McSwiggan, Jr.
		James J. McSwiggan, Jr.
		President and Chief Operating Officer

EX-99.1

Exhibit 99.1

May 17, 2010 09:25 ET

Royal Bancshares of Pennsylvania, Inc. Announces Financial Results for the First Quarter of 2010

NARBERTH, PA—(Marketwire — May 17, 2010) — Royal Bancshares of Pennsylvania, Inc. (NASDAQ: RBPAA) (“Royal”) today announced its consolidated financial results for the first quarter ended March 31, 2010.

For the quarter ended March 31, 2010, net loss attributable to Royal was $1.1 million, or 12 cents per common share, as compared to a net loss of $6.8 million, or 53 cents per common share for the quarter ended March 31, 2009. Royal’s primary banking subsidiary, Royal Bank America, and its subsidiaries, returned to profitability with a first quarter profit of $195,000.

The notably improved financial results in the first quarter of 2010 were driven by a $1.0 million increase in net interest income; a $4.1 million decrease in investment impairments; a $0.9 million decrease in provision for loan and lease losses; $0.5 million in gains on sale of loans and leases; and $0.3 million of net gains on sales of other real estate owned (OREO) and available-for-sale (AFS) investment securities compared to a $0.3 million loss in the first quarter of 2009. These improvements were partially offset by increases in FDIC assessments, as well as OREO impairment charges and loan collection expenses.

Robert R. Tabas, Chairman and CEO, said “With the return of our core Royal Bank America banking subsidiary to profitability in the first quarter, we believe we are turning the corner. Net interest income and net interest margins are expanding, our regulatory capital ratios are increasing, and our core banking franchise continues to serve our customers and communities. The tone of business in our marketplace is different than it was a year ago, and there is a sense of optimism in both the consumer and small business markets.”

Mr. Tabas continued, “One area of disappointment was an increase in non-accrual and impaired loans during the first quarter. Clearly the economic environment remains uncertain, and this is impacting collateral valuations. We believe we are taking the right actions to mitigate risk in our loan portfolios, and that we continue to make positive progress in this regard.”

The following is an overview of key financial metrics at quarter end:

— Total assets were $1.2 billion at March 31, 2010, compared to $1.3 billion at December 31, 2009.

— Total deposits were $826.2 million at March 31, 2010 compared to $881.8 million at December 31, 2009. The decrease was largely driven by Royal’s ongoing effort to reduce brokered CDs which continued during the first quarter of 2010.

— Total loans decreased to $630.4 million at March 31, 2010 compared to $656.5 million at December 31, 2009 due to pay downs and pay-offs of existing loans and charge-offs.

— At March 31, 2010, Royal Bank America had capital ratios above the level required to meet regulatory standards for a well-capitalized institution. Total capital to risk-weighted assets was 14.74%; Tier I capital to risk-weighted assets was 13.46%: and Tier I capital to average assets was 8.64%. All regulatory capital ratios increased during the first quarter.

— Net interest income was $8.0 million in the first quarter of 2010, compared to $7.1 million in the comparable prior year period. The increase was largely driven by Royal’s ongoing effort to reduce brokered CDs, Federal Home Loan Bank advances and repricing of maturing retail CDs, which resulted in lower interest expense relative to interest income. This effort also drove a 27 basis point improvement in net interest margin, to 2.79% in the first quarter of 2010, compared to 2.52% in the first quarter of 2009, and a 35 basis point improvement from the linked fourth quarter 2009 where net interest margin was 2.44%.

— Non-accrual and impaired loans were $83.7 million at March 31, 2010, compared to $73.7 million at December 31, 2009, an increase of $10.0 million. The $10.0 million increase was primarily the result of $19.8 million in additions partially offset by a $6.1 million reduction in existing non-accrual loan balances through payments or loans becoming current and placed back on accrual and $3.7 million in charge-offs.

— Gains on sales of AFS investment securities were $167,000 for the quarter as compared to a loss on sales of AFS investment securities of $214,000 in the first quarter of 2009.

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. For the past 40+ years, Royal has played a lead role in the growth and development of our region, empowering small businesses, entrepreneurs and individuals to achieve their financial goals and enrich our communities. 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, 2009.

ROYAL BANCSHARES OF PENNSYLVANIA, INC.

CONDENSED INCOME STATEMENT

	Three Months
	Ended Mar. 31st
	2010			2009
(in thousands, except for earnings per common share)	(Unaudited)			(Unaudited)
Interest Income	$	15,623		$	16,354
Interest Expense		7,603			9,285
Net Interest Income		8,020			7,069
Provision for Loan Losses		1,903			2,797
Net Interest Income after Provision		6,117			4,272
Non Interest Income/(Loss)		1,305			(3,583	)
Non Interest Expense		8,053			7,226
Loss before Taxes		(631	)		(6,537	)
Income Taxes		0			0
Net Loss		(631	)		(6,537	)
Less Net Income attributable to noncontrolling interest		442			216
Net Loss attributable to Royal Bancshares		($1,073	)		($6,753	)
Loss per common share — basic		($0.12	)		($0.53	)
SELECTED RATIOS:
Return on Average Assets		-0.3	%		-2.3	%
Return on Average Equity		-4.1	%		-28.4	%
Average Equity to Assets		8.4	%		7.9	%
Book Value Per Share	$	5.44		$	5.56

CONDENSED BALANCE SHEET

	Mar. 31, 2010		Dec. 31, 2009
(in thousands)	(unaudited)		(unaudited)
Cash and Cash Equivalents	$	64,315	$	58,298
Investment Securities		418,260		449,671
Loans & Leases (net)		630,401		658,787
Premises and Equipment (net)		18,269		18,798
Accrued Interest receivable		15,532		14,942
Other Assets		75,165		92,230
Total Assets	$	1,221,942	$	1,292,726
Deposits		826,227		881,755
Borrowings		240,556		257,827
Other Liabilities		23,196		23,056
Subordinated debentures		25,774		25,774
Royal Bancshares Shareholders’ Equity		102,589		101,156
Noncontrolling Interest		3,600		3,158
Total Equity		106,189		104,314
Total Liabilities and Equity	$	1,221,942	$	1,292,726

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.”

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

EX-99.2

Exhibit 99.2

Royal Bancshares of Pennsylvania Announces Appointment of Two New Directors

NARBERTH, PA -- (Marketwire - 05/20/10) -- Royal Bancshares of Pennsylvania, Inc. (NASDAQ:RBPAA) (“Royal”), parent company of Royal Bank America and Royal Asian Bank, announced today that Michael J. Piracci and Jay H. Shah have been appointed to its board of directors.

Mr. Piracci worked for the Federal Deposit Insurance Corporation (FDIC) for 37 years, having started with the nation’s largest examiner and supervisor of banks in 1967. Piracci steadily rose through the organization to the position of Assistant Regional Director where he spent the 17 years prior to his retirement in 2004 with responsibility for financial institutions in New Jersey, Pennsylvania, Maryland, Delaware, the District of Columbia and Puerto Rico as well as administration for the New York Region.

“The highly-specialized knowledge and experience Mike brings to the board could not come at a more valuable time as we, like all financial institutions, find ourselves in an ever increasingly regulated environment,” noted Robert R. Tabas, Chairman and CEO of Royal Bancshares of Pennsylvania, Inc. “His guidance and expertise will benefit us as we continue to foster productive relationships with our regulators and satisfactorily navigate regulatory matters.”

Mr. Shah is CEO and member of the Board of Trustees of Hersha Hospitality Trust (NYSE: HT), a self-advised real estate investment trust which owns interests in 76 hotels, totaling 9,838 rooms in upscale, mid-scale and extended stay hotels primarily along the Northeast Corridor from Boston to Washington, DC.

“Jay’s first-hand experience as the CEO of a public company, as well as his extensive expertise in business and real estate management, make him a valuable addition to our Board,” noted Mr. Tabas.

Prior to joining the Hersha organization , Shah’s varied career experience included time spent as principal in the law firm of Shah & Byler, LLP, a consultant with Coopers & Lybrand LLP, a legislative assistant to the late Senator John Heinz and in the Philadelphia District Attorney’s Office. In 2007, Shah was selected as one of the Philadelphia Business Journal’s “40 Under 40,” which recognizes the impact of young professionals in the Philadelphia region.

The appointments of Mr. Piracci and Mr. Shah bring the total number of directors of Royal Bancshares of Pennsylvania, Inc. to 12, the majority of whom are independent directors.

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. For the past 40+ years, Royal has played a lead role in the growth and development of our region, empowering

small businesses, entrepreneurs and individuals to achieve their financial goals and enrich our communities. More information on Royal Bancshares of Pennsylvania, our banks and subsidiaries is available at www.royalbankamerica.com.