0001140361-17-021029.txt : 20170516 0001140361-17-021029.hdr.sgml : 20170516 20170516172259 ACCESSION NUMBER: 0001140361-17-021029 CONFORMED SUBMISSION TYPE: 425 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20170516 DATE AS OF CHANGE: 20170516 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: BRYN MAWR BANK CORP CENTRAL INDEX KEY: 0000802681 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 232434506 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 SEC ACT: 1934 Act SEC FILE NUMBER: 001-35746 FILM NUMBER: 17849593 BUSINESS ADDRESS: STREET 1: 801 LANCASTER AVE CITY: BRYN MAWR STATE: PA ZIP: 19010 BUSINESS PHONE: 6105252300 MAIL ADDRESS: STREET 1: 801 LANCASTER AVE CITY: BRYN MAWR STATE: PA ZIP: 190103396 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: ROYAL BANCSHARES OF PENNSYLVANIA INC CENTRAL INDEX KEY: 0000922487 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 231627866 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 425 BUSINESS ADDRESS: STREET 1: 732 MONTGOMERY AVE CITY: NARBERTH STATE: PA ZIP: 19072 BUSINESS PHONE: 6106684700 MAIL ADDRESS: STREET 1: 732 MONGTOMERY AVENUE CITY: NARBERTH STATE: PA ZIP: 19072 425 1 form8k.htm 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 16, 2017
 Date of Report (Date of earliest event reported)
 
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
(Exact name of registrant as specified in its charter)
 
Pennsylvania
  
0‑26366
  
23‑2812193
(State or other jurisdiction
of incorporation)
  
(Commission
File Number)
  
(IRS Employer
Ident. No.)
         
One Bala Plaza Suite 522, 231 St. Asaph’s Road, Bala Cynwyd, PA
  
19004
(Address of principal executive offices)
  
(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:
 
ý Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
ý Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)
 
☐ Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))
 
☐ Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))
 
Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b‑2 of the Securities Exchange Act of 1934 (§240.12b‑2 of this chapter).
 
Emerging growth company ☐
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
 
 
Item 8.01 Other Events.
 
Bryn Mawr Bank Corporation/Royal Bancshares of Pennsylvania, Inc. Merger
 
As previously announced, on January 31, 2017, Bryn Mawr Bank Corporation (“BMBC”) and Royal Bancshares of Pennsylvania, Inc. (“RBPI”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which RBPI will merge with and into BMBC (the “Merger”), and thereafter Royal Bank America, a Pennsylvania chartered bank and wholly owned subsidiary of RBPI, will be merged with and into The Bryn Mawr Trust Company, a Pennsylvania chartered bank and wholly owned subsidiary of BMBC. As a result of the Merger, the separate corporate existence of RBPI will cease and BMBC will continue as the surviving corporation in the Merger.
 
On April 14, 2017, BMBC and RBPI filed with the Securities and Exchange Commission (the “SEC”) a Proxy Statement/Prospectus on Form S-4 (SEC File No. 333-216995) that was declared effective by the SEC on April 18, 2017 (the “Proxy Statement/Prospectus”) in connection with the proposed Merger.  The Proxy Statement/Prospectus was first mailed to the shareholders of RBPI on April 20, 2017.
 
As has previously been described in the Proxy Statement/Prospectus, following announcement of the Merger Agreement, a complaint (the “Lawsuit”) was filed in the United States District Court, Eastern District of Pennsylvania, against members of the RBPI board, BMBC and RBPI.  The lawsuit, which is captioned Parshall v. Royal Bancshares of Pennsylvania, Inc., et al., Case No. 2:17‑cv‑01641‑PBT, alleges class claims on behalf of all RBPI shareholders and is based on allegations of material misstatements and omissions in the Proxy Statement/Prospectus and violations of the Exchange Act.  The lawsuit seeks, among other remedies, to enjoin the merger or, in the event the merger is completed, rescission of the merger or rescissory damages; to direct defendants to account for unspecified damages; and costs of the lawsuit, including attorneys’ and experts’ fees.
 
BMBC and RBPI have vigorously denied, and continue to vigorously deny, any wrongdoing or liability with respect to all claims asserted in the Lawsuit, including (i) that they have committed any violations of law, (ii) that they have acted improperly in any way, (iii) that they have any liability or owe any damages of any kind to any plaintiff in the Lawsuit, and (iv) that any additional disclosures (including the additional disclosures described herein) are required under any applicable rule, regulation, statute, or law.  Rather, they are providing the additional disclosures set forth below in an effort to settle the Lawsuit in order to, among other things, (i) eliminate the burden, inconvenience, expense, risk, and distraction of further litigation, (ii) conclusively resolve all the claims that were or could have been asserted against them in the Lawsuit, and (iii) permit the Merger to proceed without risk of injunctive or other relief.  Nothing in this document or in any stipulation of settlement or other document shall be deemed to be an admission of liability or wrongdoing by any defendant in the Lawsuit, nor shall anything in this document, or in any stipulation of settlement or other document, be deemed an admission of the materiality of any of the disclosures set forth herein.  Notwithstanding the additional disclosures made herein, there can be no assurance that the Lawsuit will be settled, or, if settled, the terms of any such settlement.
 
These additional disclosures amend and supplement the Proxy Statement/Prospectus and should be read in conjunction with the disclosures contained therein.  To the extent that information in this Current Report on Form 8‑K differs from or updates information contained in the Proxy Statement/Prospectus, the Current Report on Form 8‑K is more current.  Capitalized terms used but not defined in the additional disclosures have the meanings given to them in the Proxy Statement/Prospectus.
 
ADDITIONAL DISCLOSURES
 
Additional Disclosure Regarding Background and Negotiation of the Merger
 
The section entitled “Background of the Merger” beginning on page 74 of the Proxy Statement/Prospectus is hereby amended and supplemented as follows:
 
The following language is added at the end of the fifth paragraph on page 76 of the Proxy Statement/Prospectus.
 
“RBC was engaged by RBPI on December 9, 2016 as a second advisor to RBPI’s board of directors.  RBPI’s board of directors deemed it advisable to engage RBC based on RBC’s extensive knowledge of the financial services industry in the Mid-Atlantic Region and its ability to answer questions from a different perspective.  During the two years preceding its engagement, RBC did not provide any investment banking services to BMBC or to RBPI.”
 
2
Additional Information Regarding the Opinion of Our Financial Advisor
 
The section entitled “Opinion of RBPI’s Financial Advisor in Connection with the Merger” beginning on page 79 of the Proxy Statement/Prospectus is hereby amended and supplemented as follows:
 
The following table is added to page 84 of the Proxy Statement/Prospectus immediately after the table captioned “RBPI Comparable Company Analysis.”
 
Financial data as of December 31, 2016
Pricing data as of January 27, 2017
   
Balance Sheet
Capital Position
LTM Profitability
Valuation
                         
Price/
    
Company
Ticker
Total
Assets
($mm)
Loans/
Deposits
(%)
NPAs1/
Total
Assets
(%)
TCE/
TA
(%)
Leverage
Ratio
(%)
Total
RBC
Ratio
(%)
CRE/
Total
RBC
(%)
ROAA
(%)
ROAE
(%)
Net
Interest
Margin
(%)
Efficiency
Ratio
(%)
Tang.
Book
Value
(%)
LTM
EPS
(x)
Current
Dividend
Yield
(%)
LTM
Dividend
Ratio
(%)
Market
Value
($mm)
DNB Financial Corporation
DNBF
1,071
92.4
1.30
7.51
8.42
12.48
213.5
0.59
7.38
3.18
71.0
166
19.8
0.9
18.1
130
1st Constitution Bancorp
FCCY
1,055
90.6
0.62
8.73
10.56
12.67
200.9
0.90
8.99
3.92
63.4
148
15.6
1.2
4.6
135
Mid Penn Bancorp, Inc.
MPB
1,043
84.2
0.58
6.81
6.7
11.2
327.7
0.76
10.11
3.87
70.6
149
14.5
1.9
33.9
105
Howard Bancorp, Inc.
HBMD
1,027
101.6
1.23
8.10
8.36
10.83
299.6
0.55
6.15
3.73
77.5
140
23.1
0.0
0.0
156
Parke Bancorp, Inc.
PKBK
1,016
108.0
5.01
10.54
15.38
18.43
251.0
2.01
14.47
3.96
43.6
126
9.6
2.0
16.2
135
First Bank
FRBA
1,008
94.6
0.53
8.66
8.89
12.67
390.3
0.58
7.12
3.10
62.1
161
23.8
0.6
0.0
141
Two River Bancorp
TRCB
940
97.0
1.05
8.96
8.94
12.76
355.7
0.96
8.94
3.53
63.9
152
14.9
1.0
14.2
126
Malvern Bancorp, Inc.
MLVF
879
102.4
0.37
10.89
11.45
16.03
264.4
1.49
13.33
2.63
65.1
146
11.6
0.0
0.0
140
Sussex Bancorp
SBBX
847
105.2
1.05
6.78
8.98
11.99
431.5
0.72
9.60
3.37
68.7
174
17.7
0.8
13.4
100
CB Financial Services, Inc.
CBFV
834
100.2
0.92
9.84
10.12
14.74
149.2
0.88
8.26
3.79
63.7
131
14.6
3.4
49.2
107
Severn Bancorp, Inc.
SVBI
778
110.0
4.11
10.70
9.97
14.31
254.4
2.00
17.36
3.14
83.3
103
6.2
0.0
0.0
85
Stewardship Financial Corporation
SSFN
758
85.4
1.21
6.80
7.69
13.98
232.0
0.60
9.05
3.19
76.8
114
13.3
1.3
13.9
59
                                   
 
High
1,071
110.0
5.01
10.89
15.38
18.43
431.5
2.01
17.36
3.96
83.3
174
23.8
3.4
49.2
156
 
Low
758
84.2
0.37
6.78
6.7
10.83
149.2
0.55
6.15
2.63
43.6
103
6.2
0.0
0.0
59
 
Mean
938
97.6
1.50
8.69
9.62
13.51
280.8
1.00
10.06
3.45
67.5
143
15.4
1.1
13.6
118
 
Median
974
98.6
1.05
8.69
8.96
12.72
259.4
0.82
9.02
3.45
66.9
147
14.7
1.0
13.7
128
Note:  Publicly available financial data as of September 30, 2016 for the following companies:  1st Constitution Bancorp, Mid Penn Bancorp Inc., First Bank, CB Financial Services Inc., Severn Bancorp Inc., and Stewardship Financial Corporation.
(1)
Nonperforming assets defined as nonaccrual loans and leases, real estate owned, performing TDRs, and repossessed assets.
 

3
The following table is added to page 85 of the Proxy Statement/Prospectus immediately above the section captioned “Analysis of Selected Merger Transactions.”
 
Financial data as of December 31, 2016 unless otherwise noted
Pricing data as of January 27, 2017
   
Balance Sheet
Capital Position
LTM Profitability
Valuation
                         
Price/
    
Company
Ticker
Total
Assets
($mm)
Loans/
Deposits
(%)
NPAs1/
Total
Assets
(%)
TCE/
TA
(%)
Leverage
Ratio
(%)
Total
RBC
Ratio
(%)
CRE/
Total
RBC
(%)
ROAA
(%)
ROAE
(%)
Net
Interest
Margin
(%)
Efficiency
Ratio
(%)
Tang.
Book
Value
(%)
LTM
EPS
(x)
2017
Est.
EPS2
(x)
2018
Est.
EPS2
(x)
Current
Dividend
Yield
(%)
Market
Value
($mm)
ConnectOne Bancorp, Inc.
CNOB
4,426
103.9
1.83
8.93
9.29
11.78
527.3
0.73
6.30
3.41
41.6
216
25.6
15.7
13.6
1.2
826
Univest Corporation of Pennsylvania
UVSP
4,231
100.9
0.62
8.24
8.84
12.43
195.7
0.56
4.46
3.82
71.2
241
34.8
16.7
14.0
2.7
778
Bridge Bancorp, Inc.
BDGE
4,055
88.9
0.11
7.54
8.6
15.0
334.1
0.92
9.82
3.46
54.7
236
18.3
17.9
16.4
2.5
719
Oritani Financial Corp.
ORIT
4,012
131.7
0.30
13.42
14.94
17.69
506.7
1.20
8.32
2.93
40.3
148
17.2
17.8
18.7
4.0
798
TriState Capital Holdings, Inc.
TSC
3,930
103.5
0.69
7.37
7.9
12.66
295.2
0.81
8.48
2.23
66.1
226
22.4
19.7
14.6
0.0
644
Northfield Bancorp, Inc.
NFBK
3,850
109.4
0.75
15.25
15.48
19.58
347.5
0.70
4.26
2.98
60.6
152
32.0
29.4
30.4
1.8
886
Peapack-Gladstone Financial Corporation
PGC
3,774
98.0
0.78
8.11
8.39
13.17
572.1
0.67
8.22
2.78
60.1
171
21.7
17.5
14.3
0.6
532
Financial Institutions, Inc.
FISI
3,710
78.1
0.12
6.25
7.36
12.97
137.8
0.90
10.01
3.14
60.4
218
16.2
15.8
14.8
2.5
495
First of Long Island Corporation
FLIC
3,434
93.1
0.09
9.03
8.88
16.04
287.1
0.92
10.72
2.91
50.2
212
21.1
18.1
16.4
2.0
661
Arrow Financial Corporation
AROW
2,605
77.1
0.23
8.09
9.47
15.15
110.4
1.06
11.80
3.19
57.1
237
18.6
17.4
15.1
2.7
495
CNB Financial Corporation
CCNE
2,540
89.0
1.00
6.94
7.71
14.11
193.9
0.89
10.05
3.72
61.1
216
17.8
15.7
13.6
2.6
374
Canandaigua National Corporation
CNND
2,430
97.3
0.62
7.19
9.49
12.75
222.5
0.98
12.17
3.55
65.7
157
12.2
NA
NA
2.8
272
                                     
 
High
4,426
131.7
1.83
15.25
15.48
19.58
572.1
1.20
12.17
3.82
71.2
241
34.8
29.4
30.4
4.0
886
 
Low
2,430
77.1
0.09
6.25
7.36
11.78
110.4
0.56
4.26
2.23
40.3
148
12.2
15.7
13.6
0.0
272
 
Mean
3,583
97.6
0.59
8.86
9.70
14.44
310.9
0.86
8.72
3.18
57.4
203
21.5
18.3
16.5
2.1
623
 
Median
3,812
97.6
0.62
8.10
8.86
13.64
291.1
0.90
9.15
3.17
60.3
216
19.9
17.5
14.8
2.5
652
Note:  Publicly available financial data as of September 30, 2016 for the following companies:  Peapack-Gladstone Financial Corporation, First Long Island Corporation, CNB Financial Corporation, and Canandaigua National Corporation
(1)
Nonperforming assets defined as nonaccrual loans and leases, real estate owned, performing TDRs, and repossessed assets.
(2)
Based on publicly available median analyst earnings per share estimates.
 
4
The following table is added to page 86 of the Proxy Statement/Prospectus immediately above the last paragraph on that page.
 
National Precedent Transactions Analysis
 
       
Transaction Price /
    
Buyer
Target
Announcement
Date
Transaction Value
($mm)
LTM EPS
(x)
TBV / Share
(%)
Core Deposit Premium
(%)
1-Day Market Premium
(%)
Midland States Bancorp Inc.
Centrue Financial Corporation
1/26/2017
173.8
4.1
141
NA
15.6
Renasant Corp.
Metropolitan BancGroup Inc.
1/17/2017
190.2
25.5
218
14.6
‑
MainSource Financial Group
FCB Bancorp Inc
12/19/2016
57.0
NA
189
8.5
91.5
Veritex Holdings Inc.
Sovereign Bancshares Inc.
12/14/2016
176.0
21.5
188
17.1
‑
CenterState Banks
Gateway Finl Hldgs of FL Inc.
11/30/2016
142.5
23.7
164
8.7
‑
Access National Corp.
Middleburg Financial Corp.
10/24/2016
245.4
31.4
195
13.8
24.0
CenterState Banks
Platinum Bank Holding Co.
10/18/2016
84.9
29.3
179
10.4
‑
Enterprise Financial Services
Jefferson County Bcshs Inc.
10/11/2016
130.8
19.7
146
6.0
‑
First Commonwealth Financial
DCB Financial Corp
10/3/2016
106.4
8.9
177
NA
88.5
OceanFirst Financial Corp.
Ocean Shore Holding Co.
7/13/2016
147.7
20.0
132
5.2
32.1
Cathay General Bancorp
SinoPac Bancorp
7/8/2016
340.0
46.5
126
12.1
‑
Berkshire Hills Bancorp Inc.
First Choice Bank
6/27/2016
117.8
57.8
116
2.4
‑
First Bancorp
Carolina Bank Holdings Inc.
6/22/2016
97.3
18.5
155
6.6
20.7
QCR Holdings Inc.
Community State Bank
5/23/2016
80.0
14.4
134
4.4
‑
Simmons First National Corp.
Citizens National Bank
5/18/2016
77.0
16.2
127
4.3
‑
Revere Bank
Monument Bank
5/3/2016
65.1
20.3
161
7.3
‑
First Mid-Illinois Bancshares
First Clover Leaf Fin Corp.
4/26/2016
89.5
19.4
130
4.5
33.1
Westfield Financial Inc.
Chicopee Bancorp Inc.
4/4/2016
111.0
34.2
120
5.3
15.8
Guaranty Bancorp
Home State Bancorp
3/16/2016
133.7
18.5
166
7.9
‑
Horizon Bancorp
La Porte Bancorp Inc
3/10/2016
94.1
18.6
116
4.9
9.8
Midland Financial Co.
1st Century Bancshares Inc.
3/10/2016
116.0
43.2
178
9.3
40.3
Triumph Bancorp Inc.
ColoEast Bankshares Inc.
3/7/2016
69.7
32.0
131
3.0
‑
Hampton Roads Bankshares Inc.
Xenith Bankshares Inc.
2/10/2016
104.5
32.6
120
3.2
‑
Pinnacle Financial Partners
Avenue Financial Holdings Inc.
1/28/2016
209.4
29.0
226
13.0
51.8
               
 
High
  
340.0
57.8
226
17.1
91.5
 
Low
  
57.0
4.1
116
2.4
9.8
 
Mean
  
131.7
25.4
156
7.8
38.5
 
Median
  
113.5
21.5
150
7.0
32.1
 
5
The following table is added to page 87 of the Proxy Statement/Prospectus immediately above the section captioned “Net Present Value Analysis.”
 
Regional Precedent Transactions Analysis
 
       
Transaction Price /
    
Buyer
Target
Announcement
Date
Transaction Value
($mm)
LTM EPS
(x)
TBV / Share
(%)
Core Deposit
Premium
(%)
1-Day Market
Premium
(%)
OceanFirst Financial Corp.
Ocean Shore Holding Co.
7/13/2016
147.7
20.0
132
5.2
32.1
Berkshire Hills Bancorp Inc.
First Choice Bank
6/27/2016
117.8
57.8
116
2.4
-
Revere Bank
Monument Bank
5/3/2016
65.1
20.3
161
7.3
-
Univest Corp. of Pennsylvania
Fox Chase Bancorp Inc.
12/8/2015
244.3
23.2
134
10.5
10.9
WSFS Financial Corp.
Penn Liberty Financial Corp.
11/23/2015
101.6
31.8
199
10.6
-
United Bankshares Inc.
Bank of Georgetown
11/9/2015
269.0
27.6
218
20.5
-
Beneficial Bancorp Inc
Conestoga Bank
10/22/2015
100.1
24.5
160
9.2
-
Community Bank System Inc.
Oneida Financial Corp.
2/24/2015
142.1
27.4
202
11.6
-
Bridge Bancorp Inc.
Community National Bk
12/15/2014
141.3
31.3
175
9.5
-
S&T Bancorp Inc.
Integrity Bancshares Inc.
10/30/2014
159.4
16.8
263
15.3
99.4
Cape Bancorp Inc.
Colonial Financial Services
9/10/2014
55.8
NM
88
NA
11.3
National Penn Bancshares Inc.
TF Financial Corp.
6/4/2014
141.6
19.0
148
7.7
35.6
Bryn Mawr Bank Corp.
Continental Bank Holdings Inc
5/5/2014
108.8
42.3
175
13.2
-
               
 
High
  
269.0
57.8
263
20.5
99.4
 
Low
  
55.8
16.8
88
2.4
10.9
 
Mean
  
138.0
28.5
167
10.2
37.9
 
6
The following language is added on page 87 of the Proxy Statement/Prospectus to the first paragraph of the section captioned “Net Present Value Analysis” immediately after the sentence that reads “The terminal values were then discounted to present values using different discount rates ranging from 10.0% to 15.0% which were chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of RBPI common stock.”
 
“Sandler O’Neill utilized the equity build-up method to calculate the appropriate discount rate for RBPI common stock.  As detailed in the following table, the discount rate equals the sum of the risk free rate, the equity risk premium, the size premium and the industry premium:
 
Risk Free Rate
  2.49%
Equity Risk Premium
  5.80%
Size Premium
  3.58%
Industry Premium
  0.91%
Discount Rate
12.78%

The risk free rate is represented as the yield on the 10‑year U.S. Treasury note as of January 27, 2017.  The equity risk premium, size premium and industry premium were sourced from the Duff & Phelps 2016 Valuation Handbook.”
 
The first sentence of the first paragraph on page 88 of the Proxy Statement/ Prospectus is revised to read as follows:
 
“Sandler O’Neill also performed an analysis that estimated the net present value per share of BMBC common stock assuming that BMBC performed in accordance with publicly available consensus median analyst earnings per share estimates for the years ending December 31, 2017 and December 31, 2018, as well as an estimated long-term earnings per share growth rate of 8% for BMBC for the years thereafter. This analysis also assumed that dividends paid per share by BMBC on its common stock would be consistent with BMBC’s historical practices.”
 
The following language is added to the first paragraph on page 88 of the Proxy Statement/Prospectus immediately after the sentence that reads “The terminal values were then discounted to present values using different discount rates ranging from 9.0% to 13.0% chosen to reflect different assumptions regarding required rates of return of holders or prospective buyers of BMBC common stock.”
 
“Sandler O’Neill utilized the equity build-up method to calculate the appropriate discount rate for BMBC common stock.  As detailed in the following table, the discount rate equals the sum of the risk free rate, the equity risk premium, the size premium and the industry premium:
 
Risk Free Rate
  2.49%
Equity Risk Premium
  5.80%
Size Premium
  1.70%
Industry Premium
  0.91%
Discount Rate
10.90%

The risk free rate is represented as the yield on the 10‑year U.S. Treasury note as of January 27, 2017.  The equity risk premium, size premium and industry premium were sourced from the Duff & Phelps 2016 Valuation Handbook.”
 
The third sentence of the second paragraph under the section captioned “Sander O’Neill’s Relationship” on page 89 of the Proxy Statement/Prospectus is revised to read as follows, and an additional sentence is added immediately thereafter.
 
“Most recently, Sandler O’Neill acted as placement agent to BMBC in connection with its offer and sale of $30 million of subordinated notes on August 6, 2015, for which Sandler O’Neill received a fee in an amount equal to $375,000.  Sandler did not provide any other services to BMBC during the past two years.  Currently there are no agreements, arrangements or understandings with respect to any services to be provided to BMBC by Sandler O’Neill in the future.”
 
The following sentence is added immediately below the table on page 89 of the Proxy Statement/Prospectus in the section captioned “Certain Non-Public, Unaudited, Forward-Looking Information Provided by RBPI.”
 
“In preparing financial projections of RBPI, Sandler O’Neill used estimated annual net income growth of 10%, annual balance sheet growth of 5%, and annual loan and deposit growth of 11% and 3%, respectively.  These estimated annual growth rates were provided to Sandler O’Neill by senior management of RBPI.”
 
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Safe Harbor Statement
 
This document contains certain forward-looking information about BMBC and RBPI that is intended to be covered by the safe harbor for “forward-looking statements” provided by the Private Securities Litigation Reform Act of 1995.  These statements may include statements for the period after the completion of the Merger.  Representatives of BMBC and RBPI may also make forward-looking statements.  Forward-looking statements are statements that are not historical facts. Words such as “expect,” “believe,” “will,” “may,” “anticipate,” “plan,” “estimate,” “intend,” “should,” “can,” “likely,” “could” and similar expressions are intended to identify forward-looking statements.  These statements include statements about the expected benefits of the Merger, information about the combined company’s objectives, plans and expectations, the likelihood of satisfaction of certain conditions to the completion of the Merger and whether and when the Merger will be completed.  Forward-looking statements are not guarantees of performance.  These statements are based upon the current beliefs and expectations of the management of each of BMBC and RBPI and are subject to risks and uncertainties, including the risks described in the Proxy Statement/Prospectus under the section “Risk Factors,” that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements.
 
In light of these risks, uncertainties, assumptions and factors, the results anticipated by the forward-looking statements discussed in the Proxy Statement/Prospectus or made by representatives of BMBC or RBPI may not occur.  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof or, in the case of statements made by representatives of BMBC or RBPI, on the date those statements are made.  All subsequent written and oral forward-looking statements concerning the Merger or the combined company or other matters addressed in the Proxy Statement/Prospectus and attributable to BMBC or RBPI or any person acting on behalf of either are expressly qualified in their entirety by the cautionary statements contained or referred to in this section.  Except to the extent required by applicable law or regulation, neither BMBC nor RBPI undertakes any obligation to update or publish revised forward-looking statements to reflect events or circumstances after the date of the Proxy Statement/Prospectus or the date of the forward-looking statements or to reflect the occurrence of unanticipated events.
 
Additional Information
 
This communication does not constitute an offer or the solicitation of an offer to buy our securities or the solicitation of any vote or approval.  This communication is being made in respect of the proposed Merger.  In connection with the proposed Merger, BMBC and RBPI filed a definitive Proxy Statement/Prospectus with the SEC.  The definitive Proxy Statement/Prospectus was mailed to RBPI’s shareholders on or about April 20, 2017.  Before making any voting decision, shareholders are urged to read carefully in their entirety the definitive Proxy Statement/Prospectus and any other relevant documents filed by BMBC and RBPI with the SEC when they become available because they contain and will contain important information about the proposed Merger.  You may obtain copies of all documents filed with the SEC regarding the proposed Merger, free of charge, at the SEC’s website (www.sec.gov), by accessing RBPI’s website at http://www.royalbankamerica.com or by calling RBPI at (610) 668‑4700 or by accessing BMBC’s website at http://www.bmtc.com or by calling BMBC at (610) 525‑1700.
 
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
     
Dated:  May 16, 2017
    
 
By:
/s/ F. Kevin Tylus
   
F. Kevin Tylus
   
President and Chief Executive Officer
 
 
 
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