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

July 18, 2008
Date of Report (Date of earliest event report)

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))

Item 2.02. Results of Operations and Financial Condition

On July 18, 2008, Royal Bancshares of Pennsylvania, Inc. (the “Company”) issued a press release announcing its financial results for the period ended June 30, 2008 A copy of the press release and certain additional selected financial data is attached hereto as Exhibit 99.1 and incorporated herein by reference.

Item 9.01 — Financial Statements and Exhibits

(d.) Exhibits

Exhibit Number	Description of Document
99.1	Press Release dated July 18, 2008.

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: July 23, 2008	/s/ Joseph P. Campbell
	Joseph P. Campbell
	Chief Executive Officer

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE

July 18, 2008

Royal Bank America Parent Co. Announces 2^nd Quarter Earnings And Decision To Temporarily Forego Dividend

(NARBERTH, PA — MARKETWIRE) Royal Bancshares of Pennsylvania, Inc. (“Royal”) (NASDAQ: RBPAA), the holding company for Royal Bank America and Royal Asian Bank, announced earnings for the second quarter of 2008.

Net income for the three months ended June 30, 2008 was $152,000 (after adding an additional $4.5 million pre-tax to its provision for loan losses for the quarter) or $0.01 basic and diluted earnings per share, compared to net income of $4.0 million or $0.29 basic and diluted earnings per share for the same period in 2007. Net income for the six months ended June 30, 2008 was $1.2 million, as compared to $6.3 million for the same period in 2007. Net interest margin YTD improved to 3.31% at June 30, 2008 as compared to 2.97% at June 30, 2007. Consolidated total assets ended June 30, 2008 were $1.2 billion, compared to $1.3 billion at June 30, 2007.

In response to current economic trends, the Board of Directors has elected to temporarily forego the quarterly cash dividend.

Comments from Robert R. Tabas, Chairman, Royal Bancshares of Pennsylvania:

“The Board of Directors’ decision to temporarily forego paying a cash dividend was an extremely difficult one. We understand the importance of dividends to our shareholders; however, this action was deemed necessary to strengthen our balance sheet and maintain our company’s reserves to weather this downturn.”

“Royal is unique in that along with myself, our directors and senior management hold a significant interest in the Company’s outstanding common stock. This has proven beneficial throughout our history in that the goals of the management team and our shareholders are intrinsically linked.”

“Our emphasis continues to be on fostering long-term shareholder value, a significant facet of which is the swift reinstatement of our cash dividend, which will occur as soon as earnings improve and prudent practice allows.”

Comments from Joseph P. Campbell, President/CEO, Royal Bancshares of Pennsylvania, Inc. and Royal Bank America:

“We continue to maintain a very strong capital position that exceeds regulatory minimums to be considered ‘well-capitalized,’ the highest such designation.”

“For the 6th consecutive quarter our loan activity has increased, and though we remain cautiously optimistic about the state of the economy, we are actively pursuing opportunities to finance quality projects in our immediate region and beyond.”

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 at 22 unique branch locations throughout Pennsylvania, New Jersey and New York. As The Region’s Premier Commercial Real Estate 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. Additional subsidiaries include RBA Leasing, engaged in equipment leasing solutions for small and mid-sized businesses, and RBA Capital, a lender finance company. More information on Royal Bancshares of Pennsylvania, our banks and subsidiaries is available at www.royalbankamerica.com.

Some of the information in this document may contain projections or other forward-looking statements regarding future events or the future financial performance of Royal Bancshares of Pennsylvania, Inc. and its divisions/subsidiaries (“Royal”). We wish to caution you that these statements are only predictions and that actual events or results may differ materially. For a list of factors which could affect Royal’s operating results, see Royal’s filings with the Securities and Exchange Commission, including “Item 1A. Risk Factors,” set forth in Royal’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.

Media Inquiries:
Marc Sanders
Director of Marketing
610.668.4700

FOR IMMEDIATE RELEASE July 18, 2008

ROYAL BANCSHARES OF PENNSYLVANIA, INC.
CONDENSED INCOME STATEMENT

	Three Months						Six Months
	Ended June 30th						Ended June 30th
	2008			2007			2008			2007
(in thousands, except for earnings per share)	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest Income	$	17,702		$	22,601		$	37,774		$	42,061
Interest Expense		8,452			12,582			18,625			24,540
Net Interest Income		9,250			10,019			19,149			17,521
Provision for Loan Losses		4,531			159			7,812			371
Net Interest Income after Provision		4,719			9,860			11,337			17,150
Non Interest Income		2,452			2,714			3,744			5,267
Non Interest Expense		7,204			6,829			13,955			13,404
(Loss) Income before Taxes		(33	)		5,745			1,126			9,013
Income Tax (Benefit)		(185	)		1,787			(69	)		2,728
Expense
Net Income		152			3,958			1,195			6,285
Earnings per share -basic	$	.01		$	.29		$	.09		$	.47
SELECTED RATIOS:
Return on Average Assets		0.1	%		1.2	%		0.2	%		0.9	%
Return on Average Equity		0.4	%		9.7	%		1.7	%		7.8	%
Average Equity to Assets		12.3	%		12.3	%		12.1	%		12.2	%
Book Value Per Share	$	10.35		$	12.06

CONDENSED BALANCE SHEET

	June 30, 2008		Dec. 31, 2007
(in thousands)	(unaudited)		(unaudited)
Cash and Cash Equivalents	$	11,898	$	10,905
Investment Securities		378,739		531,695
Loans (net)		652,021		625,193
Premises and Equipment (net)		29,311		31,408
Accrued Interest receivable		13,704		15,256
Other Assets		76,269		64,018
Total Assets	$	1,161,942	$	1,278,475
Deposits		682,301		770,152
Borrowings		294,836		313,477
Other Liabilities		19,642		20,838
Subordinated debentures		25,774		25,774
Minority Interest		2,177		1,867
Shareholders’ Equity		137,212		146,367
Total Liabilities and Shareholders’ Equity	$	1,161,942	$	1,278,475

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.”

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