Commitments, Contingencies, and Concentrations

6 Months Ended

Jun. 30, 2017

Commitments, Contingencies, and Concentrations [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note 9.Commitments, Contingencies, and Concentrations

We are a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of our customers.  These financial instruments include commitments to extend credit and standby letters of credit.  Such financial instruments are recorded in the financial statements when they become payable. Those instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amount recognized in the consolidated balance sheets.  The contract amounts of those instruments reflect the extent of involvement we have in particular classes of financial instruments.

Our exposure to credit loss in the event of non-performance by the other party to commitments to extend credit and standby letters of credit is represented by the contractual amount of those instruments.  We use the same credit policies in making commitments and conditional obligations as we do for on-balance-sheet instruments.

The contract amounts are as follows:

	June 30,		December 31,
(In thousands)	2017		2016
Financial instruments whose contract amounts represent credit risk:
Open-end lines of credit	$	76,366	$	74,858
Commitments to extend credit		13,341		43,344
Standby letters of credit and financial guarantees written		82		37

Legal Proceedings

From time to time, we are a party to routine legal proceedings within the normal course of business.  Such routine legal proceedings in the aggregate are believed by management to be immaterial to our financial condition or results of operations.

On January 30, 2017, the Company and Bryn Mawr Bank Corporation, (“BMBC”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, upon satisfaction of the conditions set forth in the Merger Agreement, the Company will merge with and into BMBC, with BMBC being the surviving corporation (the “Merger”).  On April 11, 2017, a shareholder filed a lawsuit in the United States District Court, Eastern District of Pennsylvania, against members of the Company’s board of directors, BMBC and the Company. 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 Company shareholders based on allegations of material misstatements and omissions in the proxy statement/prospectus and violations of the Securities Exchange Act of 1934. 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. As of the date of this filing, the Company cannot reasonably predict the outcome of the lawsuit or, in the event of an adverse outcome, the potential loss or range of possible loss relating to the lawsuit.