Royal Bancshares of Pennsylvania Inc. announced unaudited consolidated financial results for the third quarter and nine months ended September 30, 2009. For the quarter, the net loss attributable to Royal Bancshares was $4.4 million or $0.37 loss per common share, compared to a net loss of $12.0 million, or $0.90 loss per common share, in the same period in 2008. The improvement in year over year results was primarily the result of a significant reduction in impairment losses on available for sale securities ($492,000 compared to $14.7 million in the third quarter of 2008), a $2.4 million increase in gains on the sale of investment securities, and a $1.6 million decrease in the provision for loan and lease losses. Net interest income after a provision for loan and lease losses was $3.5 million in the third quarter of 2009, compared to $2.8 million for the same period in 2008. For the quarter, the company reported loss before taxes of $3.6 million, net loss of $4.1 million on the net interest income of $7.2 million compared to the loss before taxes of $18.7 million, net loss of $11.8 million on the net interest income of $8.11 million for the same period a year ago. Return on average assets was negative at 1.3% against negative return on average assets of 4.0% for the same period a year ago. Return on average equity was also negative at 15.4% compared to the negative return on average equity of 36.0% for the same period a year ago. For the nine months ended September 30, 2009, net loss attributable to Royal was $23.2 million, or $1.84 loss per common share, compared to a net loss of $10.8 million, or $0.81 loss per common share, in the nine months ended September 30, 2008. In 2009, results were negatively impacted by a $3.2 million increase in OREO and loan collection expenses, including valuation expenses, and a $6.5 million reduction in net interest income after provision for loan and lease losses as a result of growth in non-performing loans. In addition, 2008 results were positively impacted by a $6.9 million tax benefit; there was no corresponding tax benefit in 2009. Net interest income after a provision for loan and lease losses was $7.7 million compared to $14.2 million for the same period in 2008. For the nine months, the company reported loss before taxes of $21.9 million, net loss of $22.4 million on the net interest income of $21.2 million compared to the loss before taxes of $17.2 million, net loss of $10.3 million on the net interest income of $27.3 million for the same period a year ago. Return on average assets was negative at 2.4% against negative return on average assets of 1.2% for the same period a year ago. Return on average equity was also negative at 29.3% compared to the negative return on average equity of 10.3% for the same period a year ago. As on date, book value per share was $6.07 compared to $8.82 on the same day a year ago.

Royal Bancshares of Pennsylvania Inc., Annual General Meeting, May 19, 2010

On October 1, 2009, Royal Bancshares of Pennsylvania Inc. was notified that the audit practice of Beard Miller Company LLP an independent registered public accounting firm, was combined with ParenteBeard, LLC in a transaction pursuant to which Beard combined its operations with ParenteBeard and certain of the professional staff and partners of Beard joined ParenteBeard either as employees or partners of ParenteBeard. On October 1, 2009, Beard resigned as the auditors of the Company and, with the approval of the audit committee of the company’s board of directors, ParenteBeard was engaged as its independent registered public accounting firm.