Royal Bancshares of Pennsylvania, Inc. Announces Financial Results for the First Quarter of 2011


NARBERTH, PA--(Marketwire - May 13, 2011) - Royal Bancshares of Pennsylvania, Inc. (NASDAQ: RBPAA) ("Royal"), parent company of Royal Bank America, a community bank actively empowering small businesses, entrepreneurs and individuals to achieve their financial goals and enrich our communities, today announced its consolidated financial results for the first quarter ended March 31, 2011.

For the three-month period ending March 31, 2011, net loss attributable to Royal was $1.5 million or 15 cents per basic and diluted common share, as compared to a net loss of $1.1 million, or 12 cents per basic and diluted common share for the three-month period ending March 31, 2010.

Robert R. Tabas, Chairman and CEO, noted, "We are disappointed to report a loss for the quarter yet are encouraged by improvements in both our capital ratios and net interest margin, each of which illustrates the progress we are making in strengthening our bank."

The following is an overview of key financials and trends:

--  As part of a continued deleveraging strategy, total assets decreased to
    $929.4 million at March 31, 2011, compared to $980.6 million at
    December 31, 2010; total deposits decreased to $645.1 million at
    March 31, 2011, compared to $693.9 million at December 31, 2010; total
    loans (including loans held for sale) decreased to $467.9 million at
    March 31, 2011, compared to $505.3 million at December 31, 2010.

--  Net interest margin at the end of the first quarter of 2011 was 3.10%,
    a 31 basis points improvement from the comparable quarter of 2010.  Net
    interest margin has almost recovered to the level recorded in 2008,
    3.15%, highlighting the bank's ability to retain and re-price maturing
    retail CDs coupled with redemptions of higher costing brokered CDs over
    the past year, including $33.5 million in the first quarter of 2011.

--  At March 31, 2011, Royal Bank America's total capital to risk-weighted
    assets was 14.25%, Tier I capital to risk-weighted assets was 12.97%,
    and Tier I capital to average assets was 8.65% in accordance with
    regulatory accounting principles.  At December 31, 2010, such capital
    ratios were 13.76%, 12.49% and 8.03%, respectively.

--  For the three months ended March 31, 2011, the Company did not record
    other-than-temporary-impairment losses on its investment portfolio
    reflecting what we believe to be the positive impact of concentrated
    measures taken to reduce risk within the portfolio over the past few
    quarters. Investment impairment charges totaled $479,000, $11.0 million
    and $23.4 million in 2010, 2009, and 2008, respectively.

--  Total non-accrual loans at March 31, 2011 were $65.1 million as
    compared to $65.8 million at December 31, 2010 and $83.7 million
    at March 31, 2010.

About Royal Bancshares of Pennsylvania, Inc.

Royal Bancshares of Pennsylvania, Inc., headquartered in Narberth, Pennsylvania, is the parent company of Royal Bank America, which for the past 48 years has played a lead role in the growth and development of our region by empowering small businesses, entrepreneurs and individuals to achieve their financial goals and enrich our communities. More information on Royal Bancshares of Pennsylvania, Inc., Royal Bank America and its 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, 2010.

ROYAL BANCSHARES OF PENNSYLVANIA, INC.
CONDENSED INCOME STATEMENT

                                                        Three Months
                                                      Ended Mar. 31st
(in thousands, except for earnings per share)         2011         2010
                                                  -----------  -----------
                                                  (Unaudited)  (Unaudited)
Interest Income                                   $    10,574  $    15,623
Interest Expense                                        4,019        7,603
                                                  -----------  -----------
Net Interest Income                                     6,555        8,020
Provision for Loan Losses                               2,084        1,903
                                                  -----------  -----------
Net Interest Income after Provision                     4,471        6,117
Non Interest Income                                     1,364        1,305
Non Interest Expense                                    6,969        8,053
                                                  -----------  -----------
Loss before Taxes                                      (1,134)        (631)
Income Tax Expense                                          0            0
                                                  -----------  -----------
Net Loss                                               (1,134)        (631)
Less Net Income attributable to noncontrolling
 interest                                                 377          442
Net Loss attributable to Royal Bancshares         ($    1,511) ($    1,073)
                                                  ===========  ===========
Loss per common share - basic                     ($     0.15) ($     0.12)
                                                  ===========  ===========
SELECTED RATIOS:
Return on Average Assets                                 -0.6%        -0.3%
Return on Average Equity                                 -7.3%        -4.1%
Average Equity to Assets                                  8.8%         8.4%
Book Value Per Share                              $      3.65  $      5.44


CONDENSED BALANCE SHEET

                                                    Mar. 31,     Dec. 31,
(in thousands)                                        2011         2010
                                                  (unaudited)  (unaudited)
Cash and Cash Equivalents                         $     52,146 $     51,733
Investment Securities                                  315,233      327,560
Loans & Leases (net)                                   467,893      505,346
Premises and Equipment (net)                            12,958       12,529
Accrued Interest receivable                             16,867       16,864
Other Assets                                            64,277       66,594
                                                  ------------ ------------
      Total Assets                                $    929,374 $    980,626
                                                  ------------ ------------

Deposits                                               645,069      693,913
Borrowings                                             153,233      154,949
Other Liabilities                                       22,788       21,897
Subordinated debentures                                 25,774       25,774
Royal Bancshares Shareholders' Equity                   78,732       80,692
Noncontrolling Interest                                  3,778        3,401
                                                  ------------ ------------
      Total Equity                                      82,510       84,093
                                                  ------------ ------------
      Total Liabilities and Equity                $    929,374 $    980,626
                                                  ------------ ------------


      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 ASU 2009-17.

Contact Information:

Company Contact:
Marc Sanders
Vice President of Marketing
Royal Bank America
Phone: 610-668-4700