Related Party Transactions and Outside Related Director Information

Royal Bancshares of Pennsylvania, Inc. (RBPAA)

4/17/2006 Proxy Information

Ms. Stempel is the daughter of Evelyn R. Tabas, the wife of Murray Stempel, III, the sister of Lee E. Tabas and Robert R. Tabas and the sister-in-law of Howard Wurzak.

In the ordinary course of business, Royal Bank America, the Corporation's wholly-owned banking subsidiary, has had, and expects to have in the future, banking transactions with directors, officers of the Bank, principal shareholders of the Corporation and their associates which involve substantially the same terms, including interest rates, collateral and repayment terms as those prevailing at the time for comparable transactions with others, and no more than the normal risk of collectibility or other unfavorable features.

The largest aggregate amount of indebtedness to the Corporation and the Bank during the year 2005, by all directors and officers of the Corporation and Bank as a group, and their affiliates, was $9,200,000. The total of such outstanding loans at December 31, 2005, was $13,338,000 (including available funds not disbursed), representing 8.6% of shareholders' equity in the Corporation. There is one fixed rate loan with an interest rate of 6.25%. There is one floating rate loan based on 90 day LIBOR plus 300 basis points and one floating rate loan based on 30 day LIBOR plus 225 basis points. All other loans have floating interest rates ranging from prime to prime plus 100 basis points.

The Corporation has had and intends to have business transactions in the ordinary course of business with directors, officers and associates on comparable terms as those prevailing from time to time for other non-affiliated vendors of the Corporation. During 2005, the Corporation used the services of the Hilton Philadelphia Hotel and banquet facilities for Board of Director's meetings. The Hilton Philadelphia Hotel complex is managed by Howard Wurzak and owned by Stoudt Road Hotel Development, 50% of which is owned by Evelyn R. Tabas and 50% of which is owned by the Estate of Daniel M. Tabas.