922487--3/17/2008--ROYAL_BANCSHARES_OF_PENNSYLVANIA

related topics

{condition, economic, financial}

{loss, insurance, financial}

{control, financial, internal}

{competitive, industry, competition}

{regulation, change, law}

{financial, litigation, operation}

{regulation, government, change}

Competition from other financial institutions may adversely affect our profitability. Our allowance for loan losses may not be adequate to cover actual losses. We may suffer losses in our loan portfolio despite our underwriting practices. Negative publicity could damage our reputation and adversely impact our business and financial results. In the third and fourth quarters of 2007, we identified and reported certain material weaknesses in internal control over financial reporting and cannot assure you that additional material weaknesses will not be identified in the future. If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our financial statements that could require a restatement of such financial statements or our filings with the Securities and Exchange Commission may not be timely. Such events could negatively affect our stock price. Risks Related to Our Industry Our business is subject to interest rate risk and variations in interest rates may negatively affect our financial performance. Future governmental regulation and legislation could limit our future growth. Changes in accounting standards could impact earnings. Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud. Changes in consumer use of banks and changes in consumer spending and saving habits could adversely affect the Royal Bancshares financial results.

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922487--3/17/2008--ROYAL_BANCSHARES_OF_PENNSYLVANIA_INC