UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q/A
(Amendment No. 1)
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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for the quarterly period ended:
June 30, 2009
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from:
to
Commission file number:
0-26366
ROYAL BANCSHARES OF PENNSYLVANIA, INC.
(Exact name of the registrant as specified in its charter)
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PENNSYLVANIA
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23-2812193
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(State or other jurisdiction of
incorporation or organization)
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(IRS Employer
identification No.)
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732 Montgomery Avenue, Narberth, PA 19072
(Address of principal Executive Offices)
(Registrants telephone number, including area code)
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for
such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes
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No
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Indicate by checkmark whether the registrant has submitted electronically and posted on its
corporate Web site, if any, every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding twelve
months (or for such shorter period that the registrant was required to submit and post such files). Yes
o
No
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated filer, or a smaller reporting company. See definitions of large accelerated
filer, accelerated filer and smaller reporting company in Rule 12-b-2 of the Exchange Act.
Large accelerated filer
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Accelerated filer
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Non-accelerated filer
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(do not check if a smaller reporting company)
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Smaller reporting company
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act). Yes
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No
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Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of
the latest practicable date.
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Class A Common Stock
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Outstanding at July 31, 2009
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$2.00 par value
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10,847,117
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Class B Common Stock
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Outstanding at July 31, 2009
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$0.10 par value
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2,095,265
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EXPLANATORY NOTE
The Company is amending Item 4 of Part I , Item 1A. of Part II and Item 4 of Part II of the
Companys Form 10-Q for the quarter ended June 30, 2009 (the Form 10-Q) to read in their entirety
as set forth below.
The Form 10-Q as amended hereby continues to speak as of the date of the Form 10-Q and the
disclosures have not been updated to speak as of any later date. Any items in this Form 10-Q/A that
are not expressly changed hereby shall be as set forth in the Form 10-Q. All information contained
in this Amendment No. 1 and the Form 10-Q
is subject to updating and supplementing as
provided in the Companys periodic reports filed with the Securities and Exchange Commission
subsequent to the filing of the Form 10-Q.
Pursuant to SEC Rule 12b-15, in connection with this Amendment No. 1 on Form 10-Q/A, the Company is
filing updated Exhibits 31.1, 31.2, 32.1, and 32.2.
ITEM 4 CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
The Company maintains a set of disclosure controls and procedures that are designed to ensure that
information required to be disclosed in reports filed under the Securities Exchange Act of 1934, as
amended (the Exchange Act), is recorded, processed, summarized and reported within the time
periods specified in the Securities Exchange Commissions rules and forms. As of the end of the
period covered by this report, the Company evaluated, under the supervision and with the
participation of our management, including our Chief Executive Officer (CEO) and Chief Financial
Officer (CFO), the effectiveness of the design and operation of our disclosure controls and
procedures, as defined in Rule 13a-15(e) of the Exchange Act. Based on that evaluation our CEO and
CFO concluded, as a result of the material weakness described in the following paragraph, that the
Companys disclosure controls and procedures were not effective at June 30, 2009.
As described in Item 9A(T) in our annual report on Form 10-K for the year-ended December 31, 2008,
management had identified a material weakness associated with internal controls related to the
accounting for deferred income taxes. To remediate this weakness, the Company engaged a nationally
recognized independent public accounting firm to review the Companys accounting procedures related
to deferred income taxes for December 31, 2008 and March 31, 2009. The Company continued to consult
with the independent public accounting firm during the second quarter of 2009.
(b) Changes in Internal Control Over Financial Reporting
Other than as described above, there have been no changes in the Companys internal control over
financial reporting during the second quarter of 2009 that have materially affected, or are
reasonably likely to materially affect, the Companys internal control over financial reporting.
There are inherent limitations to the effectiveness of any controls system. A controls system, no
matter how well designed and operated, can provide only reasonable, not absolute, assurance that
its objectives are met. Further, the design of a control system must reflect the fact that there
are limits on resources, and the benefits of controls must
be considered relative to their costs and their impact on the business model. We intend to continue
to improve and refine our internal control over financial reporting.
PART II OTHER INFORMATION
Item 1A.
Risk Factors
Before making an investment decision, investors should carefully consider the risks described below
and in our Annual Report on Form 10-K for the year ended December 31, 2008 in conjunction with the
other information in
this report, including our consolidated financial statements and related notes. If any of the
following risks or other risks, which have not been identified or which we may believe are
immaterial or unlikely, actually occurs, our business, financial condition and results of
operations could be harmed. In such a case, the trading price of our common stock could decline,
and investors may lose all or part of their investment.
The cease and desist order limits certain activities that we may perform and increases our
compliance costs.
Royal Bank is regulated by the FDIC and the Commonwealth of Pennsylvania Department of Banking. As
more fully described in Note 20 Subsequent Events, on July 19, 2009, Royal Bank agreed to enter
into a Stipulation and Consent to the Issuance of an Order to Cease and Desist (the Orders) with
each of the FDIC and the Department of Banking. The Orders include a number of provisions
relating to the operation of the business of Royal Bank, including provisions requiring Royal Bank
to reduce its concentration in commercial real estate loans and reliance on wholesale funding
sources. The provisions of the Orders, including any actions that the FDIC or Department of
Banking may take to enforce them, as well as the additional compliance costs resulting from the
Orders, may adversely affect our business, financial condition, or results of operations.
Item 4. Submission of Matters to a Vote of Securityholders.
On May 20, 2009, at the Annual Meeting of Shareholders of Royal Bancshares of Pennsylvania, Inc.,
the shareholders voted by proxy or in person to (i) elect the four nominees as Class I Directors of
the Corporation to serve for a three year term and until their successors are elected and
qualified; (ii) ratify Beard Miller Company LLP (ParenteBeard effective October 1, 2009) as the
independent registered public accounting firm for 2009; and (iii) approve a non-binding resolution
on executive compensation.
The voting results to elect the four nominees as Class I Directors of the Corporation to serve for
a three year term and until their successors are elected and qualified are as follows:
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Edward F. Bradley
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James J. McSwiggan
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Linda Tabas Stempel
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Howard J. Wurzak
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% of
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% of
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% of
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% of
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Total shares
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shares
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Total shares
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shares
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Total shares
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shares
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Total shares
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shares
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voted
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voted
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voted
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voted
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voted
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voted
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voted
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voted
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For
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24,920,547
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78.36
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%
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24,946,031
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78.44
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%
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24,859,219
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78.17
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%
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24,906,503
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78.31
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Against
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0.00
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%
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0.00
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%
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0.00
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%
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0.00
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%
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Abstain
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273,712
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0.86
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248,228
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0.78
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%
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335,040
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1.05
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%
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287,756
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0.91
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The voting results to ratify Beard Miller Company LLP as the independent registered public
accounting firm for 2009 are as follows:
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% of
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Total shares
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shares
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voted
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voted
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For
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24,836,844
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78.10
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%
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Against
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331,545
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1.04
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%
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Abstain
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25,870
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0.81
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%
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Broker non-votes
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0.00
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%
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The voting results to approve the non-binding resolution on executive compensation are as follows:
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% of
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Total shares
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shares
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voted
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voted
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For
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24,614,231
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77.40
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%
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Against
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520,483
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1.64
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%
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Abstain
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59,545
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0.19
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Broker non-votes
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0.00
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%
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Item 6.
Exhibits
(a)
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3.1
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Articles of Incorporation of the Company. (Incorporated by reference
to Exhibit 3(i) of the Companys report on Form 10-K filed with the
Commission on March 30, 2009.)
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3.2
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Bylaws of the Company (Incorporated by reference to Exhibit 3.ii to
the Companys report on Form 10-K filed with the Commission on March
30, 2009.)
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31.1
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Section 302 Certification pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934 signed by Principal Executive
Officer.
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31.2
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Section 302 Certification pursuant to Section 13(a) or 15(d) of the
Securities and Exchange Act of 1934 signed Principal Financial
Officer.
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32.1
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Certification Pursuant to 18 U.S.C. Section 1350 pursuant to Section
906 of the Sarbanes-Oxley Act of 2002 signed by Principal Executive
Officer.
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32.2
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Certification Pursuant to 18 U.S.C. Section 1350 pursuant to Section
906 of the Sarbanes-Oxley Act of 2002, signed by Principal Financial
Officer.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this amendment to report to be signed on its behalf by the undersigned thereunto duly
authorized.
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ROYAL BANCSHARES OF PENNSYLVANIA, INC.
(Registrant)
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Dated: November 12, 2009
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/s/ Robert A. Kuehl
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Robert A. Kuehl
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Principal Financial Officer
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