Exhibit 10.3
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF BANKING

           
 
  :    
Commonwealth of Pennsylvania,
  :   Docket No.: 09____(ENF-ORD)
Department of Banking, Bureau of
  :    
Commercial Institutions,
  :    
 
  :    
v.
  :    
 
  :    
Royal Bank America.
  :    
 
  :      

CEASE AND DESIST ORDER
     WHEREAS, Royal Bank America, Narberth, Pennsylvania (the “Bank”), is a
Pennsylvania state-chartered bank and subject to regulation by the Commonwealth
of Pennsylvania Department of Banking (the “Department”) and the Federal Deposit
Insurance Corporation (“FDIC”);
     WHEREAS, the Bureau of Commercial Institutions (the “Bureau”) is primarily
responsible within the Department for the regulation and supervision of the
Bank;
     WHEREAS, the Bank was the subject of a Joint Report of Examination of the
Bank by the Bureau and the FDIC as of December 31, 2008 (the “Report of
Examination”); and,
     WHEREAS, the Report of Examination gave the Bureau and the FDIC the reason
to believe that the Bank had engaged in unsafe or unsound banking practices and
had committed violations of law and regulation.
     IT IS HEREBY ORDERED, pursuant to Section 501.A of the Department of
Banking Code, 71 P.S. § 733-501.A, that the Bank, its directors, officers,
employees, agents, and other “institution-affiliated parties,” as that term is
defined in Section 3(u) of the FDIA, 12 U.S.C. § 1813(u), and its successors and
assigns, shall CEASE AND DESIST from engaging in the following unsafe or unsound
banking practices and violations of law and regulation:

 

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     1. Operating the Bank with inadequate management policies and practices
that are detrimental to the Bank.
     2. Operating the Bank without adequate supervision and direction by the
Bank’s board of directors over the management of the Bank to prevent unsafe or
unsound banking practices.
     3. Operating the Bank with an excessive level of adversely classified loans
or assets.
     4. Operating the Bank with an excessive level of delinquent loans.
     5. Operating the Bank with an excessive level of nonaccrual loans.
     6. Engaging in unsatisfactory lending and collection practices, including,
but not limited to:
          (a) Insufficient monitoring and controls over receivable-based loans.
          (b) Excessive out-of-territory lending.
          (c) Over-reliance on real estate liquidation as a loan repayment
source and over-reliance on guarantors’ real estate net worth.
          (d) Operating with inadequate underwriting, loan-grading system and
loan administration practices.
     7. Operating the Bank with an inadequate level of capital protection for
the kind and quality of assets held by the Bank.
     8. Operating the Bank with inadequate earnings to fund growth and augment
capital.
     9. Operating the Bank with inadequate net interest margins.
     10. Operating the Bank without adequate liquidity and funds management
policies and procedures.
     11. Operating with an inadequate investment policy.

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     12. Operating the Bank with a heavy reliance on non-core funding sources.
     13. Operating the Bank with inadequate internal routines and controls.
     IT IS FURTHER ORDERED, pursuant to Section 501.A of the Department of
Banking Code, 71 P.S. § 733-501.A, that the Bank, its directors, officers,
employees, agents, and other “institution-affiliated parties,” as that term is
defined in Section 3(u) of the FDIA, 12 U.S.C. § 1813(u), and its successors and
assigns, shall take AFFIRMATIVE ACTION, as follows:
     1. Management.
          (a) The Bank shall have and retain qualified management. Each member
of management shall possess qualifications and experience commensurate with his
or her duties and responsibilities at the Bank. The qualifications of management
personnel shall be evaluated on their ability to:

  (i)   comply with the requirements of this Order;     (ii)   operate the Bank
in a safe and sound manner;     (iii)   comply with applicable laws and
regulations; and     (iv)   restore all aspects of the Bank to a safe and sound
condition, including improving the Bank’s asset quality, capital adequacy,
earnings, management effectiveness, and liquidity.

          (b) While this Order is in effect, the Bank shall notify the
Department in writing of any changes of any member of the Bank’s board of
directors (“Board”) or senior management officer within 15 days of the event.
Any notification required by this subparagraph shall include a description of
the background(s) and experience of any proposed replacement personnel and must
be received at least 30 days prior to the individual(s) assuming the new
position(s). The Bank shall also establish procedures to ensure compliance with

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section 32 of the Act, 12 U.S.C. § 1831i, and Subpart F of Part 303 of the FDIC
Rules and Regulations, 12 C.F.R. Part 303.
     2. Management — Board Supervision. Within 30 days after the effective date
of this Order, the Board shall increase its participation in the affairs of the
Bank by assuming full responsibility for the approval of the Bank’s policies and
objectives and for the supervision of the Bank’s management, including all the
Bank’s activities. The Board’s participation shall include, at a minimum,
monthly meetings in which the following areas shall be reviewed and approved by
the Board: reports of income and expenses; new, overdue, renewed, insider,
charged-off, delinquent, noncurrent, and recovered loans; investment activities;
liquidity and funds management; operating policies; and individual committee
actions. The Board minutes shall document these reviews and approvals, including
the names of any dissenting directors.
     3. Classified Assets — Charge-Off and Plan For Reduction.
          (a) Within 30 days after the effective date of this Order, the Bank
shall, to the extent that it has not previously done so, eliminate from its
books, by charge-off or collection, all assets or portions of assets classified
“Loss” by the FDIC and the Department in the Joint Report of Examination as of
December 31, 2008 (“Report of Examination”). Elimination or reduction of these
assets through proceeds of loans made by the Bank shall not be considered
“collection” for the purpose of this paragraph.
          (b) Within 60 days after the effective date of this Order, the Bank
shall formulate and submit a detailed written plan to the Bureau to reduce the
remaining assets classified “Doubtful” and “Substandard” in the Report of
Examination. The plan shall address each asset so classified with a balance of
$1,000,000 or greater and provide the following:

  (i)   the name under which the asset is carried on the Bank’s books;     (ii)
  type of asset;     (iii)   actions to be taken in order to reduce the
classified asset;     (iv)   timeframes for accomplishing the proposed actions;

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  (v)   The plan shall also include, at a minimum:         (1) a review of the
financial position of each such borrower, including the source of repayment,
repayment ability, and alternate repayment sources; and         (2) an
evaluation of the available collateral for each such credit, including possible
actions to improve the Bank’s collateral position;

  (vi)   a schedule detailing the projected reduction of total classified assets
on a quarterly basis; and,     (vii)   a provision requiring the submission of
monthly progress reports to the Board and a provision mandating a review by the
Board.

          (c) The Bank shall submit the plan to the Bureau for review and
comment. Within 30 days after the Bureau has responded to the plan, the Board
shall adopt the plan as amended or modified by the Bureau, which approval shall
be recorded in the minutes of the Board meeting. The Bank shall then immediately
initiate measures detailed in the plan to the extent such measures have not been
initiated.
          (d) For purposes of the plan, the reduction of adversely classified
assets shall be detailed using quarterly targets expressed as a percentage of
the Bank’s Tier 1 capital plus the Bank’s Allowance for Loan and Lease Losses
and may be accomplished by charge-off, collection; sufficient improvement in the
quality of adversely classified assets so as to warrant removing any adverse
classification, as determined by the Bureau; or an increase in the Bank’s Tier 1
capital.

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          (e) While this Order is in effect, the Bank shall eliminate from its
books, by charge-off or collection, all assets or portions of assets classified
“Loss” as determined at any future examination.
     4. Reduction of Delinquencies.
          (a) Within 60 days after the effective-date of this Order, the Bank
shall formulate and submit to the Bureau for review and comment a detailed
written plan for the reduction and collection of delinquent loans, such plan
shall include, but not be limited to, provisions which:

  (i)   prohibit the extension of credit for the payment of interest, unless the
Board adopts prior to such extension of credit a detailed written statement
giving reasons why such extension of credit is in the best interests of the Bank
and how it improves the position of the Bank. Copies of the statement approved
by the Board shall be made a part of the Board minutes and placed in the
appropriate loan file and submitted to the Bureau with the quarterly progress
reports required pursuant to paragraph 16 of this Order;     (ii)   delineate
areas of responsibility for implementing and monitoring the Bank’s collection
policies;     (iii)   establish specific collection procedures to be instituted
at various stages of a borrower’s delinquency;     (iv)   establish dollar
levels to which the Bank shall reduce delinquencies within 6 and 12 months from
the effective date of this Order; and,

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  (v)   provide for the submission of monthly written progress reports to the
Board for review and notation in the Board minutes.

          (b) For purposes of the plan, “reduce” means to charge-off or collect.
          (c) Within 30 days after the Bureau has responded to the plan, the
Board shall adopt the plan as amended or modified by the Bureau. The plan shall
be implemented immediately to the extent that the provisions of the plan are not
already in effect at the Bank.
     5. Restriction of Advances to Classified Borrowers.
          (a) While this Order is in effect, the Bank shall not extend, directly
or indirectly, any additional credit to or for the benefit of any borrower whose
existing credit has been classified “Loss” in the Report of Examination, either
in whole or in part, and is uncollected, or to any borrower who is already
obligated in any manner to the Bank on any extension of credit, including any
portion thereof, that has been charged off the books of the Bank and remains
uncollected. The requirements of this paragraph shall not prohibit the Bank from
renewing (after full collection, in cash, of interest due from the borrower) any
credit already extended to the borrower.
          (b) While this Order is in effect, the Bank shall not extend, directly
or indirectly, any additional credit to or for the benefit of any borrower whose
extension of credit is classified “Doubtful” and/or “Substandard” in the Report
of Examination, either in whole or in part, and is uncollected, unless the Board
has signed a detailed written statement giving reasons why failure to extend
such credit would be detrimental to the best interests of the Bank. The
statement shall be placed in the appropriate loan file and included in the
minutes of the applicable meeting of the Board.

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     6. Reduction of Commercial Real Estate Concentrations.
          (a) Within 45 days from the effective date of this Order, the Bank
shall develop and submit a written plan, acceptable to the Bureau, for
systematically reducing and monitoring the Bank’s commercial real estate (“CRE”)
loan concentration of credit identified in the Report of Examination to an
amount which is commensurate with the Bank’s business strategy, management
expertise, size, and location. Such plan shall prohibit any advances that would
increase the concentration unless the advance is pursuant to an existing loan
agreement and shall include, but not be limited to:

  (i)   dollar levels and percent of capital to which the Bank shall reduce the
concentration; and,     (ii)   timeframes for achieving the reduction in dollar
levels in response to (i) above;     (iii)   compliance with the Interagency
Guidance on Concentrations in Commercial Real Estate Lending, Sound Risk
Management Practices (FIL-104-2006, issued December 12, 2006) and Managing
Commercial Real Estate Concentrations in a Challenging Environment (FIL-22-2008,
issued March 17, 2008);     (iv)   provisions for controlling and monitoring of
CRE, including plans to address the rationale for CRE levels as they relate to
growth and capital targets, segmentation and testing of the CRE portfolio to
detect and limit concentrations with similar risk characteristics; and

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  (v)   provisions for the submission of monthly written progress reports to the
Board for review and notation in minutes of the Board meetings.

          (b) For purposes of the plan, “reduce” means to charge-off or collect
or increase Tier 1 capital.
          (c) The Bank shall submit the Plan to the Bureau for review and
comment. Within 30 days after the Bureau has responded to the plan, the Board
shall adopt the plan as amended or modified by the Bureau, which approval shall
be recorded in the minutes of the Board meeting. The plan shall be implemented
immediately to the extent that the provisions of the plan are not already in
effect at the Bank.
     7. Capital Maintenance.
          (a) Within 30 days after the effective date of this Order, and at all
times thereafter while this Order is in effect, the Bank, after establishing an
adequate Allowance for Loan and Lease Losses, shall increase and maintain its
ratio of Tier 1 capital to total assets (“leverage ratio”) equal to or greater
than 8 percent and its ratio of qualifying total capital to risk-weighted assets
(“total risk-based capital ratio”) equal to or greater than 12 percent.
          (b) If said capital ratios are less than required by this Order, as
determined as of the date of any Report of Condition and Income or at any future
examination, the Bank shall, within 30 days after notice of its capital
deficiency, submit to the Bureau a plan to increase its capital or to take such
other measures to bring its leverage and total risk-based capital ratio to the
percentage required by this Order. After the Bureau responds to the plan, the
Board shall adopt the plan, including any modifications or amendments requested
by the Bureau.

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          (c) In addition, the Bank shall comply with the FDIC’s Statement of
Policy on Risk-Based Capital found in Appendix A to Part 325 of the FDIC Rules
and Regulations, 12 C.F.R. Part 325, App. A.
          (d) For purposes of this Order, all terms relating to capital shall
have the meanings ascribed to them and shall be calculated according to the
methodology set forth in Part 325 of the FDIC Rules and Regulations, 12 C.F.R.
Part 325.
     8. Budget and Profit Plan.
          (a) Within 60 days after the effective date of this Order, the Bank
shall submit to the Bureau for review and comment a written profit plan and a
realistic, comprehensive budget for all categories of income and expense for the
remainder of the year 2009. The plan required by this paragraph shall contain
formal goals and strategies, be consistent with sound banking practices, reduce
discretionary expenses, improve the Bank’s overall earnings and net interest
income, and shall contain a description of the operating assumptions that form
the basis for major projected income and expense components.
          (b) Within 45 days after the end of each calendar quarter following
completion of the profit plan and budget required by this paragraph, the Board
shall evaluate the Bank’s actual performance in relation to the written profit
plan and budget, record the results of the evaluation, and note any actions
taken by the Bank in the Board minutes when such evaluation is undertaken.
          (c) A written profit plan and budget shall be prepared for each
calendar year for which this Order is in effect and shall be submitted to the
Bureau for review and comment within 30 days after the end of each year. Within
30 days after receipt of all such comments from the Bureau and after adoption of
any recommended changes, the Bank shall approve the

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written profit plan and budget, which approval shall be recorded in the Board
minutes. Thereafter, the Bank shall implement and follow the plan.
     9. Strategic Plan.
          (a) Within 90 days after the effective date of this Order, the Bank
shall develop and submit to the Bureau for review and comment a comprehensive
business/strategic plan (“Strategic Plan”) covering at least an operating period
of three years. The Strategic Plan shall contain an assessment of the Bank’s
current financial condition and market area, and a description of the operating
assumptions that form the basis for major projected income and expense
components.
          (b) The Strategic Plan shall address, at a minimum:
               (1) strategies for pricing policies and asset/liability
management;
               (2) specific plans for the maintenance of capital that may in no
event be less than the requirement of the provisions of paragraph 7 of this
Order and shall detail the actions to be taken to maintain the required capital
ratio, including but not limited to, the sale of new securities, the direct
contribution of cash by the directors or parent holding company, or the merger
with or acquisition by another federally insured institution or holding company
thereof;
               (3) plans for sustaining adequate liquidity, including back-up
lines of credit to meet any unanticipated deposit withdrawals;
               (4) goals for reducing problem loans;
               (5) financial goals, including pro forma statements for asset
growth, capital adequacy, and earnings;
               (6) formulation of a mission statement and the development of a
strategy to carry out that mission.

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          (c) The Bank shall submit the Strategic Plan to the Bureau for review
and comment. Within 30 days after the Bureau has responded to the plan, the
Board shall adopt the plan as amended or modified by the Bureau, which approval
shall be recorded in the minutes of the meeting of the Board. Thereafter, the
Bank shall implement and follow the Strategic Plan.
          (d) Within 45 days after the end of each calendar quarter following
the effective date of this Order, the Board shall evaluate the Bank’s
performance in relation to the Strategic Plan and record the results of the
evaluation, and any actions taken by the Bank, in the minutes of the meeting of
the Board at which such evaluation is undertaken. A copy of the evaluation shall
be submitted to the Bureau.
          (e) The Strategic Plan required by this Order shall be revised and
submitted to the Bureau for review and comment 45 days after the end of each
calendar year for which this Order is in effect. Within 30 days after the Bureau
has responded to the plan, the Board shall adopt the plan as amended or modified
by the Bureau, which approval shall be recorded in the minutes of the meeting of
the Board. Thereafter, the Bank shall implement the Strategic Plan.
     10. Liquidity and Funds Management.
          (a) Within 60 days after the effective date of this Order, the Bank
shall revise its liquidity and funds management policy and submit it to the
Bureau for review and comment. Annually thereafter, while this Order is in
effect, the Bank shall review its policy for adequacy and, based upon such
review, shall make necessary revisions to the policy to strengthen funds
management procedures and maintain adequate provisions to meet the Bank’s
liquidity needs. The initial plan shall include, at a minimum, provisions:

  (i)   establishing a reasonable range for its net non-core funding ratio as
computed in the Uniform Bank Performance Report and shall

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      address the means by which the Bank will seek to reduce its reliance on
non-core funding and high cost rate-sensitive deposits;     (ii)   identifying
the source and use of borrowed and/or volatile funds;     (iii)   establishing
sufficient back-up lines of credit that would allow the Bank to borrow funds to
meet depositor demands if the Bank’s other provisions for liquidity proved to be
inadequate;     (iv)   requiring the retention of securities and/or other
identified categories of investments that can be liquidated within one day in
amounts sufficient (as a percentage of the Bank’s total assets) to ensure the
maintenance of the Bank’s liquidity posture at a level consistent with short and
long term liquidity objectives;     (v)   establishing a minimum liquidity ratio
and defining how the ratio is to be calculated;     (vi)   establishing
contingency plans by identifying alternative courses of action designed to meet
the Bank’s liquidity needs; and,     (vii)   addressing the use of borrowings
(i.e., seasonal credit needs, match funding mortgage loans, etc.) and providing
for reasonable maturities commensurate with the use of the borrowed funds;
addressing concentration of funding sources; and, addressing pricing and
collateral requirements with specific allowable funding channels (i.e., brokered
deposits, internet deposits, Fed funds purchased and other correspondent
borrowings).

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          (b) Within 30 days after the Bureau has responded to the plan, the
Board shall adopt the plan as amended or modified by the Bureau. The plan shall
be implemented immediately to the extent that the provisions of the plan are not
already in effect at the Bank.
     11. Brokered Deposits.
          (a) Beginning with the effective date of this Order, and so long as
this Order is in effect, the Bank shall not solicit, accept, renew, or roll over
any brokered deposits unless it has applied for and been granted a waiver by the
Regional Director if the FDIC’s New York Regional Office in accordance with the
provisions of section 337.6 of the FDIC Rules and Regulations.
          (b) Within 60 days from the effective date of this Order, the Board
shall develop a plan to reduce the Bank’s reliance on non-core deposits and
wholesale funding sources to a level acceptable to the Bureau.
     12. Dividend Restriction. As of the effective date of this Order, the Bank
shall not declare or pay any cash dividend without the prior written consent of
the Bureau.
     13. Holding Company — Restriction on Payments.
          (a) As of the effective date of this Order, the Bank shall not make
any payment, directly or indirectly, to or for the benefit of the Bank’s holding
company or any other Bank affiliate, without the prior written consent of the
Bureau.
          (b) The Bank shall not enter into any contract with its holding
company or any other Bank affiliate or increase payment under any existing
contract without submitting the new contract or information concerning the
increase in any existing contract to the Bureau for review and comment.

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     14. Correction and Prevention. Beginning on the effective date of this
Order, the Bank shall take steps necessary, consistent with other provisions of
this Order and sound banking practices, to correct and prevent the unsafe or
unsound banking practices that were identified in the Report of Examination.
     15. Compliance Committee. Within 30 days after the effective date of this
Order, the Board shall establish a compliance committee of the Board with the
responsibility of ensuring that the Bank complies with the provisions of this
Order. The compliance committee shall report monthly to the entire Board, and a
copy of the report and any discussion related to the report or this Order shall
be included in the minutes of the Board meeting. Nothing contained herein shall
diminish the responsibility of the entire Board to ensure compliance with the
provisions of this Order.
     16. Progress Reports. Within 45 days after the end of each calendar quarter
following the effective date of this Order, the Bank shall furnish to the Bureau
written progress reports detailing the form and manner of any actions taken to
secure compliance with this Order and the results thereof. Such reports may be
discontinued when the corrections required by this Order have been accomplished
and the Bureau has released, in writing, the Bank from making further reports.
     17. Fidelity Bond.
          (a) Within thirty (30) days of the effective date of this Order, the
Bank shall provide to the Bureau a full and complete copy of the bond required
by 7 P.S. § 1410 (the “Bond”).

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          (b) The Bank shall immediately notify the Bureau of any notifications
or information from the Bank’s bond insurance carrier, its agents and/or
representatives that the Bond is not going to be renewed or will be terminated.
     18. Section 403 Reports to the Bureau. All reports required to be submitted
to the Bureau under this Order are special reports being required under
Section 403 of the Department of Banking Code, 71 P.S. § 733-403, and shall be
submitted to the Bureau in accordance with Section 403.B of the Department of
Banking Code, 71 P.S. § 733-403.B.
     19. Confidentiality. This Order and all reports and communications relating
to this Order shall be confidential and shall not be released or divulged to any
person or entity not officially connected to the Bank as a director, officer,
attorney or employee without the express written permission of the Department.
Notwithstanding the foregoing, the Bank may disclose the existence and contents
of this Order under the provisions of 71 P.S. § 733-404.A, relating to
disclosures required by federal and state securities laws.
     20. Other Actions.
          (a) If at any time the Department shall deem it appropriate in
fulfilling the responsibilities placed upon the Department under applicable law
to undertake any further action affecting the Bank, nothing in this Order shall
in any way inhibit, estop, bar or otherwise prevent the Department from doing
so.
          (b) Nothing herein shall preclude any proceedings brought by the
Department to enforce the terms of this Order, and that nothing herein
constitutes, nor shall the Bank contend that it constitutes, a waiver of any
right, power or authority of any other representatives of the United States,
departments or agencies thereof, Department of Justice, or any other

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representatives of the Commonwealth of Pennsylvania or any other departments or
agencies thereof, including any prosecutorial agency, to bring other actions
deemed appropriate.
     21. Communications. All communications regarding this Order shall be sent
to:
Raymond C. Harper, Director
Bureau of Commercial Institutions
Commonwealth of Pennsylvania
Department of Banking
17 North Second Street, Suite 1300
Harrisburg, Pennsylvania 17101
     22. Binding Nature. The provisions of this Order including the recital
paragraphs shall be binding upon the Bank and all of their
institution-affiliated parties, in their capacities as such, and their
successors and assigns.
     23. Effective Date. The effective date of this Order shall be the date upon
which this Order has been executed by the Bureau. Each provision of this Order
shall remain effective and enforceable, jointly and severally, until stayed,
modified, terminated or suspended by the Bureau.
     24. Titles. The titles used to identify the paragraphs of this document are
for the convenience of reference only and do not control the interpretation of
this document.

              SO ORDERED
            7/16/2009         Date Raymond C. Harper, Director        Bureau of
Commercial Institutions Commonwealth of Pennsylvania Department of Banking 17
North Second Street, Suite 1300 Harrisburg, PA 17101     

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COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF BANKING

           
 
  :    
Commonwealth of Pennsylvania,
  :   Docket No.: 09____(ENF-ORD)
Department of Banking, Bureau of
  :    
Commercial Institutions,
  :    
 
  :    
v.
  :    
 
  :    
Royal Bank America
  :    
 
  :      

STIPULATION AND CONSENT TO
ENTRY OF ORDER
     WHEREAS, Royal Bank America, Narberth, Pennsylvania (the “Bank”), is a
Pennsylvania state-chartered bank and subject to regulation by the Commonwealth
of Pennsylvania Department of Banking (the “Department”) and the Federal Deposit
Insurance Corporation (“FDIC”);
     WHEREAS, the Bureau of Commercial Institutions (the “Bureau”) is primarily
responsible within the Department for the regulation and supervision of the
Bank;
     WHEREAS, the Bank was the subject of a Joint Report of Examination of the
Bank by the Bureau and the FDIC as of December 31, 2008 (the “Report of
Examination”);
     WHEREAS, the Report of Examination gave the Bureau and the FDIC the reason
to believe that the Bank had engaged in unsafe or unsound banking practices and
had committed violations of law and regulation;
     WHEREAS, as a result of the Report of Examination, the Department is of the
opinion that grounds exist for the entry of the attached Order (the “Order”)
against the Bank pursuant to Section 501.A of the Department of Banking Code, 71
P.S. § 733-501.A; and,
     WHEREAS, the Bank in the interest of compliance and cooperation, without
admitting wrongdoing and in order to avoid administrative proceedings or other
litigation, stipulates and agrees to the following terms and conditions in
consideration of the Department’s forbearance from further litigation and such
other administrative proceedings based upon the forgoing recitals and the
matters contained in the Order.
     NOW, THEREFORE, IT IS AGREED BETWEEN THE DEPARTMENT AND THE BANK AS
FOLLOWS:
     1. Jurisdiction. The Bank is a “bank” within the meaning of Section 102(f)
of the Banking Code of 1965, 7 P.S. § 102(f).

 

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     2. Consent. The Bank consents to the issuance by the Department of the
Order and further agrees to comply with the remedial action set forth in the
Order upon its date of effectiveness as set forth in paragraph 5.
     3. Finality and Waiver. The Bank agrees that the Order is properly issued
pursuant to the Department’s authority under Section 501.A of the Department of
Banking Code, 71 P.S. § 733-501.A, and complies with all requirements of law,
and upon issuance, shall become final and unappealable. The Bank waives any
rights they may have to seek administrative or judicial review of the issuance
of the Order or the remedial actions and requirements set forth in the Order.
     4. Enforceability. The Bank acknowledges that the Department has the power
to enforce the attached Order pursuant to Section 502 of the Department of
Banking Code, 71 P.S. § 733-502.
     5. Effectiveness. The Bank stipulates and agrees that the Order will become
effective on the date that it is executed by the Department.
     6. Confidentiality. The Bank acknowledges that this Stipulation and Consent
to Entry of Order (“Stipulation and Consent”) and the Order are for the
confidential information of each member of the Board of Directors of the Bank,
Bank committee persons and any of the Bank officers, employees or Bank attorneys
at law who may be authorized by the Board of Directors of the Bank to review it.
This Stipulation and Consent, the Order, any information contained therein and
any reports or communication relating to the Stipulation and Consent and the
Order may not be distributed to any party other than those identified in this
paragraph without the prior approval of the Department, except as provided in
Section 404.A of the Department of Banking Code, 71 P.S. § 733-404.A.
     7. Required Reports. The Bank acknowledges that the reports required to be
submitted to the Department under the Order are special reports being required
under Section 403 of the Department of Banking Code, 71 P.S. § 733-403, and
that, pursuant to Section 403.E.(1), 71 P.S. § 733-403.E.(1), the Department
may, in addition to such other relief the Department is authorized to take under
the applicable statutes, impose a monetary penalty of One Hundred Dollars
($100.00) a day for each day after the time fixed by the Order that the Bank
fails to submit a required report.
     8. Other Actions.
          (a) It is expressly and clearly understood that if at any time the
Department shall deem it appropriate in fulfilling the responsibilities placed
upon the Department under applicable law to undertake any further action
affecting the Bank, nothing in this Order shall in any way inhibit, estop, bar
or otherwise prevent the Department from doing so.
          (b) It is expressly and clearly understood that nothing herein shall
preclude any proceedings brought by the Department to enforce the terms of this
Order, and that nothing herein constitutes, nor shall the Bank contend that it
constitutes, a waiver of any right, power or authority of any other
representatives of the United States, departments or agencies thereof,

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Department of Justice, or any other representatives of the Commonwealth of
Pennsylvania or any other departments or agencies thereof, including any
prosecutorial agency, to bring other actions deemed appropriate.
     9. Counsel. This Stipulation and Consent is entered into by the parties
upon full opportunity for legal advice from legal counsel.
     10. Titles. The titles used to identify the paragraphs of this document are
for the convenience of reference only and do not control the interpretation of
this document.
     WHEREFORE, in consideration of the foregoing, including the recital
paragraphs, the Department and the Bank, both intending to be legally bound, do
hereby execute this Stipulation and Consent this 15th day of July, 2009.

               (seal)
      /s/ Raymond C. Harper       Raymond C. Harper, Director      Bureau of
Commercial Institutions Commonwealth of Pennsylvania Department of Banking 17
North Second Street, Suite 1300 Harrisburg, PA 17101     

Section 501.B Notice. Pursuant to Section 501.B. of the Department of Banking
Code, 71 P.S. § 733-501.B, the undersigned Directors of Royal Bank America are
hereby given notice and warned that the Bank’s failure to comply in full with
the terms of the Order may result in an order being issued by the Bureau
directing one or more members of the Board of Directors to appear and show cause
why he or she should not be removed from his or her office or position within
the Bank.
Acknowledgement. The undersigned Directors of Royal Bank America, each
acknowledge that he or she has read the foregoing Stipulation and Consent and,
acting solely in his or her capacity as a Director, approves of the consent
thereto by Royal Bank America.

         
 
       
/s/ Edward F. Bradley
  /s/ Robert A. Richards, Jr.    
 
Edward F. Bradley, Director
 
 
Robert A. Richards, Jr., Director    
 
       
/s/ Carl M. Cousins
  /s/ Murray Stempel, III    
 
Carl M. Cousins, DVM, Director
 
 
Murray Stempel, III, Director    

[Signatures continued on next page]

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[Signatures continued from previous page]

         
 
       
/s/ Samuel Goldstein
  /s/ Evelyn R. Tabas    
 
Samuel Goldstein, Director
 
 
Evelyn R. Tabas, Director    
 
       
/s/ James J. McSwiggan
  /s/ Robert R. Tabas    
 
James J. McSwiggan, Director
 
 
Robert R. Tabas, Director    
 
       
/s/ Anthony J. Micale
  /s/ Linda Tabas Stempel    
 
Anthony J. Micale, Director
 
 
Linda Tabas Stempel, Director    
 
       
/s/ Albert Ominsky
  /s/ Edward B. Tepper    
 
Albert Ominsky, Esq., Director
 
 
Edward B. Tepper, Director    
 
       
/s/ Gregory T. Reardon
  /s/ Howard J. Wurzak    
 
Gregory T. Reardon, Director
 
 
Howard J. Wurzak, Director    

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