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                        ROYAL BANCSHARES OF PENNSYLVANIA
                    BOARD OF DIRECTORS AND SENIOR MANAGEMENT
                                 CODE OF ETHICS


We believe that maintenance of extremely high standards of honest, ethical and
impartial conduct is essential to assure the proper performance of Royal's
business and maintenance of the public's trust. Our Code of Conduct ("code")
sets forth the policies and procedures applicable to all in Royal's operations.

            o  We require compliance with the law and insist upon ethical
               behavior. This responsibility cannot be delegated or assumed by
               the company.

            o  Royal's Code is intended to guide our personnel's day-to-day
               conduct. We recognize that our code cannot anticipate every
               possible situation or cover every topic in detail. Most of the
               topics covered in this code are explained in greater detail in
               our various policies, procedures and guidelines such as those
               contained in our Bank's Employee Handbook. From time-to-time, we
               establish compliance programs to address specific subjects. All
               members of the Royal family are encouraged to seek guidance
               before taking any action on any manner in which he or she may be
               unclear.

            o  We recognize that the standards in this code can not necessarily
               take into account all legal requirements. Where more restrictive
               local laws or requirements exist, those take precedence.

            o  All Royal members are expected to comply with all applicable
               governmental rules and regulations. Any failure to obey such laws
               and regulations violates this code. Violation of our code or
               compliance programs will not be tolerated and will result in
               corrective action, up to and including termination. We encourage
               all personnel to report any known violation. Violators should
               expect that we will pursue remedies to full extent of the law,
               including civil remedies from violators as well as referral of
               any criminal misconduct to law enforcement agencies.

            o  We require all personnel to report suspected violations of this
               code, immediately to our Corporate Compliance Officer.

            o  Any questions about a topic covered in our code, should be
               directed to our Corporate Compliance Officer, our in-house or
               Corporate Counsel. We insist that any fiscal unethical or illegal
               conduct, be reported to our Corporate Compliance Officer or the
               Chairman of our Audit Committee.

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Conflicts of Interest
---------------------

         A "conflict of interest" exists any time one faces a choice between
what is in a person's own personal interest (financial or otherwise) and the
interest of our company. . When a conflict of interest arises, we encourage our
directors and officers to act with great care to avoid any possibility that
their actions do not appear to be in the best interest of the company. Should
any of our people find themselves in a position where his or her objectivity may
be questioned because of individual interest or family or personal
relationships, we ask that they notify our Corporate Compliance Officer
immediately for guidance.

Ownership Interests
-------------------

         Board of Directors approval is required for our company to do business
with an entity in which a director, senior officer or family member owns -
directly or indirectly - an interest. Whenever such persons or a family member
own or acquire an interest that is greater than 5% in any entity, Board approval
is needed when:

            o  Such entity has more than $1,000 in deposits, loans or does more
               than $1,000 in annual sales of goods or services to our company
               or its affiliates; or

            o  If such persons help make entity purchasing or lending decisions
               or have a part in payment for the goods and services.

 Whenever an ownership interest does not meet any of the above criteria, Board
approval is not needed, however, all such persons are expected to remain
obligated to keep our company's and those of our shareholders interest first in
mind.

Gifts, Meals Services and Entertainment
---------------------------------------

         No one is permitted to request or accept anything that might be used or
perceived as a means to influence such individual against the company's best
interests. Personal gifts should not be accepted other than those considered
common business courtesies and for which one would reasonably expect to give
something similar in return in the normal course of business. No one may accept
or give any gift in excess of $100 in value without the prior approval of our
Corporate Compliance Officer. (notwithstanding anything contained in this Code
to the contrary, the term "Gift(s)" or "gift(s)" shall mean a gift with a Fair
Market Value in excess of $100.)

Safeguarding Company Assets/Accuracy of Books and Records
---------------------------------------------------------

         We maintain internal controls to provide direction on protecting
company assets and financial accountability. The controls are based upon the
following principles:

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WE DO NOT PERMIT:

            o  Making personal use of company assets that creates additional
               costs for the company, interferes with work duties or violates
               any company policies;

            o  Allowing company property to be used in any manner that may be or
               may be used in connection with any illegal acts;

            o  The manipulation of financial accounts, records or reports for
               personal gain;

            o  The maintenance of off-the-book accounts intended to facilitate
               questionable or illegal payments; or

            o  The violation of any law or regulation.

WE INSIST THAT ALL PERSONNEL:

            o  Prepare project budget proposals with accurate information;

            o  Maintain books, accounts and records according to generally
               accepted accounting principles, using enough detail to reflect
               accurately and fairly company transactions;

            o  Record transactions in a timely manner, so that no misleading
               financial information is created. (These transactions include,
               but are not limited to, income, expense, indebtedness,
               obligation, reserves and acquisition or disposition of assets,
               etc.);

            o  Retain company records in accordance with established policies
               and applicable legal and regulatory requirements; and

            o  Give full, fair, accurate, timely, and understandable disclosure
               in any and all periodic reports filed with the United States
               Securities and Exchange Commission.

Insider Trading
---------------

           Any member of the Royal Family that is privy to material or
confidential information about our company or any company with whom we have a
business relationship and trades Company securities such as stocks or bonds,
while in possession of that information or tell others about it before it is
made public may have violated the insider trading laws. Insider trading is a
crime that can carry severe penalties.

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         Material information includes the type of news that would affect a
reasonable investor's decision on whether or not to invest in the company's
stock. Examples include plans to issue securities, sharp changes in earnings
patterns, changes in dividend rates, changes in key management personnel,
mergers, acquisitions, and important regulatory actions affecting the company.
Our policy forbids Royal members from trading not only in our stock, but also in
those of our suppliers, customers or other companies with whom we have a
business relationship while in possession of material inside information learned
in the course of one's employment at our company.

         We encourage all directors and officers to invest in our stock.
However, should any director or officer have access to any information not
readily available to the public, such persons must be very careful when trading
stock to be sure you have not traded while in possession of material non-public
information. Should one have such information:

            o  Do not tell anyone not authorized to have the information. A
               casual remark to a family member or friend could find its way to
               a broker and eventually to the entire financial community thereby
               requiring the company to take corrective action Any such
               "tipping" may be illegal and damaging to the company, our
               employees or our investors

            o  Do not trade in our company's stock (or that of an applicable
               outside company) until the news has been made widely public.
               Circumstances suggesting the possibility of insider trading
               tarnish our reputation and may result in an investigation by
               governmental authorities of company and stockbroker records of
               stock trading transactions. Even unintended violations could
               damage the company's reputation and result in liability or
               penalties, including criminal charges and fines against such
               individual(s).

            o  This policy against insider trading also covers transfers into
               and out of company stock or savings plans and changes in patterns
               involving purchases of our stock within the plans. However,
               generally, regular scheduled monthly purchases of our stock
               within plans are not prohibited. We encourage best practices at
               all times and ask all our members to exercise caution so as not
               to jeopardize investor confidence.

If you are planning to effect a transaction in our securities, all members are
required to contact our in-house Corporate Counsel or Executive Vice President
for clearance.

Ethical Standards Regarding Giving and Accepting Gifts
------------------------------------------------------

         Our company and its directors and officers must maintain high ethical
and professional standards in all our dealings.

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            o  We will not tolerate anyone offering to or making payment in
               money or anything of value to anyone, including a government
               official, agent or employee of a government, political party,
               with the intent to induce favorable business treatment or to
               improperly affect business or governmental decisions. We insist
               on honesty and integrity from all parties to our business
               activities.

            o  Our code cannot necessarily contemplate all actions or all local
               legal requirements. Where more restrictive local laws exist,
               those take precedence. In general, we do not consider ordinary
               and reasonable business entertainment or gifts of insubstantial
               value that are customary and legal in the local market to be
               improper. However, we encourage all members to exercise their
               best judgment so as to avoid even the hint of inappropriate
               behavior. If you are uncertain, contact our in-house corporate
               counsel for guidance.

            o  We ask that you document any entertainment of and gifts to
               customers, vendors, suppliers and potential customers, vendors
               and suppliers, as well as any and all gifts received from
               customers, vendors, supplier and potential customers, vendors and
               suppliers, when in doubt, seek guidance from our in-house
               corporate counselor on how to proceed.




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                                 ACKNOWLEDGEMENT


         I, the undersigned, hereby acknowledge that I have received a copy of
the Code of Ethics of Royal Bancshares of Pennsylvania and its subsidiaries and
affiliates. I further certify that I have reviewed the Code of Ethics, I have
had an opportunity to ask questions, and that I understand its provisions and
what they require of me as an officer and/or director of Royal Bancshares of
Pennsylvania. I understand that a violation of this Code of Ethics may result in
the termination of my employment or a request for me to resign from Royal
Bancshares of Pennsylvania.




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Date                                        Signature of Officer or Director

















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