UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-Q

[X]      QUARTERLY  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934
         For the quarterly period ended June 30, 2007.

                                       OR

[_]      TRANSITION  REPORT  PURSUANT  TO SECTION 13 OR 15(d) OF THE  SECURITIES
         EXCHANGE ACT OF 1934
         For the transition period from _______ to _______.

                         Commission file number 0-49925

                             Central Jersey Bancorp
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


           New Jersey                                      22-3757709
 ---------------------------------          ------------------------------------
 (State or other jurisdiction of            (I.R.S. Employer Identification No.)
  incorporation or organization)


                627 Second Avenue, Long Branch, New Jersey 07740
                ------------------------------------------------
          (Address of principal executive offices, including zip code)


                                 (732) 571-1300
              ----------------------------------------------------
              (Registrant's telephone number, including area code)


--------------------------------------------------------------------------------
              (Former name, former address and formal 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 [X]    No [_]

Indicate by check mark whether the registrant is a large  accelerated  filer, an
accelerated  filer, or a  non-accelerated  filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act. Check one:
Large accelerated filer [_]   Accelerated filer [X]   Non-accelerated filer [_]

Indicate by check mark whether the  registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
Yes [_]    No [X] .

As of August 3, 2007,  there were 8,744,079  shares of the  registrant's  common
stock, par value $.01 per share, outstanding.

<page>

                             Central Jersey Bancorp
                               INDEX TO FORM 10-Q
                               ------------------
                                                                            PAGE
                                                                            ----
PART I.    FINANCIAL INFORMATION
------     ---------------------

Item 1.    Financial Statements

           Consolidated Statements of Financial Condition
           as of June 30, 2007 (unaudited) and December 31, 2006...............1

           Consolidated Statements of Income (unaudited)
           for the three and six months ended June 30, 2007 and 2006...........2

           Consolidated Statements of Changes in Shareholders' Equity
           (unaudited) for the six months ended June 30, 2007 and 2006.........3

           Consolidated Statements of Cash Flows (unaudited)
           for the six months ended June 30, 2007 and 2006.....................4

           Notes to Unaudited Consolidated Financial Statements................5

Item 2.    Management's Discussion and Analysis
           of Financial Condition and Results of Operations...................13

Item 3.    Quantitative and Qualitative Disclosures about Market Risk.........22

Item 4.    Controls and Procedures............................................23

PART II.   OTHER INFORMATION
-------    -----------------

Item 1.    Legal Proceedings..................................................24

Item 1A.   Risk Factors.......................................................24

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds........24

Item 3.    Defaults Upon Senior Securities....................................24

Item 4.    Submission of Matters to a Vote of Security Holders................25

Item 5.    Other Information..................................................25

Item 6.    Exhibits...........................................................25

Signatures....................................................................26

Index of Exhibits............................................................E-1

                           Forward-Looking Statements

Statements   contained  in  this  report  that  are  not  historical   fact  are
forward-looking  statements,  as that term is defined in the Private  Securities
Litigation  Reform  Act  of  1995.  Such  statements  may  be  characterized  as
management's  intentions,  hopes,  beliefs,  expectations  or predictions of the
future. It is important to note that such forward-looking statements are subject
to risks and uncertainties  that could cause actual results to differ materially
from those  projected  in such  forward-looking  statements.  Factors that could
cause future results to vary materially from current  expectations  include, but
are not limited to, changes in interest rates, economic conditions,  deposit and
loan growth,  real estate values,  loan loss provisions,  competition,  customer
retention,  changes  in  accounting  principles,   policies  or  guidelines  and
legislative and regulatory changes.

                                       i

<page>
<table>
<caption>

                                    PART I. FINANCIAL INFORMATION

Item 1.  Financial Statements

                           CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                                 JUNE 30, 2007 AND DECEMBER 31, 2006
                                       (dollars in thousands)
                                                                         June 30,       December 31,
                                                                           2007            2006
                                                                       ------------    ------------

                                                                             <c>             <c>
ASSETS                                                                  (unaudited)
------
Cash and due from banks                                                $     12,879    $     16,162
Federal funds sold                                                           38,312          21,634
                                                                       ------------    ------------
     Cash and cash equivalents                                               51,191          37,796
Investment securities available-for-sale, at market value                   108,646          95,735
Investment securities held-to-maturity (market value of $17,441
     (unaudited) and $20,454 at June 30, 2007 and December 31, 2006,
      respectively)                                                          18,099          20,820
Federal Reserve Bank Stock                                                    1,952           1,952
Federal Home Loan Bank Stock                                                    550             542
Loans held-for-sale                                                           1,366             242

Loans                                                                       314,823         315,322
     Less: Allowance for loan losses                                          3,490           3,229
                                                                       ------------    ------------
          Loans, net                                                        311,333         312,093

Accrued interest receivable                                                   2,051           2,613
Premises and equipment                                                        5,049           5,357
Bank owned life insurance                                                     3,505           3,447
Goodwill                                                                     26,957          26,957
Core deposit intangible                                                       2,202           2,478
Due from broker                                                                  --           3,527
Other assets                                                                  2,874           2,740
                                                                       ------------    ------------
          Total assets                                                 $    535,775    $    516,299
                                                                       ============    ============

LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------

Deposits:
     Non-interest bearing                                              $     82,194    $     83,482
     Interest bearing                                                       357,505         343,795
                                                                       ------------    ------------
                                                                            439,699         427,277
Other borrowings                                                             24,268          17,099
Subordinated debentures                                                       5,155           5,155
Accrued expenses and other liabilities                                        1,509           1,273
                                                                       ------------    ------------
          Total liabilities                                                 470,631         450,804
                                                                       ------------    ------------

Shareholders' equity:
Common stock, par value $0.01 per share. Authorized
     100,000,000 shares and issued and outstanding
     8,705,129 and 8,667,281 shares at June 30, 2007 and
     December 31, 2006, respectively                                             87              87
Additional paid-in capital                                                   60,627          60,501
Accumulated other comprehensive loss, net of tax benefit                     (1,359)         (1,409)
Retained earnings                                                             5,789           6,316
                                                                       ------------    ------------
          Total shareholders' equity                                         65,144          65,495
                                                                       ------------    ------------
          Total liabilities and shareholders' equity                   $    535,775    $    516,299
                                                                       ============    ============

See accompanying notes to consolidated financial statements.

                                                 1
</table>
<page>
<table>
<caption>

                                           CONSOLIDATED STATEMENTS OF INCOME
                               FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2007 AND 2006
                                   (dollars in thousands, except per share amounts)

                                                                   Three months ended           Six months ended
                                                                        June 30,                    June 30,
                                                                   2007          2006          2007           2006
                                                                -----------   -----------   -----------    -----------
                                                                        (unaudited)                 (unaudited)

                                                                     <c>           <c>           <c>            <c>

Interest and dividend income:
     Interest and fees on loans                                 $     5,804   $     5,882   $    11,590    $    11,486
     Interest on securities available-for-sale                        1,080         1,124         2,120          2,280
     Interest on federal funds sold and due from banks                  619            64           954            112
     Interest on securities held-to-maturity                            226           251           462            506
                                                                -----------   -----------   -----------    -----------
          Total interest and dividend income                          7,729         7,321        15,126         14,384

Interest expense:
     Interest expense on deposits                                     3,293         2,564         6,397          4,661
     Interest expense on other borrowings                               184           309           343            912
     Interest expense on subordinated debentures                        110           106           218            205
                                                                -----------   -----------   -----------    -----------
          Total interest expense                                      3,587         2,979         6,958          5,778

                                                                -----------   -----------   -----------    -----------
          Net interest income                                         4,142         4,342         8,168          8,606
                                                                -----------   -----------   -----------    -----------

Provision for loan losses:                                               40            97           165            148
                                                                -----------   -----------   -----------    -----------
          Net interest income after provision for loan losses         4,102         4,245         8,003          8,458
                                                                -----------   -----------   -----------    -----------

Other income (loss):
     Impairment on available-for-sale securities                         --            --        (1,957)            --
     Service charges on deposit accounts                                367           343           720            682
     Gain on sale of available-for-sale securities                       87            --            87             --
     Income on bank owned life insurance                                 29            25            58             55
     Gain on sale of loans held-for-sale                                 26            51            33            161
     Other service charges, commissions and fees                         --             4            --              6
                                                                -----------   -----------   -----------    -----------
          Total other income (loss)                                     509           423        (1,059)           904
                                                                -----------   -----------   -----------    -----------

Operating expenses:
     Salaries and employee benefits                                   1,676         1,850         3,494          3,732
     Net occupancy expenses                                             459           424           932            826
     Data processing fees                                               215           195           444            398
     Core deposit intangible amortization                               138           155           276            309
     Other operating expenses                                           957           970         1,949          1,870
                                                                -----------   -----------   -----------    -----------
          Total other expenses                                        3,445         3,594         7,095          7,135
                                                                -----------   -----------   -----------    -----------

Income (loss) before provision for income taxes                       1,166         1,074          (151)         2,227

Income tax expense                                                      431           399           376            827
                                                                -----------   -----------   -----------    -----------

          Net income (loss)                                     $       735   $       675   $      (527)   $     1,400
                                                                ===========   ===========   ===========    ===========

Basic earnings (loss) per share                                 $       .08   $       .08   $      (.06)   $       .16
                                                                ===========   ===========   ===========    ===========
Diluted earnings (loss) per share                               $       .08   $       .07   $      (.06)   $       .15
                                                                ===========   ===========   ===========    ===========

Average basic shares outstanding                                  8,685,424     8,675,672     8,676,877      8,642,994
                                                                ===========   ===========   ===========    ===========
Average diluted shares outstanding                                9,155,322     9,175,796     8,676,877      9,163,264
                                                                ===========   ===========   ===========    ===========

See accompanying notes to consolidated financial statements.

                                                          2
</table>
<page>
<table>
<caption>

                                 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                                      FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
                                                   (dollars in thousands)

                                                                              Accumulated
                                                               Additional         other
                                                 Common         paid-in       comprehensive     Retained
                                                  stock         capital       (loss) income     earnings         Total
--------------------------------------------------------------------------------------------------------------------------

                                         <c>             <c>             <c>             <c>             <c>
Balance at December 31, 2005                  $         86    $     59,995    $     (2,153)   $      3,850    $     61,778
--------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net income                                              --              --              --           1,400           1,400
Unrealized loss on securities
   available-for-sale, net of tax of $585               --              --            (989)             --           (989)
                                                                                                              ------------
Total comprehensive income                              --              --              --              --             411
Exercise of stock options -113,150 shares
  (including tax benefit of $250)                        1             724              --              --             725
Common Stock Retired - 22,599 shares                    --            (217)             --              --            (217)

--------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 2006                      $         87    $     60,502    $     (3,142)   $      5,250    $     62,697
--------------------------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2006                  $         87    $     60,501    $     (1,409)   $      6,316    $     65,495
--------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net loss                                                --              --              --            (527)           (527)
Unrealized loss on securities
   available-for-sale, net of tax of $743               --              --          (1,311)             --          (1,311)
Reclassification adjustment for
   gains  included in
   net income (net of tax $37)                          --              --              50              --              50
Impairment on securities
   available-for-sale, net of tax of ($646)             --              --           1,311              --           1,311
                                                                                                              ------------
Total comprehensive loss                                --              --              --              --            (477)

Exercise of stock options - 36,641 shares
  (including tax benefit of $13)                        --             130              --              --             130

Cash paid for fractional shares                         --              (4)             --              --              (4)
--------------------------------------------------------------------------------------------------------------------------
Balance at June 30, 2007                      $         87    $     60,627    $     (1,359)   $      5,789    $     65,144
==========================================================================================================================

See accompanying notes to consolidated financial statements.

                                                             3
</table>
<page>
<table>
<caption>

                                 CONSOLIDATED STATEMENTS OF CASH FLOWS
                            FOR THE SIX MONTHS ENDED JUNE 30, 2007 AND 2006
                                         (dollars in thousands)
                                                                                  Six months ended
                                                                                       June 30,
                                                                                  2007         2006
                                                                                ---------    ---------
                                                                               (unaudited)  (unaudited)

                                                                                <c>          <c>
Cash flows from operating activities:
     Net (loss) income                                                          $    (527)   $   1,400
Adjustments to reconcile net (loss) income to net cash provided by
  operating activities:
    Increase in cash surrender value of life insurance                                (58)         (55)
    Deferred taxes                                                                    245          365
    Tax benefit of stock option exercises                                             (13)          --
    Provision for loan losses                                                         165          148
    Depreciation and amortization                                                     375          437
    Net discount accretion on held-to-maturity securities                              (6)          (4)
    Net premium amortization on available-for-sale securities                          51           89
    Core deposit intangible amortization                                              276          309
    Impairment on available-for-sale securities                                     1,957           --
    Gain on sale of securities available-for-sale                                     (87)          --
    Gain on the sale of loans held-for-sale                                           (33)        (161)
    Originations of loans held-for-sale                                           (13,151)     (15,956)
    Proceeds from the sale of loans held-for-sale                                  12,060       18,667
    Decrease (increase) in accrued interest receivable                                562           (9)
    (Increase) decrease  in other assets                                             (387)         309
    Increase (decrease) in accrued expenses and other liabilities                     236         (394)
                                                                                ---------    ---------
         Net cash provided by operating activities                                  1,665        5,145
                                                                                ---------    ---------

Cash flows from investing activities:
     Proceeds from maturities of and paydowns on investment securities
       held-to-maturity                                                             2,727          924
     Proceeds from sales, maturities of and paydowns on investment securities
       available-for-sale                                                          91,223        6,962
     Purchases of  investment securities available-for-sale                      (106,005)          --
     Decrease in due from broker                                                    3,527           --
     Net decrease (increase) in loans                                                 595       (7,169)
     Purchases of premises and equipment, net                                         (67)        (191)
                                                                                ---------    ---------
           Net cash used in investing activities                                   (8,000)         526
                                                                                ---------    ---------


Cash flows from financing activities:
     Net proceeds from stock options exercised                                        143          508
     Net decrease in non-interest bearing deposits                                 (1,288)      (7,193)
     Net increase in interest bearing deposits                                     13,710       13,825
     Net increase (decrease) in other borrowings                                    7,169      (11,038)
     Cash paid for fractional shares                                                   (4)          --
                                                                                ---------    ---------
           Net cash provided by (used in) financing activities                     19,730       (3,898)
                                                                                ---------    ---------

            Increase in cash and cash equivalents                                  13,395        1,773

Cash and cash equivalents at beginning of period                                   37,796       21,228
                                                                                ---------    ---------
Cash and cash equivalents at end of period                                      $  51,191    $  23,001
                                                                                =========    =========

Cash paid during the period for:
     Interest                                                                   $   6,727    $   5,735
                                                                                =========    =========
     Income taxes                                                               $     442    $     946
                                                                                =========    =========

See accompanying notes to consolidated financial statements.

                                                   4
</table>
<page>

                      Central Jersey Bancorp and Subsidiary

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
              ----------------------------------------------------

Note 1.  Basis of Presentation
------------------------------

The  accompanying   unaudited  consolidated  financial  statements  include  the
accounts of Central  Jersey  Bancorp and its  wholly-owned  subsidiary,  Central
Jersey Bank,  N.A., which are sometimes  collectively  referred to herein as the
"Company."

The interim  consolidated  financial statements reflect all normal and recurring
adjustments that are, in the opinion of management,  considered  necessary for a
fair  presentation of the financial  condition and results of operations for the
periods presented.  The results of operations for the three and six months ended
June 30, 2007 are not  necessarily  indicative of the results of operations that
may be expected for all of 2007.

Certain  information  and  note  disclosures   normally  included  in  financial
statements  prepared  in  accordance  with U.S.  generally  accepted  accounting
principles  ("GAAP") have been  condensed or omitted,  pursuant to the rules and
regulations of the Securities and Exchange Commission.

The number of shares outstanding and earnings per share amounts set forth herein
for all periods  presented have been adjusted to reflect the 5% stock  dividends
paid on July 2, 2007 and July 1, 2006.

These unaudited  consolidated financial statements should be read in conjunction
with the audited consolidated financial statements and notes thereto included in
Central Jersey  Bancorp's annual report on Form 10-K for the year ended December
31, 2006.

Certain  prior period  amounts have been  reclassified  to  correspond  with the
current period presentation.

Note 2.  Earnings Per Share
---------------------------

The following table reconciles shares outstanding for basic and diluted earnings
per share for the three and six months ended June 30, 2007 and 2006:

                                      Three months ended     Six months ended
                                            June 30,              June 30,
                                        2007       2006       2007       2006
                                     ------------------------------------------
Average basic shares outstanding     8,685,424  8,675,672  8,676,877  8,642,994
Add effect of dilutive securities:
       Stock options                   469,898    500,124         --    520,270
                                     ------------------------------------------
Average diluted shares outstanding   9,155,322  9,175,796  8,676,877  9,163,264
                                     ------------------------------------------

For the three  and six  months  ended  June 30,  2007,  the  effect of  dilutive
securities  related to the  Company's  stock  option plans  totaled  469,898 and
461,044, respectively, which, when added to the average basic shares outstanding
for the three and six months ended June 30, 2007,  of 8,685,424  and  8,676,877,
respectively,  would  result in  average  diluted  shares  outstanding  totaling
9,155,322 and 9,137,921,  respectively,  for the three and six months ended June
30,  2007.  However,  in  accordance  with  Statement  of  Financial  Accounting
Standards  ("SFAS") No. 128,  Earnings Per Share, due to the Company reporting a
net loss for the six months  ended June 30,  2007,  including  potential  common
shares in the denominator of a diluted per-share  computation would result in an
antidilutive per-share amount.

Stock Appreciation Rights

On January 31, 2006,  the Company  granted under its 2005 Equity  Incentive Plan
165,375 Stock

                                        5
<page>

                     Central Jersey Bancorp and Subsidiary

Appreciation  Rights ("SARS")  (93,713 were granted to employees and 71,662 were
granted to  directors),  each with an exercise  price of $9.87.  Of this amount,
5,513 SARS were subsequently forfeited.  These SARS can only be settled in cash.
The SARS vest over a four year  period and  expire  February  1, 2016.  The fair
value of SARS  granted was  estimated  on June 30, 2007 using the  Black-Scholes
option pricing model with the following weighted-average assumptions used: stock
price $7.95,  dividend  yield of 0%;  expected  volatility of 41.17%;  risk free
interest rate of 4.94%; and expected lives of seven years. These SARS had a fair
value of  approximately  $3.58 per share at June 30, 2007. The Company  recorded
share based payment expense of $0 and $92,000,  pre-tax,  respectively,  for the
three  and six  months  ended  June 30,  2007,  related  to the grant of SARS on
January 31, 2006. As of June 30, 2007, total unvested  compensation  expense was
approximately $352,000, pre-tax, and will vest over 31 months.

A summary of the status of the Company's  SARS for the six months ended June 30,
2007 is presented below:


                                             For the six months ended
                                                   June 30, 2007
-----------------------------------------------------------------------
                                                            Weighted
                                                             average
                                                            exercise
                                                SARS          price
-----------------------------------------------------------------------
                                                 159,862   $       9.87
Outstanding at beginning of year

Granted                                               --             --

Forfeited                                             --             --

Exercised                                             --             --
=======================================================================

Outstanding at period end                        159,862   $       9.87
=======================================================================
                                                  39,965   $       9.87
SARS exercisable at period end

Weighted average fair value of
     SARs granted                           $       3.58
=======================================================================

                                       6
<page>

                     Central Jersey Bancorp and Subsidiary

Stock Option Plan

In 2000,  the Company  established  its Employee and Director  Stock Option Plan
(the "Plan").  The Plan currently  provides for the granting of stock options to
purchase in aggregate  up to 1,458,605  shares of the  Company's  common  stock,
subject to adjustment for certain  dilutive events such as stock  distributions.
During the six months ended June 30, 2007, no options were granted.  As a result
of the January 1, 2005 combination with Allaire  Community Bank, all outstanding
options  granted  under the Plan became fully  vested.  In addition,  options to
purchase  763,551  shares of Allaire  Community Bank common stock were converted
into options to purchase  763,551 shares of Central Jersey Bancorp common stock,
all of which are fully vested.

A summary of the  status of the  Company's  stock  options as of and for the six
months ended June 30, 2007 is presented below:

                                      For the six months ended
                                           June 30, 2007
----------------------------------------------------------------
                                                     Weighted
                                                      average
                                                     exercise
                                        Shares         price
----------------------------------------------------------------

Outstanding at beginning of year       1,429,803    $       4.94

Granted                                       --              --

Forfeited                                 (2,222)           8.54

Exercised                                (36,641)           3.18
================================================================

Outstanding at period end              1,390,940    $       4.98
================================================================

Options exercisable at period end      1,390,940    $       4.98

Weighted average fair value of
     options granted                                       n/a(1)
================================================================


-----------------------
(1) No stock options were ganted in 2007.


                                       7
<page>

                     Central Jersey Bancorp and Subsidiary

Note 3.  Loans Receivable, Net and Loans Held-for-Sale
------------------------------------------------------

Loans receivable, net and loans held-for-sale, at June 30, 2007 and December 31,
2006, consisted of the following (in thousands):

                                     June 30,     December 31,
Loan Type                              2007           2006
---------                          ------------   ------------

Real estate loans - commercial     $    242,684   $    237,015
Home equity and second mortgages         37,406         35,573
Commercial and industrial loans          27,566         35,476
1-4 family real estate loans              3,958          4,182
Consumer loans                            3,028          2,857
                                   ------------   ------------

     Subtotal                      $    314,642   $    315,103
Less:
Deferred loan costs, net                    181            219
     Allowance for loan losses            3,490          3,229
                                   ------------   ------------
          Net loans                $    311,333   $    312,093
                                   ============   ============

Loans held-for-sale                $      1,366   $        242
                                   ============   ============


Non-Performing Loans

Loans  are  considered  to be  non-performing  if they (a) are on a  non-accrual
basis, (b) are past due ninety days or more and still accruing interest,  or (c)
have been renegotiated to provide a reduction or deferral of interest because of
a weakening in the financial  position of the borrowers.  A loan,  which is past
due ninety days or more and still accruing  interest,  remains on accrual status
only when it is both adequately secured as to principal and is in the process of
collection.  Central Jersey Bancorp had non-accrual  loans totaling $2.1 million
at June 30, 2007,  as compared to $91,000 at December 31, 2006.  The increase in
non-performing  loans is due primarily to one commercial  mortgage loan totaling
$2.0 million, which was placed on non-accrual status in April 2007.

There were no loan  charge-offs  during the six months ended June 30,  2007,  as
compared  to $46,000  for the same  period in 2006  Recoveries  totaled  $96,000
during the six months  ended June 30,  2007,  as compared to $2,000 for the same
period in 2006.

                                       8
<page>

                     Central Jersey Bancorp and Subsidiary

Note 4.  Deposits
-----------------

The major  types of  deposits  at June 30,  2007 and  December  31, 2006 were as
follows (in thousands):

                                                  June 30,     December 31,
Deposit Type                                        2007           2006
------------                                    ------------   ------------


Demand deposits, non-interest bearing           $     82,194   $     83,482
Savings, N.O.W. and money market accounts            203,659        202,650
Certificates of deposit of less than $100,000         85,501         75,842
Certificates of deposit of $100,000 or more           68,345         65,303
                                                ------------   ------------

     Total                                      $    439,699   $    427,277
                                                ============   ============

Note 5.  Subordinated Debentures
--------------------------------

In March 2004, MCBK Capital Trust I, a special purpose business trust of Central
Jersey  Bancorp,  issued  an  aggregate  of  $5.0  million  of  trust  preferred
securities to ALESCO Preferred Funding III, a pooled investment vehicle. Sandler
O'Neill  &  Partners,  L.P.  acted as  placement  agent in  connection  with the
offering  of the  trust  preferred  securities.  The  securities  issued by MCBK
Capital Trust I are fully  guaranteed by Central  Jersey Bancorp with respect to
distributions  and amounts  payable upon  liquidation,  redemption or repayment.
These  securities have a floating  interest rate equal to the three-month  LIBOR
plus 285 basis points, which resets quarterly. The securities mature on April 7,
2034 and may be called at par by Central  Jersey Bancorp any time after April 7,
2009.  These  securities  were  placed  in a  private  transaction  exempt  from
registration under the Securities Act of 1933, as amended.

The entire proceeds to MCBK Capital Trust I from the sale of the trust preferred
securities  were used by MCBK Capital  Trust I in order to purchase $5.1 million
of  subordinated  debentures  from  Central  Jersey  Bancorp.  The  subordinated
debentures  bear a variable  interest rate equal to LIBOR plus 285 basis points.
Although  the  subordinated  debentures  are  treated as debt of Central  Jersey
Bancorp,  they currently qualify as Tier I Capital  investments,  subject to the
25% limitation under risk-based capital  guidelines of the Federal Reserve.  The
portion of the trust preferred securities that exceeds this limitation qualifies
as Tier II Capital of Central Jersey Bancorp.  At June 30, 2007, $5.0 million of
the trust  preferred  securities  qualified  for  treatment  as Tier I  Capital.
Central Jersey  Bancorp is using the proceeds it received from the  subordinated
debentures to support the general balance sheet growth of Central Jersey Bancorp
and to maintain Central Jersey Bank, N.A.'s required regulatory capital ratios.

On March 1, 2005,  the  Federal  Reserve  adopted a final  rule that  allows the
continued inclusion of outstanding and prospective  issuances of trust preferred
securities in the Tier I Capital of bank holding companies,  subject to stricter
quantitative  limits and  qualitative  standards.  The new  quantitative  limits
become  effective  after a five-year  transition  period  ending March 31, 2009.
Under the final rules,  trust  preferred  securities and other  restricted  core
capital  elements  are limited to 25% of all core capital  elements.  Amounts of
restricted  core  capital  elements in excess of these limits may be included in
Tier II Capital.  At June 30, 2007,  the only  restricted  core capital  element
owned by Central Jersey Bancorp is trust  preferred  securities.  Central Jersey
Bancorp  believes  that its trust  preferred  issues  qualify as Tier I Capital.
However,  in the event that the trust preferred  issues do not qualify as Tier I
Capital, Central Jersey Bank, N.A. would remain well capitalized.

Note 6.  Other-Than-Temporary Impairment
----------------------------------------

During the six months ended June 30, 2007,  Central  Jersey  Bancorp  executed a
balance sheet  restructuring  strategy involving  approximately $88.6 million of
investment securities held in the available-for-sale

                                       9
<page>

                     Central Jersey Bancorp and Subsidiary

investment  portfolio.   The  restructuring   resulted  in  a  one-time  pre-tax
impairment charge of approximately $1.96 million, which was reflected in Central
Jersey Bancorp's  consolidated  financial  statements for the three months ended
March 31, 2007. Available-for-sale  investment securities,  consisting primarily
of lower yielding fixed rate callable  agency  investment  securities  were sold
during the second quarter of 2007 and replaced with higher  yielding  investment
securities  with a comparable to modestly  shorter  aggregate  weighted  average
life. The market value loss that these  investment  securities  carried at March
31,  2007,  was recorded as an  other-than-temporary  impairment  since  Central
Jersey Bancorp did not have the intent to hold these securities to recovery. The
investment  securities the Company  identified as impaired were primarily  fixed
rate government  sponsored  agency bonds that either had a below market interest
rate coupon or a longer than  desired  maturity  term.  Central  Jersey  Bancorp
realized  a gain  on the  sale  of  available-for-sale  securities  of  $87,000,
pre-tax,  in  conjunction  with the balance  sheet  restructuring  for the three
months ended June 30, 2007.

Note 7.  Income Taxes
---------------------

The Company  recorded an income tax  expense of  $431,000  for the three  months
ended June 30, 2007 on income  before  taxes of $1.2  million,  resulting  in an
effective  tax rate of 36.96%,  as compared to income tax expense of $399,000 on
income before taxes of $1.1 million for the same period in 2006, resulting in an
effective  tax rate of 37.15%.

The Company  recorded an income tax expense of $376,000 for the six months ended
June 30,  2007 on a loss  before  taxes of  $151,000,  as compared to income tax
expense of $827,000 on income  before  taxes of $2.2 million for the same period
in 2006,  resulting  in an  effective  tax rate of 37.14%.

The reason the Company  recorded an income tax expense for the six months  ended
June 30,  2007,  even  though the  Company  reported a net loss for the  period,
resulted from the fact that the majority of the investment  securities for which
the  previously-mentioned  $1.96  million  other-than-temporary  impairment  was
recorded  were held by CJB  Investment  Company,  a  wholly-owned  subsidiary of
Central  Jersey  Bank,  N.A. A full  valuation  allowance  was  recorded for the
impairment of the  investment  securities  sold by CJB Investment  Company.  The
impairment  of the  investment  securities at the  investment  company level was
considered  a  capital  loss  for  tax  purposes  while  the  impairment  of the
investment  securities  held by Central  Jersey  Bank,  N.A. was  considered  an
ordinary loss for tax purposes.  CJB Investment  Company does not, at this time,
have the ability to generate  capital  gains and utilize the capital  losses and
thus  a full  valuation  allowance  was  required  for  the  investment  company
available-for-sale  securities  which were identified as  other-than-temporarily
impaired.

Note 8. Branch Office Closings
------------------------------

On May 31, 2007,  Central Jersey Bancorp  announced to its customers that two of
its branch  offices  would be closing  effective  September 14, 2007 - Route 35,
Neptune City and Highway 33, Neptune Township.  The customer  relationships from
both of these branch  offices will be moved to the West  Sylvania,  Neptune City
branch  office.  As a result of the  August 22,  2005  merger  between  Monmouth
Community Bank, N.A. and Allaire  Community Bank,  Central Jersey Bank, N.A. was
serving a single  banking  market with three  overlapping  branch  offices.  The
majority of the one-time pre-tax expenses  associated with the  consolidation of
these two branch  offices into our West  Sylvania,  Neptune City branch  office,
totaling approximately  $293,000,  will be reflected in Central Jersey Bancorp's
consolidated  financial statements for the three months ended September 30, 2007
in accordance  with SFAS No. 146,  Accounting for Costs  Associated with Exit or
Disposal  Activities.  For the three months ended June 30, 2007,  Central Jersey
Bancorp  recorded  approximately  $35,000,   pre-tax,  in  one-time  termination
benefits related to the branch office consolidations in accordance with SFAS No.
146.

                                       10
<page>

                     Central Jersey Bancorp and Subsidiary

Note 9.  Recent Accounting Pronouncements
-----------------------------------------

In March 2006, the Financial Accounting Standards Board ("FASB") issued SFAS No.
156, Accounting for Servicing of Financial Assets. Prior thereto,  SFAS No. 140,
Accounting for Transfers and Servicing of Financial  Assets and  Extinguishments
of  Liabilities,  established,  among  other  things,  the  accounting  for  all
separately recognized servicing assets and servicing  liabilities.  SFAS No. 156
amends SFAS No. 140 to require that all separately  recognized  servicing assets
and servicing  liabilities be initially  measured at fair value, if practicable.
SFAS No. 156  permits,  but does not  require,  the  subsequent  measurement  of
separately  recognized servicing assets and servicing liabilities at fair value.
Under SFAS No. 156, an entity can elect  subsequent  fair value  measurement  to
account  for  its   separately   recognized   servicing   assets  and  servicing
liabilities.  By electing  that option,  an entity may  simplify its  accounting
because  SFAS No. 156 permits  income  statement  recognition  of the  potential
offsetting  changes  in fair  value  of those  servicing  assets  and  servicing
liabilities and derivative  instruments in the same accounting period.  SFAS No.
156 was effective in the first fiscal year  beginning  after  September 15, 2006
with earlier adoption  permitted.  Central Jersey Bancorp's adoption of SFAS No.
156 on  January  1,  2007 did not have a  material  impact  on its  consolidated
financial statements.

In July  2006,  the FASB  issued  FASB  Interpretation  No. 48,  Accounting  for
Uncertainty  in Income  Taxes  ("FIN  48").  FIN 48  establishes  a  recognition
threshold and measurement for income tax positions recognized in an enterprise's
financial  statements in  accordance  with SFAS No. 109,  Accounting  for Income
Taxes. FIN 48 also prescribes a two-step  evaluation  process for tax positions.
The first step is recognition and the second is measurement. For recognition, an
enterprise judgmentally determines whether it is more-likely-than-not that a tax
position will be sustained  upon  examination,  including  resolution of related
appeals or litigation processes,  based on the technical merits of the position.
If the tax position meets the  more-likely-than-not  recognition threshold it is
measured and recognized in the financial statements as the largest amount of tax
benefit  that is greater  than 50% likely of being  realized.  If a tax position
does not meet the  more-likely-than-not  recognition  threshold,  the benefit of
that position is not recognized in the financial statements.

Tax positions that meet the  more-likely-than-not  recognition  threshold at the
effective date of FIN 48 may be recognized,  or continue to be recognized,  upon
adoption  of  this  Interpretation.   The  cumulative  effect  of  applying  the
provisions of FIN 48 shall be reported as an  adjustment to the opening  balance
of retained earnings for that fiscal year. FIN 48 was effective for fiscal years
beginning after December 15, 2006.  Central Jersey Bancorp's  adoption of FIN 48
on January 1, 2007 did not have a material impact on its consolidated  financial
statements.

In September 2006, the FASB issued SFAS No. 157, Fair Value  Measurements.  This
Statement  defines fair value,  establishes a framework for measuring fair value
in GAAP, and enhances disclosures about fair value measurements.  This Statement
applies when other accounting pronouncements require fair value measurements; it
does not require new fair value  measurements.  This  Statement is effective for
financial  statements issued for fiscal years beginning after November 15, 2007,
and interim  periods  within those years.  Earlier  application  is  encouraged,
provided the entity has not yet issued financial statements, including financial
statements for any interim  period for that fiscal year.  Central Jersey Bancorp
does not expect the  adoption  of SFAS No. 157 to have a material  impact on its
consolidated financial statements.

In September 2006, the Emerging Issues Task Force ("EITF") of the FASB discussed
public comments received on two issues: (1) EITF Issue No. 06-4,  Accounting for
Deferred  Compensation  and  Post-Retirement   Benefit  Aspects  of  Endorsement
Split-Dollar Life Insurance  Arrangements,  and (2) EITF Issue 06-5,  Accounting
for Purchases of Life Insurance -- Determining the Amount that could be Realized
in Accordance  with FASB Technical  Bulletin 85-4  (Accounting  for Purchases of
Life Insurance). On September 7, the EITF agreed to clarify certain points based
on  public  comments.  The EITF  reached a  consensus  that an  employer  should
recognize  a  liability  for  future  benefits  under SFAS No.  106,  Employers'
Accounting for Postretirement  Benefits Other Than Pensions,  or APB Opinion No.
12,


                                       11
<page>

                     Central Jersey Bancorp and Subsidiary

Omnibus  Opinion  -  1967,  for  an  endorsement   split-dollar  life  insurance
arrangement subject to the EITF Issue No. 06-4. This liability is to be based on
the  substantive  agreement  with the  employee.  The consensus is effective for
fiscal years beginning  after December 15, 2007.  Early adoption is permitted as
of the  beginning of an entity's  fiscal year.  Entities  should  recognize  the
effects  of  applying  the  consensus  on this  issue as a change in  accounting
principle  through a  cumulative-effect  adjustment  to retained  earnings or to
other components of equity or net assets in the statement of financial  position
as of the beginning of the year of adoption.  Retrospective  application  to all
prior periods is permitted.  Central  Jersey Bancorp is evaluating the impact of
adoption of EITF 06-4 on its consolidated financial statements.

In  February  2007,  the FASB issued  SFAS No.  159,  The Fair Value  Option for
Financial Assets and Financial Liabilities. Under this Statement, Central Jersey
Bancorp may elect to report  financial  instruments  and certain  other items at
fair value on a  contract-by-contract  basis with  changes in value  reported in
earnings. This election is irrevocable.  SFAS No. 159 provides an opportunity to
mitigate  volatility  in reported  earnings  that is caused by measuring  hedged
assets  and  liabilities  that  were  previously  required  to  use a  different
accounting method than the related hedging contracts when the complex provisions
of SFAS No. 133,  Accounting for Derivative  Instruments and Hedging Activities,
are not met.

SFAS  No.  159 is  effective  for  years  beginning  after  November  15,  2007.
Consequently, Central Jersey Bancorp will be required to adopt the provisions of
SFAS No. 159, as applicable,  beginning January 1, 2008.  Central Jersey Bancorp
does not expect the  adoption  of SFAS No. 159 to have a material  impact on its
consolidated financial statements.



                                       12
<page>

Item 2. Management's  Discussion and Analysis of Financial Condition and Results
        ------------------------------------------------------------------------
        of Operations
        -------------

General

The following  discussion and analysis is intended to provide  information about
the Company's  financial condition as of June 30, 2007 and results of operations
for the  three and six  months  ended  June 30,  2007 and  2006.  The  following
information  should  be  read  in  conjunction  with  the  Company's   unaudited
consolidated  financial  statements  for the three and six months ended June 30,
2007 and 2006, including the related notes thereto,  contained elsewhere in this
document.

Critical Accounting Policies

"Management's  Discussion  and  Analysis of Financial  Condition  and Results of
Operations," as well as disclosures  found elsewhere in this quarterly report on
Form  10-Q,  are  based  upon the  Company's  unaudited  consolidated  financial
statements, which have been prepared in accordance with GAAP. The preparation of
these consolidated  financial  statements requires the Company to make estimates
and judgments that affect the reported amounts of assets, liabilities,  revenues
and expenses.  Note 1 to Central Jersey Bancorp's audited consolidated financial
statements  for the year ended  December 31, 2006,  included with Central Jersey
Bancorp's  annual  report on Form 10-K for the year  ended  December  31,  2006,
contains a summary of the Company's significant accounting policies.  Management
believes  the  Company's  policies  with  respect  to the  methodology  for  the
determination  of the allowance for loan losses and the impairment of investment
securities requires  management to make difficult and subjective  judgments that
often require assumptions or estimates about uncertain matters. Changes in these
judgments,   assumptions  or  estimates  could  materially   impact  results  of
operations.  These  critical  policies and their  application  are  periodically
reviewed with the Company's Audit Committee and its Board of Directors.

For purposes of reporting cash flows, cash and cash equivalents  include cash on
hand,  amounts due from banks and overnight  federal  funds sold.  Federal funds
sold are generally sold for one-day periods.

Investment securities held-to-maturity are comprised of debt securities that the
Company has the positive intent and ability to hold to maturity. Such securities
are stated at cost,  adjusted  for  amortization  of premiums  and  accretion of
discounts over the estimated  remaining lives of the securities as an adjustment
to the yield using the level-yield method.  Securities to be held for indefinite
periods of time and not intended to be  held-to-maturity,  including  all equity
securities, are classified as available-for-sale.  Securities available-for-sale
include securities that management intends to use as part of its asset/liability
management  strategy  and that may be sold in  response  to changes in  interest
rates,  resultant prepayment risk and other factors related to interest rate and
resultant prepayment risk changes. Securities  available-for-sale are carried at
estimated  fair value.  Unrealized  holding gains and losses on such  securities
available-for-sale  are  excluded  from  earnings  and  reported  as a  separate
component of shareholders'  equity.  Gains and losses on sales of securities are
based on the specific  identification  method and are  accounted  for on a trade
date basis.

On  a  quarterly  basis,  the  Company  evaluates   investment   securities  for
other-than-temporary impairment. For individual investment securities classified
as either available-for-sale or held-to-maturity,  a determination is made as to
whether a decline in fair  value  below the  amortized  cost basis is other than
temporary.  If the  decline in fair value is judged to be other than  temporary,
the cost basis of the  individual  investment  security shall be written down to
fair  value  as a new cost  basis  and the  amount  of the  write-down  shall be
included in earnings (that is,  accounted for as a realized loss).  The new cost
basis shall not be changed for subsequent  recoveries in fair value.  Subsequent
increases in the fair value of  available-for-sale  securities shall be included
as a separate component of equity; subsequent decreases in fair value, if not an
other-than-temporary  impairment, also shall be included as a separate component
of equity.

Loans are stated at unpaid principal balances, less unearned income and deferred
loan fees and costs.

                                       13
<page>

Interest on loans is  credited to  operations  based upon the  principal  amount
outstanding.

Loan origination and commitment fees and certain direct loan  origination  costs
are deferred,  and the net amount is amortized  over the  estimated  life of the
loan as an adjustment to the loan's yield using the level-yield method.

A loan is considered  impaired when, based on current information and events, it
is probable that the Company will be unable to collect all amounts due according
to the  contractual  terms of the loan  agreement.  Impaired  loans are measured
based on the  present  value of expected  future cash flows,  or, as a practical
expedient,  at the  loan's  observable  market  price,  or the fair value of the
underlying  collateral,   if  the  loan  is  collateral  dependent.   Conforming
residential  mortgage  loans,  home  equity and second  mortgages,  and loans to
individuals  are  excluded  from the  definition  of impaired  loans as they are
characterized  as  smaller  balance,  homogeneous  loans  and  are  collectively
evaluated.

The  accrual  of  income  on  loans,  including  impaired  loans,  is  generally
discontinued  when a  loan  becomes  more  than  ninety  days  delinquent  as to
principal or interest or when other  circumstances  indicate that  collection is
questionable,  unless the loan is well secured and in the process of collection.
Income on non-accrual loans, including impaired loans, is recognized only in the
period in which it is collected, and only if management determines that the loan
principal is fully  collectible.  Loans are returned to an accrual status when a
loan is brought  current as to principal  and  interest  and reasons  indicating
doubtful collection no longer exists.

A loan is considered past due when a payment has not been received in accordance
with  the  contractual  terms.   Generally,   commercial  loans  are  placed  on
non-accrual  status when they are 90 days past due unless they are well  secured
and in the process of  collection  or,  regardless of the past due status of the
loan,  when management  determines  that the complete  recovery of principal and
interest  is in doubt.  Commercial  loans  are  generally  charged  off after an
analysis is completed which indicates that  collectibility of the full principal
balance is in doubt.  Consumer loans are generally charged off after they become
120 days past due.  Mortgage  loans are not  generally  placed on a  non-accrual
status unless the value of the real estate has  deteriorated to the point that a
potential loss of principal or interest exists. Subsequent payments are credited
to income only if  collection  of  principal is not in doubt.  If principal  and
interest payments are brought contractually current and future collectibility is
reasonably  assured,  loans are returned to accrual  status.  Mortgage loans are
generally charged off when the value of the underlying collateral does not cover
the outstanding  principal  balance.  Loan  origination and commitment fees less
certain costs are deferred and the net amount  amortized as an adjustment to the
related loan's yield. Loans held-for-sale are recorded at the lower of aggregate
cost or market value.

The  allowance  for loan  losses is based upon  management's  evaluation  of the
adequacy of the  allowance,  including an assessment  of: (a) known and inherent
risks in the loan portfolio, (b) the size and composition of the loan portfolio,
(c)  actual  loan  loss  experience,  (d) the  level of  delinquencies,  (e) the
individual  loans for which  full  collectibility  may not be  assured,  (f) the
existence and estimated net realizable  value of any  underlying  collateral and
guarantees  securing  the  loans,  and  (g)  the  current  economic  and  market
conditions.  Although management uses the best information available,  the level
of the  allowance  for loan  losses  remains  an  estimate  that is  subject  to
significant judgment and short-term change.  Various regulatory agencies,  as an
integral part of their examination  process,  periodically  review the Company's
allowance  for loan  losses.  Such  agencies  may  require  the  Company to make
additional  provisions for loan losses based upon information  available to them
at the time of their  examination.  Furthermore,  the majority of the  Company's
loans are secured by real estate in the State of New  Jersey.  Accordingly,  the
collectibility  of a substantial  portion of the carrying value of the Company's
loan portfolio is  susceptible to changes in local market  conditions and may be
adversely  affected  should real estate values decline or the Central New Jersey
area experience an adverse economic climate. Future adjustments to the allowance
for loan losses may be necessary  due to  economic,  operating,  regulatory  and
other  conditions  beyond the Company's  control.  Management  believes that the
allowance for loan losses is adequate.

                                       14
<page>

Income taxes are  accounted for under the asset and  liability  method.  Current
income  taxes are  provided  for based upon  amounts  estimated  to be currently
payable, for both federal and state income taxes. Deferred federal and state tax
assets and liabilities  are recognized for the expected future tax  consequences
of existing  differences  between financial  statement and tax basis of existing
assets and liabilities. Deferred tax assets are recognized for future deductible
temporary  differences  and tax loss  carry  forwards  if their  realization  is
"more-likely-than-not." The effect of a change in the tax rate on deferred taxes
is recognized in the period of the enactment date.

Comprehensive  income is  segregated  into net  income  and other  comprehensive
income.  Other comprehensive  income includes items previously recorded directly
to equity, such as unrealized gains and losses on securities available-for-sale.
Comprehensive  income is presented in the Statements of Changes in Shareholders'
Equity.

The  Company's  operations  are solely in the  financial  services  industry and
include  providing  to its  customers  traditional  banking and other  financial
services.  The Company operates primarily in the geographical  region of Central
New Jersey.  Management makes operating decisions and assesses performance based
on an ongoing review of the Company's consolidated financial results. Therefore,
the Company has a single operating segment for financial reporting purposes.

Intangible  assets  of the  Company,  consists  of  goodwill  and  core  deposit
premiums.  Goodwill  represents  the  excess  of the  purchase  price  over  the
estimated  fair value of  identifiable  net  assets  acquired  through  purchase
acquisitions.  In  accordance  with SFAS No. 142,  goodwill  with an  indefinite
useful life is not  amortized,  but is  evaluated  for  impairment  on an annual
basis.

Core deposit premiums represent the intangible value of depositor  relationships
assumed in purchase  acquisitions and are amortized on an accelerated basis over
a period of ten years.  The amortization of the core deposit premium is recorded
in other operating expenses.

Long-lived assets including  goodwill and certain  identifiable  intangibles are
periodically  evaluated for impairment in value.  Long-lived assets and deferred
costs are typically measured whenever events or circumstances  indicate that the
carrying amount may not be recoverable.  No such events have occurred during the
periods reported.  Certain  identifiable  intangibles and goodwill are evaluated
for impairment at least annually  utilizing the "market  approach" as prescribed
by SFAS No. 142,  Goodwill and Other  Intangible  Assets.  Asset  impairment  is
recorded when required.

Overview

Central  Jersey  Bancorp  reported  net income of $735,000  for the three months
ended June 30, 2007,  as compared to $675,000 for the same period in 2006.  This
represents an increase of $60,000, or 8.9%. Basic and diluted earnings per share
were both $0.08 for the three months  ended June 30, 2007,  as compared to $0.08
and $0.07,  respectively,  for same period in 2006. Per share earnings have been
adjusted in all periods to reflect the 5% stock  dividends  paid on July 2, 2007
and July 1, 2006.

During the six months ended June 30, 2007,  Central  Jersey  Bancorp  executed a
balance sheet  restructuring  strategy involving  approximately $88.6 million of
investment securities held in the available-for-sale  investment portfolio.  The
restructuring  resulted in a one-time pre-tax impairment charge of approximately
$1.96  million,  which was reflected in Central  Jersey  Bancorp's  consolidated
financial   statements   for  the   three   months   ended   March   31,   2007.
Available-for-sale investment securities, consisting primarily of lower yielding
fixed rate callable  agency  investment  securities  were sold during the second
quarter of 2007 and replaced with higher yielding  investment  securities with a
comparable to modestly shorter aggregate weighted average life. The market value
loss that these investment securities carried at March 31, 2007, was recorded as
an other-than-temporary impairment since Central Jersey Bancorp did not have the
intent to hold these  securities  to recovery.  The  investment  securities  the
Company  identified as impaired were

                                       15
<page>

primarily fixed rate government  sponsored  agency bonds that either had a below
market  interest  rate coupon or a longer than desired  maturity  term.  Central
Jersey Bancorp realized a gain on the sale of  available-for-sale  securities of
$87,000,  pre-tax,  in conjunction with the balance sheet  restructuring for the
three months ended June 30, 2007.

As a result of the  previously-mentioned  balance sheet  restructuring,  Central
Jersey Bancorp reported a net loss of $527,000 for the six months ended June 30,
2007,  as  compared  to net income of $1.4  million for the same period in 2006.
Basic and  diluted  loss per share for the six months  ended June 30,  2007 were
both ($0.06),  as compared to basic and diluted  earnings per share of $0.16 and
$0.15, respectively, for the same period in 2006.

Total  assets of $535.8  million at June 30, 2007 were  comprised  primarily  of
$126.7  million in  investment  securities,  $311.3  million in net loans,  $1.4
million in loans  held-for-sale  and $51.2 million in cash and cash equivalents,
as  compared  to total  assets of $516.3  million at December  31,  2006,  which
primarily consisted of $116.6 million in investment  securities,  $312.1 million
in net loans,  $242,000 in residential loans  held-for-sale and $37.8 million in
cash and cash  equivalents.  Total assets at June 30, 2007 were funded primarily
through  deposits  totaling $439.7 million and other  borrowings  totaling $24.3
million,  as compared  to $427.3  million and $17.1  million,  respectively,  at
December 31, 2006.

At June 30, 2007,  non-accrual loans totaled $2.1 million as compared to $91,000
at December 31, 2006. The increase in  non-performing  loans is due primarily to
one  commercial  mortgage  loan  totaling  $2.0  million,  which  was  placed on
non-accrual  status in April 2007. There were no loan charge-offs during the six
months ended June 30, 2007,  as compared to $46,000 for the same period in 2006.
Recoveries  totaled  $96,000  during the six  months  ended  June 30,  2007,  as
compared to $2,000 for the same period in 2006.

Results of Operations

General

Central Jersey  Bancorp's  principal  source of revenue is derived from its bank
subsidiary's  net interest  income,  which is the  difference  between  interest
income on earning  assets and interest  expense on deposits and borrowed  funds.
Interest-earning  assets consist principally of loans, investment securities and
federal funds sold, while the sources used to fund such assets consist primarily
of deposits.  Central  Jersey  Bancorp's net income is also affected by its bank
subsidiary's  provision  for loan  losses,  other-than-temporary  impairment  of
investment  securities,  other income and other expenses.  Other income consists
primarily  of service  charges and fees.  Other  expenses  consist  primarily of
salaries and employee  benefits,  occupancy  costs and other  operating  related
expenses.

For the three and six months ended June 30, 2007 and 2006

Net Interest Income

Net  interest  income was $4.1 million for the three months ended June 30, 2007,
as compared to $4.3 million for the same period in 2006. Net interest income for
the three months ended June 30, 2007 was comprised  primarily of $5.8 million of
interest and fees on loans, $1.3 million of interest on securities, and $619,000
of interest on federal funds sold and due from banks,  less interest  expense on
deposits of $3.3  million,  interest  expense on borrowed  funds of $184,000 and
interest  expense on  subordinated  debentures  of  $110,000.  The  average  net
interest  margin for the three  months ended June 30, 2007 was 3.48% as compared
to 3.76% for the same period in 2006.

Net interest  income was $8.2 million for the six months ended June 30, 2007, as
compared to $8.6 million for the same period in 2006.  Net  interest  income for
the six months ended June 30, 2007 was  comprised

                                       16
<page>

primarily  of $11.6  million  of  interest  and fees on loans,  $2.6  million of
interest on  securities,  and $954,000 of interest on federal funds sold and due
from banks, less interest expense on deposits of $6.4 million,  interest expense
on borrowed funds of $343,000 and interest expense on subordinated debentures of
$218,000. The average net interest margin for the six months ended June 30, 2007
was 3.51%, as compared to 3.74% for the same period in 2006.

Interest  and  dividend  income was $7.7 million for the three months ended June
30,  2007,  as  compared  to $7.3  million  for the same  period  in 2006.  This
represents  an increase of  $400,000,  or 5.5%,  which is due  primarily  to the
general increase in interest rates. The average yield on interest-earning assets
increased  to 6.43% for the three  months  ended June 30,  2007,  as compared to
6.39% for the same period in 2006. Average  interest-earning  assets, which were
91.5% of average total assets, totaled $477.4 million for the three months ended
June 30, 2007, and were comprised  primarily of $317.7 million in loans,  $110.3
million in investment  securities,  $45.6 million in federal funds sold and $3.8
million in other interest bearing deposits.

Interest and dividend income was $15.1 million for the six months ended June 30,
2007, as compared to $14.4 million for the same period in 2006.  This represents
an increase of $700,000, or 4.9%, which is due primarily to the general increase
in interest rates.  The average yield on  interest-earning  assets  increased to
6.42% for the six months ended June 30, 2007,  as compared to 6.31% for the same
period in 2006.  Average  interest-earning  assets,  which were 91.1% of average
total assets, totaled $469.9 million for the six months ended June 30, 2007, and
were  comprised  primarily  of  $317.8  million  in  loans,  $114.1  million  in
investment  securities,  $34.3 million in federal funds sold and $3.7 million in
other interest bearing deposits.

Interest  expense was $3.6 million for the three months ended June 30, 2007,  as
compared  to $3.0  million  for the same  period  in 2006.  This  represents  an
increase of $600,000,  or 20.0%.  The increase was due  primarily to the cost of
deposits and interest bearing  liabilities which increased to an average cost of
3.17% for the three months ended June 30, 2007 from an average cost of 2.69% for
the same  period  in 2006.  Average  interest-bearing  deposits  totaled  $347.1
million for the three months ended June 30, 2007, as compared to $327.3  million
for the same period in 2006, representing an increase of $19.8 million, or 6.1%,
and were  comprised  of $120.5  million in  interest-bearing  checking and money
market  deposits,  $73.3 million in savings  deposits and $153.2 million in time
deposits.   Interest   expense   associated  with  borrowings  and  subordinated
debentures  totaled  $184,000 and $110,000,  respectively,  for the three months
ended June 30, 2007, as compared to $309,000 and $106,000, respectively, for the
same  period  in 2006.  Borrowings  for the three  months  ended  June 30,  2007
averaged  $21.4  million,  as compared  to $26.7  million for the same period in
2006.  The decrease in borrowings was primarily  attributable  to an increase in
deposits and cash flows derived from the Company's normal business activities.

Interest  expense was $7.0 million for the six months  ended June 30,  2007,  as
compared  to $5.8  million  for the same  period  in 2006.  This  represents  an
increase of $1.2 million,  or 20.7%.  The increase was due primarily to the cost
of deposits and interest bearing  liabilities which increased to an average cost
of 3.13% for the six months  ended June 30,  2007 from an average  cost of 2.60%
for the same period in 2006.  Average  interest-bearing  deposits totaled $342.4
million for the three months ended June 30, 2007, as compared to $317.7  million
for the same period in 2006,  representing  an increase $24.7 million,  or 7.8%,
and were  comprised  of $120.4  million in  interest-bearing  checking and money
market  deposits,  $73.1 million in savings  deposits and $148.8 million in time
deposits.   Interest   expense   associated  with  borrowings  and  subordinated
debentures totaled $343,000 and $218,000, respectively, for the six months ended
June 30, 2007, as compared to $912,000 and $205,000,  respectively, for the same
period in 2006. Borrowings for the six months ended June 30, 2007 averaged $19.4
million,  as compared to $40.0 million for the same period in 2006. The decrease
in  borrowings  was primarily  attributable  to an increase in deposits and cash
flows derived from the Company's normal business activities.

                                       17
<page>

Provision for Loan Losses

For the three and six months ended June 30, 2007,  the provision for loan losses
was $40,000 and  $165,000,  respectively,  as compared to $97,000 and  $148,000,
respectively,  for the same  periods  in 2006.  The  provision  for loan  losses
recorded  during the three and six months ended June 30, 2007 is a direct result
of the change in risk rating of certain  commercial  loans.  Recoveries  totaled
$96,000 during the six months ended June 30, 2007, as compared to $2,000 for the
same period in 2006.

Non-Interest Income (Loss)

Non-interest  income  (loss),  which  consists  of  service  charges  on deposit
accounts,  income from bank owned life  insurance  and fees from the gain on the
sale of residential mortgages,  was $509,000 for the three months ended June 30,
2007, as compared to $423,000 for the same period in 2006.

Non-interest  income (loss)  reflected a loss of $1.1 million for the six months
ended June 30, 2007,  as compared to income of $904,000,  for the same period in
2006.  The  non-interest  income loss for the six months ended June 30, 2007, is
directly related to the previously-disclosed  $1.96 million, pre-tax, other than
temporary  impairment  recorded in conjunction  with the one-time  balance sheet
restructuring charge.

Non-Interest Expense

Non-interest  expense was $3.4 million and $7.1 million,  respectively,  for the
three and six months ended June 30,  2007,  as compared to $3.6 million and $7.1
million,  respectively,  for the  same  periods  in 2006.  Non-interest  expense
generally  includes  costs  associated  with  employee  salaries  and  benefits,
occupancy expenses,  data processing fees, professional fees and other operating
expenses.

The table below present's non-interest expense, by major category, for the three
and six months ended June 30, 2007 and 2006 (in thousands):

                                       Three months ended     Six months ended
                                             June 30,             June 30,
Non-Interest Expense                     2007       2006       2007       2006
--------------------                   --------   --------   --------   --------

Salaries and employee benefits         $  1,676   $  1,850   $  3,494   $  3,732
Net occupancy expenses                      459        424        932        826
Data processing fees                        215        195        444        398
Outside service fees                        214        223        416        432
Audit and tax fees                          150         93        265        156
Core deposit intangible amortization        138        155        276        309
Legal fees and expenses                      69         50        182         71
Printing, stationery, and supplies           54         70        116        123
Advertising and marketing expenses           38         34         74         84
Other operating expenses                    432        500        896      1,004
                                       --------   --------   --------   --------
      Total                            $  3,445   $  3,594   $  7,095   $  7,135
                                       ========   ========   ========   ========

Income Tax Expense

The Company  recorded an income tax  expense of  $431,000  for the three  months
ended June 30, 2007 on income  before  taxes of $1.2  million,  resulting  in an
effective  tax rate of 36.96%,  as compared to income tax expense of $399,000 on
income before taxes of $1.1 million for the same period in 2006, resulting in an
effective  tax rate of 37.15%.

                                       18
<page>

The Company  recorded an income tax expense of $376,000 for the six months ended
June 30,  2007 on a loss  before  taxes of  $151,000,  as compared to income tax
expense of $827,000 on income  before  taxes of $2.2 million for the same period
in 2006, resulting in an effective tax rate of 37.14%.

The reason the Company  recorded an income tax expense for the six months  ended
June 30,  2007,  even  though the  Company  reported a net loss for the  period,
resulted from the fact that the majority of the investment  securities for which
the  previously-mentioned  $1.96  million  other-than-temporary  impairment  was
recorded  were held by CJB  Investment  Company,  a  wholly-owned  subsidiary of
Central  Jersey  Bank,  N.A. A full  valuation  allowance  was  recorded for the
impairment of the  investment  securities  sold by CJB Investment  Company.  The
impairment  of the  investment  securities at the  investment  company level was
considered  a  capital  loss  for  tax  purposes  while  the  impairment  of the
investment  securities  held by Central  Jersey  Bank,  N.A. was  considered  an
ordinary loss for tax purposes.  CJB Investment  Company does not, at this time,
have the ability to generate  capital  gains and utilize the capital  losses and
thus  a full  valuation  allowance  was  required  for  the  investment  company
available-for-sale  securities  which were identified as  other-than-temporarily
impaired.

Financial Condition

Cash and Cash Equivalents

Cash and cash equivalents  consist primarily of cash on hand, due from banks and
federal  funds sold.  At June 30,  2007,  cash and cash  equivalents  were $51.2
million,  an increase of $13.4  million,  or 35.4%,  over the  December 31, 2006
total of $37.8  million.  During this period,  federal  funds sold  increased by
$16.7  million.  This  increase  was due  primarily  to the timing of cash flows
related to the Company's business activities.

Investment Portfolio

Investment  securities  totaled  $126.7 million at June 30, 2007, an increase of
$10.1 million, or 8.7%, over the December 31, 2006 total of $116.6 million.  The
increase  in  investment  securities  is due  to  purchases  of  mortgage-backed
securities  made during the three months ended June 30, 2007. For the six months
ended June 30, 2007,  principal pay downs of mortgage-backed  securities totaled
$3.5 million and $2.0 million of government-sponsored agency securities matured.

Loan Portfolio

Loans  held-for-sale  totaled  $1.4  million at June 30,  2007,  as  compared to
$242,000 at December  31,  2006.  The  increase  in loans  held-for-sale  is due
primarily to the timing of residential mortgage loan closings.

Loans,  net of the allowance  for loan losses,  closed the six months ended June
30, 2007 at $311.3 million, a decrease of $800,000,  or (0.26%), from the $312.1
million  balance at December 31, 2006.  The slight  decrease in loan balances is
reflective of the general slowdown in loan origination  volume being experienced
by the banking industry.

The allowance for loan losses,  which began the year at $3.23 million,  or 1.02%
of total loans,  was $3.49 million at June 30, 2007, with the allowance for loan
losses ratio at 1.11% of total loans.  The  increase in the  allowance  for loan
losses ratio is due primarily to the incremental loan loss provision recorded in
conjunction  with the  downgrade  in risk  rating of certain  commercial  loans.
Recoveries  totaled  $96,000  during the six  months  ended  June 30,  2007,  as
compared to $2,000 for same period in 2006.

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<page>

Non-performing Loans

A loan is considered to be non-performing  if it (1) is on a non-accrual  basis,
(2) is past due ninety days or more and still accruing interest, or (3) has been
renegotiated to provide a reduction or deferral of interest or principal because
of a weakening in the financial position of the borrower.  A loan, which is past
due ninety days or more and still accruing  interest,  remains on accrual status
only where it is both  adequately  secured as to principal and is in the process
of collection.  The Company, at June 30, 2007, had non-performing loans totaling
$2.1  million,  as compared to $91,000 at December  31,  2006.  The  increase in
non-performing  loans is due primarily to one commercial  mortgage loan totaling
$2.0 million, which was placed on non-accrual status in April 2007.

Potential Problem Loans

In addition to  non-performing  loans,  the Company  maintains a "watch list" of
loans which are  subject to  heightened  scrutiny  and more  frequent  review by
management.  Loans may be placed on the "watch  list"  because of  documentation
deficiencies,  or because management has identified  "structural weakness" which
potentially could cause such loans to become non-performing in future periods.

As of June 30, 2007,  loans on the watch list totaled $8.8 million,  as compared
to $5.0 million at December 31, 2006.  The increase in loans on the "watch list"
is due primarily to the  previously-disclosed  $2.0 million commercial  mortgage
loan which was placed on non-accrual status in April 2007.

Allowance for Loan Losses and Related Provision

For the three and six months ended June 30, 2007,  the provision for loan losses
was $40,000 and  $165,000,  respectively,  as compared to $97,000 and  $148,000,
respectively, for the same periods in 2006. The increase is due primarily to the
incremental  loan loss provision  recorded in conjunction  with the downgrade in
risk rating of certain  commercial  loans  during the three and six months ended
June 30, 2007.

Loan portfolio  composition remained consistent at June 30, 2007, as compared to
December  31,  2006,  with  commercial  loans  comprising  85.9% of total  loans
outstanding  at June 30, 2007,  as compared to 86.5% at December  31,  2006.  In
addition,  the Company had  non-accrual  loans totaling $2.1 million at June 30,
2007,  as compared to $91,000 at December 31,  2006.  Net loans  totaled  $311.3
million at June 30, 2007, as compared to $312.1  million at December 31, 2006, a
decrease of $800,000,  or (0.26%).  The allowance  for loan losses  increased to
$3.49 million,  or 1.11% of total gross loans,  at June 30, 2007, as compared to
$3.23 million, or 1.02% of total gross loans, at December 31, 2006. The increase
in the allowance for loan losses ratio is due primarily to the incremental  loan
loss  provision  recorded in  conjunction  with the  downgrade in risk rating of
certain commercial loans during the three and six months ended June 30, 2007.

Deposits

One of the Company's  primary  strategies is the  accumulation  and retention of
core  deposits.  Core deposits are defined as all deposits with the exception of
certificates  of deposits in excess of  $100,000.  Deposits,  at June 30,  2007,
totaled $439.7 million, an increase of $12.4 million, or 2.9%, over the December
31,  2006  total of $427.3  million.  Core  deposits  as a  percentage  of total
deposits were 84.5% and 84.7%,  respectively,  at June 30, 2007 and December 31,
2006.

Borrowings

Other  borrowings  were $24.3  million at June 30,  2007,  as  compared to $17.1
million at December  31,  2006,  representing  an increase of $7.2  million,  or
42.1%.  These borrowings are short-term in nature. The increase is due to growth
in Central Jersey Bank, N.A.'s sweep account product for business customers.

                                       20
<page>

Liquidity and Capital Resources

Liquidity  defines the ability of Central Jersey Bank, N.A. to generate funds to
support asset growth, meet deposit  withdrawals,  maintain reserve  requirements
and otherwise  operate on an ongoing basis.  An important  component of a bank's
asset and liability  management  structure is the level of liquidity,  which are
net liquid assets  available to meet the needs of its  customers and  regulatory
requirements.  The  liquidity  needs of  Central  Jersey  Bank,  N.A.  have been
primarily met by cash on hand, loan and investment amortizations and borrowings.
Central  Jersey  Bank,  N.A.  invests  funds not needed for  operations  (excess
liquidity)  primarily in daily federal  funds sold.  During the six months ended
June 30, 2007, Central Jersey Bank, N.A. continued to maintain a large secondary
source of  liquidity  known as  investment  securities  available-for-sale.  The
market  value  of  that   portfolio  was  $108.6   million  and  $95.7  million,
respectively, at June 30, 2007 and December 31, 2006.

It has been Central Jersey Bank,  N.A.'s  experience  that its core deposit base
(which  is  defined  as  transaction  accounts  and term  deposits  of less than
$100,000) is primarily relationship-driven. Non-core deposits (which are defined
as term deposits of $100,000 or greater) are much more interest rate  sensitive.
In any event, adequate sources of reasonably priced on-balance sheet funds, such
as  overnight  federal  funds sold,  due from banks and  short-term  investments
maturing in less than one year,  must be continually  accessible for contingency
purposes.  This is  accomplished  primarily by the daily  monitoring  of certain
accounts for  sufficient  balances to meet future loan  commitments,  as well as
measuring Central Jersey Bank, N.A.'s liquidity position on a monthly basis.

Supplemental  sources  of  liquidity  include  large  certificates  of  deposit,
wholesale  and  retail   repurchase   agreements,   and  lines  of  credit  with
correspondent  banks.  Correspondent  banks,  which are typically referred to as
"banker's  banks,"  offer  essential  services  such as cash letter  processing,
investment services,  loan participation  support,  wire transfer operations and
other  traditional  banking  services.  Brokered  deposits,  which are  deposits
obtained, directly or indirectly, from or through the mediation or assistance of
a deposit  broker,  may be  utilized as  supplemental  sources of  liquidity  in
accordance  with Central Jersey Bank,  N.A.'s balance sheet  management  policy.
Contingent  liquidity  sources  may include  off-balance  sheet  funds,  such as
advances from both the Federal Home Loan Bank and the Federal  Reserve Bank, and
federal  funds  purchase  lines with  "upstream"  correspondents.  An additional
source of liquidity is made  available by  curtailing  loan activity and instead
using  the  available  cash to fund  short-term  investments  such as  overnight
federal funds sold or other approved investments maturing in less than one year.
In addition,  future  expansion of Central  Jersey Bank,  N.A.'s retail  banking
network is expected to create  additional  sources of liquidity from new deposit
customer relationships.

Central Jersey Bank, N.A. is subject to various regulatory capital  requirements
administered  by  federal  banking  agencies.  Failure to meet  minimum  capital
requirements   can  initiate   certain   mandatory   and   possibly   additional
discretionary,  actions by regulators  that, if undertaken,  could have a direct
material  effect on Central  Jersey Bank,  N.A.'s  financial  statements.  Under
capital adequacy  guidelines and the regulatory  framework for prompt corrective
action,  Central Jersey Bank,  N.A. must meet specific  capital  guidelines that
involve quantitative measures of Central Jersey Bank, N.A.'s assets, liabilities
and certain  off-balance-sheet  items as calculated under regulatory  accounting
practices.  Central Jersey Bank, N.A.'s capital amounts and  classification  are
also subject to qualitative  judgments by the regulators about components,  risk
weightings and other factors.

Quantitative  measures  established  by  regulation to ensure  capital  adequacy
require  Central Jersey Bank,  N.A. to maintain  minimum amounts and ratios (set
forth in the  following  table)  of Total  Capital  and Tier 1  Capital  to risk
weighted assets and of Tier 1 Capital to average assets (leverage  ratio). As of
June 30, 2007,  Central Jersey Bank, N.A. met all capital adequacy  requirements
to which it is subject.

                                       21
<page>

The  following is a summary of Central  Jersey Bank,  N.A.'s and Central  Jersey
Bancorp's  actual  capital  ratios as of June 30, 2007 and  December  31,  2006,
compared to the minimum capital  adequacy  requirements and the requirements for
classification as a "well-capitalized" institution:

<table>
<caption>
                                           Tier I                        Tier I
                                         Capital to                    Capital to                   Total Capital to
                                     Average Assets Ratio             Risk Weighted                  Risk Weighted
                                       (Leverage Ratio)                Asset Ratio                    Asset Ratio
                                    June 30,     December 31,     June 30,     December 31,     June 30,     December 31,
                                      2007          2006            2007           2006           2007           2006
                                  ------------   ------------   ------------   ------------   ------------   ------------

                                   <c>           <c>            <c>            <c>            <c>            <c>

Central Jersey Bancorp                8.31%         8.38%          11.68%         11.71%         12.68%         12.62%
Central Jersey Bank, N.A.             8.44%         8.47%          11.86%         11.81%         12.86%         12.72%

"Adequately capitalized"
institution (under federal
regulations)                          4.00%         4.00%           4.00%          4.00%          8.00%          8.00%


"Well capitalized" institution
(under federal regulations)           5.00%         5.00%           6.00%          6.00%         10.00%         10.00%

</table>

Item 3.  Quantitative and Qualitative Disclosures about Market Risk

Qualitative Analysis. Interest rate risk is the exposure of a bank's current and
future  earnings  and capital  arising  from the adverse  movements  in interest
rates.  Central Jersey Bank,  N.A.'s most  significant risk exposure is interest
rate risk.  The  guidelines of Central  Jersey Bank,  N.A.'s  interest rate risk
policy seek to limit the  exposure to changes in interest  rates that affect the
underlying economic value of assets and liabilities, earnings and capital.

The ALCO/Investment  Committee of Central Jersey Bank, N.A. meets on a quarterly
basis to review the impact of interest rate changes on net interest income,  net
interest margin and the economic value of equity. Members of the ALCO/Investment
Committee  include  Central  Jersey  Bancorp's  President  and  Chief  Executive
Officer,  Chief Operating  Officer,  Chief  Financial  Officer and Chief Lending
Officer.  The  ALCO/Investment  Committee  reviews a variety of strategies  that
project  changes in asset or  liability  mix and the impact of those  changes on
projected net interest income.

Central  Jersey Bank,  N.A.'s  strategy for  liabilities  has been to maintain a
stable  core-funding  base by focusing on core deposit  account  acquisition and
increasing products and services per household. Time deposits as a percentage of
total  deposits  were 34.99% at June 30, 2007, as compared to 33.03% at December
31, 2006. Time deposits are generally short term in nature. As of June 30, 2007,
97.8% of all time  deposits had  maturities  of one year or less, as compared to
85.7% at December  31,  2006.  Central  Jersey  Bank,  N.A.'s  ability to retain
maturing  time  deposit   accounts  is  the  result  of  a  strategy  to  remain
competitively priced within the marketplace. Central Jersey Bank, N.A.'s pricing
strategy may vary depending  upon funding needs and Central Jersey Bank,  N.A.'s
ability to fund operations through alternative  sources,  primarily by accessing
short term lines of credit  with the Federal  Home Loan Bank  during  periods of
pricing dislocation.

Quantitative Analysis. Central Jersey Bank, N.A. measures sensitivity to changes
in interest rates through the use of balance sheet and income simulation models.
The analyses  capture  changes in net interest income using flat rates as a base
case and rising and declining interest rate forecasts. Central Jersey Bank, N.A.
measures  changes in net  interest  income for the  forecast  period,  generally
twelve to twenty-four months, within set limits for acceptable change.

                                       22
<page>

The following  table sets forth the results of the projected net interest income
simulation model for the twelve month period  commencing July 1, 2007 and ending
June 30, 2008:


                                              Net Interest Income
                                              -------------------
Change in Interest Rates
In Basis Points (Rate Shock)       Amount ($)      Change (%)        Change ($)
-------------------------------------------------------------------------------

+200                              $ 20,207         $  2,010             11.05%
+100                                19,211            1,014              5.57%
Base Case                           18,197               --                --
-100                                17,273             (924)            (5.08%)
-200                              $ 15,929         $ (2,268)           (12.46%)


The preceding  table  indicates that for the twelve month period ending June 30,
2008, in the event of an immediate 200 basis point parallel increase in interest
rates,  Central Jersey Bank, N.A. would  experience an 11.05%,  or $2.0 million,
increase  in net  interest  income for the  period.  In the event of a 200 basis
point decrease in interest rates,  Central Jersey Bank, N.A. would  experience a
(12.46%), or $2.3 million,  decrease in net interest income for the twelve month
period ending June 30, 2008.

Item 4.  Controls and Procedures

As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the  "Exchange  Act"),  as of the end of the period  covered by this  quarterly
report, the Company carried out an evaluation of the effectiveness of the design
and operation of its disclosure  controls and  procedures.  This  evaluation was
carried out under the  supervision and with the  participation  of the Company's
management,  including its President and Chief  Executive  Officer and Executive
Vice  President and Chief  Financial  Officer,  who concluded that the Company's
disclosure  controls  and  procedures  are  effective.  The  Company's  Internal
Auditors also  participated in this evaluation.  There has been no change in the
Company's  internal  controls during the last fiscal quarter that has materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

Disclosure  controls and procedures are controls and other  procedures  that are
designed to ensure that  information  required to be disclosed in the  Company's
reports  filed or  submitted  under the  Exchange  Act is  recorded,  processed,
summarized and reported, within the time periods specified in the Securities and
Exchange  Commission's  rules and  forms.  Disclosure  controls  and  procedures
include,  without  limitation,  controls and procedures  designed to ensure that
information  required to be disclosed in the  Company's  reports filed under the
Exchange Act is  accumulated  and  communicated  to  management,  including  its
President and Chief  Executive  Officer and Executive  Vice  President and Chief
Financial Officer, to allow timely decisions regarding required disclosure.


                                       23
<page>


                           PART II. OTHER INFORMATION

Item 1.       Legal Proceedings
              -----------------

              The Company is not engaged in any legal  proceedings of a material
              nature at the present  time.  From time to time,  the Company is a
              party to routine  legal  proceedings  within the normal  course of
              business.  Such routine  legal  proceedings  in the  aggregate are
              believed by management to be immaterial to the Company's financial
              condition or results of operations.

Item 1A.      Risk Factors
              ------------

              There have been no material  changes to the risk factors that were
              previously  disclosed in the Company's  annual report on Form 10-K
              for the fiscal year ended December 31, 2006.

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds
              -----------------------------------------------------------

              Not Applicable.

Item 3.       Defaults Upon Senior Securities
              -------------------------------

              Not Applicable.


                                       24
<page>

Item 4.       Submission of Matters to a Vote of Security Holders
              ---------------------------------------------------

              The  following  matter was  submitted to a vote of Central  Jersey
              Bancorp's  shareholders  at Central  Jersey  Bancorp's 2007 Annual
              Meeting  of  Shareholders  held  on June  28,  2007  (the  "Annual
              Meeting"). The number of shares of Central Jersey Bancorp's common
              stock  that were  present  at the  Annual  Meeting in person or by
              proxy was 7,196,664.

              Election of Directors
              ---------------------

              At the Annual Meeting,  the shareholders  elected each of James G.
              Aaron, Esq., Mark R. Aikins, Esq., Nicholas A. Alexander,  C.P.A.,
              John A.  Brockriede,  George S. Callas,  James P. Dugan, M. Claire
              French,  William H. Jewett,  Paul A. Larson,  Jr., John F. McCann,
              Carmen M.  Penta,  C.P.A.,  Mark G.  Solow,  James S.  Vaccaro and
              Robert  S.  Vuono to  serve as a  director  of the  Company.  Each
              nominee  for  director  was  elected  for a  one  year  term.  The
              balloting for election was as follows:
<table>
<caption>
              -------------------------------------------------------------------------------
                                                                        Votes
              Name of Director                Votes For   Percentage   Withheld   Percentage
              -------------------------------------------------------------------------------

                                           <c>            <c>        <c>           <c>
              James G. Aaron, Esq.            6,814,929      94.7       381,735       5.3
              -------------------------------------------------------------------------------
              Mark R. Aikins, Esq.            6,967,613      96.8       229,051       3.2
              -------------------------------------------------------------------------------
              Nicholas A. Alexander, C.P.A.   7,000,579      97.3       196,085       2.7
              -------------------------------------------------------------------------------
              John A. Brockriede              6,993,510      97.2       203,154       2.8
              -------------------------------------------------------------------------------
              George S. Callas                6,810,559      94.6       386,105       5.4
              -------------------------------------------------------------------------------
              James P. Dugan, Esq.            6,996,405      97.2       200,259       2.8
              -------------------------------------------------------------------------------
              M. Claire French                7,007,699      97.4       188,965       2.6
              -------------------------------------------------------------------------------
              William H. Jewett               7,012,752      97.4       183,912       2.6
              -------------------------------------------------------------------------------
              Paul A. Larson, Jr.             7,013,654      97.5       183,010       2.5
              -------------------------------------------------------------------------------
              John F. McCann                  6,996,813      97.2       199,851       2.8
              -------------------------------------------------------------------------------
              Carmen M. Penta, C.P.A.         7,008,318      97.4       188,346       2.6
              -------------------------------------------------------------------------------
              Mark G. Solow                   7,005,715      97.3       190,949       2.7
              -------------------------------------------------------------------------------
              James S. Vaccaro                6,997,691      97.2       198,973       2.8
              -------------------------------------------------------------------------------
              Robert S. Vuono                 7,007,117      97.4       189,547       2.6
              -------------------------------------------------------------------------------
</table>

Item 5.       Other Information
              -----------------

              Not Applicable.

Item 6.       Exhibits
              --------

              See Index of Exhibits commencing on page E-1.

                                       25
<page>

                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the  Registrant  has duly  caused  this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                    Central Jersey Bancorp
                                    --------------------------------------------
                                    Registrant


Date:  August 9, 2007                   /s/ James S. Vaccaro
                                    --------------------------------------------
                                    James S. Vaccaro
                                    President and
                                    Chief Executive Officer
                                    (Principal Executive Officer)


Date:  August 9, 2007                   /s/ Anthony Giordano, III
                                    --------------------------------------------
                                    Anthony Giordano, III
                                    Executive Vice President, Chief Financial
                                    Officer, Treasurer and Assistant Secretary
                                    (Principal Financial and Accounting Officer)


                                       26
<page>

                                INDEX OF EXHIBITS

     Exhibit No.              Description of Exhibit
     -----------              ----------------------

         2.1      Plan  of  Acquisition  of  all  of the  outstanding  stock  of
                  Monmouth Community Bank by the Registrant,  entered into as of
                  March 16, 2000 by Monmouth  Community  Bank and the Registrant
                  (Incorporated  by reference to Exhibit 2.1 to the Registrant's
                  Registration   Statement  on  Form  SB-2   (Registration   No.
                  333-87352), effective July 23, 2002).

         2.2      Agreement and Plan of Acquisition,  dated as of June 30, 2004,
                  by and  between the  Registrant  and  Allaire  Community  Bank
                  ("Allaire"):  Upon the request of the  Securities and Exchange
                  Commission, the Registrant agrees to furnish a copy of Exhibit
                  A -  Voting  Agreement  of  Allaire  Stockholders  and  Voting
                  Agreement  of  the  Registrant's  Shareholders;  Exhibit  B  -
                  Allaire Affiliate Agreement,  Exhibit C - Opinion of Giordano,
                  Halleran & Ciesla,  P.C.,  as counsel to the  Registrant,  and
                  Exhibit  D - Opinion  of Frieri  Conroy &  Lombardo,  LLC,  as
                  counsel to  Allaire,  and the  following  Schedules:  Schedule
                  1.10(a) - Composition of the Registrant's  Board of Directors;
                  Schedule   1.10(b)  -  Composition  of  Allaire  and  Monmouth
                  Community  Bank  Boards  of  Directors;   Schedule  1.10(c)  -
                  Executive  Officers of the  Registrant,  Allaire and  Monmouth
                  Community Bank;  Schedule  3.02(a) - Stock Options  (Allaire);
                  Schedule  3.02(b) -  Subsidiaries  (Allaire);  Schedule 3.08 -
                  Absence of Changes or Events  (Allaire);  Schedule 3.09 - Loan
                  Portfolio   (Allaire);   Schedule  3.10  -  Legal  Proceedings
                  (Allaire); Schedule 3.11 - Tax Information (Allaire); Schedule
                  3.12(a) - Employee Benefit Plans (Allaire); Schedule 3.12(b) -
                  Defined Benefit Plans  (Allaire);  Schedule 3.12(h) - Payments
                  or  Obligations  (Allaire);  Schedule  3.12(m)  -  Grantor  or
                  "Rabbi"  Trusts  (Allaire);   Schedule  3.12(n)  -  Retirement
                  Benefits   (Allaire);   Schedule   3.13(c)  -  Buildings   and
                  Structures   (Allaire);   Schedule   3.14(a)  -  Real   Estate
                  (Allaire);  Schedule  3.14(b)  -  Leases  (Allaire);  Schedule
                  3.16(a) - Material  Contracts  (Allaire);  Schedule  3.16(c) -
                  Certain Other Contracts  (Allaire);  Schedule 3.16(d) - Effect
                  on  Contracts   and  Consents   (Allaire);   Schedule  3.18  -
                  Registration Obligations (Allaire);  Schedule 3.20 - Insurance
                  (Allaire);  Schedule  3.21(b) - Benefit or Compensation  Plans
                  (Allaire);  Schedule  3.21(d)  -  Labor  Relations  (Allaire);
                  Schedule 3.22 - Compliance  with  Applicable  Laws  (Allaire);
                  Schedule  3.23  -  Transactions  with  Management   (Allaire);
                  Schedule 3.25 - Deposits  (Allaire);  Schedule 4.02(a) - Stock
                  Options   (Registrant);   Schedule   4.02(b)  -   Subsidiaries
                  (Registrant);  Schedule  4.08 - Absence  of  Changes or Events
                  (Registrant);  Schedule  4.09 - Loan  Portfolio  (Registrant);
                  Schedule 4.10 - Legal Proceedings (Registrant);  Schedule 4.11
                  - Tax Information  (Registrant);  Schedule  4.12(a) - Employee
                  Benefit Plans (Registrant); Schedule 4.12(b) - Defined Benefit
                  Plans (Registrant); Schedule 4.12(g) - Payments or Obligations
                  (Registrant);  Schedule  4.12(l) - Grantor or  "Rabbi"  Trusts
                  (Registrant);   Schedule   4.12(m)   -   Retirement   Benefits
                  (Registrant);  Schedule  4.13(c) - Buildings  and  Structures;
                  (Registrant)  Schedule  4.14(a)  and 4.14(b) - Real Estate and
                  Leases  (Registrant);  Schedule  4.16(a) - Material  Contracts
                  (Registrant);  Schedule  4.16(c)  -  Certain  Other  Contracts
                  (Registrant);  Schedule  4.16(d)  - Effect  on  Contracts  and
                  Consents   (Registrant);    Schedule   4.18   -   Registration
                  Obligations   (Registrant);    Schedule   4.20   -   Insurance
                  (Registrant); Schedule 4.21(b) - Benefit or Compensation Plans
                  (Registrant); Schedule 4.21(d) - Labor Relations (Registrant);
                  Schedule 4.22 - Compliance with Applicable Laws  (Registrant);
                  Schedule 4.23 -  Transactions  with  Management  (Registrant);
                  Schedule  4.25 -  Deposits  (Registrant);  Schedule  6.18(a) -
                  Notice of Deadlines  (Allaire);  and Schedule 6.18(b) - Notice
                  of  Deadlines  (Registrant)   (Incorporated  by  reference  to
                  Exhibit  2.2 to the  Registrant's  Quarterly  Report  on  Form
                  10-QSB for the quarter ended June 30, 2004).

                                      E-1

<page>

         3.1      Certificate of Incorporation of the Registrant, as amended and
                  restated  on January 1, 2005  (Incorporated  by  reference  to
                  Exhibit 3.1 to the  Registrant's  Annual Report on Form 10-KSB
                  for the year ended December 31, 2004).

         3.2      By-laws of the Registrant,  as amended and restated on January
                  1, 2005  (Incorporated  by  reference  to  Exhibit  3.2 to the
                  Registrant's  Annual  Report on Form 10-KSB for the year ended
                  December 31, 2004).

         4.       Specimen  certificate  representing  the  Registrant's  common
                  stock, par value $0.01 per share (Incorporated by reference to
                  Exhibit 4 to Amendment No. 1 to the Registrant's  Registration
                  Statement on Form SB-2 (Registration No. 333-87352), effective
                  July 23, 2002).

         10.1.1   Registrant's  Stock Option Plan  (Incorporated by reference to
                  Exhibit  10.1 to the  Registrant's  Registration  Statement on
                  Form SB-2  (Registration  No.  333-87352),  effective July 23,
                  2002).

         10.1.2   The Allaire  Community  Bank 1999  Director  Stock Option Plan
                  (Incorporated  by reference to Exhibit 4.4 to the Registrant's
                  Registration   Statement   on  Form  S-8   (Registration   No.
                  333-122468), effective February 2, 2005).

         10.1.3   The Allaire  Community  Bank 2000  Director  Stock Option Plan
                  (Incorporated  by reference to Exhibit 4.5 to the Registrant's
                  Registration   Statement   on  Form  S-8   (Registration   No.
                  333-122468), effective February 2, 2005).

         10.1.4   The Allaire  Community  Bank 2001  Director  Stock Option Plan
                  (Incorporated  by reference to Exhibit 4.6 to the Registrant's
                  Registration   Statement   on  Form  S-8   (Registration   No.
                  333-122468), effective February 2, 2005).

         10.2     Indenture  between  Registrant and  Wilmington  Trust Company,
                  dated March 25, 2004  (Incorporated  by  reference  to Exhibit
                  10.10 to the Registrant's Annual Report on Form 10-KSB for the
                  year ended December 31, 2003).

         10.3     Amended  and  Restated  Declaration  of Trust of MCBK  Capital
                  Trust I, dated March 25, 2004  (Incorporated  by  reference to
                  Exhibit 10.11 to the Registrant's Annual Report on Form 10-KSB
                  for the year ended December 31, 2003).

         10.4     Guarantee   Agreement  by  Registrant  and  Wilmington   Trust
                  Company,  dated March 25, 2004  (Incorporated  by reference to
                  Exhibit 10.12 to the Registrant's Annual Report on Form 10-KSB
                  for the year ended December 31, 2003).

         10.5     Change of Control  Agreement,  dated as of August 1, 2006,  by
                  and between the Registrant  and Robert S. Vuono  (Incorporated
                  by  reference  to Exhibit  10.13 to the  Registrant's  Current
                  Report on Form 8-K dated August 1, 2006).

         10.5.1   Amendment  No. 1 to Change of Control  Agreement,  dated as of
                  February 21, 2007,  between the Registrant and Robert S. Vuono
                  (Incorporated   by   reference   to  Exhibit   10.5.1  to  the
                  Registrant's  Annual  Report on Form  10-K for the year  ended
                  December 31, 2006).

                                      E-2

<page>

         10.6     Change of  Control  Agreement,  dated as of  January  1, 2005,
                  between the Registrant and Robert K. Wallace  (Incorporated by
                  reference to Exhibit 10.8 to the Registrant's Annual Report on
                  Form 10-KSB for the year ended December 31, 2004).

         10.7     Severance Agreement,  dated as of January 1, 2005, between the
                  Registrant and Carl F. Chirico  (Incorporated  by reference to
                  Exhibit 10.9 to the Registrant's  Annual Report on Form 10-KSB
                  for the year ended December 31, 2004).

         10.8     Change of Control  Agreement,  dated as of August 1, 2006,  by
                  and between the Registrant and James S. Vaccaro  (Incorporated
                  by  reference  to Exhibit  10.11 to the  Registrant's  Current
                  Report on Form 8-K dated August 1, 2006).

         10.8.1   Amendment  No. 1 to Change of Control  Agreement,  dated as of
                  February 21, 2007, between the Registrant and James S. Vaccaro
                  (Incorporated   by   reference   to  Exhibit   10.8.1  to  the
                  Registrant's  Annual  Report on Form  10-K for the year  ended
                  December 31, 2006).

         10.9     Change of Control  Agreement,  dated as of August 1, 2006,  by
                  and  between  the   Registrant  and  Anthony   Giordano,   III
                  (Incorporated   by   reference   to   Exhibit   10.12  to  the
                  Registrant's Current Report on Form 8-K dated August 1, 2006).

         10.9.1   Amendment  No. 1 to Change of Control  Agreement,  dated as of
                  February  21,  2007,   between  the   Registrant  and  Anthony
                  Giordano,  III (Incorporated by reference to Exhibit 10.9.1 to
                  the Registrant's Annual Report on Form 10-K for the year ended
                  December 31, 2006).

         10.10    Change of Control  Agreement,  dated as of February  21, 2007,
                  between the Registrant and Thomas J. Garrity  (Incorporated by
                  reference to Exhibit 10.10 to the  Registrant's  Annual Report
                  on Form 10-K for the year ended December 31, 2006).

         10.11    Change of Control  Agreement,  dated as of  February  21, 2007
                  between the Registrant and Lisa A. Borghese  (Incorporated  by
                  reference to Exhibit 10.11 to the  Registrant's  Annual Report
                  on Form 10-K for the year ended December 31, 2006).

         10.12    Central   Jersey   Bancorp   2005   Equity    Incentive   Plan
                  (Incorporated   by   reference   to   Exhibit   10.10  to  the
                  Registrant's  Quarterly  Report on Form  10-Q for the  quarter
                  ended March 31, 2005).

         31.1     Section 302 Certification of Chief Executive Officer.

         31.2     Section 302 Certification of Chief Financial Officer.

         32.1     Certification of Chief Executive Officer Pursuant to 18 U.S.C.
                  Section 1350.

         32.2     Certification of Chief Financial Officer Pursuant to 18 U.S.C.
                  Section 1350.

                                      E-3