##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 (Mark one)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    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: 000-52749
 BANCORP OF NEW JERSEY, INC.
  New Jersey
    
    20-8444387(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)1365 Palisade Ave, Fort Lee, New Jersey
    
    07024(Address of principal executive offices)
    
    (Zip Code)
 (201) 944-8600
 (Registrants telephone number, including area code)
 204 Main Street, Fort Lee, New Jersey 07024
 þ o
  o o þ
  o þ




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##### 



INDEX
 PAGEPart I Financial InformationItem 1. Financial Statements:Unaudited Consolidated Statements of Financial Condition   September 30, 2007 and December 31, 2006
    
    
    3Unaudited Consolidated Statements of Operations  Three Months Ended September 30, 2007 and 2006
    
    
    4Unaudited Consolidated Statements of Operations  Nine Months Ended September 30, 2007 and 2006
    
    
    5Unaudited Consolidated Statements of Cash Flows  Nine Months Ended September 30, 2007 and 2006
    
    
    6Notes to Unaudited Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    27Item 4. Controls and Procedures
    
    
    29Part II Other InformationItem 1. Legal Proceedings
    
    
    30Item 1A. Risk Factors
    
    
    30Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    30Item 3. Defaults Upon Senior Securities
    
    
    30Item 4. Submission of Matters to a Vote of Securities Holders
    
    
    31Item 5. Other Information
    
    
    31Item 6. Exhibits
    
    
    31Signatures
    
    
    32Form of Stock Option AgreementRule 13a-14(a) Certification of the Principal Executive OfficerRule 13a-14(a) Certification of the Principal Financial OfficerSection 1350 Certifications
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BANCORP OF NEW JERSEY, INC.
 
   September 30, 2007
    
    
    December 31, 2006ASSETSCash and due from banks
    
    $
    3,049
    
    
    $
    284Interest bearing deposits
    
    
    623
    
    
    
    1,569Federal funds sold
    
    
    
    
    
    
    6,986Total cash and cash equivalents
    
    
    3,672
    
    
    
    8,839Securities available for sale
    
    
    100
    
    
    
    9,699Securities held to maturity, (estimated fair value
of $2,008 in 2007 and $2,002 in 2006)
    
    
    1,996
    
    
    
    1,993Loans receivable
    
    
    167,519
    
    
    
    80,638Deferred loan fees and unamortized costs, net
    
    
    97
    
    
    
    47Less: allowance for loan losses
    
    
    (1,772
    )
    
    
    (866
    )Net loans
    
    
    165,844
    
    
    
    79,819Premises and equipment, net
    
    
    7,994
    
    
    
    4,612Accrued interest receivable
    
    
    911
    
    
    
    439Other assets
    
    
    1,228
    
    
    
    646TOTAL ASSETS
    
    $
    181,745
    
    
    $
    106,047LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Non-interest bearing
    
    $
    18,873
    
    
    $
    10,244Savings and interest-bearing transaction accounts
    
    
    51,453
    
    
    
    40,667Time deposits under $100
    
    
    4,864
    
    
    
    1,189Time deposits $100 and over
    
    
    54,889
    
    
    
    9,767Total deposits
    
    
    130,079
    
    
    
    61,867Federal funds purchased
    
    
    6,000
    
    
    
    Other liabilities
    
    
    664
    
    
    
    1,141TOTAL LIABILITIES
    
    
    136,743
    
    
    
    63,008Commitments and contingenciesStockholders equity:Common stock, no par value, authorized 20,000,000
shares; issued and outstanding 2,458,535 shares at
September 30, 2007; $10 par value, authorized
5,000,000 shares; issued and outstanding 2,399,838
shares at December 31, 2006
    
    
    44,989
    
    
    
    23,998Additional Paid in Capital
    
    
    
    
    
    
    19,667Retained earnings (accumulated deficit)
    
    
    13
    
    
    
    (665
    )Accumulated other comprehensive income
    
    
    
    
    
    
    39TOTAL STOCKHOLDERS EQUITY
    
    
    45,002
    
    
    
    43,039TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    181,745
    
    
    $
    106,047
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BANCORP OF NEW JERSEY, INC.
 
  For the Three Months Ended September 30,2007
    
    
    2006(In thousands, except per share data)INTEREST INCOMELoans, including fees
    
    $
    2,839
    
    
    $
    634Securities
    
    
    25
    
    
    
    111Federal funds sold
    
    
    22
    
    
    
    341TOTAL INTEREST INCOME
    
    
    2,886
    
    
    
    1,086INTEREST EXPENSESavings and money markets
    
    
    493
    
    
    
    135Time deposits
    
    
    606
    
    
    
    14Short term borrowings
    
    
    143
    
    
    
    TOTAL INTEREST EXPENSE
    
    
    1,242
    
    
    
    149NET INTEREST INCOME
    
    
    1,644
    
    
    
    937Provision for loan losses
    
    
    278
    
    
    
    367NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES
    
    
    1,366
    
    
    
    570NONINTEREST INCOME  principally fees and service charges
    
    
    46
    
    
    
    5NONINTEREST EXPENSESalaries and employee benefits
    
    
    645
    
    
    
    406Occupancy and equipment expense
    
    
    224
    
    
    
    121Other expenses
    
    
    243
    
    
    
    145TOTAL NONINTEREST EXPENSE
    
    
    1,112
    
    
    
    672Income (loss) before provision for income taxes
    
    
    300
    
    
    
    (97
    )Income tax benefit
    
    
    (144
    )
    
    
    NET INCOME (LOSS)
    
    $
    444
    
    
    $
    (97
    )PER SHARE OF COMMON STOCKBasic earnings (loss)
    
    $
    0.18
    
    
    $
    (0.04
    )Diluted earnings (loss)
    
    $
    0.18
    
    
    $
    (0.04
    )
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BANCORP OF NEW JERSEY, INC.
 
  For the Nine Months Ended September 30,2007
    
    
    2006(In thousands, except per share data)INTEREST INCOMEInterest on escrow funds
    
    $
    
    
    
    $
    624Loans, including fees
    
    
    6,916
    
    
    
    718Securities
    
    
    240
    
    
    
    114Federal funds sold
    
    
    86
    
    
    
    709TOTAL INTEREST INCOME
    
    
    7,242
    
    
    
    2,165INTEREST EXPENSESavings and money markets
    
    
    1,409
    
    
    
    153Time deposits
    
    
    1,116
    
    
    
    15Short term borrowings
    
    
    261
    
    
    
    43TOTAL INTEREST EXPENSE
    
    
    2,786
    
    
    
    211NET INTEREST INCOME
    
    
    4,456
    
    
    
    1,954Provision for loan losses
    
    
    906
    
    
    
    564NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES
    
    
    3,550
    
    
    
    1,390NONINTEREST INCOME  principally fees and service charges
    
    
    106
    
    
    
    6NONINTEREST EXPENSESalaries and employee benefits
    
    
    1,676
    
    
    
    693Occupancy and equipment expense
    
    
    546
    
    
    
    193Other expenses
    
    
    793
    
    
    
    913TOTAL NONINTEREST EXPENSE
    
    
    3,015
    
    
    
    1,799Income (loss) before provision for income taxes
    
    
    641
    
    
    
    (403
    )Income tax benefit
    
    
    (37
    )
    
    
    NET INCOME (LOSS)
    
    $
    678
    
    
    $
    (403
    )PER SHARE OF COMMON STOCKBasic earnings(loss)
    
    $
    0.28
    
    
    $
    (0.17
    )Diluted earnings(loss)
    
    $
    0.28
    
    
    $
    (0.17
    )
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BANCORP OF NEW JERSEY, INC.
 
  For the Nine Months EndedSeptember 30,2007
    
    
    2006(in thousands)CASH FLOWS FROM OPERATING ACTIVITIESNet income (loss)
    
    $
    678
    
    
    $
    (403
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Depreciation and amortization
    
    
    109
    
    
    
    31Provision for loan losses
    
    
    906
    
    
    
    564Recognition of stock option expense
    
    
    58
    
    
    
    Changes in operating assets and liabilities:(Increase)decrease in accrued interest receivable
    
    
    (472
    )
    
    
    334(Decrease)increase in other assets
    
    
    (582
    )
    
    
    (218
    )(Decrease)increase in other liabilities
    
    
    (477
    )
    
    
    33NET CASH PROVIDED BY OPERATING ACTIVITIES
    
    
    220
    
    
    
    341CASH FLOWS FROM INVESTING ACTIVITIESPurchases of securities
    
    
    
    
    
    
    (10,551
    )Sales of securities available for sale
    
    
    9,557
    
    
    
    Net increase in loans
    
    
    (86,931
    )
    
    
    (49,612
    )Purchases of premises and equipment
    
    
    (3,491
    )
    
    
    (3,994
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    (80,865
    )
    
    
    (64,157
    )CASH FLOWS FROM FINANCING ACTIVITIESNet increase in deposits
    
    
    68,212
    
    
    
    38,192Proceeds from issuance of common stock
    
    
    500
    
    
    
    42,736Increase in federal funds purchased
    
    
    6,000
    
    
    
    Exercise of stock options and warrants
    
    
    766
    
    
    
    NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    75,478
    
    
    
    80,928Net (decrease) increase in cash and cash equivalents
    
    
    (5,167
    )
    
    
    17,112Cash and cash equivalents, beginning of year
    
    
    8,839
    
    
    
    12CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    3,672
    
    
    $
    17,124Cash paid during the period for:Interest
    
    $
    2,423
    
    
    $
    204Income taxes
    
    $
    679
    
    
    $
    
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BANCORP OF NEW JERSEY, INC.
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2007
 Note 1. Significant Accounting Policies
 Basis of Financial Statement PresentationThe accompanying consolidated financial statements include the accounts of Bancorp of New
Jersey, Inc., (the Company) and its direct wholly-owned subsidiary, Bank of New Jersey (the
Bank). These financial statements include the effect of the holding company reorganization
which took place on July 31, 2007 pursuant to a plan of acquisition that was approved by the
boards of directors of the Company and the Bank and adopted by the shareholders of the Bank
at a special meeting held July 19, 2007.The holding company reorganization is accounted for as a reorganization under common control
and the assets, liabilities, and shareholders equity of the Bank immediately prior to the
holding company reorganization have been carried forward on the Companys consolidated
financials statements at the amounts carried on the Banks books at the effective date of the
holding company reorganization. The consolidated capitalization, assets, liabilities,
results of operations and other financial data of the Company immediately following the
reorganization were substantially the same as those of the Bank immediately prior to the
holding company reorganization. Accordingly, these consolidated financial statements of the
Company include the Banks historical recorded values.The Companys class of common stock has no par value and the Banks class of common stock has
par value of $10 per share. As a result of the holding company reorganization, amounts
previously recognized as additional paid in capital on the Banks financial statements have
been reclassified into the Companys consolidated financial statements.These financial statements reflect all adjustments and disclosures which management believes
are necessary for a fair presentation of interim results. All significant inter-company
accounts and transactions have been eliminated in consolidation. The results of operations
for the quarter and nine months presented do not necessarily indicate the results that the
Company will achieve for the 2007 fiscal year. You should read these consolidated unaudited
interim financial statements in conjunction with the financial statements and accompanying
notes that are presented in the Banks registration statement on Form 10, filed with the
Federal Deposit Insurance Corporation on April 30, 2007.The financial information in this quarterly report has been prepared in accordance with U.S.
generally accepted accounting principles; these financial statements have not been audited.
Certain information and footnote disclosures required under generally accepted accounting
principles have been condensed or omitted, as permitted by rules and regulations of the
Securities and Exchange Commission.Certain reclassifications have been made to the prior period financial statements to conform
to the September 30, 2007 presentation.
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OrganizationThe Company is a New Jersey corporation and bank holding company registered with the Board of
Governors of the Federal Reserve System. The Bank is a community bank which provides a full
range of banking services to individuals and corporate customers in New Jersey. Both the
Company and the Bank are subject to competition from other financial institutions. The Bank
is regulated by state and federal agencies and is subject to periodic examinations by those
regulatory authorities. The Bank conducts a traditional commercial banking business,
accepting deposits from the general public, including individuals, businesses, non-profit
organizations, and governmental units. The Bank makes commercial loans, consumer loans, and
both residential and commercial real estate loans. In addition, the Bank provides other
customer services and makes investments in securities, as permitted by law. The Bank has
sought to offer an alternative, community-oriented style of banking in an area, that is
presently dominated by larger, statewide and national institutions. The Banks focus is on
establishing and retaining customer relationships by offering a broad range of traditional
financial services and products, competitively-priced and delivered in a responsive manner to
small businesses, professionals and individuals in the local market. As a community bank,
the Bank endeavors to provide superior customer service that is highly personalized,
efficient and responsive to local needs. To better serve its customers and expand it market
reach, the Bank provides for the delivery of certain of its financial products and services
to its local customers and to a broader market through the use of mail, telephone and
internet banking. The Bank seeks to deliver these products and services with the care and
professionalism expected of a community bank and with a special dedication to personalized
customer service.
 Note 2. Stockholders Equity and related transactions
 A 10% stock distribution was made during January, 2007 (the 2007 stock distribution).
Earnings per share and all share data have been restated to reflect the effect of the 2007
stock distributionOn September 7, 2007, the Company issued and sold an aggregate of 21,739 shares of its class
of common stock, no par value per share, for a per share sale price of $23.00, and an
aggregate sale price of $499,997, in cash. The purchasers consisted of one of the directors
of the Company and certain of his family members. The purchasers acquired the shares for
investment purposes only and not with a view to or for sale in connection with any
distribution of shares. The purchase price was equal to the fair market value of the common
stock at the time of the sale, as determined by the board of directors of the Company, based
upon the most recent trading information available to the Company and other information.
 Note 3. Benefit Plans and Stock-Based Compensation
 During 2006, the Banks stockholders approved the 2006 Stock Option Plan (the 2006 Option
Plan), which was assumed by the Company in connection with the holding company
reorganization effective July 31, 2007. (See Note 11 for additional information regarding
the holding company reorganization.) The 2006 Option Plan allows employees of the Company to
purchase up to 119,992 shares of the Companys common stock. The option price per share is
the market value of the common stock underlying the option on the date of grant. The number
of shares available under the 2006 Option Plan, as well as the option price and number of shares underlying options outstanding on the date of the 2007 stock distribution have been
equitably adjusted to account for the 2007 stock distribution. During 2006, incentive stock
options to purchase 62,150 shares were issued to employees. The Company has no option awards
with market or performance conditions attached to them.
 8




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During 2006, the Bank awarded incentive stock options (ISO) which vested over a 2 year period
and ISO options which vested over a 3 year period. The per share weighted-average fair
values of stock options granted during 2006, which vest over a 2 year period and a 3 year
period, were $2.52 and $4.34, respectively, on the date of grant using the Black Scholes
option-pricing model, as adjusted for the 2007 stock distribution. The options which vest
over a 2 year period used the following assumptions in determining the grant date fair value
of the 2006 option grants: expected dividend yields of 0.00%, risk-free interest rates of
4.77%, expected volatility of 16.00%; and average expected lives of 2 years. The options
which vest over a 3 year period used the following assumptions used in determining the grant
date fair value of the 2006 option grants: expected dividend yields of 0.00%, risk-free
interest rates of 4.77%, expected volatility of 22.00%; and average expected lives of 3.5
years.Share based compensation expense was $18,000 and $58,000 for the three months and nine months
ended September 30, 2007, respectively, compared to no share based compensation for the same
periods in 2006. No stock options were granted during the first nine months of 2007 or 2006.At a special meeting of stockholders of the Bank held on July 19, 2007, the stockholders of
the Bank adopted the 2007 Non-Qualified Stock Option Plan for Directors (the 2007 Director
Plan). The 2007 Director Plan was assumed by the Company in connection with the holding
company reorganization effective July 31, 2007. (See Note 11 for additional information
regarding the holding company reorganization.) The 2007 Director Plan provides for 240,000
options to purchase shares of common stock to non-employee directors. At September 30, 2007,
there have been no grants to non-employee directors under the 2007 Director Plan.Option activity under the Companys stock option plans for the nine months ended September
30, 2007 is as follows:
 ExercisepriceNumber of
    
    pershares
    
    shareOutstanding, January 1, 2007
    
    
    62,150
    
    
    $
    18.18Granted
    
    
    
    
    
    
    Exercised
    
    
    (11,000
    )
    
    
    18.18Forfeited
    
    
    
    
    
    
    Outstanding, end of quarter
    
    
    51,150
    
    
    $
    18.18Options exercisable at September 30, 2007
    
    
    11,000
    
    
    $
    18.18
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Note 4. Earnings Per Share.
 Basic earnings per share
 Diluted earnings per share
  For the Three Months EndedSeptember 30,(In thousands except per share data)
    
    2007
    
    2006Net income (loss) applicable to
common stock
    
    $
    444
    
    
    $
    (97
    )Weighted average number of common
shares outstanding  basic
    
    
    2,425
    
    
    
    2,400Basic earnings(loss) per share
    
    $
    0.18
    
    
    $
    (0.04
    )Net income (loss) applicable to
common stock
    
    $
    444
    
    
    $
    (97
    )Weighted average number of common
shares and common share equivalents
- diluted
    
    
    2,456
    
    
    
    2,400Diluted earnings(loss) per share
    
    $
    0.18
    
    
    $
    (0.04
    )
  10




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##### Table of Contents



For the Nine Months EndedSeptember 30,(In thousands except per share data)
    
    2007
    
    2006Net income (loss) applicable to
common stock
    
    $
    678
    
    
    $
    (403
    )Weighted average number of common
shares outstanding  basic
    
    
    2,414
    
    
    
    2,400Basic earnings(loss) per share
    
    $
    0.28
    
    
    $
    (0.17
    )Net income (loss) applicable to
common stock
    
    $
    678
    
    
    $
    (403
    )Weighted average number of common
shares and common share equivalents
 diluted
    
    
    2,442
    
    
    
    2,400Diluted earnings(loss) per share
    
    $
    0.28
    
    
    $
    (0.17
    )
  11




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Note 5. Comprehensive Income
  Three months ended September 30,2007
    
    
    2006Comprehensive Income (Loss)Net income (loss)
    
    $
    444
    
    
    $
    (97
    )Gross unrealized holding losses on
securities available for sale
    
    
    
    
    
    
    Gain realized on sale of securities
available for sale
    
    
    
    
    
    
    Net unrealized holding losses on
securities available for sale
    
    
    
    
    
    
    Total comprehensive income(loss)
    
    $
    444
    
    
    $
    (97
    )
 Nine months ended September 30,2007
    
    
    2006Comprehensive Income (Loss)Net income (loss)
    
    $
    678
    
    
    $
    (403
    )Gross unrealized holding losses on
securities available for sale
    
    
    (42
    )
    
    
    Gain realized on sale of securities
available for sale
    
    
    3
    
    
    
    Unrealized holding losses on
securities available for sale (net
of taxes $(15))
    
    
    (39
    )
    
    
    Total comprehensive income (loss)
    
    $
    639
    
    
    $
    (403
    )
 12




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##### Table of Contents



Note 6. Securities Available for Sale and Investment Securities
 A summary of securities available for sale at September 30, 2007 and at December 31, 2006 is
as follows (in thousands):
 Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    FairSeptember 30, 2007
    
    Cost
    
    Gains
    
    Losses
    
    ValueGovernment Sponsored
Enterprise obligations
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    Equity Securities
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    100Total available for sale
    
    $
    100
    
    
    
    
    
    
    
    
    
    
    $
    100
 Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    FairDecember 31, 2006
    
    Cost
    
    Gains
    
    Losses
    
    ValueGovernment Sponsored
Enterprise obligations
    
    $
    9,560
    
    
    
    39
    
    
    
    
    
    
    $
    9,599Equity Securities
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    100Total available for sale
    
    $
    9,660
    
    
    
    39
    
    
    
    
    
    
    $
    9,699
 A summary of held to maturity securities at September 30, 2007 and at December 31, 2006 is as
follows (in thousands):
 Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    FairSeptember 30, 2007
    
    Cost
    
    Gains
    
    Losses
    
    ValueObligations of U.S. Treasury
    
    $
    1,996
    
    
    
    12
    
    
    
    
    
    
    $
    2,008Total held to maturity
    
    $
    1,996
    
    
    
    12
    
    
    
    
    
    
    $
    2,008
 Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    FairDecember 31, 2006
    
    Cost
    
    Gains
    
    Losses
    
    ValueObligations of U.S. Treasury
    
    $
    1,993
    
    
    
    9
    
    
    
    
    
    
    $
    2,002Total held to maturity
    
    $
    1,993
    
    
    
    9
    
    
    
    
    
    
    $
    2,002
 13




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Note 7. Loans.
 The components of the loan portfolio at September 30, 2007 and December 31, 2006 are
summarized as follows (in thousands):
 September 30,
    
    
    December 31,2007
    
    
    2006Real estate
    
    $
    115,602
    
    
    $
    50,787Commercial
    
    
    24,008
    
    
    
    14,678Credit lines
    
    
    23,681
    
    
    
    13,519Consumer
    
    
    4,228
    
    
    
    1,654$
    167,519
    
    
    $
    80,638
 The Bank grants commercial, mortgage and installment loans primarily to New Jersey residents
and businesses within its local trading area. Its borrowers abilities to repay or otherwise
satisfy their obligations are dependent upon various factors, including the borrowers income
and net worth, cash flows generated by the underlying collateral, value of the underlying
collateral and priority of the Banks lien on the collateral. Such factors are dependent
upon various economic conditions and individual circumstances beyond the Banks control; the
Bank is therefore subject to risk of loss. The Bank believes its lending policies and
procedures reasonably account for the potential exposure to such risks and that adequate
provisions for loan losses are provided for all known and inherent risks. Management
believes that the allowance for loan losses is maintained at a level adequate to provide for
losses inherent in the loan portfolio.
 14




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The following tables present the activity in the allowance for loan losses during the periods
indicated (in thousands):
 Three months endedSeptember 30,2007
    
    
    2006Balance at beginning of period
    
    $
    1,494
    
    
    $
    197Provision charged to expense
    
    
    278
    
    
    
    367Loans charged off
    
    
    0
    
    
    
    0Recoveries
    
    
    0
    
    
    
    0Balance at end of period
    
    $
    1,772
    
    
    $
    564
 Nine months ended September 30,2007
    
    
    2006Balance at beginning of period
    
    $
    866
    
    
    $
    0Provision charged to expense
    
    
    906
    
    
    
    564Loans charged off
    
    
    0
    
    
    
    0Recoveries
    
    
    0
    
    
    
    0Balance at end of period
    
    $
    1,772
    
    
    $
    564
 There were no impaired loans at September 30, 2007 or at December 31, 2006. As of September
30, 2007 and December 31, 2006, the Bank also had no non-accrual loans or non-performing
loans.
 Note 8. Income Taxes
  15




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Note 9. Guarantees
  Note 10. Recent Accounting Pronouncements
     16




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Note 11. Holding Company Reorganization
   17




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ITEM 2
Managements Discussion and Analysis of
Financial Condition and Results of Operations
  Statements Regarding Forward Looking Information
    18




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Critical Accounting Policies, Judgments and Estimates
 The financial statements have been prepared in conformity with U.S. generally accepted
accounting principles. In preparing the financial statements, management is required to make
estimates and assumptions that affect the reported amounts of assets and liabilities as of
the date of the statement of financial condition and revenues and expenses for the period
indicated. Actual results could differ significantly from those estimates. Management
believes the following critical accounting policies encompass the more significant judgments
and estimates used in the preparation of the consolidated financial statements.Allowance for Loan LossesMaterial estimates that are particularly susceptible to significant change in the near term
relate to the determination of the allowance for loan losses. Losses on loans are charged to
the allowance for loan losses. Additions to this allowance are made by recoveries of loans
previously charged off and by a provision charged to expense. The determination of the
balance of the allowance for loan losses is based on an analysis of the loan portfolio,
economic conditions and other factors warranting recognition. Management believes that the
allowance for loan losses is maintained at an adequate level to provide for losses inherent
in the loan portfolio. While management uses available information to recognize losses on
loans, future additions may be necessary based on changes in economic conditions,
particularly in New Jersey. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Banks allowance for loan losses. Such
agencies may require the Bank to recognize additions to the allowance based on their
judgments about information available to them at the time of their examinations.Deferred Income TaxesWe recognize deferred tax assets and liabilities for future tax effects of temporary
differences. Deferred tax assets are subject to managements judgment based upon available
evidence that future realization is more likely than not. If management determines that we
may be unable to realize all of part of net deferred tax assets in the future, a direct
charge to income tax expense may be required to reduce the value of the net deferred tax
asset to the expected realizable amount.
 19




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Results of Operations
 Three Months Ended September 30, 2007 and 2006 and
 Nine Months Ended September 30, 2007 and 2006
   Net Income
    20




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Net Interest Income
   Provision for Loan Losses
  Non-interest Income
  21




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Non-interest Expense
  Income Tax Expense
  22




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FINANCIAL CONDITION
 %.
 Loans
     Loan Quality
  23




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Investment Securities
  Deposits
  Borrowings and Federal Funds Purchased
  24




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Liquidity
     Capital Resources
  25




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MinimumSeptember 30,
    
    Regulatory2007
    
    RequirementsRisk-Based Capital :Tier 1 Capital Ratio
    
    
    28.59
    %
    
    
    4.0
    %Total Capital Ratio
    
    
    29.71
    %
    
    
    8.0
    %Leverage Ratio
    
    
    25.94
    %
    
    
    8.0
    %
   26




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ITEM 3. Quantitative and Qualitative Disclosures about Market/Interest Risk
   27




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0  3
    
    
    0  6
    
    
    0  1
    
    
    0  5
    
    
    5  15Months
    
    
    Months
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    All Others
    
    
    TOTALSecurities, excluding
equity securities
    
    $
    
    
    
    $
    
    
    
    $
    1,996
    
    
    $
    1,996
    
    
    $
    
    
    
    $
    
    
    
    $
    1,996Loans :Commercial
    
    
    15,246
    
    
    
    17,245
    
    
    
    17,572
    
    
    
    22,211
    
    
    
    1,819
    
    
    
    
    
    
    
    24,030Real Estate
    
    
    29,321
    
    
    
    29,321
    
    
    
    30,336
    
    
    
    74,513
    
    
    
    5,369
    
    
    
    35,778
    
    
    
    115,660Credit Lines
    
    
    20,874
    
    
    
    23,601
    
    
    
    23,601
    
    
    
    23,601
    
    
    
    
    
    
    
    
    
    
    
    23,601Consumer
    
    
    620
    
    
    
    639
    
    
    
    917
    
    
    
    2,100
    
    
    
    563
    
    
    
    1,565
    
    
    
    4,228Federal Funds Sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other Assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,230
    
    
    
    12,230TOTAL ASSETS
    
    $
    66,061
    
    
    $
    70,806
    
    
    $
    74,422
    
    
    $
    124,421
    
    
    $
    7,751
    
    
    $
    49,573
    
    
    $
    181,745Transaction /
Demand Accounts
    
    $
    8,110
    
    
    $
    8,110
    
    
    $
    8,110
    
    
    $
    8,110
    
    
    
    
    
    
    
    
    
    
    $
    8,110Money Market
    
    
    40,481
    
    
    
    40,481
    
    
    
    40,481
    
    
    
    40,481
    
    
    
    
    
    
    
    
    
    
    
    40,481Savings
    
    
    2,862
    
    
    
    2,862
    
    
    
    2,862
    
    
    
    2,862
    
    
    
    
    
    
    
    
    
    
    
    2,862Time Deposits
    
    
    15,192
    
    
    
    26,768
    
    
    
    58,645
    
    
    
    59,752
    
    
    
    
    
    
    
    
    
    
    
    59,752Fed Funds Purchased
    
    
    6,000
    
    
    
    6,000
    
    
    
    6,000
    
    
    
    6,000
    
    
    
    
    
    
    
    
    
    
    
    6,000Other Liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,538
    
    
    
    19,538Equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,002
    
    
    
    45,002TOTAL LIABILITIES
AND EQUITY
    
    $
    72,645
    
    
    $
    84,221
    
    
    $
    116,098
    
    
    $
    117,205
    
    
    $
    
    
    
    $
    64,540
    
    
    $
    181,745Dollar Gap
    
    
    (6,584
    )
    
    
    (13,415
    )
    
    
    (41,676
    )
    
    
    7,216
    
    
    
    Gap / Total Assets
    
    
    (3.62
    %)
    
    
    (7.38
    %)
    
    
    (22.93
    %)
    
    
    3.97
    %Target Gap Range
    
    
    +/- 35.00
    
    
    
    +/- 30.00
    
    
    
    +/- 25.00
    
    
    
    +/- 25.00RSA / RSL
    
    
    90.94
    %
    
    
    84.07
    %
    
    
    64.10
    %
    
    
    106.16
    %(Rate Sensitive Assets to
Rate Sensitive Liabilities)
 28




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ITEM 4. Controls and Procedures
 Evaluation of disclosure controls and procedures.
   Changes in internal controls over financial reporting.
 
 29




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1.  Legal Proceedings
  
 Item 1A.Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults Upon Senior Securities
  30




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Item 4. Submission of Matters to a Vote of Securities Holders
  1.
    
    A proposal to adopt a Plan of Acquisition, pursuant to which the Bank would adopt
a bank holding company structure, the Bank would become a wholly-owned subsidiary of the
Company, and the shareholders of the Bank would become shareholders of the Company
through a one-to-one exchange of their Bank common stock for shares of Company common
stock.
 For
    
    Against
    
    Abstain
    
    Broker Non-Votes1,805,975
    
    4,675
    
    3,410
    
    none
 2.
    
    A proposal to approve the number of authorized shares of the Company as set forth
in the Companys certificate of incorporation (i.e., 20,000,000 shares of common stock,
no par value).
 For
    
    Against
    
    Abstain
    
    Broker Non-Votes1,802,125
    
    8,525
    
    3,410
    
    none
 3.
    
    A proposal to approve a provision in the Company certificate of incorporation
providing for a classified board of directors with one-third of the directors being
elected each year.
 For
    
    Against
    
    Abstain
    
    Broker Non-Votes1,803,445
    
    7,205
    
    3,410
    
    none
 4.
    
    A proposal to adopt the 2007 Non-Qualified Stock Option Plan for Directors, which
provides for options to purchase shares of common stock to be issued to non-employee
directors of the Bank.
 For
    
    Against
    
    Abstain
    
    Broker Non-Votes1,783,295
    
    17,930
    
    12,834
    
    none
  
 Item 5. Other Information
  
 Item 6. Exhibits
  31




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SIGNATURES
  Bancorp of New Jersey, Inc.Date: November 14, 2007
    By:
    /s/ Albert F. BuzzettiAlbert F. BuzzettiPresident and Chief Executive OfficerBy:
    /s/ Michael LeslerMichael LeslerExecutive Vice President and Chief Financial Officer 32




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EXHIBIT INDEX
 ExhibitNumber
    
    Description10.1
    
    2007 Non-Qualified Stock Option Plan For Directors*10.2
    
    Form of Stock Option Agreement under the 2007 Non-Qualified Stock Option Plan For Directors31.1
    
    Rule 13a-14(a) Certification of the Principal Executive Officer31.2
    
    Rule 13a-14(a) Certification of the Principal Financial Officer32
    
    Section 1350 Certifications
 
 *

    Incorporated by reference to the Companys Registration Statement on Form S-4 (Registration
No. 333-141124), filed with the Securities and Exchange Commission on March 7, 2007, as amended by
Amendment No. 1 on Form S-4/A, filed on April 27, 2007, and Amendment No. 2 on Form S-4/A, filed on
May 15, 2007 33