UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2008
 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
 
  þ o
  Large accelerated filer
o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller reporting company
þ
 o þ




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INDEX
 PAGEPart I            Financial InformationItem 1. Financial Statements:Unaudited Consolidated Statements of Financial Condition
- September 30, 2008 and December 31, 2007
    
    
    3Unaudited Consolidated Statements of Operations  Three
Months Ended September 30, 2008 and 2007
    
    
    4Unaudited Consolidated Statements of Operations  Nine
Months Ended September 30, 2008 and 2007
    
    
    5Unaudited Consolidated Statements of Cash Flows  Nine
Months Ended September 30, 2008 and 2007
    
    
    6Notes to Unaudited Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    22Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    29Item 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
    
    
    30Item 5. Other Information
    
    
    30Item 6. Exhibits
    
    
    30Signatures
    
    
    31
  2




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BANCORP OF NEW JERSEY, INC.
 
   September 30, 2008
    
    December 31, 2007ASSETSCash and due from banks
    
    $
    3,218
    
    
    $
    8,481Interest bearing deposits
    
    
    223
    
    
    
    543Federal funds sold
    
    
    18,884
    
    
    
    57,091Total cash and cash equivalents
    
    
    22,325
    
    
    
    66,115Restricted investment in bank stock, at cost
    
    
    346
    
    
    
    328Securities available for sale
    
    
    16,936
    
    
    
    Securities held to maturity (fair value of $2,014
at December 31, 2007)
    
    
    
    
    
    
    1,996Loans receivable
    
    
    220,668
    
    
    
    183,460Deferred loan fees and unamortized costs, net
    
    
    94
    
    
    
    76Less: allowance for loan losses
    
    
    (2,225
    )
    
    
    (1,912
    )Net loans
    
    
    218,537
    
    
    
    181,624Premises and equipment, net
    
    
    10,178
    
    
    
    8,300Accrued interest receivable
    
    
    1,174
    
    
    
    613Other assets
    
    
    1,574
    
    
    
    1,269TOTAL ASSETS
    
    $
    271,070
    
    
    $
    260,245LIABILITIES AND STOCKHOLDERS EQUITYLIABILITIES:Deposits:Non-interest bearing
    
    $
    25,278
    
    
    $
    23,292Savings and interest-bearing transaction accounts
    
    
    65,957
    
    
    
    55,645Time deposits under $100
    
    
    40,224
    
    
    
    41,303Time deposits $100 and over
    
    
    91,078
    
    
    
    92,701Total deposits
    
    
    222,537
    
    
    
    212,941Accrued interest payable and other liabilities
    
    
    1,035
    
    
    
    1,464TOTAL LIABILITIES
    
    
    223,572
    
    
    
    214,405Commitments and contingenciesStockholders equity:Common stock, no par value, authorized 20,000,000
shares; issued and outstanding 5,064,797shares at
September 30, 2008; and 4,970,090 shares at
December 31, 2007
    
    
    47,032
    
    
    
    45,689Retained earnings
    
    
    504
    
    
    
    151Accumulated other comprehensive loss
    
    
    (38
    )
    
    
    TOTAL STOCKHOLDERS EQUITY
    
    
    47,498
    
    
    
    45,840TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    271,070
    
    
    $
    260,245
  3




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BANCORP OF NEW JERSEY, INC.
 
  For the Three Months Ended September 30,2008
    
    2007(In thousands, except per share data)INTEREST INCOMELoans, including fees
    
    $
    3,236
    
    
    $
    2,839Securities
    
    
    238
    
    
    
    25Federal funds sold
    
    
    69
    
    
    
    22TOTAL INTEREST INCOME
    
    
    3,543
    
    
    
    2,886INTEREST EXPENSESavings and money markets
    
    
    271
    
    
    
    493Time deposits
    
    
    1,406
    
    
    
    606Short term borrowings
    
    
    11
    
    
    
    143TOTAL INTEREST EXPENSE
    
    
    1,688
    
    
    
    1,242NET INTEREST INCOME
    
    
    1,855
    
    
    
    1,644Provision for loan losses
    
    
    88
    
    
    
    278NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES
    
    
    1,767
    
    
    
    1,366NONINTEREST INCOME principally fees and service charges
    
    
    57
    
    
    
    46NONINTEREST EXPENSESalaries and employee benefits
    
    
    840
    
    
    
    645Occupancy and equipment expense
    
    
    289
    
    
    
    224Data processing
    
    
    72
    
    
    
    48Professional fees
    
    
    63
    
    
    
    57Other expenses
    
    
    142
    
    
    
    138TOTAL NONINTEREST EXPENSE
    
    
    1,406
    
    
    
    1,112Income before provision for income taxes
    
    
    418
    
    
    
    300Income tax expense(benefit)
    
    
    179
    
    
    
    (144
    )NET INCOME
    
    $
    239
    
    
    $
    444PER SHARE OF COMMON STOCKBasic and diluted earnings
    
    $
    0.05
    
    
    $
    0.09
   4




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BANCORP OF NEW JERSEY, INC.
 
  For the Nine Months Ended September 30,2008
    
    2007(In thousands, except per share data)INTEREST INCOMELoans, including fees
    
    $
    9,536
    
    
    $
    6,916Securities
    
    
    545
    
    
    
    240Federal funds sold
    
    
    715
    
    
    
    86TOTAL INTEREST INCOME
    
    
    10,801
    
    
    
    7,242INTEREST EXPENSESavings and money markets
    
    
    1,009
    
    
    
    1,409Time deposits
    
    
    4,744
    
    
    
    1,116Short term borrowings
    
    
    12
    
    
    
    261TOTAL INTEREST EXPENSE
    
    
    5,765
    
    
    
    2,786NET INTEREST INCOME
    
    
    5,036
    
    
    
    4,456Provision for loan losses
    
    
    313
    
    
    
    906NET INTEREST INCOME
AFTER PROVISION FOR
LOAN LOSSES
    
    
    4,723
    
    
    
    3,550NONINTEREST INCOME principally fees and
service charges
    
    
    202
    
    
    
    106NONINTEREST EXPENSESalaries and employee benefits
    
    
    2,498
    
    
    
    1,676Occupancy and equipment expense
    
    
    838
    
    
    
    546Data processing
    
    
    219
    
    
    
    124Professional fees
    
    
    269
    
    
    
    293Other expenses
    
    
    461
    
    
    
    376TOTAL NONINTEREST EXPENSE
    
    
    4,285
    
    
    
    3,015Income before provision for income taxes
    
    
    640
    
    
    
    641Income tax expense(benefit)
    
    
    287
    
    
    
    (37
    )NET INCOME
    
    $
    353
    
    
    $
    678PER SHARE OF COMMON STOCKBasic and diluted earnings
    
    $
    0.07
    
    
    $
    0.14
   5




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BANCORP OF NEW JERSEY, INC.
 
  For the Nine Months EndedSeptember 30,2008
    
    2007(in thousands)CASH FLOWS FROM OPERATING ACTIVITIESNet income
    
    $
    353
    
    
    $
    678Adjustments to reconcile net income to net cash Provided
by (used in) operating activities:Depreciation and amortization
    
    
    255
    
    
    
    109Provision for loan losses
    
    
    313
    
    
    
    906Recognition of stock option expense
    
    
    298
    
    
    
    58Net gain from securities transactions
    
    
    (1
    )
    
    
    Fees earned from mortgage referrals
    
    
    (15
    )
    
    
    Changes in operating assets and liabilities:Increase in accrued interest receivable
    
    
    (561
    )
    
    
    (472
    )Increase in other assets
    
    
    (305
    )
    
    
    (582
    )Decrease in other liabilities
    
    
    (429
    )
    
    
    (477
    )XNET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
    
    
    (92
    )
    
    
    220CASH FLOWS FROM INVESTING ACTIVITIESPurchases of securities available for sale, net
    
    
    (23,960
    )
    
    
    Purchases of investment in bank stock
    
    
    (18
    )
    
    
    Proceeds from sales or calls of securities available for sale
    
    
    7,000
    
    
    
    9,557Maturities of securities held to maturity
    
    
    2,000
    
    
    
    Net increase in loans
    
    
    (37,226
    )
    
    
    (86,931
    )Purchases of premises and equipment
    
    
    (2,133
    )
    
    
    (3,491
    )NET CASH USED IN INVESTING ACTIVITIES
    
    
    (54,337
    )
    
    
    (80,865
    )CASH FLOWS FROM FINANCING ACTIVITIESNet increase in deposits
    
    
    9,596
    
    
    
    68,212Increase in federal funds purchased
    
    
    
    
    
    
    6,000Issuance of common stock
    
    
    
    
    
    
    500Exercise of stock options
    
    
    230
    
    
    
    200Exercise of warrants
    
    
    813
    
    
    
    566NET CASH PROVIDED BY FINANCING ACTIVITIES
    
    
    10,639
    
    
    
    75,478Net decrease in cash and cash equivalents
    
    
    (43,790
    )
    
    
    (5,167
    )Cash and cash equivalents, beginning of year
    
    
    66,115
    
    
    
    8,839CASH AND CASH EQUIVALENTS, END OF PERIOD
    
    $
    22,325
    
    
    $
    3,672Cash paid during the period for:Interest
    
    $
    6,291
    
    
    $
    2,423Income taxes
    
    $
    372
    
    
    $
    679
  6




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BANCORP OF NEW JERSEY, INC.
 
 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Significant Accounting Policies
 Basis of Financial Statement Presentation
        7




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Organization
  Note 2. Stockholders Equity and related transactions
     Note 3. Benefit Plans and Stock-Based Compensation
 2006 Stock Option Plan
  8




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2007 Director Plan
     9




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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)
    
    2008
    
    2007Net income applicable to common stock
    
    $
    239
    
    
    $
    444Weighted average number of common
shares outstanding  basic
    
    
    5,048
    
    
    
    4,850Basic earnings per share
    
    $
    0.05
    
    
    $
    0.09Net income applicable to common stock
    
    $
    239
    
    
    $
    444Weighted average number of common shares
and common share equivalents  diluted
    
    
    5,143
    
    
    
    4,912Diluted earnings per share
    
    $
    0.05
    
    
    $
    0.09
   10




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For the Nine Months EndedSeptember 30,(In thousands except per share data)
    
    2008
    
    2007Net income applicable to common stock
    
    $
    353
    
    
    $
    678Weighted average number of common
shares outstanding  basic
    
    
    5,008
    
    
    
    4,828Basic earnings per share
    
    $
    0.07
    
    
    $
    0.14Net income applicable to common stock
    
    $
    353
    
    
    $
    678Weighted average number of common shares
and common share equivalents  diluted
    
    
    5,077
    
    
    
    4,884Diluted earnings per share
    
    $
    0.07
    
    
    $
    0.14
   11




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Note 5. Comprehensive Income
  Nine months ended September 30,2008
    
    
    2007Comprehensive IncomeNet income
    
    $
    353
    
    
    $
    678Unrealized holding loss on
securities available for sale, net
of taxes of $24 and $15 for 2008
and 2007, respectively
    
    
    (38
    )
    
    
    (39
    )Total comprehensive income
    
    $
    315
    
    
    $
    639
 12




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Note 6. Securities Available for Sale and Investment Securities
  Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    FairSeptember 30, 2008
    
    Cost
    
    Gains
    
    Losses
    
    ValueGovernment Sponsored
Enterprise obligations
    
    $
    17,000
    
    
    $
    9
    
    
    $
    (73
    )
    
    $
    16,936
    Gross
    
    GrossAmortized
    
    Unrealized
    
    Unrealized
    
    FairDecember 31, 2007
    
    Cost
    
    Gains
    
    Losses
    
    ValueObligations of U.S. Treasury
    
    $
    1,996
    
    
    $
    18
    
    
    
    
    
    
    $
    2,014
  13




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Note 7. Loans.
  September 30,
    
    
    December 31,2008
    

2007Real estate
    
    $
    149,835
    
    
    $
    123,335Commercial
    
    
    31,889
    
    
    
    27,056Credit lines
    
    
    34,440
    
    
    
    28,133Consumer
    
    
    4,504
    
    
    
    4,936$
    220,668
    
    
    $
    183,460
  14




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Three months ended
    
    
    Three months endedSeptember 30, 2008
    
    
    September 30, 2007Balance at beginning of period
    
    $
    2,137
    
    
    $
    1,494Provision charged to expense
    
    
    88
    
    
    
    278Loans charged off
    
    
    0
    
    
    
    0Recoveries
    
    
    0
    
    
    
    0Balance at end of period
    
    $
    2,225
    
    
    $
    1,772
 Nine months ended
    
    
    Nine months endedSeptember 30, 2008
    
    
    September 30, 2007Balance at beginning of period
    
    $
    1,912
    
    
    $
    866Provision charged to expense
    
    
    313
    
    
    
    906Loans charged off
    
    
    0
    
    
    
    0Recoveries
    
    
    0
    
    
    
    0Balance at end of period
    
    $
    2,225
    
    
    $
    1,772
  15




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Note 8. Guarantees
  Note 9. Fair Value Measurements
    
    
    Level 1 Inputs- Unadjusted quoted prices in active markets for identical assets or
liabilities that the reporting entity has the ability to access at the measurement date.
 16




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
    
    Level 2 Inputs- Inputs other than quoted prices included in Level 1 that are
observable for the asset or liability, either directly or indirectly. These might include
quoted prices for similar assets or liabilities in active markets, quoted prices for
identical or similar assets or liabilities in markets that are not active, inputs other
than quoted prices that are observable for the asset or liability (such as interest rates,
volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived
principally from or corroborated by market data by correlation or other means.
    
    Level 3 Inputs- Unobservable inputs for determining the fair values of assets or
liabilities that reflect an entitys own assumptions about the assumptions that market
participants would use in pricing the assets or liabilities.
   Securities Available for Sale
 Impaired Loans.
   TotalLevel 1
    
    Level 2
    
    Level 3
    
    FairInputs
    
    Inputs
    
    Inputs
    
    ValueSecurities available for sale
    
    $
    
    
    
    $
    16,936
    
    
    $
    
    
    
    $
    16,936Impaired loans
    
    $
    
    
    
    $
    
    
    
    $
    1,997
    
    
    $
    1,997
  17




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18




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Note 10. Recent Accounting Pronouncements
      19




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20




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21




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ITEM 2
Managements Discussion and Analysis of
Financial Condition and Results of Operations
  Statements Regarding Forward Looking Information
    22




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Critical Accounting Policies, Judgments and Estimates
  Allowance for Loan Losses
  Deferred Income Taxes
  23




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Results of Operations
 Three Months Ended September 30, 2008 and 2007 and
 Nine Months Ended September 30, 2008 and 2007
  Net Income
    Net Interest Income
  24




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Provision for Loan Losses
  Non-interest Income
  Non-interest Expense
  Income Tax Expense
  25




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FINANCIAL CONDITION
 %.
 Loans
     Loan Quality
  26




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Investment Securities
  Deposits
  Liquidity
    27




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Capital Resources
     MinimumSeptember 30,
    
    Regulatory2008
    
    RequirementsRisk-Based Capital :Tier 1 Capital Ratio
    
    
    22.05
    %
    
    
    4.0
    %Total Capital Ratio
    
    
    23.09
    %
    
    
    8.0
    %Leverage Ratio
    
    
    18.37
    %
    
    
    8.0
    %
   28




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ITEM 3. Quantitative and Qualitative Disclosures about Market/Interest Risk
  
 ITEM 4. Controls and Procedures
 Evaluation of disclosure controls and procedures.
   Changes in internal controls over financial reporting.
  29




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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
  
 Item 4. Submission of Matters to a Vote of Securities Holders
  
 Item 5. Other Information
  
 Item 6. Exhibits
  30




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SIGNATURES
  Bancorp of New Jersey, Inc.Date:      November 14, 2008
    By:
    /s/ Albert F. BuzzettiAlbert F. BuzzettiPresident and Chief Executive OfficerBy:
    /s/ Michael LeslerMichael LeslerExecutive Vice President and
     Chief Financial Officer 
 31




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EXHIBIT INDEX
 ExhibitNumber
    
    Description31.1
    
    Rule 13a-14(a) Certification of the Principal Executive Officer31.2
    
    Rule 13a-14(a) Certification of the Principal Financial Officer32
    
    Section 1350 Certifications
 32