UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

                                   (Mark One)

      |x|   ANNUAL  REPORT  PURSUANT  TO SECTION  13 OR 15(d) OF THE  SECURITIES
            EXCHANGE ACT OF 1934

            For the fiscal year ended December 31, 2005

                                       OR

      |_|   TRANSITION  REPORT  UNDER  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)               (Zip Code)

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

      Securities registered under Section 12(b) of the Act: None
                                                            ----

      Securities registered under Section 12(g) of the Act:

                          Common Stock, par value $0.01
                  --------------------------------------------
                                (Title of class)

      Indicate by check mark if the Registrant is a well-known seasoned issuer,
as defined in Rule 405 of the Securities Act. Yes |_| No |X|


<PAGE>

      Indicate by check mark if the  Registrant  is not required to file reports
pursuant to Section 13 or Section 15(d) of the Act. Yes |_| No |X|

      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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best  of  the  Registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. |_|

      Indicate  by check mark  whether  the  Registrant  is a large  accelerated
filer, an accelerated  filer,  or a  non-accelerated  filer.  See definitions 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 June 30, 2005, the aggregate market value of the Registrant's common
stock held by non-affiliates was approximately $100,051,072.

      As of March 10, 2006,  7,825,314 shares of the  Registrant's  common stock
were outstanding.

                       DOCUMENTS INCORPORATED BY REFERENCE
                       -----------------------------------

Part III of this Annual Report on Form 10-K incorporates  certain information by
reference  from the  Registrant's  Proxy  Statement  for the  Annual  Meeting of
Shareholders  scheduled to be held on May 25, 2006. The Proxy  Statement will be
filed with the Securities and Exchange Commission by April 30, 2006.


                                       ii
<PAGE>

                SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
                -------------------------------------------------

      Certain information included in this Annual Report on Form 10-K and other
filings of the Registrant under the Securities Act of 1933, as amended (the
"Securities Act"), and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as well as information communicated orally or in writing
between the dates of such filings, contains or may contain "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act. Such statements are subject to certain risks, trends
and uncertainties that could cause actual results to differ materially from
expected results. Among these risks, trends and uncertainties are the effect of
governmental regulation on Central Jersey Bank, N.A., a nationally chartered
commercial bank and wholly-owned subsidiary of the Registrant, the availability
of working capital, the cost of personnel and the competitive markets in which
Central Jersey Bank, N.A. operates.

      In some cases, forward-looking statements can be identified by terminology
such as "may," "will," "should," "could," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of such terms or other comparable terminology. Although the Registrant believes
that the expectations reflected in the forward-looking statements contained
herein are reasonable, the Registrant cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither the Registrant, nor any
other person, assumes responsibility for the accuracy and completeness of such
statements. The Registrant is under no duty to update any of the forward-looking
statements contained herein after the date of this Annual Report on Form 10-K.


                                       iii
<PAGE>

                             CENTRAL JERSEY BANCORP

                               INDEX TO FORM 10-K
                               ------------------

<TABLE>
<CAPTION>
PART I                                                                                 PAGE
------                                                                                 ----
<S>          <C>                                                                         <C>
Item 1.      Business.....................................................................1

Item 1A.     Risk Factors................................................................13

Item 1B.     Unresolved Staff Comments...................................................18

Item 2.      Properties..................................................................18

Item 3.      Legal Proceedings...........................................................19

Item 4.      Submission of Matters to a Vote of Security Holders.........................19

PART II
-------

Item 5.      Market for Registrant's Common Equity, Related Stockholder Matters
             and Issuer Purchases of Equity Securities...................................19

Item 6.      Selected Financial Data.....................................................21

Item 7.      Management's Discussion and Analysis of Financial Condition
             and Results of Operations...................................................23

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk..................44

Item 8.      Financial Statements and Supplementary Data.................................45

Item 9.      Changes in and Disagreements With Accountants on Accounting
             and Financial Disclosure....................................................45

Item 9A.     Controls and Procedures.....................................................45

Item 9B.     Other Information...........................................................47

PART III
--------

Item 10.*    Directors and  Executive Officers of the Registrant.........................48

Item 11.*    Executive Compensation......................................................48

Item 12.*    Security Ownership of Certain Beneficial Owners and Management and
             Related Stockholder Matters.................................................48
</TABLE>


                                       iv
<PAGE>

<TABLE>
<S>          <C>                                                                         <C>
Item 13.*    Certain Relationships and Related Transactions..............................48

Item 14.*    Principal Accountant Fees and Services......................................48

Item 15.     Exhibits and Financial Statement Schedules..................................48

Signatures   ............................................................................50
</TABLE>

*     The information  required under this Item is contained in the Registrant's
      Proxy  Statement for the Annual  Meeting of  Shareholders  scheduled to be
      held on May 25, 2006, and is incorporated  herein by reference.  The Proxy
      Statement  will be filed with the  Securities  and Exchange  Commission by
      April 30, 2006.


                                        v
<PAGE>

                                     PART I

Item 1. Business
        --------

Business Development

      Central Jersey Bancorp is a bank holding company headquartered in Long
Branch, New Jersey. The holding company was incorporated in New Jersey on March
7, 2000, and became an active bank holding company on August 31, 2000 through
the acquisition of Monmouth Community Bank, National Association. On January 1,
2005, Central Jersey Bancorp completed its strategic business combination
transaction with Allaire Community Bank, a New Jersey state-chartered bank,
pursuant to which Allaire Community Bank became a wholly-owned bank subsidiary
of Central Jersey Bancorp. On the effective date of the combination, the name of
the holding company was changed from Monmouth Community Bancorp to Central
Jersey Bancorp. In addition, as a part of the combination, each outstanding
share of common stock of Allaire Community Bank was exchanged for one share of
Central Jersey Bancorp common stock. Consequently, 3,992,280 shares of common
stock of Central Jersey Bancorp were issued to the stockholders of Allaire
Community Bank.

      In August of 2005, Central Jersey Bancorp combined its two bank
subsidiaries, Monmouth Community Bank, N.A. and Allaire Community Bank, into a
single banking entity, named Central Jersey Bank, National Association. Central
Jersey Bank, N.A. offers a full range of retail and commercial banking services
primarily to customers located in Monmouth County and Ocean County, New Jersey.
These services include checking accounts, savings accounts, money market
accounts, certificates of deposit, installment loans, real estate mortgage
loans, commercial loans, wire transfers, money orders, traveler's checks, safe
deposit boxes, night depositories, federal payroll tax deposits, bond coupon
redemption, bank by mail, direct deposit, automated teller services and
telephone and internet banking. Central Jersey Bank, N.A. has debit card,
merchant card and international services available to its customers through
correspondent institutions. Central Jersey Bank, N.A. currently has fourteen
full-service branch facilities located in Belmar, Bradley Beach, Long Branch
(2), Manasquan, Point Pleasant, Spring Lake Heights, Little Silver, Neptune,
Neptune City (2), Ocean Grove, and Wall Township (2), New Jersey.

      Central Jersey Bank, N.A. is a national association chartered by the
Office of the Comptroller of the Currency ("OCC"). The deposits of the bank
subsidiary are insured by the Federal Deposit Insurance Corporation ("FDIC").
Central Jersey Bank, N.A. provides a broad range of financial products and
services to individual consumers, small businesses and professionals in the
market to which it serves. When a customer's loan requirements exceed Central
Jersey Bank, N.A.'s lending limit, the bank subsidiary may seek to arrange such
loan on a participation basis with other financial institutions. In addition,
Central Jersey Bank, N.A. participates in loans originated by other financial
institutions.

Business Strategy

      Central Jersey Bancorp's strategy is to provide a competitive range of
community banking services to its market area, in a professional environment, at
fair and reasonable prices,


                                       1
<PAGE>

at convenient operating hours, with a commitment to prompt, quality and highly
personalized service, which are both efficient and responsive to local needs.
Service to customers and a commitment to the community are the basic and
distinguishing features offered by Central Jersey Bank, N.A., Central Jersey
Bancorp's bank subsidiary. Management believes there is a continuing need and
significant market demand for a local bank to provide personalized service that
is responsive to local community needs and managed by experienced personnel.

Market Area

      Central Jersey Bank, N.A. currently operates fourteen full-service branch
facilities located in Belmar, Bradley Beach, Long Branch (2), Manasquan, Point
Pleasant, Spring Lake Heights, Neptune City (2), Little Silver, Ocean Grove,
Neptune and Wall Township (2), New Jersey. Except for the Point Pleasant branch,
located in Ocean County, New Jersey, each branch is within Monmouth County, New
Jersey, the sixth largest county in the State of New Jersey. The individual
branch locations provide a great deal of exposure and are well-situated to
conveniently serve businesses, professionals and individuals throughout Central
Jersey Bancorp's market area.

      Commercial activity within Central Jersey Bancorp's market area includes
small and medium sized businesses, corporate offices, professional offices,
major retail centers, resort and recreational businesses along the nearby
oceanfront, as well as numerous industrial establishments specializing in light
manufacturing, baking products, rubber and plastic products, surgical and
medical devices, electronics and telecommunications. In addition, the market
area contains a variety of major employers, including Monmouth Medical Center,
Jersey Shore University Medical Center and Monmouth University.

Services Offered

      Central Jersey Bancorp's bank subsidiary is community oriented and offers
services and products designed to meet the needs of local individuals,
businesses and professionals. Business people and professionals are offered a
broad spectrum of deposit and loan products designed to satisfy their
occupational and personal financial needs. In addition, Central Jersey Bank,
N.A. provides a broad array of consumer banking services to the general public
residing or working in the market area to which it serves.

Deposits. In order to attract and retain stable deposit relationships with the
commercial establishments and other businesses within our market area, Central
Jersey Bank, N.A. offers competitive small business cash management services. We
believe that the expertise and experience of our management coupled with the
introduction of new technologies enables Central Jersey Bank, N.A. to maximize
the growth of business related deposits. The primary deposit services of Central
Jersey Bank, N.A. offered to non-business customers are comprised of demand
deposits, savings deposits (including money markets), time deposits and
individual retirement accounts.

Loans. Central Jersey Banks N.A.'s loan portfolio consists primarily of
variable-rate and short-term fixed rate loans, with a significant concentration
in commercial purpose transactions. We believe that the familiarity of
management and the members of our board of directors appointed


                                       2
<PAGE>

to the loan committees of Central Jersey Bank, N.A. with prospective local
borrowers enables Central Jersey Bank, N.A. to better evaluate the character,
integrity and creditworthiness of prospective borrowers.

Residential Mortgage Loans. In order to effectively penetrate the mortgage
market, Central Jersey Bank, N.A. offers a range of residential mortgage
products at competitive rates. Central Jersey Bank, N.A. sells its residential
mortgage production to government agencies and private investors in order to
manage interest rate risk and liquidity. Management believes that our policy of
closing loans in a time frame that meets the needs of our borrowers is important
to our business.

Commercial Mortgage/Construction Loans. Central Jersey Bank, N.A. originates
various types of loans secured with real estate, including construction loans.
Central Jersey Bank, N.A.'s loan officers work closely with real estate
developers, individual builders and attorneys to offer construction loans and
services to the residential real estate market as well as to owner-occupied
commercial properties and investment properties. Construction lending
constitutes a minor portion of the loan portfolio. In some cases, Central Jersey
Bank, N.A. may originate loans larger than its lending or policy limits and will
participate these loans with other financial institutions.

Consumer Lending. Central Jersey Bank, N.A. offers retail customers consumer
loan services including secured and unsecured personal loans, home equity loans,
lines of credit and auto loans.

Small Business Loans. Central Jersey Bank, N.A. generally targets businesses
with annual revenues of less than $25,000,000. Often, these businesses are
ignored by the larger lending institutions and have experienced the negative
effects of the bank consolidations. Central Jersey Bank, N.A. offers
responsiveness, flexibility and local decision-making for loan applications of
small business owners, thereby eliminating the delays generally associated with
non-local management. Central Jersey Bank, N.A. may participate in the future in
Small Business Administration (SBA) programs, and currently participates in
programs offered through the New Jersey Economic Development Authority. As an
independent community bank, Central Jersey Bank, N.A. serves the special needs
of professionals in the legal, medical, accounting, insurance and real estate
industries. Lines of credit, term loans and time loans are tailored to meet the
needs of our customers in the professional community.

Other Services. To further attract and retain customer relationships, Central
Jersey Bank, N.A. provides an expanded array of financial services, including
the following: the issuance of money orders, treasurer checks, certified checks
and gift checks, wire transfers, U.S. Savings Bonds sales and redemptions, debit
cards, U.S. Treasury Bills, notes and bonds, MAC card memberships, federal
payroll tax deposits, safe deposit boxes, traveler's checks, night depositories,
bond coupon redemptions, bank-by-mail, direct deposit, business sweep accounts,
automated teller machines and telephone and internet banking. Central Jersey
Bank, N.A. offers a variety of personal and business credit cards. These credit
cards are underwritten and managed by one or more third party unaffiliated
banking organizations. Central Jersey Bank, N.A. also maintains coin counting
machines, for the convenience of its customers, in each of its branch offices.


                                       3
<PAGE>

Competition

      The banking business in New Jersey is very competitive. Central Jersey
Bank, N.A. competes for deposits and loans with existing New Jersey and
out-of-state financial institutions which have longer operating histories,
larger capital reserves and more established customer bases. Central Jersey
Bank, N.A.'s competition includes large financial service companies and other
entities, in addition to traditional banking institutions such as savings and
loan associations, savings banks, commercial banks, internet banks and credit
unions. Such competition includes community banks, with banking philosophies
similar to those of Central Jersey Bank, N.A., which are located within or near
the market area served by us.

      Central Jersey Bank, N.A.'s larger competitors have a greater ability than
our bank subsidiary to finance wide ranging advertising campaigns through their
greater capital resources. Marketing efforts to introduce prospective customers
to our bank subsidiary depend heavily upon referrals from our board of
directors, advisory boards, management and shareholders, selective advertising
in local media and direct mail solicitations. Central Jersey Bank, N.A. competes
for business principally on the basis of high quality, personal service to
customers, customer access to bank decision makers and competitive interest
rates and fees.

      In the financial services industry in recent years, intense market
demands, technological and regulatory changes and economic pressures have eroded
once clearly defined financial service industry classifications. Existing banks
have been forced to diversify their services, increase rates paid on deposits,
provide competitive pricing on loans and become more cost effective, as a result
of competition with one another and with new types of financial service
companies, including non-banking competitors. Corresponding changes in the
regulatory framework have resulted in increasing homogeneity in the financial
services offered by financial institutions. Some of the results of these market
dynamics in the financial services industry have been a number of new bank and
non-bank competitors, increased merger activity, and increased customer
awareness of product and service differences among competitors. These factors
may be expected to affect our business prospects.

Employees

      George W. Callas (Chairman of the Board), Carl F. Chirico (Vice-Chairman
of the Board), James S. Vaccaro (President and Chief Executive Officer), Robert
S. Vuono (Senior Executive Vice President, Chief Operating Officer and
Secretary), and Anthony Giordano, III (Executive Vice President, Chief Financial
Officer, Treasurer and Assistant Secretary) currently are the executive officers
of the holding company, Central Jersey Bancorp, and its banking subsidiary,
Central Jersey Bank, N.A. Except for Mr. Vuono and Robert K. Wallace (Executive
Vice President of Lending), none of the officers of Central Jersey Bancorp or
Central Jersey Bank, N.A. has an employment agreement. Including the
aforementioned officers, Central Jersey Bancorp had a total of 152 full time
equivalent employees as of March 10, 2006.

Holding Company Operations

      Central Jersey Bancorp serves as the holding company for Central Jersey
Bank, N.A. The holding company has no assets or liabilities other than its
investment in Central Jersey Bank,


                                       4
<PAGE>

N.A and its participation in MCBK Capital Trust I, a Delaware statutory business
trust and a wholly-owned, unconsolidated subsidiary of the holding company which
was formed in March 2004. See "Item 7. Management's Discussion and Analysis of
Financial Condition and Results of Operation - Guaranteed Preferred Beneficial
Interest in the Central Jersey Bancorp Subordinated Debt." The holding company
does not conduct, nor does management believe that it will conduct, any
business. All banking products and services are, and will be, provided by
Central Jersey Bancorp's bank subsidiary. Moreover, on March 9, 2004, Monmouth
Community Bank, N.A., the original banking subsidiary of Central Jersey Bancorp,
formed MCB Investment Company, a New Jersey corporation. For state tax purposes,
MCB Investment Company was formed to hold and invest in securities in support of
Monmouth Community Bank, N.A. Further, on January 10, 2001, Allaire Community
Bank, a former bank subsidiary of Central Jersey Bancorp that was combined with
Monmouth Community Bank, N.A. to form Central Jersey Bank, N.A. in August 2005,
formed Allaire Investment Co., Inc., a New Jersey corporation, for the same
purposes that Monmouth Community Bank, N.A. formed MCB Investment Company.
Central Jersey Bancorp combined the two New Jersey investment subsidiaries
effective January 1, 2006. The name of the combined investment subsidiary is CJB
Investment Corp.

Government Regulation

      Central Jersey Bancorp and its subsidiaries, including Central Jersey
Bank, N.A., operate within a system of banking laws and regulations intended to
protect bank customers and depositors. These laws and regulations govern the
permissible operations and management, activities, reserves, loans and
investments of Central Jersey Bancorp and its subsidiaries. In addition, Central
Jersey Bancorp is subject to federal and state securities laws and general
federal laws and regulations. Central Jersey Bancorp and its non-bank subsidiary
also are subject to the corporate laws and regulations of their respective
states of incorporation. The following descriptions summarize the key banking
and other laws and regulations to which Central Jersey Bancorp and Central
Jersey Bank, N.A. are subject. These descriptions are not intended to be
complete and are qualified in their entirety by reference to the full text of
the statutes and regulations discussed. Future changes in these laws and
regulations, or in the interpretation and application thereof by their
administering agencies, cannot be predicted, but could have a material effect on
the business and results of Central Jersey Bancorp and its subsidiaries.

      Central Jersey Bancorp is a bank holding company under the Federal Bank
Holding Company Act of 1956, as amended by the 1999 financial modernization
legislation known as the Gramm-Leach-Bliley Act, and is subject to the
supervision of the Board of Governors of the Federal Reserve System. In general,
the Bank Holding Company Act limits the business of bank holding companies to
banking, managing or controlling banks, and performing certain servicing
activities for subsidiaries and, as a result of the Gramm-Leach-Bliley Act
amendments to the Bank Holding Company Act, would permit bank holding companies
that are also designated as "financial holding companies" to engage in any
activity, or acquire and retain the shares of any company engaged in any
activity, that is either (1) financial in nature or incidental to such financial
activity (as determined by the Federal Reserve Board in consultation with the
OCC or (2) complementary to a financial activity and does not pose a substantial
risk to the safety and soundness of depository institutions or the financial
system generally (as determined by the Federal Reserve Board). In order for a
bank holding company to engage in the broader range of activities that are
permitted by the Bank Holding Company Act for bank holding companies that


                                       5
<PAGE>

are also financial holding companies, upon satisfaction of certain regulatory
criteria, the bank holding company must file a declaration with the Federal
Reserve Board that it elects to be a financial holding company. Central Jersey
Bancorp does not intend to seek a financial holding company designation at this
time, and does not believe that the current decision not to seek a financial
holding company designation will adversely affect its ability to compete in its
chosen markets. Central Jersey Bancorp does not believe that seeking such a
designation would position it to compete more effectively in the offering of its
current products and services.

      Central Jersey Bank, N.A., the banking subsidiary of Central Jersey
Bancorp, is a national association, and is subject to the regulation,
supervision and examination of the OCC. In addition, as a national bank, Central
Jersey Bank, N.A. was required to become a member bank of the Federal Reserve
Bank of New York, and is subject to examination and regulation by the Board of
Governors of the Federal Reserve System. The Federal Reserve Board regulates
aspects of activities conducted by Central Jersey Bancorp and its subsidiaries,
as discussed below.

Dividend Restrictions

      Central Jersey Bancorp and its subsidiaries are separate legal entities
whose finances are in some ways interconnected. Central Jersey Bancorp's
principal source of funds to fulfill its guarantee of trust preferred securities
issued by CJB Investment Corp. or to pay cash dividends on its common stock, if
such dividends were to be declared, is from cash dividends paid to it by Central
Jersey Bank, N.A. Certain federal statutes and regulations limit the payment of
dividends to Central Jersey Bancorp by its bank subsidiary without regulatory
approval.

      As a national bank, Central Jersey Bank, N.A. must obtain prior approval
from the OCC to pay a cash dividend if the total of all cash dividends declared
by Central Jersey Bank, N.A. in any calendar year would exceed Central Jersey
Bank, N.A.'s net profits for that year, combined with its retained net profits
for the preceding two calendar years, less any required transfers to surplus.
Additionally, Central Jersey Bank, N.A. may not declare dividends in excess of
net profits on hand, after deducting the amount by which the principal amount of
all loans on which interest is past due for a period of six months or more
exceeds the reserve for credit losses.

      The payment of dividends is limited further by applicable minimum capital
requirements. The Federal Reserve Board and the OCC have issued additional
guidelines and policy statements, applicable to Central Jersey Bancorp and
Central Jersey Bank, N.A., requiring bank holding companies and national banks
to continually evaluate the level of cash dividends in relation to their
respective operating income, capital needs, asset quality and overall financial
condition, and limiting dividends to payments out of current operating earnings.

      As a insured depository institution, Central Jersey Bank, N.A. is subject
to the Federal Deposit Insurance Act which provides that no dividends may be
paid by an insured depository institution if it is in arrears in the payment of
any insurance assessment due to the FDIC. In addition, under the Federal Deposit
Insurance Act, an insured depository institution may not pay any dividend if the
institution is undercapitalized or if the payment of the dividend would cause
the institution to become undercapitalized, as further discussed below. A
payment of dividends


                                       6
<PAGE>

that would have the effect of depleting a depository institution's capital base
to an inadequate level could constitute an unsafe and unsound practice subject
to a cease and desist order.

      Central Jersey Bank, N.A. has never declared any cash dividends and
neither Central Jersey Bancorp nor any of its subsidiaries currently
contemplates the payment of such dividends in 2006.

Transactions with Affiliates

      Banking laws and regulations impose certain restrictions on the ability of
bank holding companies and their non-bank subsidiaries to borrow from and engage
in other transactions with their subsidiary banks. Generally, these restrictions
require that any extensions of credit must be secured by designated amounts of
specified collateral and are limited to (1) 10% of the bank's capital stock and
surplus per non-bank affiliated borrower, and (2) 20% of the bank's capital
stock and surplus aggregated as to all non-bank affiliated borrowers. In
addition, certain transactions with affiliates must be on terms and conditions,
including credit standards, at least as favorable to the institution as those
prevailing for arms-length transactions. Central Jersey Bank, N.A. also must
comply with regulations which restrict loans made to directors, executive
officers and principal shareholders of Central Jersey Bancorp and its
subsidiaries.

Liability of Commonly Controlled Institutions and "Source of Strength" Doctrine

      The Federal Deposit Insurance Act contains a "cross-guarantee" provision
that could result in any insured depository institution owned by Central Jersey
Bancorp being assessed for losses incurred by the FDIC in connection with
assistance provided to, or the failure of, any other insured depository
institution owned by Central Jersey Bancorp. Also, under the Bank Holding
Company Act and Federal Reserve Board policy, bank holding companies are
expected to represent a source of financial and managerial strength to their
bank subsidiaries, and to commit resources to support bank subsidiaries in
circumstances where banks may not be in a financial position to support
themselves. Capital loans by a bank holding company to a bank subsidiary are
subordinate in right of repayment to deposits and other bank indebtedness. If a
bank holding company declares bankruptcy, its bankruptcy trustee must fulfill
any commitment made by the bank holding company to sustain the capital of its
subsidiary banks.

      In addition, under the National Bank Act, as amended, if the capital stock
of a subsidiary national bank is impaired, by losses or otherwise, the OCC is
authorized to require payment of the deficiency by assessment upon the bank's
parent company, and to sell the stock of the bank if such assessment is not
satisfied within three months to the extent necessary to eliminate the
deficiency.

Deposit Insurance

      The Deposit Insurance Fund of the FDIC insures substantially all of the
deposits of Central Jersey Bank, N.A., subject to general limits of $100,000 for
each insured depositor, and $250,000 for retirement accounts. Insurance of
deposits by the FDIC subjects Central Jersey Bank, N.A. to comprehensive
regulation, supervision and examination by the FDIC. Central Jersey Bank, N.A.
is required, among other things, to pay premium charges to the FDIC for
insurance and to maintain a reserve account and liquid assets at levels fixed,
from time to time,


                                       7
<PAGE>

by the FDIC. In addition, the bank's insured deposits are subject to assessments
which may be imposed under the Deposit Insurance Fund Act of 1996 to service
interest payable on obligations issued by the Financing Corporation.

      The FDIC utilizes a risk-based assessment system (discussed below) which
imposes premiums based on a bank's capital level and supervisory rating.
Depository institutions that the FDIC regards as healthier will pay lower
premiums than relatively weaker institutions. The FDIC periodically examines
insured depository institutions to determine whether premium increases or other
measures are appropriate. Under the Federal Deposit Insurance Act, the FDIC may
terminate deposit insurance upon a finding that the institution has engaged in
unsafe and unsound practices, is in an unsafe or unsound condition, or has
violated any applicable banking law, rule, order or regulatory condition imposed
by a bank's federal regulatory agency.

Capital Adequacy

      The Federal Reserve Board and the OCC have substantially similar
risk-based capital and leverage ratio guidelines for banking organizations.
These guidelines are intended to ensure that banking organizations have adequate
capital given the risk levels of their assets and off-balance sheet financial
instruments. Under the risk-based capital and leverage ratio guidelines, assets
and off-balance sheet items are assigned to broad risk categories, each with
appropriate weights. The resulting capital ratios represent capital as a
percentage of total risk-weighted assets and off-balance sheet items. These
risk-based capital requirements identify concentration of credit risk, and
facilitate management of those risks.

      To derive total risk-weighted assets, bank assets are given risk-weights
of 0%, 20%, 50% and 100%. In addition, certain off-balance sheet items are
converted to asset equivalent amounts to which an appropriate risk-weight will
apply. Most loans are assigned to the 100% risk category, except for performing
first mortgage loans fully secured by residential property, which carry a 50%
risk-weighting. Most investment securities (including, primarily, general
obligation claims of states or other political subdivisions of the United
States) are assigned to the 20% category, except for municipal or state revenue
bonds, which have a 50% risk-weight, and direct obligations of the U.S. Treasury
or obligations backed by the full faith and credit of the United States
government, which have a 0% risk-weight. In converting off-balance sheet items,
direct credit substitutes, including general guarantees and standby letters of
credit backing financial obligations, are given a 100% risk-weighting.
Transaction-related contingencies such as bid bonds, standby letters of credit
backing nonfinancial obligations, and undrawn commitments (including commercial
credit lines with an initial maturity or more than one year) have a 50%
risk-weighting. Short-term commercial letters of credit have a 20%
risk-weighting, and certain short-term unconditionally cancelable commitments
have a 0% risk-weighting.

      Under the capital guidelines, a banking organization's total capital is
divided into tiers. "Tier I Capital" consists of common shareholders' equity and
qualifying preferred stock, less certain goodwill items and other intangible
assets. Not more than 25% of qualifying Tier I capital may consist of trust
preferred securities. "Tier II Capital" consists of hybrid capital instruments,
perpetual debt, mandatory convertible debt securities, a limited amount of
subordinated debt, and preferred stock that does not qualify as Tier I Capital,
plus a limited amount of loan and lease loss allowances and a limited amount of
unrealized holding gains on


                                       8
<PAGE>

equity securities. "Tier III Capital" consists of qualifying unsecured
subordinated debt. "Total Capital" is the sum of Tier I, Tier II and Tier III
Capital. The sum of Tier II and Tier III Capital may not exceed the amount of
Tier I Capital.

      Under the Federal Reserve Board's risk-based capital guidelines for bank
holding companies, the required minimum ratio of Total Capital (the sum of Tier
I, Tier II and Tier III capital) to risk-weighted assets (including certain
off-balance sheet activities, such as standby letters of credit) is 8%. The
required minimum ratio of Tier I Capital to risk-weighted assets is 4%. At
December 31, 2005, Central Jersey Bancorp's ratios of Total Capital and Tier 1
Capital to risk-weighted assets were 11.05% and 10.15%, respectively.

      The Federal Reserve Board also requires bank holding companies to comply
with minimum leverage ratio guidelines. The leverage ratio is the ratio of a
bank holding company's Tier I Capital (excluding intangibles) to its total
assets (excluding intangibles). Bank holding companies normally must maintain a
minimum leverage ratio of 4%, unless the bank holding company has the highest
supervisory rating or has implemented the Federal Reserve Board's risk-adjusted
measure for market risk, in which case its minimum leverage ratio must be 3%.
Banking organizations undergoing significant growth or undertaking acquisitions
must maintain even higher capital positions. At December 31, 2005, Central
Jersey Bancorp's leverage ratio was 7.60%. Central Jersey Bank, N.A. is subject
to similar risk-based and leverage capital guidelines, as adopted by the OCC.

      Banking regulators currently are developing proposed revisions to their
existing capital adequacy regulations and standards, based on policy guidelines
issued by the Basel Committee on Banking Supervision, an international committee
of central banks and bank regulators from major industrialized countries.
Central Jersey Bank, N.A. is analyzing the potential impact of these proposed
revisions on its risk-based capital.

Prompt Corrective Action

      The Federal Deposit Insurance Act requires federal banking regulators to
take prompt corrective action with respect to depository institutions that do
not meet minimum capital requirements. Failure to meet minimum requirements can
initiate certain mandatory and possibly additional discretionary actions by
regulators that, if undertaken, could have an adverse material effect on Central
Jersey Bancorp's financial condition. Under the Prompt Corrective Action
Regulations, Central Jersey Bank, N.A. must meet specific capital guidelines
that involve quantitative measures of its assets, liabilities and certain
off-balance sheet items as calculated under regulatory accounting practices.

      The Prompt Corrective Action Regulations define specific capital
categories based on an institution's capital ratios. The capital categories, in
declining order, are "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." The Federal Deposit Insurance Act imposes progressively more
restrictive constraints on operations, management and capital distributions,
depending on the capital category by which the institution is classified.
Institutions categorized as "undercapitalized" or worse may be subject to
requirements to file a capital plan with their primary federal regulator,
prohibitions on the payment of dividends and management fees, restrictions on
asset growth and


                                       9
<PAGE>

executive compensation, and increased supervisory monitoring, among other
things. Other restrictions may be imposed on the institution by the regulatory
agencies, including requirements to raise additional capital, sell assets or
sell the entire institution. Once an institution becomes "critically
undercapitalized," it generally must be placed in receivership or
conservatorship within ninety days.

      The Prompt Corrective Action Regulations provide that an institution is
"well capitalized" if the institution has a total risk-based capital ratio of
10.0% or greater, a Tier I risk-based capital ratio of 6.0% or greater, and a
leverage ratio of 5.0% or greater. The institution also may not be subject to an
order, written agreement, and capital directive or prompt corrective action
directive to meet and maintain a specific level for any capital measure. An
institution is "adequately capitalized" if it has a total risk-based capital
ratio of 8.0% or greater, a Tier I risk-based capital ratio of 4.0% or greater,
and a leverage ratio of 4.0% or greater (or a leverage ratio of 3.0% or greater
if the institution is rated composite 1 in its most recent report of
examination, subject to appropriate federal banking agency guidelines), and the
institution does not meet the definition of a well-capitalized institution. An
institution is deemed "undercapitalized" if it has a total risk-based capital
ratio that is less than 8.0%, a Tier I risk-based capital ratio of less than
4.0%, or a leverage ratio of less than 4.0% (or a leverage ratio of 3.0% or
greater if the institution is rated composite 1 in its most recent report of
examination, subject to appropriate federal banking agency guidelines), and the
institution does not meet the definition of a significantly undercapitalized or
critically undercapitalized institution. An institution is "significantly
undercapitalized" if the institution has a total risk-based capital ratio that
is less than 6.0%, a Tier I risk-based capital ratio of less than 3.0%, or a
leverage ratio less than 3.0% and the institution does not meet the definition
of a critically undercapitalized institution, and is "critically
undercapitalized" if the institution has a ratio of tangible equity to total
assets that is equal to or less than 2.0%.

      The appropriate federal banking agency may, under certain circumstances,
reclassify a well capitalized insured depository institution as adequately
capitalized. The appropriate agency is also permitted to require an adequately
capitalized or undercapitalized institution to comply with the supervisory
provisions as if the institution were in the next lower category (but not to
treat a significantly undercapitalized institution as critically
undercapitalized) based on supervisory information other than an institution's
capital levels.

      At December 31, 2005, Central Jersey Bank, N.A. was "well capitalized"
based on the ratios and guidelines noted above. However, the capital categories
of the bank are determined solely for the purpose of applying the Prompt
Corrective Action Regulations and may not constitute an accurate representation
of its overall financial condition or prospects. Additional information on
capital amounts and ratios of Central Jersey Bancorp and Central Jersey Bank,
N.A. is found in Note (11) to our consolidated financial statements included
herein.

Unsafe and Unsound Practices

      Notwithstanding its Prompt Corrective Action category dictated by
risk-based capital ratios, the Federal Deposit Insurance Act permits the
appropriate bank regulatory agency to reclassify an institution if it
determines, after notice and a hearing, that the condition of the institution is
unsafe or


                                       10
<PAGE>

unsound, or if it deems the institution to be engaging in an unsafe or unsound
practice. Under the Financial Institutions Supervisory Act, the OCC has the
authority to prohibit national banks from engaging in any activity in the
conduct of their business which the OCC believes constitutes an unsafe or
unsound practice. The Federal Reserve Board has similar authority with regard to
bank holding companies and their non-bank subsidiaries.

The USA PATRIOT Act

      On October 26, 2001, the President signed into law certain comprehensive
anti-terrorism legislation known as the USA PATRIOT Act of 2001. Title III of
the USA PATRIOT Act substantially broadened the scope of the U.S.
anti-money-laundering laws and regulations by imposing significant new
compliance and due diligence obligations, creating new crimes and penalties and
expanding the extra-territorial jurisdiction of the United States. The U.S.
Treasury Department has issued a number of implementing regulations which apply
various requirements of the USA PATRIOT Act to financial institutions such as
Central Jersey Bank, N.A. Those regulations impose new obligations on financial
institutions to maintain appropriate policies, procedures and controls to
detect, prevent and report money laundering and terrorist financing.

      Failure of a financial institution to comply with the USA PATRIOT Act's
requirements could have serious legal consequences for an institution and
adversely affect its reputation. Central Jersey Bancorp has adopted appropriate
policies, procedures and controls to address compliance with the requirements of
the USA PATRIOT Act under the existing regulations and will continue to revise
and update its policies, procedures and controls to reflect changes required by
the Act and by the Treasury Department regulations.

Community Reinvestment Act

      The Federal Community Reinvestment Act requires banks to respond to the
full range of credit and banking needs within their communities, including the
needs of low and moderate-income individuals and areas. A bank's failure to
address the credit and banking needs of all socio-economic levels within its
markets may result in restrictions on growth and expansion opportunities for the
bank, including restrictions on new branch openings, relocation, formation of
subsidiaries, mergers and acquisitions. In the latest CRA examination report
with respect to Central Jersey Bank, N.A., dated November 10, 2003, Central
Jersey Bank, N.A. received a rating of satisfactory.

Consumer Privacy

      In addition to fostering the development of "financial holding companies,"
the Gramm-Leach-Bliley Act modified laws relating to financial privacy. The new
financial privacy provisions generally prohibit financial institutions,
including Central Jersey Bancorp and Central Jersey Bank, N.A., from disclosing
or sharing nonpublic personal financial information to third parties for
marketing or other purposes not related to transactions, unless customers have
an opportunity to "opt out" of authorizing such disclosure, and have not elected
to do so. It has never been the policy of Central Jersey Bancorp to release such
information except as may be required by law. The Fair Credit Reporting Act also
restricts information sharing among affiliates for marketing and other purposes.


                                       11
<PAGE>

Loans to One Borrower

      Federal banking laws limit the amount a bank may lend to a single borrower
to 15% of the bank's capital base, unless the entire amount of the loan is
secured by adequate amounts of readily marketable capital. However, no loan to
one borrower may exceed 25% of a bank's statutory capital, notwithstanding
collateral pledged to secure it.

Depositor Preference Statute

      Under federal law, depositors, certain claims for administrative expenses
and employee compensation against an insured depository institution are afforded
a priority over other general unsecured claims against the institution, in the
event of a "liquidation or other resolution" of the institution by a receiver.

Sarbanes-Oxley Act of 2002

      On July 30, 2002, the President of the United State signed into law the
Sarbanes-Oxley Act of 2002. The stated goals of Sarbanes-Oxley Act are to
increase corporate responsibility, to provide for enhanced penalties for
accounting and auditing improprieties at publicly traded companies and to
protect investors by improving the accuracy and reliability of corporate
disclosures pursuant to the securities laws. The Sarbanes-Oxley Act generally
applies to all companies, both domestic and foreign, that file or is required to
file periodic reports with the Securities and Exchange Commission under the
Exchange Act.

      The Sarbanes-Oxley Act of 2002 includes very specific disclosure
requirements and corporate governance rules, requires the Securities and
Exchange Commission and self regulatory organizations to adopt extensive
additional disclosure, corporate governance and other related rules and mandates
further studies of certain issues by the Securities and Exchange Commission and
the Comptroller General. The Sarbanes-Oxley Act of 2002 represents significant
federal involvement in matters traditionally left to state regulatory systems,
such as the regulation of the accounting profession, and to state corporate law,
such as the relationship between a board of directors and management and between
a board of directors and its committees.

The Sarbanes-Oxley Act of 2002 addresses, among other matters:

      o     audit committees for all reporting companies;

      o     certification of financial statements by the chief executive officer
            and the chief financial officer;

      o     the forfeiture of bonuses or other incentive-based compensation and
            profits from the sale of an issuer's securities by directors and
            senior officers under certain circumstances;

      o     a prohibition on insider trading during pension plan black out
            periods;

      o     disclosure of off-balance sheet transactions;

      o     expedited filing requirements for certain periodic and current
            reports;


                                       12
<PAGE>

      o     disclosure of a code of ethics;

      o     "real time" filing of periodic reports;

      o     the formation of a public accounting oversight board;

      o     auditor independence; and

      o     various increased criminal penalties for violations of securities
            laws.

Overall Impact of New Legislation and Regulations

      Various legislative initiatives are from time to time introduced in
Congress. It cannot be predicted whether or to what extent the business and
condition of Central Jersey Bancorp and its subsidiaries will be affected by new
legislation or regulations, and legislation or regulations as yet to be proposed
or enacted.

Impact of Monetary Policies

      The earnings of Central Jersey Bank, N.A. will be affected by domestic
economic conditions and the monetary and fiscal policies of the United States
government and its agencies. The monetary policies of the Federal Reserve Board
have had, and will likely continue to have, an important impact on the operating
results of banks through the Federal Reserve Board's power to implement national
monetary policy in order, among other things, to curb inflation or combat a
recession. The Federal Reserve Board has a major effect upon the levels of bank
loans, investments and deposits through its open market operations in United
States government securities and through its regulation of, among other things,
the discount rate on borrowing of member banks and the reserve requirements
against member bank deposits. It is not possible to predict the nature and
impact of future changes in monetary and fiscal policies.

Item 1A. Risk Factors

      The following is a discussion of certain significant risk factors that
could potentially adversely affect our financial condition and results of
operations.

We compete for deposits and loan customers with larger financial institutions
whose customer bases are broader and whose lending limits exceed Central Jersey
Bank, N.A.'s lending limits. We also compete with similar banks focused on the
same markets and customers. Competition costs money, and competition could
reduce the number of customers using the banking services provided by us.

      New Jersey is a competitive banking environment. Central Jersey Bank, N.A.
competes for deposits and for borrowers with larger and more established
in-state and out-of-state financial institutions, including large financial
service companies and other entities, in addition to traditional banking
institutions such as savings and loan associations, savings banks, commercial
banks and credit unions. Because of their greater capitalization and other
resources, these older and larger institutions may have competitive advantages
resulting from their ability to offer more convenient facilities and higher
lending limits. Lending limits are primarily a function of a bank's capital
base. Accordingly, larger banks that have much larger capital bases than Central


                                       13
<PAGE>

Jersey Bank, N.A., have lending limits which exceed those of Central Jersey
Bank, N.A. Several larger banks with branches in our market area have lending
limits which exceed $1 billion. Central Jersey Bank, N.A.'s current lending
limit is approximately $6.1 million.

      Central Jersey Bank, N.A. also has community bank competitors with similar
goals and business territories. Three community banks have commenced operations
within Central Jersey Bank, N.A.'s existing market area since 1996.

      We compete by offering personal, local service and extended hours of
operation, but we may also compete by offering lower interest rates and paying
more to attract deposits. Because we operate in a highly-competitive market, it
is likely that the cost of competing for market share is greater for us than it
would be for a small bank in a less competitive market. The cost of our
competitive efforts may impact profitability, and we can offer no assurance that
any of our competitive efforts will be successful. See "Item 1. Business -
Competition."

Use by other banks of advanced banking technologies creates more competition and
could result in increased costs to us in our effort to remain current.

      Larger and more established banks may have access to more funding for
technological research, development and introduction of new technologies,
including internet banking, telephone banking and automated teller machine (ATM)
technologies. While Central Jersey Bank, N.A. offers access to each of these
technologies to its customers, additional capital investment will be required to
keep our technology current. Emerging technologies and innovations in existing
technologies make the continuing need to improve a constant challenge. Capital
expenditures for enhanced technologies may not represent long-term investments,
as these technologies quickly become obsolete. Such expenditures also may reduce
our profitability.

Competition for deposits may impact our profitability.

      Deposits represent a source of funds for loans made by banks, and
competition for deposits could result in fewer funds available to make loans and
to generate other interest-earning opportunities. Other banks may compete more
effectively for deposits by offering more convenient depositary locations and by
keeping branches open for longer hours. We can pay higher rates of interest to
attract deposits, but this reduces Central Jersey Bank, N.A.'s net interest
margin. We also can pay more for advertising and other incentives to attract
deposits. However, any of these efforts could lower our profit margins, and we
can offer no assurance that they will succeed.

Interest rate fluctuations beyond our control influence our profitability. As a
result, our financial performance could suffer, despite our best efforts.

      Our profitability depends in large part on the difference between the
interest Central Jersey Bank, N.A. pays on funds available to it, and the
interest Central Jersey Bank, N.A. earns on funds it makes available to others.
The price of funds may depend on many factors beyond our control, including
Federal economic, fiscal and monetary policies, and general economic conditions.
These factors may be influenced by national and international economic and
political


                                       14
<PAGE>

trends and events, including inflation, recession, unemployment and
international conflicts. Any of these events could trigger an increase in
interest rates, which will increase our cost of funds.

      Fluctuations in interest rates paid by Central Jersey Bank, N.A. for funds
it needs could affect our operating performance and condition, by affecting the
margin or "spread" between what Central Jersey Bank, N.A. pays for funds and
what it earns by charging interest to lend funds. Interest rates were recently
at historically low levels. However, the Federal Reserve has increased its
target for the Federal funds rate several times. If interest rates continue to
rise or if the yield curve continues to flatten, and if rates on deposits and
borrowings reprice upwards, faster than the rates on loans and investments,
Central Jersey Bancorp and Central Jersey Bank, N.A. would experience
compression of its interest rate spread and net interest margin, which would
have a negative effect on profitability.

Our small market area increases the potential impact of regional economic and
other conditions, so that localized problems could have unmitigated consequences
for us.

      Our current primary market is coastal Monmouth County, New Jersey. Our
branches serve only a portion of this market. Potential problems directly
affecting our region, including regional disasters such as floods, or economic
problems such as office or plant closings and layoffs, could hinder our growth
and hurt our performance, because we may not have branches in unaffected areas
to offset localized problems. This could result in losses or make us less
profitable.

Our newer relationships with smaller customers, and our smaller overall customer
base size, could result in larger loan loss experience.

      To compete with larger lending institutions, we attempt to attract
customers seeking new banking relationships. Customers that are not larger
businesses or high net-worth individuals may have less capacity to repay loans
during economic down-turns or other adverse events. This fact exposes Central
Jersey Bank, N.A. to the risk of non-payment or late payment of loans and could
result in collection expenses and loan losses. Our experienced lenders and
underwriters take into account these considerations, and our strict credit
policies, loan approval process and loan monitoring offers additional
safeguards. While many of the loans that we approve may be new to our
institution, the relationships are known to our staff and have been actively
managed by our lenders during their tenure at other financial institutions.
However, until our loan portfolio matures, its quality will be difficult to
measure, and even after it matures, we can offer no assurance that Central
Jersey Bank, N.A. will not incur collection expenses and loan losses.

      Central Jersey Bank, N.A. participates in loans originated by other
financial institutions. Central Jersey Bank, N.A. reviews the credit risk
associated with its participation in such loans under the same credit policies
that it applies to loans it initiates. The application of these policies may
reduce, but does not eliminate, the risk of loan losses.

Regulations and regulatory developments may impact our performance by increasing
our costs of compliance or increasing competition.

      Central Jersey Bank, N.A. is subject to extensive governmental
supervision, regulation and control. Future legislation and government policy
could adversely affect lending trends and


                                       15
<PAGE>

practices, deposit volume, the operations of Central Jersey Bank, N.A. and the
banking industry as a whole. The statutes and regulations governing financial
institutions have been substantially modified during recent years, and likely
will continue to be the subject of future modification. Changes in the
regulations that govern our operations may increase our costs of compliance, and
may give rise to industry-wide changes which could result in other cost
increases for Central Jersey Bank, N.A.

      For example, many of the recent regulatory changes have increased
competition between banks and nonbanks, which now may offer similar products and
services. They have also increased merger activity between banks and nonbanks,
and elevated customer awareness of differences among competitors in products,
services and fees. These changes may result in increased competitive efforts by
Central Jersey Bank, N.A., resulting in increased costs to Central Jersey Bank,
N.A.

We compete with larger financial institutions for personnel, and we may have
difficulties attracting and retaining qualified employees if larger and more
profitable banks and other financial institutions offer more compensation and
other benefits than we do. Also, we are dependent on certain key employees,
whose loss could hinder our development.

      Experienced and service-oriented personnel are important to success in the
financial services industry. Our business is managed by a team of executives and
officers with substantial experience and community contacts in our market area.
We are particularly dependent to a significant degree upon the skill and
experience of certain executive officers and skilled employees. In addition, our
current staff consists of well-trained, qualified employees. We intend to
continue to motivate our existing staff and to hire similarly qualified
candidates; however, there can be no assurance that we will be successful in
doing so, especially since larger and more profitable banks and other financial
institutions generally have greater resources to offer more compensation and
other benefits than we do.

Increased emphasis on commercial lending may expose us to increased lending
risks.

      At December 31, 2005, $265.3 million, or 85.5% of Central Jersey Bank,
N.A.'s total loans consisted of commercial, industrial and commercial real
estate loans. This portfolio continues to grow and we intend to continue to
emphasize these types of lending. These types of loans generally expose a lender
to greater risk of non-payment and loss than the one-to-four family residential
mortgage loans because repayment of the loans often depends on the successful
operation of the property and the income stream of the borrowers. Such loans
typically involve larger loan balances to single borrowers or groups of related
borrowers as compared to one-to-four- family residential mortgage loans. Also,
many of our borrowers have more than one loan outstanding. Consequently, an
adverse development with respect to one loan or one credit relationship can
expose Central Jersey Bank, N.A. to a significantly greater risk of loss
compared to an adverse development with respect to a one-to-four family
residential loan.


                                       16
<PAGE>

We may not be able to continue to grow our business, which may adversely impact
our results of operations.

      During the last five years, our total assets have grown substantially from
$118,024 at December 31, 2000 to $514,563 billion at December 31, 2005, through
internal growth and the combination with Allaire Community Bank. Our business
strategy calls for continued expansion, but we do not anticipate growth to
continue at this rate. Our ability to continue to grow depends, in part, upon
our ability to open new branch locations, successfully attract deposits to
existing and new branches, and identify favorable loan and investment
opportunities. In the event that we do not continue to grow, our results of
operations could be adversely impacted.

Unmanaged growth may adversely impact our financial results.

      As part of our expansion strategy, we plan to open new branches in our
existing and target markets. However, we may be unable to identify attractive
locations on terms favorable to us or to hire qualified management to operate
the new branches. In addition, the organizational and overhead costs may be
greater than we anticipated or we may not be able to obtain the regulatory
approvals necessary to open new branches. New branches may take longer than
expected to reach profitability, and we cannot assure that they will become
profitable. The additional costs of starting new branches may adversely impact
our financial results.

      Our ability to manage growth successfully will depend on whether we can
continue to fund this growth while maintaining cost controls and asset quality,
as well as on factors beyond our control, such as national and regional economic
conditions and interest rate trends. If we are not able to control costs and
maintain asset quality, such growth could adversely impact our earnings and
financial condition.

For our continued growth and possible expansion, we may need to raise additional
capital in the future, which may be unavailable or available at terms
unacceptable to us.

      Central Jersey Bancorp is required by federal regulatory authorities to
maintain adequate levels of capital to support its operations. We may at some
point need to raise additional capital to support continued growth. Our ability
to raise additional capital, if needed, will depend on conditions in the capital
markets at that time, which are outside Central Jersey Bancorp's control, and on
its financial performance. Accordingly, we cannot assure you of our ability to
raise additional capital if needed or on terms acceptable to us. If Central
Jersey Bancorp cannot raise additional capital when needed, the ability to
further expand its operations could be materially impaired.

If our allowance for loan losses is not sufficient to cover actual loan losses,
our earnings would decrease.

      In an attempt to mitigate any loan losses we may incur, we maintain an
allowance for loan losses based on, among other things, national and regional
economic conditions, and historical loss experience and delinquency trends among
loan types. However, we cannot predict loan losses with certainty and we cannot
assure you that charge offs in future periods will not exceed the allowance for
loan losses. In addition, regulatory agencies, as an integral part of their


                                       17
<PAGE>

examination process, review our allowance for loan losses and may require
additions to the allowance based on their judgment about information available
to them at the time of their examination. Factors that require an increase in
our allowance for loan losses could reduce our earnings.

Our hardware and software systems are vulnerable to damage that could harm our
business.

      We rely upon our existing information systems for operating and monitoring
all major aspects of our business, including deposit and loan information, as
well as various internal management functions. These systems and our operations
are vulnerable to damage or interruption from natural disasters, power loss,
network failure, improper operation by our employees, security breaches,
computer viruses or intentional attacks by third parties. Any disruption in the
operation of our information systems could adversely impact our operations,
which may affect our results of operations and financial condition.

Item 1B. Unresolved Staff Comments
         -------------------------

      None.

Item 2. Properties
        ----------

Bank Buildings

      The main office and the original branch of Central Jersey Bank, N.A. is
located in the City of Long Branch, New Jersey at 627 Second Avenue. On August
1, 2003, Central Jersey Bank, N.A. purchased the land and building of this
branch.

Central Jersey Bank, N.A. also leases office space or owns the buildings at the
following branch locations:

      o     700 Allaire Road, Spring Lake Heights, New Jersey.

      o     Route 35 and 3rd Avenue, Neptune City, New Jersey.

      o     700 Branch Avenue, Little Silver, New Jersey.

      o     61 Main Avenue, Ocean Grove, New Jersey.

      o     3636 Highway 33, Neptune, New Jersey.

      o     444 Ocean Boulevard, Long Branch, New Jersey.

      o     2200 Highway 35, Sea Girt, New Jersey.

      o     155 Main Street, Manasquan, New Jersey.

      o     Shark River Plaza, 300 West Sylvania Avenue, Route 33, Neptune City,
            New Jersey.

      o     2201 Bridge Avenue, Point Pleasant, New Jersey.

      o     501 Main Street, Bradley Beach, New Jersey.


                                       18
<PAGE>

      o     611 Main Street, Belmar, New Jersey.

      o     Shop Rite Plaza, 2445 Highway 34, Manasquan, New Jersey.

      In addition, Central Jersey Bank, N.A. leases approximately 5,000 square
feet of office, storage and conference space at 6 West End Court, Long Branch,
New Jersey.

Item 3. Legal Proceedings
        -----------------

      There are no material legal, governmental, administrative or other
proceedings pending against Central Jersey Bancorp and Central Jersey Bank,
N.A., or to which Central Jersey Bancorp and Central Jersey Bank, N.A. is a
party, and to the knowledge of management no such material proceedings are
threatened or contemplated.

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

      None.

                                     PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and
        ----------------------------------------------------------------------
        Issuer Purchases of Equity Securities
        -------------------------------------

      The common stock of Central Jersey Bancorp currently trades on the NASDAQ
Capital Market under the ticker symbol "CJBK."

      The following table sets forth, for the periods indicated, the high and
low last sale information for Central Jersey Bancorp's common stock, as reported
on the NASDAQ Capital Market for the period commencing January 1, 2004 through
December 31, 2005. Please note that the information set forth below reflects
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions, and has been adjusted to reflect the two-for-one
stock split, in the form of a stock dividend, for shareholders of record on June
15, 2005, and the six-for-five stock split, in the form of a stock dividend, for
shareholders of record on July 15, 2004.

      Year Ended December 31, 2005                          High          Low
                                                          --------      --------

      First Quarter..................................      $16.53        $13.00
      Second Quarter.................................       15.59         13.75
      Third Quarter..................................       17.45         14.79
      Fourth Quarter.................................       14.77         12.20

      Year Ended December 31, 2004                          High          Low
                                                          --------      --------

      First Quarter..................................      $12.40        $10.84
      Second Quarter.................................       12.39         10.00
      Third Quarter..................................       12.50          8.96
      Fourth Quarter.................................       12.03         11.62


                                       19
<PAGE>

      As of March 10, 2006, the following were market makers for Central Jersey
Bancorp's common stock: UBS Securities LLC; Citadel Derivatives Group LLC;
Janney Montgomery LLC; Citigroup Global Markets Inc.; Susquehanna Capital Group;
E*Trade Capital Markets LLC; Ryan, Beck & Co., LLC; Hill Thompson; Magid, L.P.;
Sandler, O' Neill & Partners, L.P.; Knight Equity Markets, L.P.; and The Brut
ECN, LLC.

      As of March 10, 2006, the approximate number of registered holders of
Central Jersey Bancorp's common stock was 706.

      Central Jersey Bancorp has not paid any cash dividends on its common stock
and does not presently intend to declare or pay cash dividends. Our dividend
policy is subject to certain regulatory considerations and the discretion of our
board of directors and depends upon a number of factors, including operating
results, financial condition and general business conditions. Holders of common
stock are entitled to receive dividends as, if and when declared by our board of
directors out of funds legally available therefor, subject to the restrictions
set forth under the Federal Bank Holding Company Act. We may pay cash dividends
without regulatory approval if net income available to shareholders fully funds
the proposed dividends, and the expected rate of earnings retention is
consistent with capital needs, asset quality and overall financial condition.

      Central Jersey Bancorp did not repurchase any shares of its common stock
during the period covered by this report.


                                       20
<PAGE>

Item 6. Selected Financial Data
        -----------------------

      The following selected consolidated financial data of Central Jersey
Bancorp and Central Jersey Bank, N.A. as of and for the years ended December 31,
2001 through 2005 are derived from the audited financial statements of Central
Jersey Bancorp and Central Jersey Bank, N.A. The selected consolidated financial
data as of and for the years ended December 31, 2005, 2004, and 2003 should be
read in conjunction with the consolidated financial statements of Central Jersey
Bancorp and the related notes thereto and management's discussion and analysis
thereof appearing elsewhere in this document.

          CENTRAL JERSEY BANCORP - Summarized Statements of Operations

                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                        Year Ended
                                                       December 31,
                                 --------------------------------------------------------
                                   2005       2004(1)     2003(1)     2002(1)     2001(1)
                                 --------    --------    --------    --------    --------
<S>                              <C>         <C>         <C>         <C>         <C>
Interest and dividend income     $ 24,947    $ 11,551    $  9,111    $  8,275    $  6,543
Interest expense                    7,502       3,046       2,612       2,789       2,703
                                 --------    --------    --------    --------    --------
Net interest income                17,445       8,505       6,499       5,486       3,840
                                                                                 --------
Provision for loan losses             426         260         150         373         211
                                 --------    --------    --------    --------    --------
Net interest income after
  provision for loan losses        17,019       8,245       6,349       5,113       3,629
                                 --------    --------    --------    --------    --------
Other income                        1,624         849         780         661         440
Operating expenses, including
  salaries and employee
  benefits, professional and
  application fees, occupancy
  expenses, etc                    14,550       7,098       6,325       4,920       3,531
                                 --------    --------    --------    --------    --------
Income before provision for
  income taxes                      4,093       1,996         804         854         538
Income taxes                        1,461         778         322          70           1
                                 --------    --------    --------    --------    --------
Net income                       $  2,632    $  1,218    $    482    $    784    $    537
                                 ========    ========    ========    ========    ========
Net income per share (2)
  Basic                          $   0.34    $   0.33    $   0.13    $   0.27    $   0.20
  Diluted                        $   0.31    $   0.31    $   0.13    $   0.27    $   0.20
</TABLE>

(1)   Does not include the results of operations of Allaire Community Bank which
      combined with Central Jersey Bancorp on January 1, 2005.

(2)   All per share amounts have been restated to reflect the 5% stock
      distributions paid on December 31, 2003, 2002, 2001 and 2000, the
      two-for-one stock split, in the form of a stock dividend, for shareholders
      of record on June 15, 2005, and the six-for-five stock split, in the form
      of a stock dividend, for shareholders of record on July 15, 2004.


                                       21
<PAGE>

               CENTRAL JERSEY BANCORP - Summarized Balance Sheets

                                 (in thousands)

<TABLE>
<CAPTION>
                                                                             At
                                                                         December 31,
                                              ----------------------------------------------------------------
                                                 2005        2004(1)       2003(1)       2002(1)      2001(1)
                                              ---------     ---------     ---------     ---------    ---------
<S>                                           <C>           <C>           <C>           <C>          <C>
Assets:
Cash and due from banks                       $  21,228     $   9,169     $   9,689     $   8,880    $   3,798
Federal funds sold                                   --         9,425         4,675         7,500        9,900
Investment securities held to maturity           22,567        16,484        15,079        25,539       27,289
Investment securities available for sale,
   at market value                              111,175        73,668        68,196        44,791       12,679
Loans held for sale                               3,127            --            --           302          269
Loans, net                                      307,168       139,697       115,805        89,026       61,612
Premises and equipment                            6,006         2,496         2,171         1,638        1,300
Bank owned life insurance                         3,338            --            --            --           --
Goodwill                                         27,229            --            --            --           --
Core deposit intangibles                          3,097            --            --            --           --
Other assets                                      9,628         3,176         2,037         1,861        1,177
Due from broker                                      --            --         4,961            --           --
                                              ---------     ---------     ---------     ---------    ---------
Total assets                                  $ 514,563     $ 254,115     $ 222,613     $ 179,537    $ 118,024
                                              =========     =========     =========     =========    =========
Liabilities and Shareholders' Equity:
Deposits                                      $ 407,554     $ 232,853     $ 207,234     $ 164,007    $ 108,892
Accrued expenses and other liabilities            1,885           252           480           599          240
Other borrowings                                 38,191            --            --            --           --
Subordinated debentures                           5,155         5,155            --            --           --
                                              ---------     ---------     ---------     ---------    ---------
Total liabilities                               452,785       238,260       207,714       164,606      109,132
                                              ---------     ---------     ---------     ---------    ---------
Shareholders' equity:
Common stock                                         78            38            19            18           13
Additional paid-in capital                       60,003        15,218        15,238        14,764        9,516
Accumulated other comprehensive
   (loss)/income                                 (2,153)         (619)         (358)          149           70
Retained earnings (accumulated deficit)           3,850         1,218            --            --         (707)
                                              ---------     ---------     ---------     ---------    ---------
Total shareholders' equity                       61,778        15,855        14,899        14,931        8,892
                                              ---------     ---------     ---------     ---------    ---------
Total liabilities and shareholders' equity    $ 514,563     $ 254,115     $ 222,613     $ 179,537    $ 118,024
                                              =========     =========     =========     =========    =========
</TABLE>

(1)   Does not include the assets, liabilities and shareholders' equity of
      Allaire Community Bank which combined with Central Jersey Bancorp on
      January 1, 2005.


                                       22
<PAGE>

Item 7. Management's Discussion and Analysis of Financial Condition and Results
        -----------------------------------------------------------------------
        of Operations
        -------------

      The following discussion and analysis is intended to provide information
about Central Jersey Bancorp's financial condition for the years ended December
31, 2005 and 2004 and results of operations for the years ended December 31,
2005, 2004 and 2003. The following information should be read in conjunction
with Central Jersey Bancorp's audited financial statements for the years ended
December 31, 2005, 2004 and 2003, including the related notes thereto, which
begin on page F-1 of this report.

General

      Central Jersey Bancorp (formerly Monmouth Community Bancorp) is a bank
holding company headquartered in Long Branch, New Jersey. The holding company
was incorporated in New Jersey on March 7, 2000, and became an active bank
holding company on August 31, 2000 through the acquisition of Central Jersey
Bank, N.A. (formerly Monmouth Community Bank, N.A.). On January 1, 2005, Central
Jersey Bancorp completed its strategic business combination transaction with
Allaire Community Bank, a New Jersey state-chartered bank, pursuant to which
Allaire Community Bank became a wholly-owned bank subsidiary of Central Jersey
Bancorp. On the effective date of the combination, the name of the holding
company was changed from Monmouth Community Bancorp to Central Jersey Bancorp.
In addition, as a part of the combination, each outstanding share of common
stock of Allaire Community Bank was exchanged for one share of Central Jersey
Bancorp common stock.

      The following discussion and analysis and the audited financial statements
for the years ended December 31, 2005, 2004 and 2003, including the related
notes thereto, except for Note (2), do not address or reflect the financial
performance of Allaire Community Bank for any periods prior to January 1, 2005.
Such discussion and analysis and financial statement disclosure only addresses
and reflects the financial performance of Central Jersey Bancorp and Monmouth
Community Bank, N.A. Inasmuch as the combination of Central Jersey Bancorp and
Allaire Community Bank took place on January 1, 2005, the financial performance
of Allaire Community Bank on and after said date has been reflected in the
consolidated financial statements of Central Jersey Bancorp. For historical
financial performance of Allaire Community Bank, and certain pro-forma financial
information with respect to Central Jersey Bancorp and Allaire Community Bank,
after giving effect to the combination, please see Central Jersey Bancorp's
current report on Form 8-K, dated as of January 1, 2005, as amended.

Critical Accounting Policies

      Note (1) to our consolidated financial statements for the years ended
December 31, 2005, 2004 and 2003, contained elsewhere in this report, includes a
summary of our significant accounting policies. We believe our policy, with
respect to the methodology for our determination of the allowance for loan
losses, involve a high degree of complexity and require management to make
difficult and subjective judgments which often requires assumptions or estimates
about uncertain matters. Changes in these judgments, assumptions or estimates
could cause reported results to differ materially. This critical policy and its
application are periodically reviewed by Central Jersey Bancorp's audit
committee and board of directors.


                                       23
<PAGE>

      Additional critical accounting policies relate to judgments about other
asset impairments, including goodwill, investment securities and deferred tax
assets. Central Jersey Bancorp performs an annual analysis to test the aggregate
balance of goodwill for impairment in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets. For
purposes of goodwill impairment evaluation, Central Jersey Bancorp is identified
as the reporting unit. Fair value of goodwill is determined in the same manner
as goodwill recognized in a business combination and uses standard valuation
methodologies including a review of comparable transactions. If the carrying
amount of goodwill pursuant to this analysis were to exceed the implied fair
value of goodwill, an impairment loss would be recognized. No impairment loss
was required to be recognized for the year ended December 31, 2005. For the year
ended December 31, 2005, Central Jersey Bancorp recorded $27.2 million of
goodwill related to the combination with Allaire Community Bank.

      Central Jersey Bancorp's available for sale securities portfolio is
carried at estimated fair value, with any unrealized gains or losses, net of
taxes, reported as accumulated other comprehensive income (loss) in
shareholders' equity. Estimated fair values are based on published or securities
dealers' market prices. Securities which Central Jersey Bancorp has the positive
intent and ability to hold to maturity are classified as held to maturity and
carried at amortized cost. Central Jersey Bancorp conducts a periodic review and
evaluation of the securities portfolio to determine if any declines in the fair
values of securities are other than temporary. If such a decline were deemed
other than temporary, Central Jersey Bancorp would write down the security to
fair value through a charge to current period operations. The market value of
the securities portfolio is significantly affected by changes in interest rates.
In general, as interest rates rise, the market value of fixed-rate securities
decreases and as interest rates fall, the market value of fixed-rate securities
increases. With significant changes in interest rates, Central Jersey Bancorp
evaluates its intent and ability to hold securities to maturity or for a
sufficient amount of time to recover the recorded principal balance.

      The determination of whether deferred tax assets will be realizable is
predicated on estimates of future taxable income. Such estimates are subject to
management's judgment. A valuation reserve is established when management is
unable to conclude that it is more likely than not that it will realize deferred
tax assets based on the nature and timing of these items.

Overview

      Net income from operations for the year ended December 31, 2005 was $2.6
million, or $.34 per basic share and $.31 per diluted share, compared to net
income of $1.2 million, or $.33 per basic share and $.31 per diluted share, for
the year ended December 31, 2004. Per share earnings have been adjusted in both
periods to reflect the two-for-one stock split, in the form of a stock dividend,
to shareholders of record on June 15, 2005, the six-for-five stock split, in the
form of a stock dividend, to shareholders of record on July 15, 2004, and the 5%
stock distribution to the shareholders of Central Jersey Bancorp paid on
December 31, 2003.

      The reported earnings and balance sheet figures ended December 2004 do not
include those of Allaire Community Bank which combined with Central Jersey
Bancorp on January 1, 2005. Per share earnings have been adjusted for the period
to reflect the two-for-one stock split, in the form


                                       24
<PAGE>

of a stock dividend, for shareholders of record on June 15, 2005 and the
six-for-five stock split, in the form of a stock dividend, for shareholders of
record on July 15, 2004.

      Total assets of $514.6 million at December 31, 2005 were comprised
primarily of $133.7 million in investment securities, $307.2 million in net
loans and $21.2 million in cash and due from banks, compared to total assets of
$254.1 million at December 31, 2004, which primarily consisted of $9.4 million
in Federal funds sold, $90.2 million in investment securities, $139.7 million in
net loans and $9.2 million in cash and due from banks. Total assets at December
31, 2005 were funded primarily through deposits totaling $407.6 million, a 75%
increase over deposits totaling $232.9 million at December 31, 2004, due
primarily to the combination with Allaire Community Bank on January 1, 2005.

      At the year ended December 31, 2005, non-accrual loans totaled $79
thousand as compared to non-accrual loans totaling $128 thousand for the year
ended December 31, 2004. There were no loans ninety days or greater past due and
still accruing interest at December 31, 2005 or 2004. There was $92 thousand in
loan charge-offs during 2005 as compared to no loan charge-offs in 2004.

                                                           At or For the
                                                       Year ended December 31,
                                                    ----------------------------
      Performance Ratios:                             2005      2004      2003
                                                      ----      ----      ----
            Return on average assets                  0.54%     0.50%     0.24%
            Return on average tangible assets         0.58%     0.58%     0.24%
            Return on average equity                  4.31%     7.93%     3.23%
            Return on average tangible equity         8.51%     8.51%     3.23%
            Shareholders' equity to total assets     12.51%     6.34%     6.69%

Results of Operations

General

      Central Jersey Bancorp's principal source of revenue is derived from
Central Jersey Bank, N.A.'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, 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 Central
Jersey Bank, N.A.'s provision for loan losses, other income and operating
expenses. Other income consists primarily of service charges and fees. Operating
expenses consist primarily of salaries and employee benefits, occupancy costs
and other operating related expenses.

      On January 1, 2005, Central Jersey Bancorp completed its strategic
business combination transaction with Allaire Community Bank, a New Jersey
state-chartered bank, pursuant to which Allaire Community Bank became a
wholly-owned bank subsidiary of Central Jersey Bancorp. On the effective date of
the combination, the name of the holding company was changed from Monmouth
Community Bancorp to Central Jersey Bancorp. In addition, as a part


                                       25
<PAGE>

of the combination, each outstanding share of common stock of Allaire Community
Bank was exchanged for one share of Central Jersey Bancorp common stock.

      The combination was accounted for as a purchase and the excess cost over
the fair value of net assets acquired ("goodwill") in the transaction was $27.2
million. Under the provisions of SFAS No. 142, goodwill is not being amortized
in connection with this transaction and the goodwill will not be deductible for
income tax purposes. Central Jersey Bancorp also recorded a core deposit
intangible of $3.8 million in connection with the combination, which is being
amortized on an accelerated basis over 10 years. The amortization of premiums
and discounts resulting from the fair value adjustments of assets and
liabilities may have a material impact on Central Jersey Bancorp's results of
operations in future periods.

For the years ended December 31, 2005 and 2004

Net Interest Income

      Net interest income for Central Jersey Bank, N.A. was $17.4 million for
the year ended December 31, 2005, as compared to $8.5 million for the year ended
December 31, 2004. This increase was due primarily to the combination with
Allaire Community Bank on January 1, 2005. Net interest income for the year
ended December 31, 2005 was comprised primarily of $239 thousand in interest on
Federal funds sold and due from banks, $18.7 million in interest and fees on
loans and $6.0 million in interest on securities, less interest expense on
deposits of $6.6 million and interest expense on borrowed funds of $897
thousand, whereas net interest income for the year ended December 31, 2004 was
comprised primarily of $114 thousand in interest on Federal funds sold and due
from banks, $8.2 million in interest on loans and $3.2 million in interest on
securities, less interest expense on deposits of $2.8 million and interest
expense on borrowed funds of $210 thousand.

      Interest-earning assets averaged $428.0 million for the year ended
December 31, 2005, an 85.7% increase over interest-earning assets averaging
$230.4 million for the year ended December 31, 2004, due primarily to the
combination with Allaire Community Bank. Interest-earning assets for such
periods were funded primarily by deposit inflows and the proceeds from borrowed
funds. Deposits for the year ended December 31, 2005 averaged $400.7 million, of
which $312.2 million, or 77.9%, were interest-bearing. This number represents an
81.1% increase over average total deposits of $221.3 million for the year ended
December 31, 2004, due primarily to the combination with Allaire Community Bank,
of which $192.4 million, or 86.9%, were interest-bearing. Subordinated debt and
other borrowings as of December 31, 2005, averaged $5.2 million and $18.2
million, respectively, as compared to $3.9 million and $1.3 million,
respectively, for the year ended December 31, 2004. The increase was due
primarily to the combination with Allaire Community Bank.

      Net interest margin, which represents net-interest income as a percentage
of average interest-earning assets, was 4.08% for the year ended December 31,
2005, as compared to 3.69% for the year ended December 31, 2004. The net
interest margin expansion was due primarily to an increase in interest rates, as
measured by the Prime Rate of interest, which increased from 5.25% at December
31, 2004 to 7.25% at December 31, 2005. As Central Jersey Bank, N.A.


                                       26
<PAGE>

generates the majority of its interest income on loans and investments, the
prevailing interest rate environment resulted in a modestly higher yield on
total interest earning assets.

      The following table presents a summary of the principal components of
average interest-earning assets and average interest-bearing liabilities with
the related interest income and interest expense for the years ended December
31, 2005, 2004 and 2003:

<TABLE>
<CAPTION>
    (dollars in thousands)                 Year ended December 31, 2005         Year ended December 31, 2004
                                         --------------------------------     --------------------------------

                                          Average                Average       Average                Average
                                          Balance    Interest   Yield/Cost     Balance    Interest   Yield/Cost
                                         --------    --------    --------     --------    --------    --------
<S>                                      <C>         <C>             <C>      <C>         <C>             <C>
Interest earning assets:
Federal funds sold                       $  2,129    $     48        2.25%    $  6,167    $     80        1.30%
Loans receivable, gross                   278,243      18,726        6.73%     129,706       8,206        6.33%
Deposits with banks                         2,766         191        6.91%         589          34        5.77%
Securities                                144,831       5,982        4.13%      93,945       3,231        3.44%
                                         --------    --------    --------     --------    --------    --------
    Total interest earning assets         427,969      24,947        5.83%     230,407      11,551        5.01%
Cash and due from banks                    18,082                                9,454
Allowance for loan losses                  (2,982)                              (1,496)
Other assets                               44,444                                3,912
                                         --------                             --------
Total Assets                             $487,512                             $242,277
                                         ========                             ========

Interest bearing liabilities:
Interest bearing demand                  $ 88,301    $  1,596        1.81%    $ 56,795    $    668        1.18%
Money market                               24,905         447        1.79%      39,689         479        1.21%
Savings                                    71,282         676        0.95%      20,772         128        0.62%
Time                                      127,744       3,896        3.05%      75,134       1,561        2.08%
                                         --------    --------    --------     --------    --------    --------
    Total interest bearing deposits       312,232       6,615        2.12%     192,390       2,836        1.47%
Other borrowings                           18,216         547        3.00%       1,274          17        1.33%
Subordinated debentures                     5,155         340        6.60%       3,866         193        4.99%
                                         --------    --------    --------     --------    --------    --------
    Total interest-bearing liabilities    335,603       7,502        2.24%     197,530       3,046        1.54%
Non-interest bearing demand                88,435                               28,913
Other liabilities                           2,467                                  482
Shareholders' equity                       61,007                               15,352
                                         --------                             --------
Total liabilities and shareholders'
equity                                   $487,512                             $242,277
                                         ========                             ========
Net interest income                                  $ 17,445                             $  8,505
                                                     ========                             ========
Net interest rate spread(1)                                          3.59%                                3.47%

Net interest margin(2)                                               4.08%                                3.69%

<CAPTION>
    (dollars in thousands)                 Year ended December 31, 2003
                                         --------------------------------

                                          Average                Average
                                          Balance    Interest   Yield/Cost
                                         --------    --------    --------
<S>                                      <C>         <C>             <C>
Interest earning assets:
Federal funds sold                       $ 11,976    $    105        0.88%
Loans receivable, gross                    97,016       6,438        6.64%
Deposits with banks                           593          35        5.84%
Securities                                 81,909       2,533        3.09%
                                         --------    --------    --------
    Total interest earning assets         191,494       9,111        4.76%
Cash and due from banks                     7,837
Allowance for loan losses                  (1,256)
Other assets                                3,144
                                         --------
Total Assets                             $201,219
                                         ========

Interest bearing liabilities:
Interest bearing demand                  $ 47,581    $    553        1.16%
Money market                               42,921         661        1.54%
Savings                                    18,232         116        0.64%
Time                                       51,542       1,282        2.49%
                                         --------    --------    --------
    Total interest bearing deposits       160,276       2,612        1.63%
Other borrowings                               --          --          --
Subordinated debentures                        --          --          --
                                         --------    --------    --------
    Total interest-bearing liabilities    160,276       2,612        1.63%
Non-interest bearing demand                25,554
Other liabilities                             488
Shareholders' equity                       14,901
                                         --------
Total liabilities and shareholders'
equity                                   $201,219
                                         ========
Net interest income                                  $  6,499
                                                     ========
Net interest rate spread(1)                                          3.13%

Net interest margin(2)                                               3.39%
</TABLE>

----------
(1)   Net interest rate spread represents the difference between the yield on
      interest-earning assets and the cost of interest-bearing liabilities.

(2)   Net interest margin represents net interest income divided by average
      interest-earning assets.

Rate/Volume Analysis

      The following table presents the extent to which changes in interest rates
and changes in the volume of interest-earning assets and interest-bearing
liabilities have affected Central Jersey Bank, N.A.'s interest income and
interest expense during the periods indicated. Information is provided in each
category with respect to: (1) changes attributable to changes in volume (changes
in volume multiplied by prior rate); (2) changes attributable to changes in rate
(changes


                                       27
<PAGE>

in rate multiplied by prior volume); and (3) the net change. The changes
attributable to the combined impact of volume and rate have been allocated
proportionately to the changes due to volume and the changes due to rate (in
thousands).

<TABLE>
<CAPTION>
                                            Year ended December 31, 2005           Year ended December 31, 2004
                                                     Compared to                            Compared to
                                            Year ended December 31, 2004           Year ended December 31, 2003
                                         ----------------------------------     ----------------------------------

                                          Increase (Decrease)                    Increase (Decrease)
                                           Due to Change in:                      Due to Change in:
                                         ---------------------      Total       ---------------------      Total
                                                                   Increase                               Increase
                                          Volume        Rate      (Decrease)     Volume        Rate      (Decrease)
                                         --------     --------     --------     --------     --------     --------
<S>                                      <C>          <C>          <C>          <C>          <C>          <C>
(in thousands)
Interest Income:
  Loans                                  $  9,965     $    555     $ 10,520     $  2,008     $   (240)    $  1,768
  Securities                                2,007          744        2,751          396          303          699
  Other interest-bearing deposits             149            8          157           --           (1)          (1)
  Federal funds sold                          (32)          --          (32)         (63)          37          (26)
                                         ----------------------------------     ----------------------------------
   Total interest-earning assets           12,089        1,307       13,396        2,341           99        2,440

Interest Expense:
  Interest-bearing checking                   472          456          928          108            7          115
  Savings deposits                            448          100          548           16           (4)          12
  Money market deposits                      (216)         184          (32)         (47)        (135)        (182)
  Time deposits                             1,400          935        2,335          516         (237)         279
                                         ----------------------------------     ----------------------------------
Total interest-bearing deposits             2,104        1,675        3,779          593         (369)         224
  Other borrowings                            485           45          530           17           --           17
  Subordinated debentures                      75           72          147          193           --          193
                                         ----------------------------------     ----------------------------------
   Total interest-bearing liabilities       2,664        1,792        4,456          803         (369)         434
                                         ----------------------------------     ----------------------------------

Net interest income                      $  9,425     $   (485)    $  8,940     $  1,538     $    468     $  2,006
                                         ========     ========     ========     ========     ========     ========
</TABLE>

Provision for Loan Losses

      For the year ended December 31, 2005, Central Jersey Bank, N.A.'s
provision for loan losses was $426 thousand, as compared to $260 thousand for
the prior year.

      See "Financial Condition - Allowance for Loan Losses and Related
Provision" for a further discussion on provision for loan losses.

Other Income

      Other income was $1.6 million for the year ended December 31, 2005, as
compared to $849 thousand for the year ended December 31, 2004, an increase of
$775 thousand, or 91.3%, due primarily to the combination with Allaire Community
Bank. The increase was due primarily to service charges on bank accounts which
were $1.4 million for the year ended December 31, 2005, as compared to $830
thousand for the prior year, an increase of $571 thousand, or 68.8%. There were
no gains on the sale of available for sale securities for the years ended
December 31, 2005 and 2004. There was a gain of $105 thousand on the sale of
loans held for sale for the period ended December 31, 2005 as compared to no
gain for the year ended December 31, 2004. In addition, the cash surrender value
of Bank Owned Life Insurance was $112 thousand for year ended December 31, 2005
as compared to $0 in the prior year.


                                       28
<PAGE>

Operating Expenses

      Operating expenses include, among other costs and expenses, salaries,
costs of employee benefits, professional and application fees and occupancy
expense. Operating expenses for the year ended December 31, 2005 were $14.6
million, as compared to operating expenses of $7.1 million for the prior year.
This increase was due primarily to the combination with Allaire Community Bank
and expenses incurred to support the general growth of Central Jersey Bank, N.A
In addition, Central Jersey Bank, N.A. incurred $688 thousand in core deposit
intangible amortization expense related to the combination with Allaire
Community Bank for the year ended December 31, 2005 as compared to none in 2004.
Full-time equivalent employees totaled 152 at December 31, 2005 as compared to
82.5 at December 31, 2004. This increase was due primarily to the combination
with Allaire Community Bank. The table below presents operating expenses, by
major category, for the years ended December 31, 2005, 2004 and 2003,
respectively (in thousands):

Operating Expenses:                              2005         2004         2003
-------------------                              ----         ----         ----

Salaries and employee benefits                 $ 7,287      $ 3,619      $ 3,185
Net occupancy expenses                           1,718          844          792
Outside service fees                             1,017          530          500
Data processing fees                               937          571          485
Core deposit intangible amortization               688           --           --
Furniture, fixtures and equipment                  599          290          277
Audit and tax fees                                 365           96           80
Stationery, supplies and printing                  288          185          182
Insurance expense                                  231          106           77
Advertising and public relations expenses          220          236          172
Legal fees and expenses                            135           72           98
Regulatory exam fees                                72           74           64
Other operating expenses                           993          475          413
                                               -------      -------      -------
      Total                                    $14,550      $ 7,098      $ 6,325
                                               =======      =======      =======

Income Tax Expense

      For the year ended December 31, 2005, income tax expense was $1.5 million
on income before taxes of $4.1 million, resulting in an effective tax rate of
35.7%, as compared to income tax expense of $778 thousand on income before taxes
of $2.0 million for the year ended December 31, 2004, resulting in an effective
tax rate of 39.0%. This increase was due primarily to the combination with
Allaire Community Bank and the tax exempt interest from the Bank Owned Life
Insurance.

For the years ended December 31, 2004 and 2003

Net Interest Income

      Net interest income of Central Jersey Bank, N.A. was $8.5 million for the
year ended December 31, 2004, as compared to $6.5 million for the year ended
December 31, 2003. Net interest income for the year ended December 31, 2004 was
comprised primarily of $114


                                       29
<PAGE>

thousand in interest on Federal funds sold and due from banks, $8.2 million in
interest on loans and $3.2 million in interest on securities, less interest
expense on deposits of $2.8 million and $210 thousand in other borrowings,
whereas net interest income for the year ended December 31, 2003 was comprised
primarily of $140 thousand in interest on Federal funds sold and due from banks,
$6.4 million in interest on loans and $2.5 million in interest on securities,
less interest expense on deposits of $2.6 million.

      Interest-earning assets averaged $230.4 million for the year ended
December 31, 2004 a 20.3% increase over interest-earning assets of $191.5
million for the year ended December 31, 2003. Interest-earning assets for such
periods were funded primarily by deposit inflows. Deposits for the year ended
December 31, 2004 averaged $221.3 million, of which $192.4 million, or 86.9%,
were interest-bearing. This number represents a 19.1% increase over average
total deposits of $185.8 million for the year ended December 31, 2003, of which
$160.3 million, or 86.3%, were interest-bearing.

      Net interest margin, which represents net-interest income as a percentage
of average interest-earning assets, was 3.69% for the year ended December 31,
2004, as compared to 3.39% for the year ended December 31, 2003. The net
interest margin compression experienced in 2003 and 2002 was primarily
attributable to the general interest rate-declines that occurred during such
years. During 2004 and 2003, interest rates, as measured by the prime rate of
interest, increased from 4.75% at the beginning of 2003 to 5.25% by December 31,
2004. As Central Jersey Bank, N.A. generates the majority of its interest income
on loans and investments, the prevailing interest rate environment resulted in
significantly lower rates available on interest earning assets.

Provision for Loan Losses

      For the year ended December 31, 2004, Central Jersey Bank, N.A.'s
provision for loan losses was $260 thousand, as compared to $150 thousand for
the prior year.

Other Income

      Other income was $849 thousand for the year ended December 31, 2004, as
compared to $780 thousand for the year ended December 31, 2003, an increase of
$69 thousand, or 8.8%. The increase was due primarily to service charges on bank
accounts which were $830 thousand for the year ended December 31, 2004, as
compared to $656 thousand for the prior year, an increase of $174 thousand, or
26.5%. There were no gains realized on available for sale securities as well as
loans held for sale as of December 31, 2004 as compared to $76 thousand and $13
thousand for the same period in 2003.

Operating Expenses

      Operating expenses include, among other costs and expenses, salaries,
costs of employee benefits, professional and application fees and occupancy
expense. Operating expenses for the year ended December 31, 2004 were $7.1
million, as compared to operating expenses of $6.3 million for the year ended
December 31, 2003. This increase was due to expenses incurred to support the
general growth of Central Jersey Bank, N.A.


                                       30
<PAGE>

Financial Condition

Cash and Cash Equivalents

      Cash and cash equivalents consist of cash on hand, due from banks, and
federal funds sold. At December 31, 2005, cash and cash equivalents were $21.2
million, as compared to $18.6 million at December 31, 2004, an increase of $2.6
million, or 14.2%, due primarily to the combination with Allaire Community Bank.

Intangible Assets

      Intangible assets of Central Jersey Bancorp, 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. For the year ended December 31, 2005, Central Jersey Bancorp recorded
$27.2 million of goodwill related to the combination with Allaire Community
Bank.

      Core deposit premiums represent the intangible value of depositor
relationships assumed in purchase acquisitions and are amortized on accelerated
basis over a period of ten years. The amortization of the core deposit premium
is recorded in other operating expenses. For the year ended December 31, 2005,
Central Jersey Bancorp recorded $3.8 million of core deposit intangible related
to the combination with Allaire Community Bank.

Securities Portfolio

      At December 31, 2005, Central Jersey Bank, N.A.'s securities portfolio
consisted of obligations of United States Government sponsored agencies and
mortgaged-backed securities of United States Government sponsored agencies.
Securities held to maturity of $22.6 million at December 31, 2005, represented
an increase of $6.1 million over the year ended December 31, 2004 total of $16.5
million. Securities available-for-sale had a market value of $111.2 million at
December 31, 2005, representing an increase of $37.5 million over the December
31, 2004 total of $73.7 million. This increase was due primarily to the
combination with Allaire Community Bank.


                                       31
<PAGE>

The following table summarizes the maturity and weighted average yields in each
of Central Jersey Bank, N.A.'s securities portfolios at December 31, 2005:

<TABLE>
<CAPTION>
                                                         Over         Over
Maturities and weighted average yields:     Within       1 to 5      5 to 10      Over 10
(dollars in thousands)                      1 Year       Years        Years        Years        Total
                                           --------     --------     --------     --------     --------
<S>                                        <C>          <C>          <C>          <C>          <C>
Securities held to maturity:
Mortgage-backed securities
   Amortized cost                          $     --     $  2,352     $  6,776     $  1,887     $ 11,015
   Weighted average yield                        --         4.16%        5.00%        5.32%        4.88%
Obligations of U.S. Government agencies
   Amortized cost                                --        3,994        2,504        5,054       11,552
   Weighted average yield                        --         3.57%        4.31%        4.82%        4.28%
                                           ------------------------------------------------------------
Total securities held to maturity
   Amortized cost                          $     --     $  6,346     $  9,280     $  6,941     $ 22,567
   Weighted average yield                        --         3.79%        4.81%        4.96%        4.57%
                                           ============================================================

Securities available for sale:
Mortgage-backed securities
   Market value                            $     --     $ 16,565     $ 11,589     $     --     $ 28,154
   Weighted average yield                        --         3.43%        3.71%          --         3.55%
Obligations of U.S. Government agencies
   Market value                               9,376       25,458       33,192       13,456       81,482
   Weighted average yield                      2.60%        3.07%        4.98%        5.40%        4.18%
Other debt securities
   Market value                               1,435           --          104           --        1,539
   Weighted average yield                      3.00%          --         5.69%          --         3.18%
                                           ------------------------------------------------------------
Total securities available for sale
   Market value                            $ 10,811     $ 42,023     $ 44,885     $ 13,456     $111,175
   Weighted average yield                      2.65%        3.19%        4.65%        5.40%        4.01%
                                           ============================================================
</TABLE>

Investment Policy

      The board of directors has adopted an investment policy to govern the
investment function of Central Jersey Bank, N.A., which includes the purchase of
securities for the held-to-maturity and available-for-sale portfolios and the
sale of securities from the available-for-sale portfolio.

      The basic objectives of the investment function are:

      o     to keep Central Jersey Bank, N.A.'s funds fully employed at the
            maximum after-tax return;

      o     to minimize exposure to credit risk; and

      o     to provide liquidity required by current circumstances.

      As used in our investment policy and in other policies of Central Jersey
Bank, N.A., the term "liquidity" refers to the expected cash flow from
performing assets and secondary to borrowings secured by performing assets.
These two sources of liquidity are expected to fund the operations of Central
Jersey Bank, N.A. For this reason, unless otherwise indicated, the term
"liquidity" in Central Jersey Bank, N.A.'s policies does not refer to proceeds
from the sale of assets, except for the sale of assets available-for-sale.


                                       32
<PAGE>

      Investment management therefore emphasizes:

      o     preservation of principal;

      o     strong cash-flow characteristics;

      o     ready availability of credit information;

      o     appropriateness of size both as to Central Jersey Bank, N.A. and as
            to an obligor's outstanding debt;

      o     eligibility as collateral for public-agency deposits and customer
            repurchase-agreement accounts; and

      o     broad marketability, as an indicator of quality.

      The purpose of bonds in the held-to-maturity portfolio is to provide
earnings consistent with the safety factors of quality, maturity and risk
diversification. This purpose is reflected in the accounting principle that
carrying a debt security at amortized cost is appropriate only if the investment
committee of Central Jersey Bank, N.A. has the intent and ability to hold that
security to maturity. Management should be indifferent to price fluctuations
unrelated to the continuing ability of a security to contribute to recurring
income. For purposes of our investment policy, a security shall be deemed to
have matured if it is sold (1) within 3 months of maturity or a call date if
exercise of the call is probable, or (2) after collection of at least 85% of the
principal outstanding at acquisition.

      Debt securities that are not positively expected to be held to maturity,
but rather for indefinite periods of time, and equity securities, shall be
booked to the available-for-sale portfolio, which shall be monitored daily and
reported at fair value with unrealized holding gains and losses excluded from
earnings and reported as a tax-effected net amount in a separate component of
shareholders' equity. However, in calculating and reporting regulatory capital,
only net unrealized losses on marketable equity securities is deducted from Tier
1 or core capital.

Loan Portfolio

      Central Jersey Bank, N.A.'s primary policy goal is to establish a sound
credit portfolio that contributes, in combination with other earning assets, to
a satisfactory return on assets, return on shareholders' equity and capital to
asset ratio.

      Central Jersey Bank, N.A. conducts both commercial and retail lending
activities. The loan approval process at Central Jersey Bank, N.A. is driven by
the aggregate indebtedness of the borrower and related entities. Executive
officers with lending authority and loan officers have various individual and
collective loan approval authorities up to $500,000. This lending limit was
increased from $250,000 to $500,000 on January 1, 2005, the effective date of
the combination of Central Jersey Bancorp and Allaire Community Bank. All credit
accommodations exceeding $500,000 are referred to Central Jersey Bank, N.A.'s
loan committee for review and approval. The loan committee is comprised of
internal and outside directors. A loan officer with a loan application for more
than $500,000 (or from a borrowing relationship with aggregate debt in excess of
$500,000) presents a complete analysis of the proposed credit accommodation to
the members of the loan committee for their consideration.


                                       33
<PAGE>

      The analysis includes, among other things, the following:

            o     a description of the borrower;

            o     the loan purpose and use of proceeds;

            o     the requested loan amount;

            o     the recommended term;

            o     the recommended interest rate;

            o     primary, secondary and tertiary sources of repayment;

            o     proposed risk rating;

            o     full collateral description;

            o     fees (if any);

            o     full borrower financial analysis, including comparative
                  balance sheets, income statements and statements of cash
                  flows; and

            o     inherent strengths and weaknesses of the requested credit
                  accommodation.

      A similar analysis is prepared for those loan requests aggregating in
excess of $100,000 but less than the $500,000 threshold.

      Central Jersey Bank, N.A. utilizes a comprehensive approach to loan
underwriting. The primary quantitative determinants in the underwriting process
include overall creditworthiness of the borrower, cash flow from operations in
relation to debt service requirements and the ability to secure the credit
accommodation with collateral of adequate value.

      For commercial loans, the collateral is somewhat dependent on the loan
type. Commercial lines of credit, term loans and time notes are typically
secured by a general lien on business assets and qualified (typically less than
90 days) accounts receivable (based upon an acceptable advance rate). Commercial
mortgage loans are secured by the underlying property with an acceptable equity
margin. Personal guarantees from the principals of a business are generally
required. In general, Central Jersey Bank, N.A. requires that income available
to service debt repayment requirements be equal to at least 125% of those
requirements.

      Commercial loans are often subject to cyclical economic risks of the
underlying business(s) of the borrower. Such risks are generally reduced during
the loan approval process. For example, Central Jersey Bank, N.A. requires that
a loan amount be less than the value of the collateral securing the loan and
that the standard cash flow analysis of the commercial borrower shows an ample
margin for debt service even with significant business contraction. Commercial
mortgage underwriting also requires that available funds for debt service exceed
debt service requirements.

      Retail or consumer loan credit accommodations include home equity loans,
home equity lines of credit, direct automobile loans and secured and unsecured
personal loans. Underwriting criteria for home equity products include a loan to
value not to exceed 80% and a debt service to income ratio not to exceed 45%.
Such criteria provide Central Jersey Bank, N.A. with underwriting comfort
without placing the institution in a position of competitive disadvantage.

      There are a number of risks associated with the granting of consumer
loans. While income and equity or collateral values are primary determinants of
the loan approval process for


                                       34
<PAGE>

consumer loans, Central Jersey Bank, N.A. also gives much consideration to
employment and debt payment history of the borrower(s). As with the commercial
underwriting process, consumer loans require both an income cushion and a
collateral cushion. Such criteria provide for a margin should a borrower's
income diminish or the collateral securing the loan depreciate in value.

      The granting of a loan, by definition, contains inherent risks. Central
Jersey Bank, N.A. attempts to mitigate risks through sound credit underwriting.
Each loan that Central Jersey Bank, N.A. approves undergoes credit scrutiny that
results in a quantification of risk and then the assignment of a risk rating.
Individual risk ratings carry with them a required reserve that is used to fund
Central Jersey Bank, N.A.'s allowance for loan losses. The inherent risk
associated with each loan is a function of loan type, collateral, cash flow,
credit rating, general economic conditions and interest rates.

      Central Jersey Bank, N.A. is limited by regulation as to the total amount
which may be committed and loaned to a borrower and its related entities.
Central Jersey Bank, N.A.'s legal lending limit is equal to 15% of its capital
funds, including capital stock, surplus, retained earnings and the allowance for
loan losses. Central Jersey Bank, N.A. may lend an additional 10% of its capital
funds to a borrower and its related entities if the additional loan or extension
of credit is fully secured by readily marketable collateral having a market
value at least equal to the amount borrowed. The additional limitation is
separate from, and in addition to, the general limitation of 15%.

      The following table summarizes net loans outstanding by loan category and
amount at December 31, 2005, 2004, 2003, 2002 and 2001.

<TABLE>
<CAPTION>
(in thousands)                               2005        2004        2003        2002        2001
                                             ----        ----        ----        ----        ----
---------------------------------------------------------------------------------------------------
<S>                                        <C>         <C>         <C>         <C>         <C>
Commercial and industrial loans            $ 32,708    $ 22,392    $ 20,380    $ 17,060    $ 17,396

Real estate loans - commercial              232,570      96,291      77,799      57,079      32,776

1-4 family real estate loans                  4,858          --          --          --          --

Home equity and second mortgages             38,153      22,014      17,734      14,816      11,182

Consumer loans                                2,054         638       1,270       1,601       1,113
---------------------------------------------------------------------------------------------------

Total loans                                $310,343    $141,335    $117,183    $ 90,556    $ 62,467

Less allowance for loan losses                3,175       1,638       1,378       1,228         855
---------------------------------------------------------------------------------------------------

Net loans                                  $307,168    $139,697    $115,805    $ 89,328    $ 61,612
===================================================================================================

Loans held for sale                        $  3,127    $      0    $      0    $    302    $    269
===================================================================================================
</TABLE>

      For the year ended December 31, 2005, net loans increased by $167.5
million to $307.2 million, which represents a 119.9% increase from the balance
of $139.7 million at December 31, 2004, due primarily to the combination with
Allaire Community Bank.


                                       35
<PAGE>

      For the year ended December 31, 2005, commercial and industrial loans and
commercial real estate loans increased by $146.6 million to $265.3 million,
which represents a 123.5% increase from the balance of $118.7 million at
December 31, 2004, due primarily to the combination with Allaire Community Bank.

      During 2005, home equity and second mortgages increased by $16.1 million
to $38.2 million at December 31, 2005, which represents a 73.2% increase from
the balance of $22.0 million at December 31, 2004, due primarily to the
combination with Allaire Community Bank.

      The following table summarizes the maturities of loans by category and
whether such loans are at a fixed or floating rate at December 31, 2005.

<TABLE>
<CAPTION>
                                                                              December 31, 2005
                                                      -----------------------------------------------------------------------------

Maturity and repricing data for loans:                 Within     Over 1 to 3   Over 3 to 5   Over 5 to 15    Over 15
(in thousands)                                         1 Year        Years         Years         Years         Years        Total
                                                      -----------------------------------------------------------------------------
<S>                                                   <C>          <C>           <C>           <C>           <C>          <C>
Loans secured by 1-4 family residential properties

    Fixed rate                                        $     364    $     892     $   2,608     $   6,911     $   4,094    $  14,869

    Adjustable rate                                      10,717           21           438           229            --       11,405

All other loans secured by real estate

    Fixed rate                                            9,176       39,445        58,516        35,168        29,762      172,067

    Adjustable rate                                      96,308        2,947         8,844         3,903            --      112,002

                                                      -----------------------------------------------------------------------------
Total                                                 $ 116,565    $  43,305     $  70,406     $  46,211     $  33,856    $ 310,343
                                                      =============================================================================
</TABLE>

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. Central Jersey Bank, N.A. had non-performing
loans totaling $79 thousand and $128 thousand at December 31, 2005 and 2004,
respectively.

Potential Problem Loans

      In addition to non-performing loans, Central Jersey Bank, N.A. 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
weaknesses" which potentially could cause such loans to become non-performing in
future periods.


                                       36
<PAGE>

      As of December 31, 2005 and 2004, there were no loans identified as having
structural weaknesses on the "watch list." The total balance of loans on the
"watch list" at December 31, 2005 and 2004 was $4.1 million and $4.5 million,
respectively.

Allowance for Loan Losses and Related Provision

      The allowance for loan losses is a valuation reserve available for losses
incurred or expected on extension of credit. The determination of the adequacy
of the allowance for loan losses is a critical accounting policy of Central
Jersey Bank, N.A., due to the inherently subjective nature of the evaluation.
Credit losses primarily arise from Central Jersey Bank, N.A.'s loan portfolio,
but also may be derived from other credit-related sources, including commitments
to extend credit. Additions are made to the allowance through periodic
provisions which are charged to expense. All losses of principal are charged to
the allowance when incurred or when a determination is made that a loss is
expected. Subsequent recoveries, if any, are credited to the allowance.

      As part of our evaluation of the adequacy of our allowance for loan
losses, each quarter we prepare an analysis. This analysis categorizes the
entire loan portfolio by certain risk characteristics such as loan type
(commercial, commercial real estate, one- to four-family, consumer, etc.) and
loan risk rating.

      Loan risk ratings for every loan are determined by credit officers who
consider various factors including the borrower's current financial condition
and payment status, historical loan performance, underlying collateral, as well
as internal loan review and regulatory ratings. Any loans with known potential
losses are categorized and reserved for separately.

      The loss factors applied to each loan risk rating are inherently
subjective in nature, and, in Central Jersey Bank, N.A.'s circumstances, even
more so due to the lack of any meaningful charge-off experience. Loss factors
are assigned to loan risk rating categories on the basis of our assessment of
the potential risk inherent in each loan type. Key factors we consider in
determining loss factors for each loan type include the current real estate
market conditions, changes in the trend of delinquencies and non-performing
loans, the current state of the local and national economy, loan portfolio
growth and changes in composition and concentrations within the portfolio. The
loss factors are evaluated by management on a quarterly basis and any
adjustments are approved by the board of directors of Central Jersey Bancorp.
There have been no significant changes in loss factors in 2005 as compared to
2004.

      We establish the provision for loan losses after considering the allowance
for loan loss worksheet, the amount of the allowance for loan losses in relation
to the total loan balance, loan portfolio growth, loan delinquency trends and
peer group analysis. Central Jersey Bank, N.A.'s allowance for loan losses is
allocated on an individual loan basis and Central Jersey Bank, N.A. does not
maintain an unallocated allowance for loan losses. We have applied this process
consistently and have made minimal changes in the estimation methods and
assumptions that we have used.

      Our primary lending emphasis is the origination of commercial real estate
loans, commercial and industrial loans, and to a lesser extent, home equity and
second mortgages. As a


                                       37
<PAGE>

result of our strategic plans and lending emphasis, we have a loan concentration
in commercial loans at December 31, 2005 and 2004, the majority of which are
secured by real property located in New Jersey.

      Based on the composition of our loan portfolio and the growth in our loan
portfolio over the past five years, we believe the primary risks inherent in our
portfolio are possible increases in interest rates, a possible decline in the
economy, generally, and a possible decline in real estate market values. Any one
or a combination of these events may adversely affect our loan portfolio
resulting in increased delinquencies and loan losses.

      The provision for loan losses was $426 thousand for 2005, as compared to
$260 thousand for 2004. The 2005 provision was required based upon credit
characteristics of the net loan growth for the year ended December 31, 2005. The
provision for loan losses of $260 thousand for the year ended December 31, 2004
was in response to net loan growth of 20.6% during such period. There were no
significant changes in loan portfolio composition, asset quality, or credit
delinquencies that impacted the allowance for loan losses during the year ended
December 31, 2005, as compared to 2004.

      Loan portfolio composition remained consistent in 2005, as compared to
2004, with commercial loans comprising 85.5% of total loans outstanding at
December 31, 2005 and 2004. In addition, Central Jersey Bank, N.A. had
non-accrual or impaired loans totaling $79 thousand at December 31, 2005 as
compared to $128 thousand at December 31, 2004. Gross loans outstanding totaled
$310.3 million at December 31, 2005, as compared to $141.3 million at December
31, 2004, an increase of $169.0 million, or 119.6%. The allowance for loan
losses increased to $3.2 million, or by 93.8%, at December 31, 2005, from the
$1.6 million at December 31, 2004, due primarily to the combination with Allaire
Community Bank.

      The following table summarizes Central Jersey Bank, N.A.'s allowance for
loan losses for the years ended December 31, 2005, 2004, 2003, 2002 and 2001.

<TABLE>
<CAPTION>
(in thousands)                                            2005          2004       2003        2002         2001
                                                         -------      -------     -------     -------     -------

-----------------------------------------------------------------------------------------------------------------
<S>                                                      <C>          <C>         <C>         <C>         <C>
Balance, beginning of year                               $ 1,638      $ 1,378     $ 1,228     $   855     $   650

Provision charged to expense                                 426          260         150         373         211

Charge-offs                                                  (92)           0           0          (1)         (6)

Allaire Community Bank combination                         1,203           --          --          --          --

Recoveries                                                     0            0           0           1           0
-----------------------------------------------------------------------------------------------------------------
Balance, end of year                                     $ 3,175      $ 1,638     $ 1,378     $ 1,228     $   855
=================================================================================================================
Ratio of allowance for loan losses to total loans           1.02%        1.16%       1.10%       1.36%       1.37%

Ratio of net charge-offs to average loans outstanding       0.03%        0.00%       0.00%       0.00%       0.00%
</TABLE>


                                       38
<PAGE>

      The following table sets forth Central Jersey Bank, N.A.'s percent of
allowance for loan losses to total allowance and the percent of loans to total
loans in each of the categories listed at the dates indicated (dollars in
thousands):

<TABLE>
<CAPTION>
                       December 31, 2005                    December 31, 2004                     December 31, 2003

                          Percent of     Percent                Percent of     Percent                Percent of     Percent
                           allowance     of loans                allowance     of loans                allowance     of loans
                           to total      to total                to total      to total                to total      to total
 Loan Type       Amount    allowance      loans        Amount    allowance      loans        Amount    allowance      loans
 ---------       ------    ---------      -----        ------    ---------      -----        ------    ---------      -----
<S>             <C>           <C>          <C>        <C>           <C>          <C>        <C>           <C>          <C>
Commercial      $ 2,749        86.6%        85.5%     $ 1,403        85.7%        84.0%     $ 1,151        83.5%        83.8%

Consumer            426        13.4%        14.5%         235        14.3%        16.0%         227        16.5%        16.2%
                -------     -------      -------      -------     -------      -------      -------     -------      -------
Total           $ 3,175       100.0%       100.0%     $ 1,638       100.0%       100.0%     $ 1,378       100.0%       100.0%
                =======     =======      =======      =======     =======      =======      =======     =======      =======

<CAPTION>
                      December 31, 2002                 December 31, 2001

                         Percent of    Percent              Percent of    Percent
                          allowance    of loans              allowance    of loans
                          to total     to total              to total     to total
  Loan Type     Amount    allowance     loans      Amount    allowance     loans
  ---------     ------    ---------     -----      ------    ---------     -----
<S>             <C>         <C>         <C>        <C>         <C>         <C>
Commercial      $1,007       82.0%       81.9%     $  709       82.9%       80.3%

Consumer           221       18.0%       18.1%        146       17.1%       19.7%
                ------     ------      ------      ------     ------      ------
Total           $1,228      100.0%      100.0%     $  855      100.0%      100.0%
                ======     ======      ======      ======     ======      ======
</TABLE>

Deposits

      One of Central Jersey Bank, N.A.'s primary strategies is the accumulation
and retention of core deposits. Core deposits are defined as of all deposits
except certificates of deposits with balances in excess of $100 thousand.

      Total deposits were $407.6 million at December 31, 2005, an increase of
$174.7 million, or 75.0%, from the year ended December 31, 2004 total of $232.9
million. Core deposits as a percentage of total deposits were 65.1% at December
31, 2005 as compared to 77% at December 31, 2004.

      The following table represents categories of Central Jersey Bank, N.A.'s
deposits at December 31, 2005, 2004 and 2003.

<TABLE>
<CAPTION>
                                                      December 31,   December 31,   December 31,
                                                      ------------   ------------   ------------
          (in thousands)                                  2005           2004           2003
                                                          ----           ----           ----
<S>                                                    <C>            <C>            <C>
      Demand deposits, non-interest bearing            $  91,297      $  29,897      $  26,818

      Savings, N.O.W. and money market accounts          173,993        122,225        118,265

      Certificates of deposit of less than $100,000       67,813         27,353         17,449

      Certificates of deposit of $100,000 or more         74,451         53,378         44,702
                                                       ---------      ---------      ---------
      Total deposits                                   $ 407,554      $ 232,853      $ 207,234
                                                       =========      =========      =========
</TABLE>


                                       39
<PAGE>

      The following table represents categories of Central Jersey Bank, N.A.'s
average deposit balances and weighted average interest rates for the years ended
December 31, 2005, 2004 and 2003.

<TABLE>
<CAPTION>
                                                     December 31,              December 31,              December 31,
                                                     ------------              ------------              ------------
(in thousands)                                           2005                      2004                      2003
                                                         ----                      ----                      ----
                                                             Weighted                  Weighted                  Weighted
                                                  Average     Average       Average     Average       Average     Average
                                                  Balance      Rate         Balance      Rate         Balance      Rate
                                                 ---------   ---------     ---------   ---------     ---------   ---------
<S>                                              <C>              <C>      <C>              <C>      <C>              <C>
Demand deposits, non-interest bearing            $  88,435          --%    $  28,913          --%    $  25,554          --%

Savings, N.O.W. and money market accounts          184,488        1.47%      117,256        1.09%      108,734        1.22%

Certificates of deposit of less than $100,000       60,040        3.04%       26,859        2.07%       17,306        2.95%

Certificates of deposit of $100,000 or more         67,704        3.05%       48,275        2.08%       34,236        2.22%
                                                 ---------   ---------     ---------   ---------     ---------   ---------
Total deposits                                   $ 400,667        1.65%    $ 221,303        1.28%    $ 185,830        1.41%
                                                 =========   =========     =========   =========     =========   =========
</TABLE>

      At December 31, 2005, Central Jersey Bank, N.A. had $142.3 million in time
deposits maturing as follows (in thousands):

<TABLE>
<CAPTION>
                                    3 months     Over 3 to    Over 1 year
                                    or less      12 months    to 3 years   Over 3 years      Total
                                   -----------------------------------------------------------------
<S>                                <C>           <C>           <C>           <C>           <C>
Less than $100,000                 $  28,269     $  33,011     $   6,265     $     268     $  67,813

Equal to or more than $100,000        39,576        26,690         5,530         2,655        74,451
                                   ---------     ---------     ---------     ---------     ---------
Total                              $  67,845     $  59,701     $  11,795     $   2,923     $ 142,264
                                   =================================================================
</TABLE>

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. During the past two years, the liquidity needs of
Central Jersey Bank, N.A. were 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. With adequate cash inflows resulting from deposits during the years 2005
and 2004, Central Jersey Bank, N.A. maintained levels of short-term assets
sufficient to maintain ample liquidity. During 2005, 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 $111.2
million at December 31, 2005 and $73.7 million at December 31, 2004.

      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


                                       40
<PAGE>

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 will 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. See "Item 1. Business - Government Regulation."

      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
December 31, 2005, Central Jersey Bank, N.A. met all capital adequacy
requirements to which it is subject.

      As of December 31, 2005, the most recent notification from the OCC
categorized Central Jersey Bank, N.A. as "well capitalized" under the regulatory
framework for prompt corrective action. There are no conditions or events since
that notification that we believe have changed Central Jersey Bank, N.A.'s
category.

      The following is a summary of Central Jersey Bank, N.A.'s and Central
Jersey Bancorp's actual capital ratios as of December 31, 2005 and 2004,
compared to the minimum capital adequacy requirements and the requirements for
classification as a "well-capitalized" institution:


                                       41
<PAGE>

<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
                                         2005        2004        2005        2004        2005       2004
                                      --------------------------------------------------------------------
<S>                                      <C>         <C>        <C>         <C>         <C>         <C>
Central Jersey Bancorp                   7.60%       8.15%      10.15%      12.70%      11.05%      13.70%
Central Jersey Bank N.A                  7.85%       8.23%      10.57%      12.82%      11.48%      13.82%

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

(b) "Well capitalized" institution
(under federal regulations)              5.00%       5.00%       6.00%       6.00%      10.00%      10.00%
</TABLE>

Guaranteed Preferred Beneficial Interest in Central Jersey Bancorp Subordinated
Debt

      In March 2004, MCBK Capital Trust I, a newly formed Delaware statutory
business trust and a wholly-owned, unconsolidated subsidiary 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, with an initial interest rate of 3.96%. 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
exempted from registration under the Securities Act.

      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 2.85%. 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 December 31, 2005, the $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 help ensure that Central Jersey Bank, N.A. maintains the 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 December 31,


                                       42
<PAGE>

2005, the only restricted core capital element owned by Central Jersey Bancorp
is trust preferred securities. Based on a preliminary review of the final rule,
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.

Recent Accounting Pronouncements

      Financial Accounting Standards Board (the "FASB") Statement No. 123
(revised 2004) ("Statement No. 123(R)") addresses the accounting for share-based
payment transactions in which an enterprise receives employee services in
exchange for (a) equity instruments of the enterprise or (b) liabilities that
are based on the fair value of the enterprise's equity instruments or that may
be settled by the issuance of such equity instruments. Statement 123(R) requires
an entity to recognize the grant date fair value of stock options and other
equity-based compensation issued to employees in the income statement. Statement
123(R) also generally requires that an entity account for those transactions
using the fair-value-based method, and eliminates an entity's ability to account
for share-based compensation transactions using the intrinsic value method of
accounting in APB Opinion No. 25, Accounting for Stock Issued to Employees,
which was permitted under Statement 123, as originally issued. Statement 123(R)
requires entities to disclose information needed about the nature of the
share-based payment transactions and the effects of those transactions on the
financial statements. Statement 123(R) is effective for Central Jersey Bancorp
beginning January 1, 2006. Central Jersey Bancorp must use either the modified
prospective or the modified retrospective transition method. The adoption of
Statement 123(R) will cause Central Jersey Bancorp to recognize additional
expense upon the grant of each stock option. However, management does not
anticipate the adoption of Statement 123(R) to have a material impact on Central
Jersey Bancorp's consolidated financial statements.

      FASB Staff Position No. FAS 115-1 and FAS 124-1, The Meaning of
Other-Than-Temporary Impairment and its Application to Certain Investments (the
"FSP), was issued on November 3, 2005 and addresses the determination of when an
investment is considered impaired; whether the impairment is other than
temporary, and how to measure an impairment loss. The FSP also addresses
accounting considerations subsequent to the recognition of an
other-than-temporary impairment on a debt security, and requires certain
disclosures about unrealized losses that have not been recognized as
other-than-temporary impairments. The FSP replaces the impairment guidance in
ETTF issue No. 03-1 with references to existing authoritative literature
concerning other-than-temporary determinations (principally SFAS No. 115 and SEC
Staff Accounting Bulletin 58) Under the FSP, impairment losses must be
recognized in earnings equal to the entire difference between the security's
cost and its fair value at the financial statement date, without considering
partial recoveries subsequent to that date. The FSP also requires that an
investor recognizes an other-than-temporary impairment loss when a decision to
sell a security has been made and the investor does not expect the fair value of
the security to fully recover prior to the expected time of sale. The FSP is
effective for reporting periods beginning after December 15, 2005. Central
Jersey Bancorp does not expect that the application of the FSP will have a
material impact on its financial condition, results of operations or financial
statement disclosures.

      In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS
No. 154


                                       43
<PAGE>

requires retroactive application to prior periods' financial statements of a
voluntary change in accounting principle unless it is impracticable. SFAS No.
154 is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2006, with earlier application permitted to
accounting changes and corrections of errors made in fiscal years beginning
after May 31, 2005.

Impact of Inflation

      The consolidated financial statements and related financial data presented
in this report have been prepared in accordance with generally accepted
principles, which require the measurement of financial position and operating
results in terms of historical dollars without considering changes in the
relative purchasing power of money over time due to inflation. The primary
impact of inflation on the operation of Central Jersey Bancorp and Central
Jersey Bank, N.A. is reflected in increased operating costs. Unlike most
industrial companies, virtually all of the assets and liabilities of a financial
institution are monetary in nature. As a result, the effects of general levels
of inflation are primarily reflected in the interest rate paid in liabilities
and earned on interest earning assets. Interest rates do not necessarily move in
the same magnitude as the prices of goods and services. We believe that
continuation of our efforts to manage the rates, liquidity and interest
sensitivity of our assets and liabilities is necessary to generate an acceptable
return on assets.

Item 7A. 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 Asset/Liability 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 economic value of equity. Members of the
Asset/Liability Committee include Central Jersey Bancorp's President and Chief
Executive Officer, Chief Operating Officer, Chief Financial Officer and Chief
Lending Officer. The Asset/Liability 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 deposit accounts as a
percentage of total deposits were 34.9% at December 31, 2005 compared to 34.7%
at December 31, 2004. Time deposits are generally short term in nature. As of
December 31, 2005, 89.7% of all time deposits had maturities of one year or less
compared to 89.1% at December 31, 2004. Central Jersey Bank, N.A.'s ability to
retain maturing time deposit accounts is the result of a strategy to remain
competitive priced within the marketplace. Central Jersey Bank, N.A.'s pricing
strategy may vary depending upon funding


                                       44
<PAGE>

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.

      The following table sets forth the results of the twelve month projected
net interest income model as of December 31, 2005.

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

-200                                    $16,670        $  (508)         (2.96)%
-100                                     17,026           (152)         (0.88)%
Base Case                                17,178             --             --
+100                                     17,427            249           1.45%
+200                                     17,650            472           2.75%

      The above table indicates that as of December 31, 2005, in the event of an
immediate 200 basis point parallel increase in interest rates, Central Jersey
Bank, N.A. would experience a 2.75%, or $472 thousand, increase in net interest
income. In the event of a 200 basis point decrease in interest rates, Central
Jersey Bank, N.A. would experience a (2.96%), or $508 thousand, decrease in net
interest income.

Item 8. Financial Statements and Supplementary Data
        -------------------------------------------

      The consolidated financial statements and supplementary data of Central
Jersey Bancorp called for by this item are submitted under a separate section of
this report. Reference is made to the Index of Consolidated Financial Statements
contained on page F-1 herein.

Item 9. Changes in and Disagreements With Accountants on Accounting and
        ---------------------------------------------------------------
        Financial Disclosure
        --------------------

      None.

Item 9A. Controls and Procedures
         -----------------------

      As required by Rule 13a-15 under the Exchange Act, as of the end of the
period covered by this Annual Report on Form 10-K, Central Jersey Bancorp
carried out an evaluation of the effectiveness of the design and operation of
Central Jersey Bancorp's disclosure controls and


                                       45
<PAGE>

procedures. This evaluation was carried out under the supervision and with the
participation of Central Jersey Bancorp's management, including Central Jersey
Bancorp's President and Chief Executive Officer and Central Jersey Bancorp's
Executive Vice President and Chief Financial Officer, who concluded that Central
Jersey Bancorp's disclosure controls and procedures are effective. There has
been no significant change in Central Jersey Bancorp's internal controls during
the last fiscal quarter that has materially affected, or is reasonably likely to
materially affect, Central Jersey Bancorp'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 Central
Jersey Bancorp'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 Central Jersey Bancorp's
reports filed under the Exchange Act is accumulated and communicated to
management, including Central Jersey Bancorp's President and Chief Executive
Officer and Executive Vice President and Chief Financial Officer, as
appropriate, to allow timely decisions regarding required disclosure.

     Management's Annual Report on Internal Control Over Financial Reporting
     -----------------------------------------------------------------------

      The management of Central Jersey Bancorp is responsible for establishing
and maintaining adequate internal control over financial reporting. Central
Jersey Bancorp's internal control system is a process designed to provide
reasonable assurance to the company's management and board of directors
regarding the preparation and fair presentation of published financial
statements.

      Central Jersey Bancorp's internal control over financial reporting
includes policies and procedures that pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect transactions and
dispositions of assets; provide reasonable assurances that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with accounting principles generally accepted in the United States of
America, and that receipts and expenditures are being made only in accordance
with authorizations of management and the directors of Central Jersey Bancorp;
and provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use or disposition of Central Jersey Bancorp's assets
that could have a material effect on our financial statements.

      All internal control systems, no matter how well designed, have inherent
limitations. Therefore, even those systems determined to be effective can
provide only reasonable assurance with respect to financial statement
preparation and presentation. Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.

      Management assessed the effectiveness of Central Jersey Bancorp's internal
control over financial reporting as of December 31, 2005. In making this
assessment, we used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-Integrated
Framework (COSO). Based on the assessment management believes that, as


                                       46
<PAGE>

of December 31, 2005, Central Jersey Bancorp's internal control over financial
reporting is effective based on those criteria.

           Attestation Report of the Registered Public Accounting Firm
           -----------------------------------------------------------

      Central Jersey Bancorp's independent registered public accounting firm
that audited the consolidated financial statements has issued an audit report on
our assessment of, and the effectiveness of, Central Jersey Bancorp's internal
control over financial reporting as of December 31, 2005. This report appears on
page F-3.

Item 9B. Other Information
         -----------------

      None


                                       47
<PAGE>

                                    PART III

Item 10. Directors and Executive Officers of the Registrant
         --------------------------------------------------

      The information required under this Item with respect to Central Jersey
Bancorp's directors and executive officers is contained in Central Jersey
Bancorp's Proxy Statement for the Annual Meeting of Shareholders scheduled to be
held on May 25, 2006, under the captions "Election of Directors," "Compliance
with Section 16(a) of the Securities Exchange Act" and "Executive Officers" and
is incorporated herein by reference.

Item 11. Executive Compensation
         ----------------------

      The information required under this Item with respect to executive
compensation is contained in Central Jersey Bancorp's Proxy Statement for the
Annual Meeting of Shareholders scheduled to be held on May 25, 2006, under the
caption "Executive Compensation" and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and
         ------------------------------------------------------------------
         Related Stockholder Matters
         ---------------------------

      The information required by Items 201(d) and 403 of Regulation S-B is
contained in Central Jersey Bancorp's Proxy Statement for the Annual Meeting of
Shareholders scheduled to be held on May 25, 2006, under the captions
"Securities Authorized for Issuance under Equity Compensation Plan" and
"Principal Shareholders and Security Ownership of Management" and is
incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions
         ----------------------------------------------

      The information required by this item is contained in Central Jersey
Bancorp's Proxy Statement for the Annual Meeting of Shareholders scheduled to be
held on May 25, 2006, under the caption "Certain Relationships and Related Party
Transactions" and is incorporated herein by reference.

Item 14. Principal Accountant Fees and Services
         --------------------------------------

      The information required by this item is contained in Central Jersey
Bancorp's Proxy Statement for the Annual Meeting of Shareholders scheduled to be
held on May 25, 2006, under the caption "Principal Accountant Fees and Services"
and is incorporated herein by reference.

Item 15. Exhibits and Financial Statement Schedules
         ------------------------------------------

      (a)   Exhibits
            --------

            Reference is made to the Index of Exhibits beginning on page E-1
            herein.


                                       48
<PAGE>

      (b)   Financial Statement Schedules:
            ------------------------------

            Reference is made to the Index of Consolidated Financial Statements
            on page F-1 herein. No schedules are included with the consolidated
            financial statements because the required information is
            inapplicable or is presented in the consolidated financial
            statements or notes thereto.


                                       49
<PAGE>

                                   SIGNATURES

      In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.

                                      CENTRAL JERSEY BANCORP


Date: March 14, 2006                  By: /s/ James S. Vaccaro
                                          -------------------------------------
                                          James S. Vaccaro
                                          President and Chief Executive Officer

      KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James S. Vaccaro and Robert S. Vuono and each of
them, his true and lawful attorneys-in-fact and agents for him and in his name,
place an stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Annual Report on Form 10-K, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as they might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents may lawfully do or cause to be done by virtue hereof.

      In accordance with Section 13 or 15(d) of the Exchange Act, the Registrant
has caused this report to be signed by the following persons in the capacities
and on the dates stated.

<TABLE>
<CAPTION>
          Signatures                                Title                               Date
          ----------                                -----                               ----
<S>                                  <C>                                           <C>

     /s/ George S. Callas            Chairman of the Board of Directors            March 14, 2006
--------------------------------
       George S. Callas


      /s/ Carl F. Chirico            Vice Chairman of the Board of Directors       March 14, 2006
---------------------------------
        Carl F. Chirico


     /s/ James S. Vaccaro            President and Chief Executive Officer         March 14, 2006
--------------------------------     (Principal Executive Officer)
       James S. Vaccaro
</TABLE>


                                       50
<PAGE>

<TABLE>
<CAPTION>
          Signatures                                Title                               Date
          ----------                                -----                               ----
<S>                                  <C>                                           <C>

      /s/ Robert S. Vuono            Senior Executive Vice President,              March 14, 2006
--------------------------------     Chief Operating Officer, Secretary
        Robert S. Vuono              and Director


   /s/ Anthony Giordano, III         Executive Vice President,  Chief              March 14, 2006
--------------------------------     Financial Officer, Treasurer and
     Anthony Giordano, III           Assistant Secretary (Principal
                                     Financial and Accounting Officer)


      /s/ James G. Aaron                           Director                        March 14, 2006
--------------------------------
        James G. Aaron


      /s/ Mark R. Aikins                           Director                        March 14, 2006
--------------------------------
        Mark R. Aikins


   /s/ Nicholas A. Alexander                       Director                        March 14, 2006
--------------------------------
     Nicholas A. Alexander


    /s/ John A. Brockriede                         Director                        March 14, 2006
--------------------------------
      John A. Brockriede


      /s/ James P. Dugan                           Director                        March 14, 2006
--------------------------------
        James P. Dugan


     /s/ M. Claire French                          Director                        March 14, 2006
--------------------------------
       M. Claire French


     /s/ William H. Jewett                         Director                        March 14, 2006
--------------------------------
       William H. Jewett


    /s/ Paul A. Larson, Jr.                        Director                        March 14, 2006
--------------------------------
      Paul A. Larson, Jr.


      /s/ John F. McCann                           Director                        March 14, 2006
--------------------------------
        John F. McCann
</TABLE>


                                       51
<PAGE>

<TABLE>
<CAPTION>
          Signatures                                Title                               Date
          ----------                                -----                               ----
<S>                                  <C>                                           <C>

      /s/ Carmen M. Penta                          Director                        March 14, 2006
--------------------------------
        Carmen M. Penta


       /s/ Mark G. Solow                           Director                        March 14, 2006
--------------------------------
         Mark G. Solow
</TABLE>


                                       52
<PAGE>

                             CENTRAL JERSEY BANCORP
                                 AND SUBSIDIARY

                        Consolidated Financial Statements

                                    Contents

                                December 31, 2005

Reports of Independent Registered Public Accounting Firm ....................F-2
Consolidated Balance Sheets at December 31, 2005 and 2004....................F-5
Consolidated Statements of Income for the years ended December 31, 2005,
     2004 and 2003...........................................................F-6
Consolidated Statements of Changes in Shareholders' Equity for the years
     ended December 31, 2005, 2004 and 2003..................................F-7
Consolidated Statement of Cash Flows for the years ended
     December 31, 2005, 2004 and 2003........................................F-8
Notes to Consolidated Financial Statements...................................F-9


                                      F-1
<PAGE>

             Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Central Jersey Bancorp:

We have audited the accompanying  consolidated  balance sheets of Central Jersey
Bancorp  and  subsidiary  as of  December  31,  2005 and 2004,  and the  related
consolidated  statements of income,  changes in shareholders'  equity,  and cash
flows for each of the years in the  three-year  period ended  December 31, 2005.
These consolidated financial statements are the responsibility of Central Jersey
Bancorp's  management.  Our  responsibility  is to  express  an opinion on these
consolidated financial statements based on our audits.

We conducted our audits in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement.  An audit includes examining, on a
test basis,  evidence  supporting  the amounts and  disclosures in the financial
statements.  An audit also includes assessing the accounting principles used and
significant  estimates  made by  management,  as well as evaluating  the overall
financial  statement  presentation.   We  believe  that  our  audits  provide  a
reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly,  in all material  respects,  the  financial  position of Central  Jersey
Bancorp  and  subsidiary  as of December  31, 2005 and 2004,  and the results of
their  operations  and their cash flows for each of the years in the  three-year
period ended  December 31, 2005,  in  conformity  with U.S.  generally  accepted
accounting principles.

We also have audited in  accordance  with the  standards  of the Public  Company
Accounting  Oversight Board (United States), the effectiveness of Central Jersey
Bancorp  and  subsidiary's  internal  control  over  financial  reporting  as of
December  31,  2005,  based  on  criteria  established  in  Internal  Control  -
Integrated Framework issued by the Committee of Sponsoring  Organizations of the
Treadway  Commission  (COSO),  and our report dated March 10, 2006  expressed an
unqualified  opinion on management's  assessment of, and the effective operation
of, internal control over financial reporting.


/s/ KPMG LLP
Short Hills, New Jersey
March 10, 2006


                                      F-2
<PAGE>

             Report of Independent Registered Public Accounting Firm
             -------------------------------------------------------

                  On Internal Control Over Financial Reporting
                  --------------------------------------------

The Board of Directors and Shareholders
Central Jersey Bancorp:

We have audited management's assessment, included on page 45, Item 9A., Control
Procedures - Management Report on Internal Control Over Financial Reporting,
that Central Jersey Bancorp and subsidiary (the "Company") maintained effective
internal control over financial reporting as of December 31, 2005, based on
criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Management of the Company is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting. Our responsibility is to express an
opinion on management's assessment and an opinion on the effectiveness of the
Company's internal control over financial reporting based on our audit.

We conducted  our audit in accordance  with the standards of the Public  Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain  reasonable  assurance  about whether  effective
internal  control  over  financial  reporting  was  maintained  in all  material
respects. Our audit included obtaining an understanding of internal control over
financial reporting,  evaluating management's assessment, testing and evaluating
the design and operating  effectiveness of internal control, and performing such
other  procedures as we considered  necessary in the  circumstances.  We believe
that our audit provides a reasonable basis for our opinion.

A company's  internal control over financial  reporting is a process designed to
provide reasonable  assurance  regarding the reliability of financial  reporting
and the preparation of financial  statements for external purposes in accordance
with generally accepted accounting principles. A company's internal control over
financial  reporting  includes those policies and procedures that (1) pertain to
the  maintenance  of records that, in reasonable  detail,  accurately and fairly
reflect the  transactions  and  dispositions  of the assets of the company;  (2)
provide  reasonable  assurance  that  transactions  are recorded as necessary to
permit preparation of financial statements in accordance with generally accepted
accounting  principles,  and that receipts and  expenditures  of the company are
being made only in accordance with authorizations of management and directors of
the company; and (3) provide reasonable assurance regarding prevention or timely
detection of  unauthorized  acquisition,  use, or  disposition  of the company's
assets that could have a material effect on the financial statements.

Because of its inherent  limitations,  internal control over financial reporting
may not prevent or detect misstatements.  Also, projections of any evaluation of
effectiveness to future periods are subject to the risk that controls may become
inadequate  because of changes in  conditions,  or that the degree of compliance
with the policies or procedures may deteriorate.

In our opinion, management's assessment that Central Jersey Bancorp and
subsidiary maintained effective internal control over financial reporting as of
December 31, 2005, is fairly stated, in all material respects, based on criteria
established in Internal Control--Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Also, in our
opinion, Central Jersey Bancorp and subsidiary maintained, in all material
respects, effective internal control over financial reporting as of December 31,
2005, based on criteria established in Internal Control--Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).


                                      F-3
<PAGE>

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheets of
Central Jersey Bancorp and subsidiary as of December 31, 2005 and 2004, and the
related consolidated statements of income, changes in shareholders' equity, and
cash flows for each of the years in the three-year period ended December 31,
2005, and our report dated March 10, 2006 expressed an unqualified opinion on
those consolidated financial statements.


/s/ KPMG LLP
Short Hills, New Jersey
March 10, 2006


                                      F-4
<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2005 AND 2004
                (dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
ASSETS                                                                2005          2004
------                                                             ---------     ---------
<S>                                                                <C>           <C>
Cash and due from banks                                            $  21,228     $   9,169
Federal funds sold                                                        --         9,425
Investment securities available for sale, at market value            111,175        73,668
Investment securities held to maturity (market value of $22,058
   and $16,549 at December 31, 2005 and 2004, respectively)           22,567        16,484
Loans held for sale                                                    3,127            --
Loans, net                                                           307,168       139,697
Accrued interest receivable                                            2,636         1,075
Premises and equipment                                                 6,006         2,496
Bank owned life insurance                                              3,338            --
Goodwill                                                              27,229            --
Core deposit intangible                                                3,097            --
Other assets                                                           6,992         2,101
                                                                   ---------     ---------
        Total assets                                               $ 514,563     $ 254,115
                                                                   =========     =========

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

Deposits:
   Non-interest bearing                                            $  91,297     $  29,897
   Interest bearing                                                  316,257       202,956
                                                                   ---------     ---------
                                                                     407,554       232,853

Other borrowings                                                      38,191            --
Subordinated debentures                                                5,155         5,155
Accrued expenses and other liabilities                                 1,885           252
                                                                   ---------     ---------
        Total liabilities                                            452,785       238,260
                                                                   ---------     ---------

Shareholders' equity:
Common stock, par value $0.01 per share. Authorized
   100,000,000 shares and issued and outstanding
   7,780,804 and 3,721,450 shares at December 31, 2005
   and 2004, respectively                                                 78            38
Additional paid-in capital                                            60,003        15,218
Accumulated other comprehensive loss                                  (2,153)         (619)
Retained earnings                                                      3,850         1,218
                                                                   ---------     ---------
        Total shareholders' equity                                    61,778        15,855
                                                                   ---------     ---------
        Total liabilities and shareholders' equity                 $ 514,563     $ 254,115
                                                                   =========     =========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>

                        CONSOLIDATED STATEMENTS OF INCOME
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                (dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                  2005          2004          2003
                                                               ----------    ----------    ----------
<S>                                                            <C>           <C>           <C>
Interest and dividend income:
   Interest and fees on loans                                  $   18,726    $    8,206    $    6,438
   Interest on securities available for sale                        4,891         2,517         1,791
   Interest on securities held to maturity                          1,091           714           742
   Interest on federal funds sold and due from banks                  239           114           140
                                                               ----------    ----------    ----------
        Total interest and dividend income                         24,947        11,551         9,111

Interest expense:
   Interest expense on deposits                                     6,615         2,836         2,612
   Interest expense on subordinated debentures                        340           193            --
   Interest expense on other borrowings                               547            17            --
                                                               ----------    ----------    ----------
        Total interest expense                                      7,502         3,046         2,612

                                                               ----------    ----------    ----------
        Net interest income                                        17,445         8,505         6,499

Provision for loan losses                                             426           260           150
                                                               ----------    ----------    ----------
        Net interest income after provision for loan losses        17,019         8,245         6,349
                                                               ----------    ----------    ----------

Other income:
   Service charges on deposit accounts                              1,401           830           656
   Income on bank owned life insurance                                112            --            --
   Gain on the sale of available for sale securities                   --            --            76
   Gain on the sale of loans held for sale                            105            --            13
   Other service charges, commissions and fees                          6            19            35
                                                               ----------    ----------    ----------
        Total other income                                          1,624           849           780
                                                               ----------    ----------    ----------

Operating expenses:
   Salaries and employee benefits                                   7,287         3,619         3,185
   Net occupancy expenses                                           1,718           844           792
   Outside service fees                                             1,017           530           500
   Data processing fees                                               937           571           485
   Core deposit intangible amortization                               688            --            --
   Professional and application fees                                  687           311           301
   Furniture, fixtures and equipment                                  599           290           273
   Stationery, supplies and printing                                  288           185           172
   Advertising and public relations                                   220           236           182
   Insurance                                                          192           106            77
   Telephone and postage                                              134           136           126
   Other operating expenses                                           783           270           232
                                                               ----------    ----------    ----------
        Total other expenses                                       14,550         7,098         6,325
                                                               ----------    ----------    ----------

Income before provision for income taxes                            4,093         1,996           804
Income taxes                                                        1,461           778           322
                                                               ----------    ----------    ----------
   Net income                                                  $    2,632    $    1,218    $      482
                                                               ==========    ==========    ==========

Basic earnings per share                                       $      .34    $      .33    $      .13
                                                               ==========    ==========    ==========
Diluted earnings per share                                     $      .31    $      .31    $      .13
                                                               ==========    ==========    ==========
Average basic shares outstanding                                7,754,487     3,721,376     3,721,176
                                                               ==========    ==========    ==========
Average diluted shares outstanding                              8,484,869     3,922,962     3,833,962
                                                               ==========    ==========    ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                        Accumulated
                                                          Additional       other
                                              Common       paid-in      comprehensive    Retained
                                              stock        capital      income (loss)    earnings         Total
----------------------------------------------------------------------------------------------------------------
<S>                                          <C>           <C>            <C>            <C>            <C>
Balance at December 31, 2002                 $     37      $ 14,745       $    149       $     --       $ 14,931
----------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net income                                         --            --             --            482            482
Unrealized loss on securities
 available for sale, net of tax of ($213)          --            --           (461)            --           (461)
Less reclassification adjustment for
   gains included in income, net of tax
   of $30                                          --            --            (46)            --            (46)
                                                                                                        --------
Total comprehensive loss                           --            --             --             --            (25)
Issuance of 5% stock distribution -
   88,254 shares                                    1           481             --           (482)            --
Fractional shares paid in cash                     --            (8)            --             --             (8)
Exercise of stock options - 144 shares             --             1             --             --              1
----------------------------------------------------------------------------------------------------------------
Balance at December 31, 2003                 $     38      $ 15,219       $   (358)      $     --       $ 14,899
----------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net income                                         --            --             --          1,218          1,218
Unrealized loss on securities
 available for sale, net of tax of ($152)          --            --           (261)            --           (261)
                                                                                                        --------
Total comprehensive income                         --            --             --             --            957
Fractional shares paid in cash                     --            (4)            --             --             (4)
Exercise of stock options - 522 shares             --             3             --             --              3
----------------------------------------------------------------------------------------------------------------
Balance at December 31, 2004                 $     38      $ 15,218       $   (619)      $  1,218       $ 15,855
----------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net income                                         --            --             --          2,632          2,632
Unrealized loss on securities
 available for sale, net of tax of ($881)          --            --         (1,534)            --         (1,534)
                                                                                                        --------
Total comprehensive income                         --            --             --             --          1,098
Allaire Community Bank combination                 40        44,356             --             --         44,496
Exercise of stock options - 49,278
 shares                                            --           429             --             --            429
----------------------------------------------------------------------------------------------------------------
Balance at December 31, 2005                 $     78      $ 60,003       $ (2,153)      $  3,850       $ 61,778
================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements


                                      F-7
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                       2005         2004         2003
                                                                                     ---------------------     --------
<S>                                                                                  <C>          <C>          <C>
Cash flows from operating activities:
   Net income                                                                        $  2,632     $  1,218     $    482
Adjustments to reconcile net income to net cash provided by operating activities:
   Increase in cash surrender value of life insurance                                    (112)          --           --
   Deferred taxes                                                                        (189)        (215)         (50)
   Provision for loan losses                                                              426          260          150
   Depreciation and amortization                                                          736          422          417
   Gain on the sale of available for sale securities                                       --           --          (76)
    Increase in accrue interest receivable                                               (242)        (107)         (21)
    Core deposit intangible amortization                                                  688           --           --
   Decrease (increase) in due from broker                                                  --        4,961       (4,961)
   Gain on the sale of loans held for sale                                               (105)          --          (13)
   Origination of loans held for sale                                                 (11,591)          --       (1,605)
   Proceeds from sale of loans held for sale                                            8,569           --        1,920
   Net premium amortization on held to maturity securities                                  7           77          108
   Net premium amortization on available for sale securities                              246          362          864
   Increase in other assets                                                            (4,510)        (650)        (185)
   Decrease in accrued expenses and other liabilities                                    (119)        (228)         (19)
                                                                                     ----------------------------------
      Net cash (used in) provided by operating activities                              (3,564)       6,100       (2,968)
                                                                                     ----------------------------------

Cash flows from investing activities:
   Purchase of investment securities held to maturity                                      --       (4,992)      (9,963)
   Purchase of investment securities available for sale                                    --      (21,127)     (85,995)
   Maturities of and paydowns on investment securities held to maturity                 2,995        3,510       20,315
   Maturities of and paydowns on investment securities available for sale              16,707       14,864       43,082
   Proceeds from sale of investment securities available for sale                          --           --       17,870
   Net increase in loans                                                              (48,052)     (24,152)     (26,627)
   Cash/cash equivalents acquired in Allaire Community Bank combination                 6,886           --           --
   Purchases of premises and equipment, net                                              (710)        (746)        (950)
                                                                                     ----------------------------------
        Net cash used in investment activities                                        (22,174)     (32,643)     (42,268)
                                                                                     ----------------------------------

Cash flows from financing activities:
   Proceeds from stock options exercised                                                  262           --           --
   Net increase in non-interest bearing deposits                                       22,163        3,079        4,237
   Net decrease in interest bearing deposits                                          (17,341)      22,540       38,990
   Issuance of subordinated debentures                                                     --        5,155           --
   Issuance of common stock, net                                                           --            3            1
   Net increase in other borrowings                                                    23,288           --           --
   Cash paid for fractional shares                                                         --           (4)          (8)
                                                                                     ----------------------------------
      Net cash provided by financing activities                                        28,372       30,773       43,220
                                                                                     ----------------------------------

      Increase (decrease) in cash and cash equivalents                                  2,634        4,230       (2,016)

Cash and cash equivalents at beginning of period                                       18,594       14,364       16,380
                                                                                     ----------------------------------
Cash and cash equivalents at end of period                                           $ 21,228     $ 18,594     $ 14,364
                                                                                     ==================================
</TABLE>


                                      F-8
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                              2005        2004        2003
                                                                            --------------------------------
<S>                                                                         <C>         <C>         <C>
Cash paid during the period for:
   Interest                                                                 $  7,597    $  2,986    $  2,616
   Taxes                                                                    $  1,860    $    993    $    361
Non cash investing activities:
   Fair value of assets acquired in Allaire Community Bank combination      $201,820    $     --    $     --
   Goodwill and core deposit intangible resulting from Allaire Community
       Bank combination                                                     $ 31,014    $     --    $     --
   Liabilities assumed in Allaire Community Bank combination                $186,528    $     --    $     --
   Common stock issued for Allaire Community Bank combination               $ 39,803    $     --    $     --
</TABLE>

See accompanying notes to consolidated financial statements


                                      F-9
<PAGE>

Central Jersey Bancorp and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2005, 2004 and 2003

(1) Summary of Significant Accounting Policies

Business

On January 1, 2005, Central Jersey Bancorp completed its strategic business
combination transaction with Allaire Community Bank, a New Jersey
state-chartered bank, pursuant to which Allaire Community Bank became a
wholly-owned bank subsidiary of Central Jersey Bancorp. On the effective date of
the combination, the name of the holding company was changed from Monmouth
Community Bancorp to Central Jersey Bancorp. In August 2005, Central Jersey
Bancorp combined its two bank subsidiaries, Monmouth Community Bank, N.A. and
Allaire Community Bank, into a single banking entity, named Central Jersey Bank,
N.A. Central Jersey Bancorp currently owns one operating subsidiary, Central
Jersey Bank, N.A.

Effective August 31, 2000, Central Jersey Bancorp, a newly formed corporation,
acquired all of the shares of Central Jersey Bank N.A. Each share of $5 par
value common stock of Central Jersey Bank, N.A. was exchanged for one share of
$0.01 par value common stock of Central Jersey Bancorp. The reorganization was
accounted for as if it were a pooling of interests. Central Jersey Bancorp and
Central Jersey Bank, N.A. are collectively referred to herein as the "Company."

The Company provides a full range of banking services to customers located
primarily in the greater Monmouth County, New Jersey area. Central Jersey
Bancorp and Central Jersey Bank, N.A. are subject, as applicable, to federal
statutes applicable to banks and bank holding companies. In 2001, Central Jersey
Bank N.A. converted from a state chartered institution to a nationally chartered
institution regulated by the Office of Comptroller of the Currency (the "OCC").
Central Jersey Bank, N.A.'s deposits are insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Central Jersey Bancorp is subject to
regulation, supervision and examination by the Federal Reserve Bank of New York.

Central Jersey Bancorp effected a two-for-one stock split, in the form of a
stock dividend, for shareholders of record on June 15, 2005, which resulted in
7,780,804 authorized and outstanding shares of Central Jersey Bancorp common
stock as of December 31, 2005. Central Jersey Bancorp effected six-for-five
stock split, in the form of a stock dividend, for shareholders of record as of
July 15, 2004, which resulted in 3,721,450 authorized and outstanding shares of
Central Jersey Bancorp common stock as of December 31, 2004. Central Jersey
Bancorp effected a 5% stock distribution for shareholders of record as of
December 15, 2003, which resulted in 3,720,806 authorized and outstanding shares
of Central Jersey Bancorp common stock as of December 31, 2003. All prior period
amounts have been retroactively restated to reflect the aforementioned stock
splits and stock distributions.


                                      F-10
<PAGE>

Basis of Financial Statement Presentation

The accompanying consolidated financial statements include the accounts of
Central Jersey Bancorp and its wholly-owned bank subsidiary, Central Jersey
Bank, N.A. All significant inter-company accounts and transactions have been
eliminated in consolidation 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 balance sheet and results of
operations for the periods indicated. Actual results could differ significantly
from those estimates.

Material estimates that are particularly susceptible to significant change in
the near term relate to the determination of the allowance for loan losses.

While management uses available information to recognize estimated losses on
loans, such estimates may be adjusted to account for changes in economic
conditions. In addition, various regulatory agencies, as an integral part of
their examination process, periodically review the Company's allowances for loan
losses. Such agencies may require the Company to increase such allowance based,
in their judgment, on the information available to them at the time of their
examination.

Reclassifications

Certain reclassifications have been made to the prior period amounts to conform
to the current period presentation.

Investment Securities

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 remaining lives of the securities as an adjustment to the
yield. On a quarterly basis, the Company evaluates investment securities for
other than temporary impairment.

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 and unrealized
holding gains and losses on such securities are excluded from earnings and
reported as a separate component of shareholders' equity, adjusted for
amortization of premiums and accretion of discounts over the remaining lives of
the securities as an adjustment to the yield. 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.


                                      F-11
<PAGE>

Loans Held for Sale

Loans held for sale are carried at the lower of aggregate cost or fair value.

Loans

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

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.

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.

The allowance for loan losses is based on management's evaluation of the
adequacy of the allowance based on known and inherent risks in the portfolio,
adverse situations that may affect the borrowers' ability to repay, estimated
value of any underlying collateral, and current economic conditions. Increases
in the allowance arise from charges to operations through the provision for loan
losses or from the recovery of amounts previously charged off. The allowance is
reduced by charge-offs. Management believes that the allowance for loan losses
is adequate.

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation is charged to operations on a straight-line basis
over the estimated useful lives of the assets or, in the case of leasehold
improvements, the lease period, if shorter. Depreciable lives range from three
to ten years for furniture, fixtures and equipment and five to fifteen years for
leasehold improvements. Gains or losses on dispositions are reflected in current
operations. Maintenance and repairs are charged to expense as incurred.


                                      F-12
<PAGE>

Bank-Owned Life Insurance

Bank-owned life insurance is accounted for using the cash surrender value method
and is recorded at its realizable value. The change in the net asset value is
included in other assets and other non-interest income.

Income Taxes

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 bases of existing
assets and liabilities. Deferred tax assets are recognized for future deductible
temporary differences and tax loss carryforwards 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.

Net Income Per Share

Basic and diluted net income per share for the year ended December 31, 2005 was
calculated by dividing the net income of $2.6 million by the weighted average
number of shares outstanding of 7,754,487 (as to the basic net income per share
determination) and 8,484,869 (as to the diluted net income per share
determination). Basic and diluted net income per share for the year ended
December 31, 2004 was calculated by dividing the net income of $1.2 million by
the weighted average number of shares outstanding of 3,721,376 (as to the basic
net income per share determination) and 3,922,962 (as to the diluted net income
per share determination). Basic and diluted net income per share for year ended
December 31, 2003 was calculated by dividing the net income of $482,000 by the
weighted average number of shares outstanding of 3,721,176 (as to the basic net
income per share determination) and 3,833,962 (as to the diluted net income per
share determination.

Cash and Cash Equivalents

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

Intangible Assets

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 Statement of Financial Accounting Standards
("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 accelerated basis over a
period of ten years. The amortization of the core deposit premium is recorded in
other operating expenses.


                                      F-13
<PAGE>

Impairment

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.

Stock Based Compensation

The Company accounts for stock-based compensation using the intrinsic value
method under Accounting Principles Board No. 25, Accounting for Stock Issued to
Employees. SFAS No. 123, Accounting for Stock-based Compensation, as amended by
SFAS No. 148, Accounting for Stock-based Compensation-Transaction and
Disclosure, permits the use of the intrinsic value method; however, also
requires the Company to disclose the pro forma net income and earnings per share
as if the stock-based compensation had been accounted for using the fair value
method. Had the compensation costs for the Company's stock option plan been
determined based on the fair value method, the Company's net income and earnings
per share would have been reduced to the pro forma amounts indicated below (in
thousands except per share data):

                                                    2005       2004       2003
--------------------------------------------------------------------------------
Net Income:
  As reported                                     $  2,632   $  1,218   $    482
Deduct: Total stock-based employee
  compensation expense determined under the
  fair value based method for all awards, net
  of related tax effects                               882        305        111
                                                  ------------------------------
  Pro forma                                       $  1,750   $    913   $    371

Net income per share - basic:
  As reported                                     $   0.34   $   0.33   $   0.13
  Pro forma                                       $   0.23   $   0.25   $   0.10

Net income per share - diluted:
  As reported                                     $   0.31   $   0.31   $   0.13
  Pro forma                                       $   0.21   $   0.24   $   0.10

The fair value of each option grant is estimated on the date of grant using the
Black-Scholes option pricing model with the following weighted-average
assumptions used for 2004 grants: dividend yield of 0%; expected volatility of
27.61%; risk free interest rate of 3.07% for director grants; and expected lives
of four years. There were no employee stock option grants during 2004. The
following weighted-average assumptions were used for 2003 grants: dividend yield
of 0%; expected volatility of 28.12%; risk free interest rate of 3.28% and 2.91%
for employee and


                                      F-14
<PAGE>

director grants, respectively; and expected lives of four years. There were no
new grants during 2005.

Effective January 1, 2005, Central Jersey Bancorp, formerly known as Monmouth
Community Bancorp ("MCB"), and Allaire Community Bank consummated a combination
in the form of a merger which resulted in the accelerated vesting of MCB
options. The Company accounted for the accelerated vesting of MCB stock options
in accordance with FIN 44, Accounting for Certain Transactions involving Stock
Compensation, an interpretation of APB Opinion No. 25.

(2) Strategic Business Combination

On January 1, 2005, Central Jersey Bancorp completed its strategic business
combination transaction with Allaire Community Bank, a New Jersey
state-chartered bank, pursuant to which Allaire Community Bank became a
wholly-owned bank subsidiary of Central Jersey Bancorp. On the effective date of
the combination, the name of the holding company was changed from Monmouth
Community Bancorp to Central Jersey Bancorp. In addition, as a part of the
combination, each outstanding share of common stock of Allaire Community Bank
was exchanged for one share of Central Jersey Bancorp common stock.

The combination was accounted for as a purchase and the excess cost over the
fair value of net assets acquired ("goodwill") in the transaction was $27.2
million. Under the provisions of SFAS No. 142, goodwill is not being amortized
in connection with this transaction and the goodwill will not be deductible for
income tax purposes. The Company also recorded a core deposit intangible of $3.8
million in connection with the combination, which is being amortized on an
accelerated basis over 10 years. The amortization of premiums and discounts
resulting from the fair value adjustments of assets and liabilities may have a
material impact on the Company's results of operations in future periods.


                                      F-15
<PAGE>

The following table presents data with respect to the fair values of assets and
liabilities acquired in the combination with Allaire Community Bank (in
thousands):

                                                  January 1, 2005
                                                  ---------------
           Assets:
              Cash and due from banks                 $  6,886
              Securities                                65,960
              Loans, net                               119,753
              Fixed assets                               3,536
              Other assets                               2,458
              Bank owned life insurance                  3,227
              Core deposit intangible                    3,785
              Goodwill                                  27,229
                                                      --------
           Total assets                               $232,834
                                                      ========
           Liabilities:
              Deposits                                $169,879
              Borrowings                                14,903
              Other liabilities                          1,752
                                                      --------
           Total liabilities                           186,534
                                                      --------
           Net assets acquired                        $ 46,300
                                                      ========

The net deferred tax asset resulting from adjustments of net assets acquired,
including the creation of the core deposit intangible amounted to $72 thousand.


                                      F-16
<PAGE>

The computation of the purchase price, the allocation of the purchase price to
net assets of Allaire Community Bank based on their respective values as of
January 1, 2005 and the resulting amount of goodwill are presented below
(dollars in thousands, except per share amounts):

<TABLE>
<S>                                                                            <C>
Common shares outstanding of Allaire Community Bank                              1,996,140
Percentage exchanged for Central Jersey Bancorp common stock                           100%
                                                                               -----------
Allaire common shares exchanged for Central Jersey Bancorp common stock          1,996,140
Exchange ratio                                                                        1.00
                                                                               -----------
Central Jersey Bancorp common stock issued                                       1,996,140
Market price per share of Central Jersey Bancorp common stock                  $     19.94
                                                                               -----------
Total purchase price of Allaire Community Bank                                      39,803
Total common stockholders' equity of Allaire Community Bank                         16,031
                                                                               -----------
Excess of purchase price over carrying value of assets acquired                $    23,772
Purchase accounting adjustments related to assets and liabilities acquired:
  Transaction costs                                                                  2,089
    Tax effect of transaction costs (at 34%)                                          (718)
  Securities held to maturity                                                          219
  Securities available for sale                                                        291
  Loans                                                                               (388)
  Lease termination cost                                                               766
  Buildings                                                                           (350)
  Time deposits                                                                        (16)
  Collateralized borrowings                                                              3
  Stock options                                                                      4,700
    Tax effect of fair value adjustments (at 34%)                                     (866)
  Core deposit intangible                                                           (3,785)
    Tax effect of core deposit intangible (at 34%)                                   1,512
                                                                               -----------
Goodwill                                                                       $    27,229
                                                                               ===========
</TABLE>

The following table presents pro forma condensed combined consolidated financial
information of the Company for the years presented as if the combination had
taken place on January 1 of such years (dollars in thousands, except per share
data):

                                           Year ended             Year ended
                                        December 31, 2004      December 31, 2003
      --------------------------------------------------------------------------
      Net interest income                   $ 17,020               $ 13,754
      Net income                               2,494                  1,662
      Basic earnings per share                  0.34                   0.23
      Diluted earnings per share                0.33                   0.21


                                      F-17
<PAGE>

(3) Cash and Due from Banks

The Company is required to maintain reserve balances with the Federal Reserve
Bank. As of December 31, 2005, the Company had a reserve balance of
approximately $7.3 million. The Company was not required to maintain any other
reserve balances.

(4) Securities

The amortized cost, gross unrealized gains and losses, and estimated market
value of investment securities held to maturity and securities available for
sale at December 31, 2005 and 2004 are as follows (in thousands):

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------
                                              2005
----------------------------------------------------------------------------------------------------
                                                                   Gross        Gross      Estimated
                                                    Amortized    unrealized   unrealized     market
                                                       cost        gains        losses       value
----------------------------------------------------------------------------------------------------
<S>                                                  <C>          <C>          <C>          <C>
Investment securities held to maturity:
Obligations of U.S. Government
  sponsored agencies                                 $ 12,657     $     --     $    312     $ 12,345
Mortgage-backed securities of U.S. Government
  sponsored agencies                                    9,910           37          234        9,713
----------------------------------------------------------------------------------------------------
Total                                                $ 22,567     $     37     $    546     $ 22,058
====================================================================================================
Investment securities available for sale:
Obligations of U.S. Government
  sponsored agencies                                 $ 85,272     $     --     $  2,355     $ 82,917
Mortgage-backed securities of U.S. Government
  sponsored agencies                                   29,246           --        1,092       28,154
Other debt securities                                     102            2           --          104
----------------------------------------------------------------------------------------------------
Total                                                $114,620     $      2     $  3,447     $111,175
====================================================================================================
</TABLE>


                                      F-18
<PAGE>

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------
                                              2004
---------------------------------------------------------------------------------------------------
                                                                  Gross        Gross      Estimated
                                                   Amortized    unrealized   unrealized     market
                                                      cost        gains        losses       value
---------------------------------------------------------------------------------------------------
<S>                                                 <C>          <C>          <C>          <C>
Investment securities held to maturity:
Obligations of U.S. Government
  sponsored agencies                                $  3,992     $     --     $     27     $  3,965
Mortgage-backed securities of U.S. Government
  sponsored agencies                                  12,492          103           11       12,584
---------------------------------------------------------------------------------------------------
Total                                               $ 16,484     $    103     $     38     $ 16,549
===================================================================================================
Investment securities available for sale:
Obligations of U.S. Government
  sponsored agencies                                $ 35,915     $     --     $    588     $ 35,327
Mortgage-backed securities of U.S. Government
  sponsored agencies                                  38,783           18          460       38,341
---------------------------------------------------------------------------------------------------
Total                                               $ 74,698     $     18     $  1,048     $ 73,668
===================================================================================================
</TABLE>

The amortized cost and estimated market value of investment securities held to
maturity and debt securities available for sale at December 31, 2005 by
contractual maturity are shown below (in thousands). Expected maturities will
differ from contractual maturities because issuers may have the right to call or
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                                                                       Estimated
                                                         Amortized       market
                                                           cost          value
      --------------------------------------------------------------------------
<S>                                                       <C>           <C>
      Investment securities held to maturity:
      Due after one year through five years               $  6,345      $  6,202
      Due after fifth year through tenth year                7,359         7,170
      Due after tenth year                                   8,863         8,686
      --------------------------------------------------------------------------
      Total                                               $ 22,567      $ 22,058
      ==========================================================================
      Investment securities available for sale:
      Due three months through one year                   $ 10,957      $ 10,811
      Due after one year through five years                 43,537        42,023
      Due after fifth year through tenth year               46,344        44,885
      Due after tenth year                                  13,782        13,456
      --------------------------------------------------------------------------
      Total                                               $114,620      $111,175
      ==========================================================================
</TABLE>

There were no securities sales during 2005 and 2004. During 2003, securities
available for sale with a carrying value of $17.9 million were sold realizing
gains totaling $76 thousand.

At December 31, 2005 and 2004, there were $91,663 and $55,155, respectively, of
investment securities pledged to secure public funds or for any other purposes
required by law.


                                      F-19
<PAGE>

Gross unrealized losses on both securities held to maturity and securities
available for sale and their related estimated fair values, aggregated by
security category and length of time that individual securities have been in a
continuous unrealized loss position, at December 31, 2005 and 2004 were as
follows (in thousands):

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                       Less than 12 months          12 months or more                 Total
                                      --------------------------------------------------------------------------
                                                   Estimated                 Estimated                 Estimated
              2005                    Unrealized     market     Unrealized     market     Unrealized     market
      Investment securities             losses       value        losses       value        losses       value
----------------------------------------------------------------------------------------------------------------
<S>                                    <C>          <C>          <C>          <C>          <C>          <C>
U.S. Government sponsored agencies     $  1,553     $ 57,039     $  1,114     $ 36,787     $  2,667     $ 93,826
Mortgage-backed securities                  290       10,740        1,035       25,522        1,325       36,262
----------------------------------------------------------------------------------------------------------------
Total                                  $  1,843     $ 67,779     $  2,149     $ 62,309     $  3,992     $130,088
================================================================================================================

<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                       Less than 12 months          12 months or more                 Total
                                      --------------------------------------------------------------------------
                                                   Estimated                 Estimated                 Estimated
              2004                    Unrealized     market     Unrealized     market     Unrealized     market
      Investment securities             losses       value        losses       value        losses       value
----------------------------------------------------------------------------------------------------------------
<S>                                    <C>          <C>          <C>          <C>          <C>          <C>
U.S. Government sponsored agencies     $    282     $ 23,685     $    333     $ 15,607     $    615     $ 39,292
Mortgage-backed securities                  274       27,243          197       11,995          471       39,238
----------------------------------------------------------------------------------------------------------------
Total                                  $    556     $ 50,928     $    530     $ 27,602     $  1,086     $ 78,530
================================================================================================================
</TABLE>

U.S. Government sponsored agencies - The unrealized losses in U.S. Government
sponsored agencies were caused by general interest rate increases. Since the
Company has the ability and intent to hold these securities until a market price
recovery or maturity, these securities are not considered other-than-temporarily
impaired.

Mortgage-backed securities - The unrealized losses on mortgage-backed securities
were caused by general interest rate increases. Fannie Mae and Freddie Mac
guarantee the contractual cash flows of these securities. Since the decline in
estimated market value is attributable to changes in interest rates and not
credit quality, and because the Company has the ability and intent to hold these
securities until a market price recovery or maturity, these securities are not
considered other-than-temporarily impaired.

(5) Loans

Loans at December 31, 2005 and 2004 are summarized as follows (in thousands):

                                                             2005         2004
--------------------------------------------------------------------------------

Commercial and industrial loans                            $ 32,708     $ 22,392
Real estate loans - commercial                              232,570           --
1-4 family real estate loans                                  4,858       96,291
Home equity and second mortgages                             38,153       22,014
Consumer loans                                                2,054          638
--------------------------------------------------------------------------------
                                                            310,343      141,335
Less allowance for loan losses                                3,175        1,638
--------------------------------------------------------------------------------
Net loans                                                  $307,168     $139,697
================================================================================
Loans held for sale                                        $  3,127           --
================================================================================


                                      F-20
<PAGE>

A substantial portion of the Company's loans are secured by real estate and made
to borrowers located in New Jersey, primarily in Monmouth County. Accordingly,
as with most financial institutions in the Company's market area, the ultimate
collectibility of a substantial portion of the Company's loan portfolio is
susceptible to changes in market conditions in the market area.

Activity in the allowance for loan losses for the years ended December 31, 2005,
2004 and 2003 is summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                         2005        2004       2003
-------------------------------------------------------------------------------------
<S>                                                    <C>         <C>        <C>
Balance, beginning of year                             $ 1,638     $ 1,378    $ 1,228
Allaire Community Bank combination                       1,203          --         --
Provision charged to expense                               426         260        150
Charge-offs                                                (92)         --         --
Recoveries                                                  --          --         --
-------------------------------------------------------------------------------------
Balance, end of year                                   $ 3,175     $ 1,638    $ 1,378
=====================================================================================
Ratio of allowance for loan losses to total loans         1.02%       1.16%      1.18%
=====================================================================================
</TABLE>

At December 31, 2005, 2004 and 2003, the Company had non-accrual loans totaling
$79, $128, and $40, respectively, and no impaired loans. There were no loans
ninety days or greater past due and still accruing interest at December 31,
2005, 2004 and 2003.

In the ordinary course of business to meet the financial needs of the Company's
customers, the Company is party to financial instruments with off-balance sheet
risk. These financial instruments include unused lines of credit and involve, to
varying degrees, elements of credit risk in excess of the amount recognized in
the financial statements. The contract or notional amounts of these instruments
express the extent of involvement the Company has in each category of financial
instruments.

The Company's exposure to credit loss from nonperformance by the other party to
the above-mentioned financial instruments is represented by the contractual
amount of those instruments. The Company uses the same credit policies in making
commitments and conditional obligations as it does for on-balance sheet
instruments. The contract or notional amount of financial instruments which
represent credit risk at December 31, 2005 and 2004 is as follows (in
thousands):

                                                             2005
      ------------------------------------------------------------
      Standby letters of credit                           $  1,289
      Outstanding loan and credit line commitments        $ 66,333
      ------------------------------------------------------------

Standby letters of credit are conditional commitments issued by the Company
which guarantee performance by a customer to a third party. The credit risk and
underwriting procedures involved in issuing letters of credit are essentially
the same as that involved in extending loan facilities to customers. All of
Central Jersey Bank, N.A.'s outstanding standby letters of credit are
performance standby letters within the scope of FASB Interpretation No. 45.
These are irrevocable undertakings by Central Jersey Bank, N.A., as guarantor,
to make payments in the


                                      F-21
<PAGE>

event a specified third party fails to perform under a non-financial contractual
obligation. Most of Central Jersey Bank, N.A.'s performance standby letters of
credit arise in connection with lending relationships and have terms of one year
or less. The maximum potential future payments Central Jersey Bank, N.A. could
be required to make equals the face amount of the letters of credit shown above.
Central Jersey Bank, N.A.'s liability for performance standby letters of credit
was insignificant at December 31, 2005.

Outstanding loan commitments represent the unused portion of loan commitments
available to individuals and companies as long as there is no violation of any
condition established in the contract. Outstanding loan commitments generally
have a fixed expiration date of one year or less, except for home equity loan
commitments which generally have an expiration date of up to 15 years. The
Company evaluates each customer's creditworthiness on a case-by-case basis. The
amount of collateral obtained, if any, upon extension of credit is based upon
management's credit evaluation of the customer. Various types of collateral may
be held, including property and marketable securities. The credit risk involved
in these financial instruments is essentially the same as that involved in
extending loan facilities to customers.

(6) Premises and Equipment

Premises and equipment at December 31, 2005 and 2004 are summarized as follows
(in thousands):

                                                           2005          2004
      -------------------------------------------------------------------------
      Land                                               $  1,074      $    176
      Buildings and improvements                            1,382           377
      Leasehold improvements                                3,551         1,929
      Equipment                                             3,746         1,545
      Auto                                                     78            --
      -------------------------------------------------------------------------
                                                            9,831         4,027
      Accumulated depreciation and amortization            (3,825)       (1,531)
      -------------------------------------------------------------------------
                                                         $  6,006      $  2,496
      =========================================================================

Depreciation and amortization expense amounted to $736, $422 and $417 in 2005,
2004 and 2003, respectively.

(7) Deposits

Interest-bearing deposits at December 31, 2005 and 2004 consist of the following
(in thousands):

                                                             2005         2004
      --------------------------------------------------------------------------
      Savings and N.O.W. accounts                          $173,993     $122,225
      Certificates of deposit less than $100,000             67,813       27,353
      Certificates of deposit of $100,000 or more            74,451       53,378
      --------------------------------------------------------------------------
      Total                                                $316,257     $202,956
      ==========================================================================

At December 31, 2005, certificates of deposit mature as follows: 2006 -
$127,546; 2007 - $10,325; 2008 - $1,470 and 2009 - $2,923.


                                      F-22
<PAGE>

(8) Subordinated Debentures and Other Borrowings

In March 2004, MCBK Capital Trust I, a newly formed Delaware statutory business
trust and a wholly-owned, unconsolidated subsidiary 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, with an initial interest rate of 3.96%. 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
exempted 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 $5.2 million
of Subordinated Debentures from Central Jersey Bancorp. The Subordinated
Debentures bear a variable interest rate equal to LIBOR plus 2.85%. 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 December 31, 2005, the $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 help ensure that Central Jersey Bank, N.A. maintains the 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 December 31, 2005, the only restricted core capital element
owned by Central Jersey Bancorp is trust preferred securities. Based on a
preliminary review of the final rule, 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.

Other borrowings were $38.2 million at December 31, 2005 as compared to no
borrowings at December 31, 2004. These borrowings, which are short term in
nature, were used to fund loan growth during the year ended December 31, 2005.
Effective January 1, 2005, the combination with Allaire Community Bank increased
borrowings by $14.9 million.

(9) Income Taxes

Components of income tax expense for the years ended December 31, 2005, 2004 and
2003 are as follows (in thousands):


                                      F-23
<PAGE>

                                                    2005       2004       2003
-------------------------------------------------------------------------------
Current income tax expense:
     Federal                                      $ 1,451    $   815    $   278
     State                                            199        178         94
-------------------------------------------------------------------------------
                                                    1,650        993        372
-------------------------------------------------------------------------------

Deferred income tax expense (benefit)
     Federal                                         (145)      (185)       (30)
     State                                            (44)       (30)       (20)
-------------------------------------------------------------------------------
                                                     (189)      (215)       (50)
-------------------------------------------------------------------------------
                                                  $ 1,461    $   778    $   322
===============================================================================

A reconciliation between the reported income taxes and income taxes which would
be computed by applying the normal federal income tax rate of 34% to income
before taxes follows (in thousands):

<TABLE>
<CAPTION>
                                                         2005        2004       2003
-------------------------------------------------------------------------------------
<S>                                                    <C>         <C>        <C>
Federal income tax                                     $ 1,392     $   679    $   273
State income tax effect, net of federal tax effect         102          97         48
Bank-owned life insurance                                  (38)         --         --
Meals and entertainment                                      4           2          3
Other                                                        1          --         (2)
-------------------------------------------------------------------------------------
Provision charged to expense                           $ 1,461     $   778    $   322
=====================================================================================
</TABLE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 2005 and
2004 are as follows (in thousands):

                                                              2005        2004
-------------------------------------------------------------------------------
Deferred tax assets:
Allowance for loan losses                                   $ 1,216     $   604
New Jersey NOL carry forwards                                    20           5
Allowance for uncollected interest                               25          20
Unrealized loss - securities available for sale               1,292         390
Net purchase accounting adjustments                              41          --
Software amortization                                             7          --
Other                                                             4          --
-------------------------------------------------------------------------------
Gross deferred tax asset                                      2,605       1,019
Less: valuation reserve                                         (20)         (5)
-------------------------------------------------------------------------------
Deferred tax assets, net                                      2,585       1,014
-------------------------------------------------------------------------------

Deferred tax liabilities:
Deferred loan costs                                              26          39
Depreciation                                                     87          33
Discount accretion                                                4           2
Accrual to cash adjustment                                      141         136
-------------------------------------------------------------------------------
Gross deferred tax liabilities                                  258         210
-------------------------------------------------------------------------------
Net deferred tax assets                                     $ 2,327     $   804
===============================================================================


                                      F-24
<PAGE>

Based upon current facts concerning taxes paid in the carryback period and
projections of future taxable income, management has determined that it is more
likely than not that the deferred tax assets will be realized, except for
certain New Jersey net operating losses by Central Jersey Bancorp, and
management has reserved against these deferred tax assets. However, there can be
no assurances about the level of future earnings.

(10) Commitments and Contingencies

At December 31, 2005, the Company was obligated under non-cancelable lease
agreements for 12 premises. The leases provide for increased rentals based upon
increases in real estate taxes and the cost of living index. Minimum rental
payments under the terms of these leases are as follows (in thousands):

                  2006                         $  777
                  2007                            722
                  2008                            626
                  2009                            502
                  2010                            287
                  2011 and thereafter             417
                  -----------------------------------
                  Total                        $3,331
                  ===================================

Total rent expense was $758, $335 and $316 in 2005, 2004 and 2003, respectively.

Litigation

Central Jersey Bank N.A. may, in the ordinary course of business, become a party
to litigation involving collection matters, contract claims and other legal
proceedings relating to the conduct of its business. Central Jersey Bank N.A.
may also have various commitments and contingent liabilities which are not
reflected in the accompanying consolidated balance sheets. Management is not
aware of any present legal proceedings or contingent liabilities and commitments
that would have a material impact on Central Jersey Bank N.A.'s financial
position or results of operations.

Related Party Transactions

The Company leases administrative office space at 6 West End Court, Long Branch,
New Jersey. Certain members of the board of directors of the Company hold an
ownership interest in the leased property. The negotiations with respect to the
leased space were conducted at arms-length and the lease amount to be paid by
Central Jersey Bank N.A. was determined by an independent appraiser to be at
fair market value. Total lease payments for 2005, 2004 and 2003 were $55, $26
and $24, respectively.

(11) Regulatory Matters

Subject to applicable law, the board of directors of Central Jersey Bank, N.A.
may provide for the payment of cash dividends. Prior approval of the OCC is
required to the extent that the total of all cash dividends to be declared by
Central Jersey Bank, N.A. in any calendar year exceeds


                                      F-25
<PAGE>

net profits, as defined, for that year combined with its retained net profits
from the preceding two calendar years less any transfers to capital surplus.

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

The prompt corrective action regulations define specific capital categories
based on an institution's capital ratios. The capital categories, in declining
order, are "well capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized" and "critically undercapitalized." An
institution categorized as "undercapitalized" or worse are subject to certain
restrictions, including the requirement to file a capital plan with its primary
federal regulator, prohibitions on the payment of dividends and management fees,
restrictions on asset growth and executive compensation and increased
supervisory monitoring, among other things. Other restrictions may be imposed on
the institution by the applicable regulatory agencies, including requirements to
raise additional capital, sell assets or sell the entire institution. Once an
institution becomes "critically undercapitalized," it must generally be placed
in receivership or conservatorship within ninety days. An institution is deemed
to be "critically undercapitalized" if it has a tangible equity ratio, as
defined, of 2% or less.

To be considered "well capitalized," an institution must generally have a
leverage ratio (Tier 1 capital to total assets) of at least 5%, a Tier 1
risk-based capital ratio of at least 6%, and a total risk-based capital ratio of
at least 10%. Management believes that, as of December 31, 2005, Central Jersey
Bank, N.A. and Central Jersey Bancorp meet all capital adequacy requirements of
their regulators. Further, the most recent regulatory notification categorized
Central Jersey Bank, N.A. and Central Jersey Bancorp as well-capitalized under
the prompt corrective action regulations.

The following is a summary of Central Jersey Bank, N.A.'s and Central Jersey
Bancorp's actual capital amounts and ratios as of December 31, 2005 and 2004,
compared to the minimum capital adequacy requirements and the requirements for
classification as a "well-capitalized" institution (dollars in thousands):


                                      F-26
<PAGE>

<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
                                        2005        2004        2005        2004        2005        2004
                                      --------------------------------------------------------------------
<S>                                       <C>         <C>        <C>         <C>         <C>         <C>
Central Jersey Bank N.A                   7.85%       8.23%      10.57%      12.82%      11.48%      13.82%

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

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

<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
                                        2005        2004        2005        2004        2005        2004
                                      --------------------------------------------------------------------
<S>                                   <C>         <C>         <C>         <C>         <C>         <C>
Central Jersey Bank N.A               $ 36,895    $ 21,085    $ 36,895    $ 21,085    $ 40,070    $ 22,723

(e) "Adequately capitalized"
institution (under federal
regulations)                            10,248      10,248       6,578       6,578      13,156      13,156

(f) "Well capitalized" institution
(under federal regulations)             12,810      12,810       9,867       9,867      16,445      16,445
</TABLE>


                                      F-27
<PAGE>

<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
                                        2005        2004        2005        2004        2005        2004
                                      --------------------------------------------------------------------
<S>                                       <C>         <C>        <C>         <C>         <C>         <C>
Central Jersey Bancorp                    7.60%       8.15%      10.15%      12.70%      11.05%      13.70%

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

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

<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
                                        2005        2004        2005        2004        2005        2004
                                      --------------------------------------------------------------------
<S>                                   <C>         <C>         <C>         <C>         <C>         <C>
Central Jersey Bancorp                $ 35,779    $ 20,892    $ 35,779    $ 20,892    $ 38,954    $ 22,530

(i) "Adequately capitalized"
institution (under federal
regulations)                            10,251      10,251       6,579       6,579      13,157      13,157

(j) "Well capitalized" institution
(under federal regulations)             12,814      12,814       9,868       9,868      16,447      16,447
</TABLE>

(12) Stock Option Plan

In 2000, the Company established an Employee and Director Stock Option Plan (the
"Plan"). The Plan currently provides for the granting of stock options to
purchase in aggregate up to 1,389,148 shares of the Company's common stock,
subject to adjustment for certain dilutive events such as stock distributions.
During 2005, no options were granted and, during 2004, 115,200 and options were
granted to directors of the Company. The options vest over a period of four
years. Effective January 1, 2005, as a result of the combination with Allaire
Community Bank, all outstanding options granted under the Plan have become fully
vested.

In addition, as a result of the combination with Allaire Community Bank, options
to purchase 727,192 shares of Allaire Community Bank common stock were converted
into options to purchase 727,192 shares of Central Jersey Bancorp common stock,
all of which are fully vested.


                                      F-28
<PAGE>

A summary of the status of the Company's stock options as of and for the years
ended December 31, 2005, 2004 and 2003 is presented below:

<TABLE>
<CAPTION>
                                                2005                     2004                     2003
---------------------------------------------------------------------------------------------------------------
                                                     Weighted                 Weighted                 Weighted
                                                     average                  average                  average
                                                     exercise                 exercise                 exercise
                                         Shares       price       Shares       price       Shares       price
---------------------------------------------------------------------------------------------------------------
<S>                                     <C>           <C>          <C>         <C>          <C>         <C>
Outstanding at beginning of year          777,568     $ 6.84       666,698     $ 6.05       428,468     $ 4.39

---------------------------------------------------------------------------------------------------------------
Allaire Community Bank
     combination                          727,192       4.01            --         --            --         --

Granted                                        --         --       115,200      11.46       240,646       8.97

Forfeited                                    (824)      7.30        (3,808)      7.60        (2,272)      4.86

Exercised                                 (67,074)      3.93          (522)      4.56          (144)      3.68
==============================================================================================================

Outstanding at end of year              1,436,862       5.54       777,568       6.84       666,698       6.04
==============================================================================================================

Options exercisable at year end         1,436,862       5.54       385,160       4.92       254,526       4.15

Weighted average fair value of
   options granted during the year                    $   --                   $ 3.03                   $ 2.45
==============================================================================================================
</TABLE>


                                      F-29
<PAGE>

The following table summarizes information about stock options outstanding at
December 31, 2005:

                       Options Outstanding and Exercisable
                                December 31, 2005
--------------------------------------------------------------------------------
                                             Weighted              Weighted
                                             average                average
      Number                                remaining              exercise
   Outstanding        Exercisable        contractual life            price
--------------------------------------------------------------------------------
      93,714             93,714              40 Months              $ 3.43
      18,472             18,472              45 Months              $ 3.43
      14,221             14,221              46 Months              $ 3.43
      31,907             31,907              48 Months              $ 3.43
     162,808            162,808              53 Months              $ 3.15
      51,058             51,058              56 Months              $ 3.72
      62,672             62,672              61 Months              $ 3.96
     176,953            176,953              65 Months              $ 4.54
     100,860            100,860              67 Months              $ 4.42
       2,481              2,481              71 Months              $ 4.20
      11,644             11,644              72 Months              $ 4.35
      63,504             63,504              74 Months              $ 5.67
      12,913             12,913              76 Months              $ 3.93
         992                992              78 Months              $ 3.93
      88,144             88,144              79 Months              $ 4.42
     127,358            127,358              80 Months              $ 3.82
      60,096             60,096              84 Months              $ 6.17
      67,103             67,103              86 Months              $ 6.41
     174,762            174,762              95 Months              $10.20
     115,200            115,200              98 Months              $11.66
================================================================================
(13) Fair Value of Financial Instruments

The following fair value estimates, methods and assumptions were used to measure
the fair value of each class of financial instruments for which it is practical
to estimate such value:

Cash and Cash Equivalents

As cash and cash equivalents are short-term in nature, the carrying amount was
considered to be a reasonable estimate of fair value.

Securities

Securities were valued based upon quoted market prices, if available, to
determine fair value. If a quoted market price was not available, fair values
were estimated using quoted market prices for similar securities.


                                      F-30
<PAGE>

Loans and Loans Held for Sale

Fair values were estimated for portfolios of performing loans with similar
characteristics. For certain similar types of loans, such as residential
mortgages, fair value was estimated using the quoted market prices for
securities backed by similar loans, adjusted for differences in loan
characteristics. The fair value of other performing loan types was estimated by
discounting total future cash flows using market discount rates that reflect the
credit and interest rate risk inherent in the loan.

Commitments to Extend Credit

The majority of Central Jersey Bank, N.A.'s commitments to extend credit carry
current market rates if converted to loans. Therefore, the estimated fair value
is approximated by the recorded deferred fee amounts. Such amounts are
immaterial to the financial statements of the Company and, therefore, are not
separately disclosed.

Deposit Liabilities

The fair value of demand, savings, N.O.W. and money market deposits is the
amount payable on demand at December 31, 2005. The fair value of certificates of
deposit was based on the discounted value of contractual cash flows. The
discount rate was estimated utilizing the rates currently offered for deposits
of similar remaining maturities.

Subordinated Debentures

The fair value of the Subordinated Debentures is assumed to approximate book
value since the securities are variable rate.

Other Borrowings

The fair value of other borrowings are assumed to approximate book value since
the borrowings are variable rate.

Limitations

Fair value estimates were made at December 31, 2005 and 2004, based upon
pertinent market data and relevant information on each financial instrument.
These estimates do not include any premium or discount that could result from an
offer to sell the Company's entire holdings of a particular financial instrument
or category thereof at one time. Since no market exists for a substantial
portion of the Company's financial instruments, fair value estimates were
necessarily based on judgments with respect to future loss experience, current
economic conditions, risk assessments of various financial instruments involving
a myriad of individual borrowers, and other factors. Given the subjective nature
of these estimates, the uncertainties surrounding them and other matters of
significant judgment that must be applied, these fair value estimations cannot
be calculated with precision. Modifications in such assumptions could
meaningfully alter these estimates. Since these fair value approximations were
made solely for the balance sheet financial instruments at December 31, 2005 and
2004, no attempt was made to estimate the value of anticipated future business
or the value of non-financial statement assets or liabilities.


                                      F-31
<PAGE>

Furthermore, certain tax implications related to the realization of the
unrealized gains and losses could have a substantial impact on these fair value
estimates and have not been incorporated into the estimates.

The estimated fair values of the Company's financial instruments at December 31,
2005 and 2004 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                    2005                    2004
                                                    ----                    ----
                                             Book         Fair        Book        Fair
                                             value        value       value       value
                                             -----        -----       -----       -----
<S>                                         <C>         <C>         <C>         <C>
Financial Assets:
Cash and cash equivalents                   $ 21,228    $ 21,228    $ 18,594    $ 18,594

Federal funds sold                                --          --       9,425       9,425

Investment securities available for sale     111,175     111,175      73,668      73,668

Investment securities held to maturity        22,567      22,058      16,484      16,549

Loans, net                                   307,168     312,109     139,697     137,602

Loans held for sale                            3,127       3,232          --          --

Financial Liabilities:
Deposits                                     407,554     411,878     232,853     232,501

Other borrowings                              38,191      38,191          --          --

Subordinated debentures                     $  5,155    $  5,155    $  5,155    $  5,155
========================================================================================
</TABLE>


                                      F-32
<PAGE>

(14) Condensed Financial Statements of Central Jersey Bancorp (Central Jersey
Bancorp only)

The following information with respect to Central Jersey Bancorp (parent company
only) should be read in conjunction with the notes to the consolidated financial
statements (in thousands):

      Balance Sheets                                         2005        2004
      -------------------------------------------------------------------------
      Assets:
      Investment in subsidiary                             $ 67,204    $ 21,203
      -------------------------------------------------------------------------
           Total assets                                      67,204      21,203
      -------------------------------------------------------------------------

      Liabilities:
      Other liabilities                                         271         193
      Subordinated debentures                                 5,155       5,155
      -------------------------------------------------------------------------
           Total liabilities                                  5,426       5,348
      -------------------------------------------------------------------------

      Shareholders' Equity:
      Common stock                                               78          38
      Additional paid-in capital                             60,003      15,218
      Retained earnings                                       3,850       1,218
      Accumulated other comprehensive loss                   (2,153)       (619)
      -------------------------------------------------------------------------
           Total shareholders' equity                      $ 61,778    $ 15,855
      -------------------------------------------------------------------------

      -------------------------------------------------------------------------
           Total liabilities and shareholders' equity      $ 67,204    $ 21,203
      =========================================================================

<TABLE>
<CAPTION>
      Statements of Income                                2005       2004       2003
      -------------------------------------------------------------------------------
<S>                                                     <C>        <C>        <C>
      Equity in undistributed earnings of the bank
          subsidiary                                    $ 2,972    $ 1,411    $   482
      Interest expense on subordinated debt                (340)      (193)        --
      -------------------------------------------------------------------------------
      Net income                                        $ 2,632    $ 1,218    $   482
      ===============================================================================
</TABLE>


                                      F-33
<PAGE>

<TABLE>
<CAPTION>
          Statements of Cash Flows                                               2005          2004         2003
          ---------------------------------------------------------------------------------------------------------
<S>                                                                           <C>           <C>           <C>
          Cash Flow From Operating Activities
          ---------------------------------------------------------------------------------------------------------
          Net income                                                          $   2,632     $   1,218     $     482
          Less equity in undistributed earnings of the bank
            subsidiary                                                           (2,972)       (1,411)         (482)
          Increase in other liabilities                                              78           193            --
          ---------------------------------------------------------------------------------------------------------
          Net cash used in operating activities                                     (262)          --            --
          ---------------------------------------------------------------------------------------------------------

          ---------------------------------------------------------------------------------------------------------
          Cash Flow From Investing Activities
          ---------------------------------------------------------------------------------------------------------
          Capital contribution (to)/from bank subsidiary                             --             1             7
          Advance to subsidiary                                                      --        (5,155)           --
          ---------------------------------------------------------------------------------------------------------
          Net cash (used in) provided by investing activities                        --        (5,154)            7
          ---------------------------------------------------------------------------------------------------------

          ---------------------------------------------------------------------------------------------------------
          Cash Flow From Financing Activities
          ---------------------------------------------------------------------------------------------------------
          Proceeds from issuance of common stock, net                               262             3             1

          Fractional shares paid in cash                                             --            (4)           (8)
          Proceeds from issuance of subordinated debt                                --         5,155            --

          ---------------------------------------------------------------------------------------------------------
          Net cash provided by (used in) financing activities                        --         5,154            (7)
          ---------------------------------------------------------------------------------------------------------

          ---------------------------------------------------------------------------------------------------------
          Cash and cash equivalents at beginning of period                           --            --            --
          ---------------------------------------------------------------------------------------------------------
          Cash and cash equivalents at the end of period                      $      --     $      --     $      --
          =========================================================================================================

Non cash investing activities:
     Fair value of assets acquired in Allaire Community Bank combination      $ 201,820     $      --     $      --
     Goodwill and core deposit intangible resulting from Allaire Community
      Bank combination                                                        $  31,014     $      --     $      --
     Liabilities assumed in Allaire Community Bank combination                $ 186,528     $      --     $      --
     Common stock issued for Allaire Community Bank combination               $  39,803     $      --     $      --
</TABLE>

(15) Recent Accounting Pronouncements

Financial Accounting Standards Board (the "FASB") Statement No. 123 (revised
2004) ("Statement 123(R)") addresses the accounting for share-based payment
transactions in which an enterprise receives employee services in exchange for
(a) equity instruments of the enterprise or (b) liabilities that are based on
the fair value of the enterprise's equity instruments or that nay be settled by
the issuance of such equity instruments. Statement 123(R) requires an entity to
recognize the grant date fair value of stock options and other equity-based
compensation issued to employees in the income statement. Statement 123(R) also
generally requires that an entity account for those transactions using the
fair-value-based method, and eliminates an entity's ability to account for
share-based compensation transactions using the intrinsic value method of
accounting in APB Opinion No. 25, Accounting for Stock Issued to Employees,
which was permitted under Statement 123, as originally issued. The revised
Statement 123(R) requires entities to disclose information needed about the
nature of the share-based payment transactions and the effects of those
transactions on the financial statements. Statement 123(R) is affective


                                      F-34
<PAGE>

for the Company beginning January 1, 2006. The Company must use either the
modified prospective or the modified retrospective transition method. The
adoption of Statement 123(R) will cause the Company to recognize additional
expense based upon the grant date fair value of each stock option. Management
does not anticipate the adoption of Statement 123(R) to have a material impact
on Central Jersey Bancorp's consolidated financial statements.

FASB Staff Position No. FAS 115-1 and FAS 124-1, The Meaning of
Other-Than-Temporary Impairment and its Application to Certain Investments (the
"FSP"), was issued on November 3, 2005 and addresses the determination of when
an investment is considered impaired; whether the impairment is other than
temporary, and how to measure an impairment loss. The FSP also addresses
accounting considerations subsequent to the recognition of an
other-than-temporary impairment on a debt security, and requires certain
disclosures about unrealized losses that have not been recognized as
other-than-temporary impairments. The FSP replaces the impairment guidance in
ETTF issue No. 03-1 with references to existing authoritative literature
concerning other-than-temporary determinations (principally SFAS No. 115 and SEC
Staff Accounting Bulletin 58). Under the FSP, impairment losses must be
recognized in earnings equal to the entire difference between the security's
cost and its fair value at the financial statement date, without considering
partial recoveries subsequent to that date. The FSP also requires that an
investor recognizes an other-than-temporary impairment loss when a decision to
sell a security has been made and the investor does not expect the fair value of
the security to fully recover prior to the expected time of sale. The FSP is
effective for reporting periods beginning after December 15, 2005. The Company
does not expect that the application of the FSP will have a material impact on
its financial condition, results of operations or financial statement
disclosures.

In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error
Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS
No. 154 requires retroactive application to prior period's financial statements
of a voluntary change in accounting principle unless it is impracticable. SFAS
No. 154 is effective for accounting changes and corrections of errors made in
fiscal years beginning after December 15, 2006, with earlier application
permitted to accounting changes and corrections of errors made in fiscal years
beginning after May 31, 2005.


                                      F-35
<PAGE>

(16) Selected Quarterly Financial Data (Unaudited)

The following tables are a summary of certain quarterly financial data for the
years ended December 31, 2005 and 2004.

<TABLE>
<CAPTION>
                                                            2005 Quarter Ended
                                       ------------------------------------------------------------
                                         March 31        June 30       September 30    December 31
                                       ------------    ------------    ------------    ------------
                                               (dollars in thousands, except per share data)
<S>                                    <C>             <C>             <C>             <C>
Interest income                        $      5,815    $      6,060    $      6,311    $      6,793
Interest expense                              1,479           1,706           1,981           2,288
                                       ------------    ------------    ------------    ------------

      Net interest income                     4,336           4,354           4,330           4,505
Provision for loan losses                       100              79              36             212
                                       ------------    ------------    ------------    ------------

      Net interest income after
          provision for loan losses           4,236           4,275           4,294           4,293

Non-interest income                             345             369             423             408
Non-interest expense                          3,626           3,689           3,703           3,532
                                       ------------    ------------    ------------    ------------

Income before income taxes                      955             955           1,014           1,169
      Income taxes                              345             345             361             410
                                       ------------    ------------    ------------    ------------
Net income                             $        610    $        610    $        653    $        759
                                       ============    ============    ============    ============

Earnings per share:

Basic                                  $       0.08    $       0.08    $       0.08    $       0.10
                                       ============    ============    ============    ============

Diluted                                $       0.07    $       0.07    $       0.08    $       0.09
                                       ============    ============    ============    ============

Weighted average shares
    outstanding:

Basic                                     7,726,268       7,745,137       7,764,509       7,779,471
                                       ============    ============    ============    ============
Diluted                                   8,458,946       8,459,631       8,623,630       8,442,312
                                       ============    ============    ============    ============
</TABLE>


                                      F-36
<PAGE>

<TABLE>
<CAPTION>
                                                           2004 Quarter Ended
                                       ------------------------------------------------------------
                                         March 31        June 30       September 30    December 31
                                       ------------    ------------    ------------    ------------
                                               (dollars in thousands, except per share data)
<S>                                    <C>             <C>             <C>             <C>
Interest income                        $      2,647    $      2,801    $      2,962    $      3,141
Interest expense                                613             697             819             917
                                       ------------    ------------    ------------    ------------

      Net interest income                     2,034           2,104           2,143           2,224
Provision for loan losses                        50              78              60              72
                                       ------------    ------------    ------------    ------------

      Net interest income after
          provision for loan losses           1,984           2,026           2,083           2,152

Non-interest income                             181             231             227             210
Non-interest expense                          1,671           1,760           1,808           1,859
                                       ------------    ------------    ------------    ------------

Income before income taxes                      494             497             502             503
      Income taxes                              200             181             203             194
                                       ------------    ------------    ------------    ------------
Net income                             $        294    $        316    $        299    $        309
                                       ============    ============    ============    ============

Earnings per share:

Basic                                  $       0.08    $       0.09    $       0.08    $       0.08
                                       ============    ============    ============    ============

Diluted                                $       0.08    $       0.07    $       0.08    $       0.08
                                       ============    ============    ============    ============

Weighted average shares
    outstanding:

Basic                                     3,721,320       3,721,418       3,721,450       3,721,450
                                       ============    ============    ============    ============
Diluted                                   3,908,684       3,899,684       3,940,328       3,999,542
                                       ============    ============    ============    ============
</TABLE>


                                      F-37
<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


                                      E-1
<PAGE>

            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).

3.1         Certificate  of  Incorporation  of the  Registrant,  as amended  and
            restated on January 4, 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        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).

10.2        Services  Agreement between Monmouth Community Bank and Bisys, Inc.,
            dated  April 27,  1998,  with  Additional  Services  Agreements  and
            Addenda  (Incorporated by reference to Exhibit 10.7 to Amendment No.
            1  to  the   Registrant's   Registration   Statement  on  Form  SB-2
            (Registration No. 333-87352), effective July 23, 2002).

10.3        QuestPoint Check Services  Agreement between Monmouth Community Bank
            and  QuestPoint  Check  Services,  L.P.,  dated as of August 1, 1998
            (Incorporated by reference to Exhibit 10.8 to Amendment No. 1 to the
            Registrant's  Registration  Statement on Form SB-2 (Registration No.
            333-87352), effective July 23, 2002).

10.4        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).


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10.5        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).

10.6        Guarantee  Agreement by Registrant  and  Wilmington  Trust  Company,
            dated March 25, 2004 (Incorporated by reference to Exhibit 12 to the
            Registrant's  Annual  Report  on  Form  10-KSB  for the  year  ended
            December 31, 2003).

10.7*       Change of Control  Agreement,  dated as of January 1, 2005,  between
            the  Registrant  and Robert S. Vuono  (Incorporated  by reference to
            Exhibit 10.7 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 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).

10.9*       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).

14.1        Chief  Executive  and  Senior  Financial   Officer  Code  of  Ethics
            (Incorporated  by  reference  to  Exhibit  14.1 to the  Registrant's
            Annual Report on Form 10-KSB for the year ended December 31, 2003).

21.1        Subsidiaries of the Registrant.

23.1        Consent of KPMG LLP, as to the Registrant's  consolidated  financial
            statements for the years ended December 31, 2005, 2004 and 2003.

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.

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*Constitutes a management contract.


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