UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                   FORM 10-KSB

(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, 2004

      |_|   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
--------------------------------------------------------------------------------
                 (Name of small business issuer 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)

      Issuer's telephone number: (732) 571-1300

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

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

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

      Check  whether  the issuer (1) filed all  reports  required to be filed by
Section 13 or 15(d) of the  Exchange  Act during the past 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
|_|

      Check if there is no disclosure  of delinquent  filers in response to Item
405 of  Regulation  S-B  contained  in  this  form,  and no  disclosure  will be
contained, to the best of the Registrant's


<PAGE>

knowledge,  in  definitive  proxy  or  information  statements  incorporated  by
reference in Part III of this Form 10-KSB or any  amendment to this Form 10-KSB.
|X|

      Revenues for the year ended December 31, 2004: $12.4 million

      The aggregate market value of the shares of the Registrant's common stock,
par value $0.01 per share, held by non-affiliates of the Registrant, as of March
11, 2005, was $96.0 million.  The Registrant has no other class of capital stock
outstanding.

      As of March 11, 2005,  3,867,350 shares of the  Registrant's  common stock
were outstanding.

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

      Part  III of this  Annual  Report  on  Form  10-KSB  incorporates  certain
information by reference from the  Registrant's  Proxy  Statement for the Annual
Meeting  of  Shareholders  scheduled  to be  held  on May 26,  2005.  The  Proxy
Statement will be filed with the Securities and Exchange Commission by April 30,
2005.

      Transitional Small Business Disclosure Format (check one): Yes |_| No |X|

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

      Certain  information  included  in this  Annual  Report on Form 10-KSB 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 Monmouth  Community Bank,  National  Association,  a
nationally  chartered  commercial  bank  and  wholly-owned   subsidiary  of  the
Registrant,  and Allaire Community Bank, a New Jersey  state-chartered  bank and
wholly-owned subsidiary of the Registrant,  the availability of working capital,
the cost of personnel and the  competitive  markets in which Monmouth  Community
Bank and Allaire Community Bank operate.

      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-KSB.


<PAGE>

                             CENTRAL JERSEY BANCORP

                              INDEX TO FORM 10-KSB
                              --------------------

PART I                                                                      PAGE
------                                                                      ----

Item 1.    Description of Business.............................................1

Item 2.    Description of Property............................................14

Item 3.    Legal Proceedings..................................................15

Item 4.    Submission of Matters to a Vote of Security Holders................15

PART II
-------

Item 5.    Market for Common Equity, Related Stockholder Matters
           and Small Business Issuer Purchases of Equity Securities...........16

Item 6.    Management's Discussion and Analysis or Plan of Operation..........17

Item 7.    Financial Statements...............................................37

Item 8.    Changes In and Disagreements With Accountants on Accounting
           and Financial Disclosure...........................................37

Item 8A.   Controls and Procedures............................................37

PART III
--------

Item 9.*   Directors, Executive Officers, Promoters and Control Persons;
           Compliance With Section 16(a) of the Exchange Act..................38

Item 10.*  Executive Compensation.............................................38

Item 11.*  Security Ownership of Certain Beneficial Owners and Management
           and Related Stockholder Matters....................................38

Item 12.*  Certain Relationships and Related Transactions.....................38

Item 13.   Exhibits and Reports on Form 8-K...................................38

Item 14.*  Principal Accountant Fees and Services.............................39

Signatures....................................................................40

*     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 26, 2005, and is incorporated  herein by reference.  The Proxy
      Statement  will be filed with the  Securities  and Exchange  Commission by
      April 30, 2005.

<PAGE>

                                     PART I

Item 1.     Description of Business
            -----------------------

Business Development

      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 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,  1,996,140  shares of common stock of Central  Jersey  Bancorp are
being issued to the stockholders of Allaire Community Bank, which will result in
the total number of  outstanding  shares of Central  Jersey Bancorp common stock
being approximately 3,856,865 shares.

      Through  its  bank  subsidiaries,  Monmouth  Community  Bank  and  Allaire
Community  Bank,  Central  Jersey  Bancorp  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.  The bank  subsidiaries have debit
card,  merchant card and  international  services  available to their  customers
through  correspondent  institutions.   The  bank  subsidiaries  currently  have
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.

      Monmouth Community Bank is a national association  chartered by the Office
of the  Comptroller  of the  Currency  ("OCC") and Allaire  Community  Bank is a
commercial  bank  organized  under  the  laws of the  State of New  Jersey.  The
deposits of both bank  subsidiaries are insured by the Federal Deposit Insurance
Corporation  ("FDIC").  As community  banks,  both Monmouth  Community  Bank and
Allaire Community Bank provide a broad range of financial  products and services
to individual  consumers,  small  businesses and  professionals in the market to
which they serve. When a customer's loan requirements exceed a bank subsidiary's
lending  limit,  the bank  subsidiary  seeks to first arrange such loan with the
other bank  subsidiary and then may seek to arrange such loan on a participation
basis with other  financial  institutions.  In addition,  the bank  subsidiaries
participate in loans originated by other financial institutions.

      In  2005,   Central  Jersey  Bancorp  intends  to  combine  its  two  bank
subsidiaries,  Monmouth Community Bank and Allaire Community Bank, into a single
banking entity, to be named Central Jersey Bank, N.A.


                                       1
<PAGE>

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, at convenient  operating hours, with a commitment to
prompt,  quality and highly  personalized  service,  which is 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
Bancorp's  bank  subsidiaries.  Management  believes there is a need for a local
bank to provide personalized service that is responsive to local community needs
and managed by experienced personnel.

Market Area

      At March 11, 2005, the bank subsidiaries  operated  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.  Each
branch  location  provides  a great deal of  exposure  and is  well-situated  to
provide  convenient  services  to  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, Monmouth University and Fort Monmouth.

Services Offered

      Each of Central Jersey Bancorp's bank  subsidiaries 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,  the bank  subsidiaries
provide  a broad  array of  consumer  banking  services  to the  general  public
residing or working in the market area to which they serve.

Deposits. In order to attract and retain stable deposit relationships with small
businesses,   the  bank  subsidiaries  offer  competitive  small  business  cash
management  services.  We  believe  that the  expertise  and  experience  of our
management  coupled with the latest technology  enables the bank subsidiaries to
maximize the growth of business related deposits. As for consumers,  the primary
deposit  services of the bank  subsidiaries  are  comprised of demand  deposits,
savings  deposits  (including  money  markets),  time  deposits  and  individual
retirement accounts.

Loans. Our 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 to the loan


                                       2
<PAGE>

committees of the bank subsidiaries with prospective local borrowers enables our
bank   subsidiaries   to  better   evaluate   the   character,   integrity   and
creditworthiness of prospective borrowers.

Residential  Mortgage  Loans.  In order to  effectively  penetrate  the mortgage
market, the bank subsidiaries offer through one or more third parties a range of
residential mortgage products at competitive rates. 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. The bank subsidiaries originate various
types of loans secured with real estate,  including construction loans. The bank
subsidiaries' 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, one of the bank  subsidiaries may
originate loans larger than its lending or policy limits and participates  these
loans with the other bank subsidiary or other financial institutions.

Consumer  Lending.  The bank subsidiaries  offer retail customers  consumer loan
services  including  secured and unsecured  personal  loans,  home equity loans,
lines of credit and auto loans.

Small  Business  Loans.  The bank  subsidiaries  target  businesses  with annual
revenues of less than  $25,000,000.  Often,  these businesses are ignored by the
larger lending  institutions  and have  experienced the most negative effects of
the recent bank  consolidations.  The bank  subsidiaries  offer  responsiveness,
flexibility and local  decision-making  for loan  applications of small business
owners,  thereby  eliminating  the delays  generally  associated  with non-local
management.  The  bank  subsidiaries  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 independent
community banks,  Monmouth  Community Bank and Allaire  Community Bank serve 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,  the bank
subsidiaries  provide  the  standard  array of  financial  services  expected of
community  banks  including:  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.  Monmouth  Community Bank and Allaire  Community Bank offer a
variety  of  personal  and  business  credit  cards.   These  credit  cards  are
underwritten  and  managed  by one or  more  third  party  unaffiliated  banking
organizations.  Each subsidiary bank 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.  We compete 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.  Our  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 our bank  subsidiaries,
which are located within or near the market area served by us.

      Our larger  competitors have a greater ability than our bank  subsidiaries
to finance wide ranging  advertising  campaigns  through their  greater  capital
resources.  Marketing  efforts to  introduce  prospective  customers to our bank
subsidiaries depend heavily upon referrals from our board of directors, advisory
boards,  management and shareholders,  selective  advertising in local media and
direct  mail   solicitations.   Our  bank  subsidiaries   compete  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

      As of the date of March  11,  2005,  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), Richard O. Lindsey (Executive
Vice President and Chief Lending Officer) and Anthony  Giordano,  III (Executive
Vice President,  Chief Financial Officer, Treasurer and Assistant Secretary) are
the executive officers of the holding company,  Central Jersey Bancorp,  and its
banking subsidiaries, Monmouth Community Bank and Allaire Community Bank. Except
for Mr.  Chirico,  Mr. Vuono and Robert K. Wallace  (Executive Vice President of
Lending, none of the officers of Central Jersey Bancorp, Monmouth Community Bank
or  Allaire   Community  Bank  has  an  employment   agreement.   Including  the
aforementioned  officers,  Central Jersey Bancorp,  Monmouth  Community Bank and
Allaire Community Bank have a total of 166 employees, 129 of whom are full-time.


                                       4
<PAGE>

Holding Company Operations

      Central Jersey Bancorp serves as a holding company for Monmouth  Community
Bank  and  Allaire  Community  Bank.  The  holding  company  has  no  assets  or
liabilities  other than its  investment in Monmouth  Community  Bank and Allaire
Community  Bank.  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  subsidiaries.  In
addition,  in March 2004,  Central Jersey Bancorp formed MCBK Capital Trust I, a
Delaware statutory business trust and a wholly-owned,  unconsolidated subsidiary
of the holding  company.  See Item 6.  "Management's  Discussion and Analysis or
Plan of  Operation -  Guaranteed  Preferred  Beneficial  Interest in the Holding
Company's  Subordinated  Debt." Moreover,  on March 9, 2004,  Monmouth Community
Bank formed MCB Investment  Company,  a New Jersey  corporation and wholly-owned
subsidiary of Monmouth  Community  Bank. For state tax purposes,  MCB Investment
Company  was formed to hold and  invest in  securities  in  support of  Monmouth
Community  Bank.  Further,  on January 10, 2001,  Allaire  Community Bank formed
Allaire  Investment  Co.,  Inc.,  a  New  Jersey  corporation  and  wholly-owned
subsidiary  of Allaire  Community  Bank,  for the same  purposes  that  Monmouth
Community Bank formed MCB Investment Company.

      In 2005, Central Jersey Bancorp intends to combine Monmouth Community Bank
and Allaire  Community  Bank into a single banking  entity,  to be named Central
Jersey Bank,  N.A.  Central  Jersey  Bancorp also intends to combine the two New
Jersey investment subsidiaries.

Government Regulation

      Each of Central Jersey Bancorp, Monmouth Community Bank and Allaire
Community Bank 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, Monmouth Community Bank and Allaire
Community Bank. In addition, Central Jersey Bancorp is subject to general
federal laws and regulations and the corporate laws and regulations of the state
of its incorporation, New Jersey. Allaire Community Bank, a New Jersey
state-chartered bank, is also subject to The New Jersey Banking Act of 1948, as
amended. The following descriptions summarize the key banking and other laws and
regulations to which Central Jersey Bancorp, Monmouth Community Bank and Allaire
Community Bank 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. 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, Monmouth Community Bank and Allaire Community
Bank.

      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


                                       5
<PAGE>

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 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.

      Monmouth Community Bank, one of the banking subsidiaries 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,
Monmouth Community Bank 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. Allaire Community Bank, the
other banking subsidiary of Central Jersey Bancorp, is a commercial bank
chartered under the laws of the State of New Jersey. It is subject to
regulation, supervision and examination by the New Jersey Department of Banking
and Insurance and by the FDIC. Each of these agencies regulates aspects of
activities conducted by Central Jersey Bancorp, Monmouth Community Bank and
Allaire Community Bank, as discussed below.

Dividend Restrictions

      Central Jersey Bancorp, Monmouth Community Bank and Allaire Community Bank
are separate legal entities whose finances are in some ways interconnected.
Central Jersey Bancorp's principal source of funds to pay cash dividends on its
common stock is from cash dividends paid to it by Monmouth Community Bank and
Allaire Community Bank. As a national bank, Monmouth Community Bank must obtain
prior approval from the OCC to pay a cash dividend if the total of all cash
dividends declared by Monmouth Community Bank in any calendar year would exceed
Monmouth Community Bank'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, Monmouth Community Bank 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. Dividend payments by Allaire
Community Bank to Central Jersey Bancorp are subject to The New Jersey Banking
Act of 1948 and the Federal Deposit Insurance Act, as amended. Under The New
Jersey Banking Act of 1948, as amended, no dividends may be paid if after such
payment Allaire Community Bank's surplus (generally, additional paid-in capital
less the accumulated deficit) would be less than 50% of its capital stock.

      The Federal Reserve Board and the OCC have issued additional guidelines
and policy statements, applicable to Central Jersey Bancorp and Monmouth
Community Bank, requiring bank holding companies and national banks to
continually evaluate the level of cash dividends


                                       6
<PAGE>

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 insured depository institutions, Monmouth Community Bank and Allaire
Community Bank are each 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 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.

      Neither Monmouth Community Bank nor Allaire Community Bank has ever
declared any cash dividends and neither entity contemplates the payment of such
dividends in 2005.

Transactions with Affiliates

      Banking laws and regulations impose certain restrictions on the ability of
bank holding companies 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. As a Federal Reserve member bank, Monmouth Community
Bank must comply with regulations which restrict loans made to Central Jersey
Bancorp and Monmouth Community Bank's directors and executive officers.

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 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.


                                       7
<PAGE>

Deposit Insurance

      The Bank Insurance Fund of the FDIC insures substantially all of the
deposits of Monmouth Community Bank and Allaire Community Bank, respectively,
subject to limits of $100,000 for each insured depositor. Insurance of deposits
by the FDIC subjects Monmouth Community Bank and Allaire Community Bank to
comprehensive regulation, supervision and examination by the FDIC. Monmouth
Community Bank and Allaire Community Bank are required, among other things, to
pay premium charges to the FDIC for insurance and maintain a reserve account and
liquid assets at levels fixed, from time to time, by the FDIC.

      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, the OCC and the FDIC 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


                                       8
<PAGE>

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 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, 2004, Central Jersey Bancorp's ratios of Total Capital and Tier 1
Capital to risk-weighted assets were 13.70% and 12.70%, 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, 2004, Central
Jersey Bancorp's leverage ratio was 8.15%. Monmouth Community Bank is subject to
similar risk-based and leverage capital guidelines, as adopted by the OCC.

      Allaire Community Bank's primary federal regulator, the FDIC, also has
implemented risk-based capital guidelines for insured depository institutions.
Like the Federal Reserve Board's requirements, the FDIC's required minimum ratio
of total capital to risk-weighted assets is 8.0%. At least half of the total
capital is required to be Tier I Capital. The required minimum ratio of Tier I
Capital to risk-weighted assets is 4%. At December 31, 2004, Allaire Community
Bank's ratios of Total Capital and Tier 1 Capital to risk-weighted assets were
12.22% and 11.36%, respectively.

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, Monmouth Community Bank and Allaire Community Bank must meet
specific capital guidelines that involve quantitative measures of their
respective 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


                                       9
<PAGE>

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 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, 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, 2004, Monmouth Community Bank and Allaire Community Bank
were each "well capitalized" based on the ratios and guidelines noted above.
However, the capital categories of these banks are determined solely for the
purpose of applying the Prompt Corrective Action Regulations and may not
constitute an accurate representation of their overall financial condition or
prospects.


                                       10
<PAGE>

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 unsound, or if it deems the institution to be engaging in an unsafe or
unsound practice. Also, if a federal regulatory agency with jurisdiction over a
depository institution believes that the depository institution will engage, is
engaging, or has engaged in an unsafe or unsound practice, the regulator may
require that the bank cease and desist from such practice, following notice and
a hearing on the matter.

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
Monmouth Community Bank and Allaire Community Bank. 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 Monmouth Community Bank, dated November 10, 2003, Monmouth
Community Bank received a rating of satisfactory. In the latest CRA examination
report with respect to Allaire Community Bank, dated June 15, 2004, Allaire
Community Bank received a rating of satisfactory.


                                       11
<PAGE>

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, Monmouth Community Bank and Allaire Community
Bank, 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.

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 are 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.


                                       12
<PAGE>

      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;

      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, Monmouth Community Bank and Allaire
Community Bank 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  Monmouth  Community  Bank 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.


                                       13
<PAGE>

Item 2.     Description of Property
            -----------------------

Bank Buildings

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

      Monmouth  Community Bank also leases office space 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

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

      The main office of Allaire Community Bank is located in the Township of
Sea Girt, New Jersey at 2200 Route 35. On September 27, 2001, Allaire Community
Bank purchased the land and building of this branch.

      Allaire Community Bank also leases office space at the following branch
locations:

            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.

            o     611 Main Street, Belmar, New Jersey.

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


                                       14
<PAGE>

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

      There  are  no  material  legal,  governmental,  administrative  or  other
proceedings  pending against Central Jersey Bancorp,  Monmouth Community Bank or
Allaire Community Bank, or to which Central Jersey Bancorp,  Monmouth  Community
Bank or Allaire Community Bank 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
            ---------------------------------------------------

      On December 16, 2004,  Central  Jersey  Bancorp held a special  meeting of
shareholders for purposes of acting upon the proposal to approve the combination
of Central Jersey  Bancorp and Allaire  Community  Bank as  contemplated  in the
Agreement and Plan of  Acquisition,  dated as of June 30, 2004,  between Central
Jersey Bancorp and Allaire  Community Bank. See "Item 1. Description of Business
- Business Development." 1,194,719 shares of Central Jersey Bancorp common stock
were voted for the combination proposal,  2,205 shares of Central Jersey Bancorp
common  stock were voted  against the  combination  proposal  and the holders of
6,228 shares of Central Jersey Bancorp common stock abstained from voting on the
combination proposal.


                                       15
<PAGE>

                                     PART II

Item 5.     Market for Common Equity, Related Stockholder Matters and Small
            ---------------------------------------------------------------
            Business Issuer Purchases of Equity Securities
            ----------------------------------------------

      The common stock of Central Jersey Bancorp  currently trades on the NASDAQ
SmallCap 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  SmallCap  Market for the period  commencing  May 12, 2003 through
December  31, 2004 and the NASDAQ OTC Bulletin  Board for the period  commencing
January 1, 2003 through May 11, 2003. 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  six-for-five  stock split  effected  July 15, 2004 and the 5% stock
distribution effected on December 31, 2003.

      Year Ended December 31, 2004                           High         Low
                                                           --------     --------
      First Quarter...................................      $24.79       $21.67
      Second Quarter..................................       24.77        20.00
      Third Quarter...................................       25.00        17.92
      Fourth Quarter..................................       34.05        23.23

      Year Ended December 31, 2003                           High         Low
                                                           --------     --------
      First Quarter...................................      $12.50       $11.75
      Second Quarter..................................       16.23        11.98
      Third Quarter...................................       16.98        15.08
      Fourth Quarter..................................       21.88        14.48

      As of March 11, 2005,  the following were market makers for Central Jersey
Bancorp's  common stock:  Ryan,  Beck & Co., LLC; Hill  Thompson;  Magid,  L.P.;
Sandler,  O' Neill & Partners,  L.P.;  Knight  Securities,  L.P.; Schwab Capital
Markets, L.P.; and The Brut ECN, LLC.

      As of March 11, 2005,  the  approximate  number of  registered  holders of
Central Jersey Bancorp's common stock was 832.

      Central Jersey Bancorp has not paid any cash dividends on its common stock
and does not intend to declare or pay cash dividends in the foreseeable  future.
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.


                                       16
<PAGE>

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

Item 6.     Management's Discussion and Analysis or Plan of Operation
            ---------------------------------------------------------

      The following  discussion and analysis is intended to provide  information
about Central Jersey Bancorp's financial condition and results of operations for
the years ended December 31, 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, 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 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.

      The following discussion and analysis and the audited financial statements
for the years ended  December  31, 2004 and 2003,  including  the related  notes
thereto,  except  for  Note  (2),  do  not  address  or  reflect  the  financial
performance  of  Allaire  Community  Bank.  Such  discussion  and  analysis  and
financial  statement  disclosure  only  addresses  and  reflects  the  financial
performance of Central Jersey Bancorp and Monmouth  Community Bank.  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 will be reflected in the  consolidated  financial  statements of
Central  Jersey  Bancorp,  including the  quarterly  report on Form 10-Q for the
three months ended March 31,  2005.  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, 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,  involves a high degree of  complexity  and requires  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 is periodically reviewed by Central Jersey Bancorp's audit committee
and board of directors.


                                       17
<PAGE>

Overview

      Net income from  operations  for the year ended December 31, 2004 was $1.2
million,  or $.65 per basic  share and $.62 per diluted  share,  compared to net
income of $482 thousand, or $.26 per basic share and $.25 per diluted share, for
the year ended  December 31, 2003. Per share earnings have been adjusted in both
periods to reflect the  six-for-five  stock split effected July 15, 2004 and the
5% stock  distribution  to the  shareholders  of Central  Jersey Bancorp paid on
December 31, 2003.

      Total  assets  of $254.1  million  at  December  31,  2004 were  comprised
primarily of $9.4 million in Federal  funds sold,  $90.1  million in  investment
securities,  $139.7  million in net loans and $9.2  million in cash and due from
banks,  compared to total assets of $222.6  million at December 31, 2003,  which
primarily  consisted of $4.7  million in Federal  funds sold,  $83.3  million in
investment securities plus an additional $5.0 million in securities due to other
banks,  $115.8 million in net loans and $9.7 million in cash and due from banks.
Total  assets at  December  31,  2004 were  funded  primarily  through  deposits
totaling $232.9 million,  a 12.4% increase over deposits totaling $207.2 million
at December 31, 2003.

      At the year ended  December  31,  2004,  non-accrual  loans  totaled  $128
thousand as compared to  non-accrual  loans  totaling  $40 thousand for the year
ended December 31, 2003. There were no loans ninety days or greater past due and
still  accruing  interest  at  December  31,  2004 or 2003.  There  were no loan
charge-offs in 2004 or 2003.

                                                              At or For the
                                                         Year ended December 31,
                                                         -----------------------

         Performance Ratios:                             2004              2003
                                                         ----              ----
             Return on average assets                    0.50%             0.24%
             Return on average shareholders' equity      7.93%             3.23%
             Shareholders' equity to total assets        6.24%             6.69%

Results of Operations

General

      Prior to January 1, 2005,  Central Jersey  Bancorp's  principal  source of
revenue was derived from Monmouth Community Bank'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 Monmouth  Community  Bank's  provision  for loan losses,  other
income and other expenses.  Other income  consists  primarily of service charges
and fees.  Other expenses consist  primarily of salaries and employee  benefits,
occupancy costs and other operating related expenses.


                                       18
<PAGE>

For the years ended December 31, 2004 and 2003

Net Interest Income

      Net interest  income for Monmouth  Community Bank 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  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,  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 and the proceeds from borrowed
funds. 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
15.9%  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.
Subordinated  debt and other  borrowings,  both of which had no average  balance
during 2003, averaged $3.9 million and $1.3 million,  respectively, for the year
ended December 31, 2004.


                                       19
<PAGE>

      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 expansion was due primarily to an increase in interest rates, as
measured by the Prime Rate of interest,  which  increased from 4.00% at December
31, 2003 to 5.25% at December  31, 2004,  through a series of five,  twenty-five
basis point rate increases during 2004. As Monmouth Community Bank 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, 2004, 2003 and 2002:

<TABLE>
<CAPTION>
   (dollars in thousands)               Year ended December 31, 2004   Year ended December 31, 2003   Year ended December 31, 2002
                                        ----------------------------   ----------------------------   ----------------------------

                                                            Average                        Average                        Average
                                         Average             Yield/     Average             Yield/     Average             Yield/
                                         Balance   Interest   Cost      Balance   Interest   Cost      Balance   Interest   Cost
                                        --------   -------  -------    --------   -------  -------    --------   -------  -------
<S>                                     <C>        <C>         <C>     <C>        <C>         <C>     <C>        <C>         <C>
Interest earning assets:
Federal funds sold                      $  6,167   $    80     1.30%   $ 11,976   $   105     0.88%   $ 15,484   $   222     1.43%
Loans receivable, gross                  129,706     8,206     6.33%     97,016     6,438     6.64%     77,347     5,568     7.20%
Deposits with banks                          589        34     5.77%        593        35     5.84%        535        32     5.92%
Securities                                93,945     3,231     3.44%     81,909     2,533     3.09%     50,914     2,453     4.82%
                                        --------   -------  -------    --------   -------  -------    --------   -------  -------
    Total interest earning assets        230,407    11,551     5.01%    191,494     9,111     4.76%    144,280     8,275     5.74%
Cash and due from banks                    9,454                          7,837                          6,435
Allowance for loan losses                 (1,496)                        (1,256)                        (1,036)
Other assets                               3,912                          3,144                          2,824
                                        --------                       --------                       --------
Total Assets                            $242,277                       $201,219                       $152,503
                                        ========                       ========                       ========

Interest bearing liabilities:

Interest bearing demand                 $ 56,795   $   668     1.18%   $ 47,581   $   553     1.16%   $ 42,274   $   796     1.88%
Money market                              39,689       479     1.21%     42,921       661     1.54%     27,322       707     2.59%
Savings                                   20,772       128     0.62%     18,232       116     0.64%     15,247       209     1.37%
Time                                      75,134     1,561     2.08%     51,542     1,282     2.49%     35,279     1,077     3.05%
                                        --------   -------  -------    --------   -------  -------    --------   -------  -------
    Total interest bearing deposits      192,390     2,836     1.47%    160,276     2,612     1.63%    120,122     2,789     2.32%
Other borrowings                           1,274        17     1.33%         --        --       --          --        --       --
Subordinated debentures                    3,866       193     4.99%         --        --       --          --        --       --
                                        --------   -------  -------    --------   -------  -------    --------   -------  -------
    Total interest-bearing liabilities   197,530     3,046     1.54%    160,276     2,612     1.63%    120,122     2,789     2.32%
Non-interest bearing demand               28,913                         25,554                         21,727
Other liabilities                            482                            488                            386
Shareholders' equity                      15,352                         14,901                         10,268
Total liabilities and shareholders'     --------                       --------                       --------
equity                                  $242,277                       $201,219                       $152,503
                                        ========                       ========                       ========

Net interest income                                $ 8,505                        $ 6,499                        $ 5,486
                                                   =======                        =======                        =======

Net interest rate spread(1)                                    3.47%                          3.13%                          3.42%

Net interest margin(2)                                         3.69%                          3.39%                          3.80%
</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.


                                       20
<PAGE>

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 Monmouth Community Bank'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  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, 2004        Year ended December 31, 2003
                                                     Compared to                         Compared to
                                            Year ended December 31, 2003        Year ended December 31, 2002
                                         ---------------------------------   ---------------------------------

                                          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                                  $  2,008    $   (240)   $  1,768    $  1,378    $   (508)   $    870
  Securities                                  396         303         699       1,157      (1,077)         80
  Other interest-bearing deposits              --          (1)         (1)          3          --           3
  Federal funds sold                          (63)         37         (26)        (43)        (74)       (117)
                                         --------------------------------    --------------------------------
   Total interest-earning assets            2,341          99       2,440       2,495      (1,659)        836

Interest Expense:
  Interest-bearing checking                   108           7         115          91        (334)       (243)
  Savings deposits                             16          (4)         12          35        (128)        (93)
  Money market deposits                       (47)       (135)       (182)        308        (354)        (46)
  Time deposits                               516        (237)        279         431        (226)        205
                                         --------------------------------    --------------------------------
Total interest-bearing deposits               593        (369)        224         865      (1,042)       (177)
  Other borrowings                             17          --          17          --          --          --
  Subordinated debentures                     193          --         193          --          --          --
                                         --------------------------------    --------------------------------
   Total interest-bearing liabilities         803        (369)        434         865      (1,042)       (177)
                                         --------------------------------    --------------------------------
Net interest income                      $  1,538    $    468    $  2,006    $  1,630    $   (617)   $  1,013
                                         ================================    ================================
</TABLE>

Provision for Loan Losses

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

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

Non-Interest Income

      Non-interest  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 8.9%.  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 on the  sale of  available  for


                                       21
<PAGE>

sale  securities  or loans held for sale for the year ended 2004 as  compared to
$76 thousand and $13 thousand, respectively, for the prior year.

Non-Interest Expense

      Non-interest expense includes,  among other costs and expenses,  salaries,
costs of employee  benefits,  professional  and  application  fees and occupancy
expense.  Non-interest  expense  for the year ended  December  31, 2004 was $7.1
million, as compared to non-interest expense of $6.3 million for the prior year.
This  increase  was due to expenses  incurred  to support the general  growth of
Monmouth Community Bank. During 2004, Monmouth Community Bank opened its seventh
branch,  Ursula  Plaza in North Long  Branch.  The Route 33  Neptune  branch was
opened in February  of 2003.  Full-time  equivalent  employees  totaled  82.5 at
December  31,  2004 as  compared to 69 at  December  31,  2003.  The table below
presents operating expenses, by major category, for the years ended December 31,
2004 and 2003, respectively (in thousands):

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

Salaries and employee benefits                             $ 3,619       $ 3,185
Net occupancy expenses                                         844           792
Data processing fees                                           571           485
Outside service fees                                           530           500
Furniture, fixtures and equipment                              290           277
Advertising and marketing expenses                             236           172
Printing, stationery, and supplies                             185           182
Insurance expense                                              106            77
Audit and tax fees                                              96            80
Regulatory exam fees                                            74            64
Legal fees and expenses                                         72            98
Other operating expenses                                       475           413
                                                           ---------------------
      Total                                                $ 7,098         6,325
                                                           =====================

Income Tax Expense

      For the year ended  December 31, 2004,  income tax expense  increased $456
thousand,  to $778  thousand,  on net  income  before  taxes  of  $2.0  million,
resulting in an effective  tax rate of 39.0% in 2004,  as compared to income tax
expense of $322  thousand on net income  before  taxes of $804  thousand for the
year ended  December  31, 2003,  resulting in an effective  tax rate of 40.0% in
2003.

For the years ended December 31, 2003 and 2002

Net Interest Income

      Net interest  income of Monmouth  Community  Bank was $6.5 million for the
year ended  December  31,  2003,  as compared to $5.5 million for the year ended
December 31, 2002. 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


                                       22
<PAGE>

and $2.5 million in interest on securities, less interest expense on deposits of
$2.6 million,  whereas net interest  income for the year ended December 31, 2002
was  comprised  primarily of $254 thousand in interest on Federal funds sold and
due from banks,  $5.6  million in interest on loans and $2.5 million in interest
on securities, less interest expense on deposits of $2.8 million.

      Interest-earning  assets  averaged  $191.5  million  for  the  year  ended
December 31, 2003, a 33% increase over interest-earning assets of $144.3 million
for the year ended December 31, 2002.  Interest-earning  assets for such periods
were funded primarily by deposit  inflows.  Deposits for the year ended December
31,  2003  averaged  $185.8  million,  of which  $160.3  million,  or 86%,  were
interest-bearing.  This number  represents  a 31% increase  over  average  total
deposits of $141.8 million for the year ended December 31, 2002, of which $120.1
million, or 85%, were interest-bearing.

      Net interest margin, which represents  net-interest income as a percentage
of average  interest-earning  assets,  was 3.39% for the year ended December 31,
2003,  as  compared  to 3.80% for the year  ended  December  31,  2002.  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 2003 and 2002,  interest  rates, as measured by the prime rate of
interest, decreased from 4.75% at the beginning of 2002 to 4.00% by December 31,
2003. As Monmouth  Community Bank 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, 2003,  Monmouth Community Bank's provision
for loan losses was $150  thousand,  as compared to $373  thousand for the prior
year.

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

Non-Interest Income

      Non-interest  income was $780  thousand  for the year ended  December  31,
2003,  as compared to $661  thousand for the year ended  December  31, 2002,  an
increase of $119  thousand,  or 18%. The  increase was due  primarily to service
charges on bank accounts  which were $656  thousand for the year ended  December
31, 2003,  as compared to $438  thousand for the prior year, an increase of $218
thousand, or 50%. In addition, Monmouth Community Bank generated $35 thousand in
fees from GMAC, which, as part of a strategic  partnership that commenced at the
beginning  of 2003,  provides  residential  mortgage  products  and  services to
customers of Monmouth  Community Bank.  However,  as a direct result of Monmouth
Community Bank switching from a residential  mortgage  provider to one that is a
true  referral  source  in 2003,  gains  from  the  sale of loans  held for sale
declined to $13 thousand in 2003 from $64 thousand in 2002. Gains on the sale of
available  for sale  securities  were $76  thousand  in 2003 as compared to $159
thousand in 2002.


                                       23
<PAGE>

Non-Interest Expense

      Non-interest expense includes,  among other costs and expenses,  salaries,
costs of employee  benefits,  professional  and  application  fees and occupancy
expense.  Non-interest  expense  for the year ended  December  31, 2003 was $6.3
million, as compared to non-interest  expense of $4.9 million for the year ended
December 31,  2002.  This  increase was due to expenses  incurred to support the
general growth of Monmouth Community Bank. During 2003,  Monmouth Community Bank
opened one new  branch.  The Route 33 Neptune  branch was opened in  February of
2003.

Financial Condition

Securities Portfolio

      At December 31,  2004,  Monmouth  Community  Bank'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 $16.5 million at December 31, 2004,  represented
an increase of $1.4 million over the year ended December 31, 2003 total of $15.1
million.  Securities  available-for-sale  had a market value of $73.7 million at
December  31, 2004,  representing  an increase of $5.5 million over the December
31, 2003 total of $68.2  million.  This  increase  was the result of the general
balance  sheet  growth  that  occurred  during  2004 and that  the  majority  of
investment  purchases  made  during  2004  occurred  in the  available  for sale
portfolio.

The following table  summarizes the maturity and weighted average yields in each
of Monmouth Community Bank's securities portfolios at December 31, 2004:

<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                                         $     --   $    519    $  5,677    $  6,296    $ 12,492
   Weighted average yield                                       --       4.88%       4.20%       4.83%       4.54%
Obligations of U.S. Government agencies
   Amortized cost                                               --      3,992          --          --       3,992
   Weighted average yield                                       --       3.58%         --          --        3.58%
                                                          --------   --------    --------    --------    --------
Total securities held to maturity
   Amortized cost                                         $     --   $  4,511    $  5,677    $  6,296    $ 16,484
   Weighted average yield                                       --       3.73%       4.20%       4.83%       4.31%
                                                          ========   ========    ========    ========    ========

Securities available for sale:

Mortgage-backed securities
   Amortized cost                                         $     --   $ 10,072    $ 28,270    $     --    $ 38,342
   Weighted average yield                                       --       3.35%       3.62%         --        3.55%
Obligations of U.S. Government agencies
   Amortized cost                                               --     35,326          --          --      35,326
   Weighted average yield                                       --       3.08%         --          --        3.08%
                                                          --------   --------    --------    --------    --------
Total securities available for sale
   Amortized cost                                         $     --   $ 45,398    $ 28,270    $     --    $ 73,668
   Weighted average yield                                       --       3.14%       3.62%         --        3.32%
                                                          ========   ========    ========    ========    ========
</TABLE>


                                       24
<PAGE>

      Securities  held to  maturity  of $15.1  million  at  December  31,  2003,
represented  a decrease of $10.4  million over the year ended  December 31, 2002
total of $25.5  million.  Securities  available-for-sale  had a market  value of
$68.2  million at December 31, 2003,  representing  an increase of $23.4 million
over the December 31, 2002 total of $44.8 million.  This increase was the result
of the general balance sheet growth that occurred during 2003 and that virtually
all  investment  purchases  made during 2003  occurred in the available for sale
portfolio.

Investment Policy

      The board of  directors  has  adopted an  investment  policy to govern the
investment  function of Monmouth  Community Bank, 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  Monmouth  Community  Bank'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  Monmouth
Community  Bank,  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 Monmouth
Community  Bank.  For  this  reason,   unless  otherwise  indicated,   the  term
"liquidity"  in Monmouth  Community  Bank's  policies does not refer to proceeds
from the sale of assets, except for the sale of assets available-for-sale.

      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 Monmouth Community Bank 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  Monmouth  Community  Bank 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.


                                       25
<PAGE>

      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

      Monmouth  Community  Bank'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.

      Monmouth  Community  Bank  conducts  both  commercial  and retail  lending
activities.  The loan approval  process at Monmouth  Community Bank 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 Monmouth Community Bank's loan
committee for review and approval.  The loan  committee is comprised of internal
officers 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.  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.

      Monmouth  Community  Bank  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.


                                       26
<PAGE>

      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,  Monmouth Community Bank 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,  Monmouth Community Bank 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 an
acceptable independent credit score for the borrower(s),  a loan to value not to
exceed 75% and a debt service to income ratio not to exceed 45%.  Such  criteria
provides Monmouth  Community Bank 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 consumer loans, Monmouth Community Bank 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.  Monmouth
Community  Bank attempts to mitigate  risks  through sound credit  underwriting.
Each loan that Monmouth  Community Bank 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
Monmouth   Community  Bank'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.

      Monmouth  Community  Bank is limited by  regulation as to the total amount
which may be  committed  and  loaned to a  borrower  and its  related  entities.
Monmouth  Community  Bank's legal  lending  limit is equal to 15% of its capital
funds, including capital stock, surplus, retained earnings and the allowance for
loan losses.  Monmouth  Community Bank 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%.


                                       27
<PAGE>

      The following table summarizes net loans  outstanding by loan category and
amount at December 31, 2004, 2003, 2002, 2001 and 2000.

<TABLE>
<CAPTION>
(in thousands)                         2004       2003       2002       2001      2000
                                       ----       ----       ----       ----      ----
---------------------------------------------------------------------------------------
<S>                                <C>        <C>        <C>        <C>        <C>
Commercial and industrial loans    $ 22,392   $ 20,380   $ 17,060   $ 17,396   $ 11,913

Real estate loans - commercial       96,291     77,799     57,079     32,776     25,355

Home equity and second mortgages     22,014     17,734     14,816     11,182      9,279

Consumer loans                          638      1,270      1,601      1,113      1,047
---------------------------------------------------------------------------------------
Total loans                        $141,335   $117,183   $ 90,556   $ 62,467   $ 47,594

Less allowance for loan losses        1,638      1,378      1,228        855        650
---------------------------------------------------------------------------------------
Net loans                          $139,697   $115,805   $ 89,328   $ 61,612   $ 46,944
=======================================================================================
Loans held for sale
                                   $      0   $      0   $    302   $    269   $      0
</TABLE>

      For the year ended December 31, 2004, net loans increased by $23.9 million
to $139.7 million,  which represents a 20.6% increase from the $115.8 million at
December 31, 2003.

      For the year ended December 31, 2004,  commercial and industrial loans and
commercial real estate loans increased by $20.5 million to $118.7 million, which
represents a 20.9% increase from the $98.2 million at December 31, 2003.

      During 2004, home equity and second mortgages increased by $4.3 million to
$22.0 million at December 31, 2004,  which  represents a 24.1% increase from the
$17.7 million at December 31, 2003.

      The following  table  summarizes  the  maturities of loans by category and
whether such loans are at a fixed or floating rate at December 31, 2004.

<TABLE>
<CAPTION>
                                                                            December 31, 2004
                                                      ---------------------------------------------------------------

                                                                   Over       Over      Over
Maturity and repricing data for loans:                 Within     1 to 3     3 to 5    5 to 10    Over 10
(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                                        $    656   $    959   $  1,205   $    846   $    490   $  4,156
    Adjustable rate                                     26,450         --         --         --         --     26,450

All other loans secured by real estate
    Fixed rate                                           2,114     18,450     27,928     19,994         --     68,486
    Adjustable rate                                     19,341         --         --         --         --     19,341

All other loans
    Fixed rate                                           2,455      2,210      4,007      2,522         47     11,241
    Adjustable rate                                     11,661         --         --         --         --     11,661
                                                      ---------------------------------------------------------------
Total                                                 $ 62,677   $ 21,619   $ 33,140   $ 23,362   $    537   $141,335
                                                      ===============================================================
</TABLE>


                                       28
<PAGE>

Non-Performing Loans

      A loan is  considered to be  non-performing  if it (1) is on a non-accrual
basis, (2) is past due ninety days or more and still accruing  interest,  or (3)
has been  renegotiated  to  provide a  reduction  or  deferral  of  interest  or
principal  because of a weakening in the financial  position of the borrower.  A
loan, which is past due ninety days or more and still accruing interest, remains
on accrual status only where it is both  adequately  secured as to principal and
is in the process of  collection.  Monmouth  Community  Bank had  non-performing
loans  totaling  $128  thousand  and $40 thousand at December 31, 2004 and 2003,
respectively.

Potential Problem Loans

      In addition to non-performing  loans,  Monmouth Community Bank 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.

      As of December 31, 2004 and 2003, 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, 2004 and 2003 was $4.5  million and $1.9  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 Monmouth
Community  Bank,  due to the  inherently  subjective  nature of the  evaluation.
Credit losses primarily arise from Monmouth Community Bank'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 Monmouth Community Bank'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,


                                       29
<PAGE>

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 2004 as compared to 2003.

      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.  Monmouth  Community  Bank's  allowance for loan losses is
allocated  on an  individual  loan basis and  Monmouth  Community  Bank 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 result of our strategic plans and lending  emphasis,  we
have a loan concentration in commercial loans at December 31, 2004 and 2003, 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 $260 thousand for 2004, as compared to
$150  thousand  for 2003.  The 2004  provision  was  required  based upon credit
characteristics  of the net loan growth of 20.6% for the year ended December 31,
2004. The provision for loan losses of $150 thousand for the year ended December
31, 2003 was in response to net loan growth of 29.7% 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, 2004, as compared to the same period in 2003.

      Loan  portfolio  composition  remained  consistent in 2004, as compared to
2003,  with  commercial  loans  comprising  84% of total  loans  outstanding  at
December 31, 2004 and 2003. In addition, Monmouth Community Bank had non-accrual
or impaired loans totaling $128 thousand at December 31, 2004 as compared to $40
thousand at December 31, 2003. Gross loans outstanding totaled $141.3 million at
December  31,  2004,  as compared to $117.2  million at December  31,  2003,  an
increase of $23.9 million,  or 20.6%. The allowance for loan losses increased to
$1.64  million,  or 1.16%,  at  December  31,  2004,  from the $1.38  million at
December 31, 2003.


                                       30
<PAGE>

      The following table  summarizes  Monmouth  Community  Bank's allowance for
loan losses for the years ended December 31, 2004, 2003, 2002, 2001 and 2000.

<TABLE>
<CAPTION>
(in thousands)                                            2004       2003       2002        2001        2000
                                                        --------   --------   --------    --------    --------
-------------------------------------------------------------------------------------------------------------
<S>                                                     <C>        <C>        <C>         <C>         <C>
Balance, beginning of year                              $ 1,378    $ 1,228    $   855     $   650     $   359

Provision charged to expense                                260        150        373         211         291

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

Recoveries                                                    0          0          1           0           0
-------------------------------------------------------------------------------------------------------------
Balance, end of year                                    $ 1,638    $ 1,378    $ 1,228     $   855     $   650
=============================================================================================================
Ratio of allowance for loan losses to total loans          1.16%      1.18%      1.36%       1.37%       1.37%

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

      The  following  table  sets forth  Monmouth  Community  Bank'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, 2004                December 31, 2003                December 31, 2002
              ----------------------------     ----------------------------     ----------------------------
                                   Percent                          Percent
                        Percent      of                  Percent      of                 Percent
                          of        loans                  of        loans                  of       Percent
                       allowance     to                 allowance     to                 allowance   of loans
                       to total     total               to total     total               to total    to total
              Amount   allowance    loans      Amount   allowance    loans      Amount   allowance    loans
              -------   -------    -------     -------   -------    -------     -------   -------    -------
<S>           <C>         <C>        <C>       <C>         <C>        <C>       <C>         <C>        <C>
Commercial
  loans       $ 1,403      85.7%      84.0%    $ 1,151      83.5%      83.8%    $ 1,007      82.0%      81.9%

Consumer
  loans           235      14.3%      16.0%        227      16.5%      16.2%        221      18.0%      18.1%
              -------   -------    -------     -------   -------    -------     -------   -------    -------
Total         $ 1,638     100.0%     100.0%    $ 1,378     100.0%     100.0%    $ 1,228     100.0%     100.0%
              =======   =======    =======     =======   =======    =======     =======   =======    =======

<CAPTION>
                    December 31, 2001               December 31, 2000
              ----------------------------     ----------------------------
                                   Percent                          Percent
                        Percent      of                  Percent      of
                          of        loans                  of        loans
                       allowance     to                 allowance     to
                       to total     total               to total     total
              Amount   allowance    loans      Amount   allowance    loans
              -------   -------    -------     -------   -------    -------
<S>           <C>         <C>        <C>       <C>         <C>        <C>
Commercial
  loans       $   709      82.9%      80.3%    $   523      80.5%      78.3%

Consumer
  loans           146      17.1%      19.7%        127      19.5%      21.7%
              -------   -------    -------     -------   -------    -------
Total         $   855     100.0%     100.0%    $   650     100.0%     100.0%
              =======   =======    =======     =======   =======    =======
</TABLE>


                                       31
<PAGE>

Deposits

      One of Monmouth  Community  Bank'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 $232.9  million at December 31, 2004, an increase of
$25.7 million,  or 12.4%,  from the year ended December 31, 2003 total of $207.2
million.  Core deposits as a percentage  of total  deposits were 77% at December
31, 2004 as compared to 78% at December 31, 2003.

      The following table  represents  categories of Monmouth  Community  Bank's
deposits at December 31, 2004, 2003 and 2002.

<TABLE>
<CAPTION>
                                                     December 31,  December 31,  December 31,
                                                     ------------  ------------  ------------
      (in thousands)                                     2004          2003          2002
                                                         ----          ----          ----
<S>                                                    <C>           <C>           <C>
      Demand deposits, non-interest bearing            $ 29,897      $ 26,818      $ 22,581

      Savings, N.O.W. and money market accounts         122,225       118,265        98,328

      Certificates of deposit of less than $100,000      27,353        17,449        16,863

      Certificates of deposit of $100,000 or more        53,378        44,702        26,235
                                                       --------      --------      --------
      Total deposits                                   $232,853      $207,234      $164,007
                                                       ========      ========      ========
</TABLE>

      The following table  represents  categories of Monmouth  Community  Bank's
average deposit balances and weighted average interest rates for the years ended
December 31, 2004, 2003 and 2002.

<TABLE>
<CAPTION>
                                                       December 31,             December 31,             December 31,
                                                       ------------             ------------             ------------
(in thousands)                                             2004                     2003                     2002
                                                           ----                     ----                     ----
                                                               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             $  28,913         --%    $  25,554         --%    $  21,727         --%

Savings, N.O.W. and money market accounts           117,256       1.09%      108,734       1.22%       84,843       2.02%

Certificates of deposit of less than $100,000        26,859       2.07%       17,306       2.95%       13,572       3.43%

Certificates of deposit of $100,000 or more          48,275       2.08%       34,236       2.22%       21,707       2.82%
                                                  ---------    -------     ---------    -------     ---------    -------
Total deposits                                    $ 221,303       1.28%    $ 185,830       1.41%    $ 141,849       1.97%
                                                  =========    =======     =========    =======     =========    =======
</TABLE>

      At December 31, 2004,  Monmouth  Community  Bank had $80.7 million in time
deposits maturing as follows (in thousands):

<TABLE>
<CAPTION>
                                                           Over 1
                                  3 months    Over 3 to   year to 3    Over 3
                                  or less     12 months     years      years       Total
                                  --------    --------    --------    --------    --------
<S>                               <C>         <C>         <C>         <C>         <C>
Less than $100,000                $  8,888    $ 15,288    $  2,448    $    729    $ 27,353

Equal to or more than $100,000      34,112      13,666       1,682       3,918      53,378
                                  --------    --------    --------    --------    --------
Total                             $ 43,000    $ 28,954    $  4,130    $  4,647    $ 80,731
                                  ========    ========    ========    ========    ========
</TABLE>


                                       32
<PAGE>

Liquidity and Capital Resources

      Liquidity defines the ability of Monmouth Community Bank 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  Monmouth
Community  Bank  were  primarily  met by cash on hand and  loan  and  investment
amortizations.  Monmouth  Community Bank invests funds not needed for operations
(excess  liquidity)  primarily in daily Federal  funds sold.  With adequate cash
inflows  resulting  from  deposits  during  the years  2004 and  2003,  Monmouth
Community Bank  maintained  levels of short-term  assets  sufficient to maintain
ample liquidity.  During 2004,  Monmouth  Community Bank continued to maintain a
large secondary source of liquidity known as Investment Securities Available for
Sale.  The market value of that portfolio was $73.7 million at December 31, 2004
and $68.2 million at December 31, 2003.

      It has been Monmouth  Community  Bank's  experience that its deposit base,
both core (which is defined as  transaction  accounts and term  deposits of less
than  $100,000)  and non-core  (which is defined as term deposits of $100,000 or
more) is primarily  relationship-driven  and not highly  sensitive to changes in
interest rates. However,  adequate sources of reasonably priced on-balance sheet
funds,  such as  overnight  Federal  funds sold,  due from banks and  short-term
investments  maturing in less than one year, must be continually  accessible for
contingency purposes.  This is accomplished primarily by the daily monitoring of
certain  accounts for sufficient  balances to meet future loan  commitments,  as
well as measuring  Monmouth  Community  Bank'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 only if
authorized by our board of directors in an addendum to Monmouth Community Bank'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  Monmouth
Community  Bank's  retail  banking  network  will create  additional  sources of
liquidity from new deposit customer relationships.

      Monmouth   Community  Bank  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 Monmouth Community Bank's financial statements. Under capital
adequacy  guidelines and the regulatory  framework for prompt corrective action,
Monmouth  Community  Bank must meet  specific  capital  guidelines  that


                                       33
<PAGE>

involve quantitative  measures of Monmouth Community Bank's assets,  liabilities
and certain  off-balance-sheet  items as calculated under regulatory  accounting
practices. Monmouth Community Bank's capital amounts and classification are also
subject to  qualitative  judgments  by the  regulators  about  components,  risk
weightings and other  factors.  See "Item 1 Description of Business - Government
Regulation."

      Quantitative measures established by regulation to ensure capital adequacy
require  Monmouth  Community  Bank 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).  We
believe that, as of December 31, 2004,  Monmouth  Community Bank met all capital
adequacy requirements to which it is subject.

      As of  December  31,  2004,  the  most  recent  notification  from the OCC
categorized  Monmouth  Community Bank 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  Monmouth  Community  Bank's
category.

      The following is a summary of the Bank and Central Jersey Bancorp's actual
capital ratios as of December 31, 2004 and 2003, compared to the minimum capital
adequacy   requirements   and  the   requirements   for   classification   as  a
"well-capitalized" institution:

<TABLE>
<CAPTION>
                                                Tier I               Tier I
                                              Capital to           Capital to          Total Capital to
                                         Average Assets Ratio     Risk Weighted           Risk Weighted
              Bank                         (Leverage Ratio)        Asset Ratio           Asset Ratio
                                           2004       2003       2004       2003       2004       2003
                                         -------------------------------------------------------------
<S>                                        <C>        <C>       <C>        <C>        <C>        <C>
Monmouth Community Bank                    8.23%      6.86%     12.82%     11.01%     13.82%     12.01%

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

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

<CAPTION>
                                                Tier I               Tier I
                                              Capital to            Capital to        Total Capital to
                                         Average Assets Ratio     Risk Weighted         Risk Weighted
     Central Jersey Bancorp                (Leverage Ratio)        Asset Ratio           Asset Ratio
                                           2004       2003       2004       2003       2004       2003
                                         -------------------------------------------------------------
<S>                                        <C>        <C>       <C>        <C>        <C>        <C>
Central Jersey Bancorp                     8.15%      6.86%     12.70%     11.01%     13.70%     12.01%

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

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


                                       34
<PAGE>

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%  (2.66% +
2.85% = 5.51%  at March 7,  2005).  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,  2004,  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
the Bank 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, 2004, 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.

Recent Accounting Pronouncements

      In December 2004, the Financial  Accounting  Standards  Board (the "FASB")
issued SFAS No. 153,  Exchanges  of  Nonmonetary  Assets,  an  amendment  of APB
Opinion No. 29, Accounting for Nonmonetary Transactions.  The amendments made by
SFAS No. 153 are based on the principle  that  exchanges of  nonmonetary  assets
should be measured based on the fair value of the assets exchanged. Further, the
amendments  eliminate the narrow exception for nonmonetary  exchanges of similar
productive  assets and  replace it with a broader  exception  for  exchanges  of
nonmonetary assets that do not have commercial substance. The provisions of SFAS
No.  153 are to be  applied  prospectively  and are  effective  for  nonmonetary
exchanges  occurring  in fiscal  periods  beginning  after June 15,  2005,  with
earlier  application  permitted for  nonmonetary  asset  exchanges


                                       35
<PAGE>

occurring in fiscal periods  beginning  after December 16, 2004. The adoption of
SFAS  No.  153 is not  expected  to  have a  material  impact  on the  Company's
financial condition or results of operations.

      In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment.  This  statement  is  a  revision  of  SFAS  No.  123,  Accounting  for
Stock-Based  Compensation,  and  supersedes  APB Opinion No. 25,  Accounting for
Stock Issued to Employees, and its related guidance. SFAS No. 123 (revised 2004)
established  standards for the  accounting for  transactions  in which an entity
exchanges its equity instruments for goods or services.  This statement requires
that the cost resulting from all share-based payment  transactions be recognized
in the financial statements.  SFAS No. 123 (revised 2004) establishes fair value
as the measurement  objective in accounting for share-based payment arrangements
and  requires  all entities to apply a  fair-value-based  measurement  method in
accounting for  share-based  payment  transactions  with  employees,  except for
equity  instruments  held by employee share ownership  plans.  This statement is
effective for public  entities that do not file as small business  issuers as of
the beginning of the first interim or annual  reporting period that begins after
June 15, 2005. We do not expect the adoption of SFAS No. 123 (revised 2004) will
have a material impact on our financial condition or results of operations.

      In September 2004, the FASB approved issuing a Staff Position to delay the
requirement to record  impairment  losses under Emerging Issues Task Force Issue
No. 03-1, The Meaning of Other Than Temporary  Impairment and its Application to
Certain  Investments  ("EITF  03-1").  The approved  delay is  applicable to all
securities  within  the scope of EITF 03-1 and will  remain in effect  until new
guidance is issued and comes into effect. The disclosure requirements originally
prescribed by EITF 03-1 will remain in effect, and SEC Staff Accounting Bulletin
No. 59, Accounting for Noncurrent Marketable Equity Securities,  September 1985,
SAB Topic 5.M,  Other Than Temporary  Impairment of Certain  Investments in Debt
and Equity Securities, remains in effect for public companies.

Impact of Inflation
-------------------

      The 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 the holding company and Monmouth Community Bank 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,  interest rates have a more significant  impact
on a financial  institution's  performance than the effects of general levels of
inflation.  Interest rates do not  necessarily  move in the same direction or 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.


                                       36
<PAGE>

Item 7.     Financial Statements
            --------------------

      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 Financial Statements contained on
page F-1 herein.

Item 8.     Changes In and Disagreements With Accountants on Accounting and
            Financial Disclosure
            --------------------

      None.

Item 8A.    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-KSB,  Central  Jersey  Bancorp
carried out an  evaluation of the  effectiveness  of the design and operation of
Central Jersey Bancorp's disclosure controls and 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 Chief Executive Officer and Chief
Financial Officer, as appropriate,  to allow timely decisions regarding required
disclosure.


                                       37
<PAGE>

                                    PART III

Item 9.     Directors, Executive Officers, Promoters and Control Persons;
            Compliance With Section 16(a) of the Exchange Act
            -------------------------------------------------

      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 26, 2005,  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 10.    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 26, 2005,  under the
caption "Executive Compensation" and is incorporated herein by reference.

Item 11.   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  26,  2005,  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 12.    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 26, 2005, under the caption "Certain Relationships and Related Party
Transactions" and is incorporated herein by reference.

Item 13. Exhibits and Reports on Form 8-K
         --------------------------------

      a)    Exhibits
            --------

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

      b)    Reports on Form 8-K:
            --------------------

      During the three months ended December 31, 2004, the Registrant filed with
the Securities and Exchange Commission the following Current Report on Form 8-K:

      The Registrant  filed a Current Report on Form 8-K with the Securities and
Exchange Commission with respect to an event occurring on October 23, 2004. This
Current Report on


                                       38
<PAGE>

Form 8-K, filed pursuant to Item 2.02 of that Form, reported the issuance of the
press  release  announcing  Central  Jersey  Bancorp's  unaudited   consolidated
financial results for the three-month period ended September 30, 2004.

      There were no financial  statements filed with the above described Current
Report on Form 8-K.

Item 14.    Principal Accounting 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 26, 2005, under the caption "Principal Accounting Fees and Services"
and is incorporated herein by reference.


                                       39
<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.

                                          MONMOUTH COMMUNITY BANCORP


Date: March 30, 2005                  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 Carl F. Chirico and James S. Vaccaro 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-KSB, 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                March 30, 2005
--------------------------------        Directors
   George S. Callas


     /s/ Carl F. Chirico                Vice Chairman of the Board              March 30, 2005
--------------------------------        of Directors
       Carl F. Chirico



    /s/ James S. Vaccaro                President and Chief Executive           March 30, 2005
--------------------------------        Officer (Principal Executive
      James S. Vaccaro                  Officer)
</TABLE>


                                       40
<PAGE>

<TABLE>
<CAPTION>
<S>                                     <C>                                     <C>

     /s/ Robert S. Vuono                Senior Executive Vice                   March 30, 2005
--------------------------------        President, Chief Operating
       Robert S. Vuono                  Officer, Secretary and Director


  /s/ Anthony Giordano, III             Executive Vice President,               March 30, 2005
--------------------------------        Chief Financial Officer,
    Anthony Giordano, III               Treasurer and Assistant
                                        Secretary (Principal Financial
                                        and Accounting Officer)


     /s/ James G. Aaron                         Director                        March 30, 2005
--------------------------------
       James G. Aaron


  /s/ Nicholas A. Alexander                     Director                        March 30, 2005
--------------------------------
    Nicholas A. Alexander


   /s/ John A. Brockriede                       Director                        March 30, 2005
--------------------------------
     John A. Brockriede


    /s/ M. Claire French                        Director                        March 30, 2005
--------------------------------
      M. Claire French


    /s/ William H. Jewett                       Director                        March 30, 2005
--------------------------------
      William H. Jewett


   /s/ Paul A. Larson, Jr.                      Director                        March 30, 2005
--------------------------------
     Paul A. Larson, Jr.


     /s/ John F. McCann                         Director                        March 30, 2005
--------------------------------
       John F. McCann


      /s/ Mark G. Solow                         Director                        March 30, 2005
--------------------------------
        Mark G. Solow
</TABLE>


                                       41
<PAGE>

                             CENTRAL JERSEY BANCORP
                                 AND SUBSIDIARY

                        Consolidated Financial Statements

                                    Contents

                                December 31, 2004

<TABLE>
<CAPTION>
<S>                                                                                      <C>
Report of Independent Registered Public Accounting Firm ................................ F-2
Consolidated Balance Sheets at December 31, 2004 and 2003............................... F-3
Consolidated Statements of Income for the years ended December 31, 2004 and 2003........ F-4
Consolidated Statements of Changes in Shareholders' Equity for the years
     ended December 31, 2004 and 2003................................................... F-5
Consolidated Statement of Cash Flows for the years ended
     December 31, 2004 and 2003......................................................... F-6
Notes to Consolidated Financial Statements.............................................. F-7
</TABLE>


<PAGE>

             Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Central Jersey Bancorp (formerly Monmouth Community Bancorp):

We have audited the accompanying  consolidated  balance sheets of Central Jersey
Bancorp  and  subsidiary  as of  December  31,  2004 and 2003,  and the  related
consolidated  statements of income,  changes in shareholders'  equity,  and cash
flows for the years then ended. 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, 2004 and 2003,  and the results of
their  operations  and their cash  flows for the years then ended in  conformity
with U.S. generally accepted accounting principles.


                                    /s/ KPMG LLP

Short Hills, New Jersey
March 18, 2005


                                      F-2
<PAGE>

                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2004 AND 2003
                (dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
ASSETS                                                                  2004         2003
------                                                                --------     --------
<S>                                                                   <C>          <C>
Cash and due from banks                                               $  9,169     $  9,689
Federal funds sold                                                       9,425        4,675
Investment securities available for sale, at market value               73,668       68,196
Investment securities held to maturity (market value of
  $16,549 and $15,278 at December 31, 2004 and 2003, respectively)      16,484       15,079
Loans, net                                                             139,697      115,805
Premises and equipment                                                   2,496        2,171
Other assets                                                             3,176        2,037
Due from broker                                                             --        4,961
                                                                      --------     --------
       Total assets                                                   $254,115     $222,613
                                                                      ========     ========

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

Deposits:
  Non-interest bearing                                                $ 29,897     $ 26,818
  Interest bearing                                                     202,956      180,416
                                                                      --------     --------
                                                                       232,853      207,234

Accrued expenses and other liabilities                                     252          480
Subordinated debentures                                                  5,155           --
                                                                      --------     --------

       Total liabilities                                               238,260      207,714
                                                                      --------     --------

Commitments and contingencies (Notes 5 and 10)

Shareholders' equity:
Common stock, par value $0.01 per share. Authorized
  100,000,000 shares and issued and outstanding
  1,860,725 and 1,860,403 shares at December 31, 2004
  and 2003, respectively                                                    19           19
Additional paid-in capital                                              15,237       15,238
Accumulated other comprehensive loss                                      (619)        (358)
Retained earnings                                                        1,218           --
                                                                      --------     --------
       Total shareholders' equity                                       15,855       14,899

                                                                      --------     --------
       Total liabilities and shareholders' equity                     $254,115     $222,613
                                                                      ========     ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-3
<PAGE>

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

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

Interest expense:
   Interest expense on deposits                                     2,836         2,612
   Interest expense on subordinated debentures                        193            --
   Interest expense on other borrowings                                17            --
                                                               ----------    ----------
        Total interest expense                                      3,046         2,612

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

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

Other income:
   Service charges on deposit accounts                                830           656
   Gain on the sale of available for sale securities                   --            76
   Gain on the sale of loans held for sale                             --            13
   Other service charges, commissions and fees                         19            35
                                                               ----------    ----------
        Total other income                                            849           780
                                                               ----------    ----------

Operating expenses:
   Salaries and employee benefits                                   3,619         3,185
   Occupancy expenses                                                 844           792
   Data processing fees                                               571           485
   Outside service fees                                               530           500
   Professional and application fees                                  311           301
   Furniture, fixtures and equipment                                  290           273
   Advertising and public relations                                   236           182
   Stationery, supplies and printing                                  185           172
   Telephone and postage                                              136           126
   Insurance                                                          106            77
   Other expenses                                                     270           232
                                                               ----------    ----------
        Total other expenses                                        7,098         6,325
                                                               ----------    ----------

Income before provision for income taxes                            1,996           804
Income taxes                                                          778           322
                                                               ----------    ----------
   Net income                                                  $    1,218    $      482
                                                               ==========    ==========

Basic earnings per share                                       $      .65    $      .26
                                                               ==========    ==========
Diluted earnings per share                                     $      .62    $      .25
                                                               ==========    ==========

Average basic shares outstanding                                1,860,688     1,860,588
                                                               ==========    ==========
Average diluted shares outstanding                              1,961,481     1,916,981
                                                               ==========    ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-4
<PAGE>

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
                 FOR THE YEARS ENDED DECEMBER 31, 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                      $     18     $ 14,764      $    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 - 72 shares                   --            1            --            --             1
-----------------------------------------------------------------------------------------------------------------
Balance at December 31, 2003                      $     19     $ 15,238      $   (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 - 261 shares                  --            3            --            --             3
-----------------------------------------------------------------------------------------------------------------
Balance at December 31, 2004                      $     19     $ 15,237      $   (619)     $  1,218      $ 15,855
=================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>

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

<TABLE>
<CAPTION>
                                                                                        2004          2003
                                                                                      --------      --------
<S>                                                                                   <C>           <C>
Cash flows from operating activities:
   Net income                                                                         $  1,218      $    482
Adjustments to reconcile net income to net cash provided by operating activities:
   Deferred taxes                                                                         (215)          (50)
   Provision for loan losses                                                               260           150
   Depreciation and amortization                                                           422           417
   Gain on the sale of available for sale securities                                        --           (76)
   Decrease (increase) in due from broker                                                4,961        (4,961)
   Gain on the sale of loans held for sale                                                  --           (13)
   Origination of loans held for sale                                                       --        (1,605)
   Proceeds from sale of loans held for sale                                                --         1,920
   Net premium amortization on held to maturity securities                                  77           108
   Net premium amortization on available for sale securities                               362           864
   Increase in other assets                                                               (757)         (185)
   Decrease in accrued expenses and other liabilities                                     (228)          (19)
                                                                                      --------      --------
        Net cash provided by (used in) operating activities                              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                  3,510        20,315
   Maturities of and paydowns on investment securities available for sale               14,864        43,082
   Proceeds from sale of investment securities available for sale                           --        17,870
   Net increase in loans                                                               (24,152)      (26,627)
   Purchases of premises and equipment, net                                               (746)         (950)
                                                                                      --------      --------
        Net cash used in investment activities                                         (32,643)      (42,268)
                                                                                      --------      --------

Cash flows from financing activities:
   Net increase in non-interest bearing deposits                                         3,079         4,237
   Net increase in interest bearing deposits                                            22,540        38,990
   Issuance of subordinated debentures                                                   5,155            --
   Issuance of common stock, net                                                             3             1
   Cash paid for fractional shares                                                          (4)           (8)
                                                                                      --------      --------
        Net cash provided by financing activities                                       30,773        43,220
                                                                                      --------      --------

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

Cash and cash equivalents at beginning of period                                        14,364        16,380
                                                                                      --------      --------
Cash and cash equivalents at end of period                                            $ 18,594      $ 14,364
                                                                                      ========      ========

Cash paid during the period for:
   Interest                                                                           $  2,986      $  2,616
                                                                                      ========      ========
   Income taxes                                                                       $    993      $    361
                                                                                      ========      ========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>

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

(1) Summary of Significant Accounting Policies

Business

On January 1, 2005, Central Jersey Bancorp (formerly Monmouth Community 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. Central Jersey
Bancorp currently owns two operating subsidiaries - Monmouth Community Bank and
Allaire Community Bank.

Effective August 31, 2000, Central Jersey Bancorp, a newly formed corporation,
acquired all of the shares of Monmouth Community Bank, N.A. Central Jersey
Bancorp and Monmouth Community Bank are collectively referred to herein as the
"Company." Each share of $5 par value common stock of Monmouth Community Bank
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.

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 the Bank are subject, as applicable, to federal statutes applicable
to banks and bank holding companies. In 2001, Monmouth Community Bank converted
from a state chartered institution to a nationally chartered institution
regulated by the Office of Comptroller of the Currency (OCC). Monmouth Community
Bank's deposits are insured by the Federal Deposit Insurance Corporation (FDIC).
Central Jersey Bancorp is subject to regulation, supervision and examination by
the Federal Reserve Bank of New York.

Central Jersey Bancorp effected six-for-five stock split for shareholders of
record as of July 15, 2004, which resulted in 1,860,725 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 1,860,403 authorized and
outstanding shares of Central Jersey Bancorp common stock as of December 31,
2003.

Basis of Financial Statement Presentation

The accompanying consolidated financial statements include the accounts of
Central Jersey Bancorp and its wholly-owned bank subsidiary, Monmouth Community
Bank. All significant inter-company accounts and transactions have been
eliminated in consolidation. Certain prior year amounts have been reclassified
to conform to the current year presentation. 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.


                                      F-7
<PAGE>

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
with 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.

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. Gains and losses on
sales of securities are based on the specific identification method and are
accounted for on a trade date basis.

Loans and Loans Held for Sale

Loans are stated at unpaid principal balances, less unearned income and deferred
loan fees and costs. Loans held for sale are carried at the lower of aggregate
cost or fair value.

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


                                      F-8
<PAGE>

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 exist.

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.

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 2004 was calculated by dividing the
net income of $1.2 million by the weighted average number of shares outstanding
of 1,860,688 (as to the basic net income per share determination) and 1,961,481
(as to the diluted net income per share determination). Basic and diluted net
income per share for 2003 was calculated by dividing the net income of $482,000
by the weighted average number of shares outstanding of 1,860,588 (as to the
basic net income per share determination) and 1,916,981 (as to the diluted net
income per share determination.


                                      F-9
<PAGE>

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.

Stock Based Compensation

The  Company  has  elected to account  for  stock-based  compensation  under APB
Opinion No. 25,  "Accounting  for Stock Issued to Employees"  and to provide pro
forma  disclosures  of net loss and loss per share as if the Company had adopted
the fair value based  method of  accounting  in  accordance  with  Statement  of
Financial   Accounting   Standards   No.  123,   "Accounting   for   Stock-Based
Compensation" as amended by Statement of Financial Accounting Standards No. 148,
"Accounting  for Stock-Based  Compensation,"  which assumes the fair value based
method of accounting had been adopted.

Had compensation cost for the Company's stock options been determined in
accordance with SFAS No. 123, the Company's net income and related per share
amounts for 2004 and 2003 would have decreased to the following pro forma
amounts:

<TABLE>
<CAPTION>
                                                                2004            2003
--------------------------------------------------------------------------------------
<S>                                                          <C>            <C>
Net Income:
  As reported                                                $1,218,000     $  482,000
Deduct: Total stock-based employee compensation
        expense determined under the fair value based
        method for all awards, net of related tax effects       305,000        111,000
                                                             -------------------------
  Pro forma                                                  $  913,000     $  371,000

Net income per share - basic:
  As reported                                                $     0.65     $     0.26
  Pro forma                                                  $     0.49     $     0.20

Net income per share - diluted:
  As reported                                                $     0.62     $     0.25
  Pro forma                                                  $     0.47     $     0.19
</TABLE>

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 director grants, respectively; and expected lives of four
years.

(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


                                      F-10
<PAGE>

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,  1,996,140 shares of common stock of Central
Jersey Bancorp are being issued to the  stockholders of Allaire  Community Bank,
which will result in the total number of  outstanding  shares of Central  Jersey
Bancorp common stock being approximately 3,856,865 shares.

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 $26.3
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.

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                      $   6,186
  Securities                                      65,522
  Loans, net                                     119,753
  Fixed assets                                     3,536
  Other assets                                     2,007
  Bank owned life insurance                        3,227
  Core deposit intangible                          3,785
  Goodwill                                        26,349
                                               ---------
Total assets                                   $ 230,365
                                               ---------
Liabilities:
  Deposits                                     $ 169,879
  Borrowings                                      14,897
  Other liabilities                                1,086
                                               ---------
Total liabilities                                185,862
                                               ---------
Net assets acquired                            $  44,503
                                               =========

The net deferred tax liability resulting from adjustments of net assets
acquired, including the creation of the core deposit intangible, amounted to
$431 thousand.


                                      F-11
<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>
<CAPTION>
<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
                                                                                -----------
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                          15,846
                                                                                -----------
Excess of purchase price over carrying value of assets acquired                 $    23,957
Purchase accounting adjustments related to assets and liabilities acquired:
  Transaction costs                                                                   1,552
    Tax effect of transaction costs (at 34%)                                           (290)
  Securities held to maturity                                                           219
  Loans                                                                                (388)
  Buildings                                                                            (350)
  Time deposits                                                                          16
  Collateralized borrowings                                                              (3)
  Stock options                                                                       4,700
    Tax effect of fair value adjustments (at 34%)                                      (566)
  Core deposit intangible                                                            (3,785)
    Tax effect of core deposit intangible (at 34%)                                    1,287
                                                                                -----------
Goodwill                                                                        $    26,349
                                                                                ===========
</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                          0.65                0.43
Diluted earnings per share                    $   0.60            $   0.40

The following table summarizes the impact of the amortization/(accretion) of the
fair value adjustments made in connection with the combination on Central Jersey
Bancorp's consolidated results of operations for the following years:

<TABLE>
<CAPTION>
    Projected future amounts        Core deposit                         Net decrease in
for the years ended December 31,     intangible    Net amortization    income before taxes
--------------------------------     ----------    ----------------    -------------------
<S>                                    <C>               <C>                 <C>
2005                                   $  582            $ 57                $  639
2006                                      534              46                   580
2007                                      485              37                   522
2008                                      437              29                   466
2009                                      388              17                   405
2010 and thereafter                     1,359             130                 1,489
</TABLE>


                                      F-12
<PAGE>

(3) Cash and Due from Banks

The Company is required to maintain reserve balances with the Federal Reserve
Bank. As of December 31, 2004, the Company had a reserve balance of
approximately $3.6 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, 2004 and 2003 are as follows (in thousands):

<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
================================================================================================================

<CAPTION>
----------------------------------------------------------------------------------------------------------------
                                      2003
----------------------------------------------------------------------------------------------------------------
                                                                                 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                                                $  4,510    $      8    $      8    $  4,510
Mortgage-backed securities of U.S. Government
  sponsored agencies                                                  10,569         199          --      10,768
----------------------------------------------------------------------------------------------------------------
Total                                                               $ 15,079    $    207    $      8    $ 15,278
================================================================================================================
Investment securities available for sale:
Obligations of U.S. Government
  sponsored agencies                                                $ 25,064    $      2    $    288    $ 24,778
Mortgage-backed securities of U.S. Government
  sponsored agencies                                                  43,733          48         363      43,418
----------------------------------------------------------------------------------------------------------------
Total                                                               $ 68,797    $     50    $    651    $ 68,196
================================================================================================================
</TABLE>


                                      F-13
<PAGE>

The amortized cost and estimated market value of investment securities held to
maturity and debt securities available for sale at December 31, 2004 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.

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

                                                                       Estimated
                                                           Amortized     market
                                                             cost        value
--------------------------------------------------------------------------------
Investment securities held to maturity:
Due after one year through five years                       $  4,511    $  4,491
Due after fifth year through tenth year                        5,677       5,690
Due after tenth year                                           6,296       6,368
--------------------------------------------------------------------------------
Total                                                       $ 16,484    $ 16,549
================================================================================
Investment securities available for sale:
Due after one year through five years                       $ 46,058    $ 45,398
Due after fifth year through tenth year                       28,640      28,270
Due after tenth year                                              --          --
--------------------------------------------------------------------------------
Total                                                       $ 74,698    $ 73,668
================================================================================

At December 31, 2004 and 2003, there were $55,155,000 and $56,917,000,
respectively, of investment securities pledged to secure public funds or for any
other purposes required by law.

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, 2004 and 2003 were as
follows (in thousands):

<TABLE>
<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
========================================================================================================================

<CAPTION>
------------------------------------------------------------------------------------------------------------------------
                                               Less than 12 months        12 months or more               Total
                                              ----------------------    ----------------------    ----------------------
                                                           Estimated                 Estimated                 Estimated
             2003                             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             $    296     $ 26,770     $     --     $     --     $    296     $ 26,770
Mortgage-backed securities                     $    363     $ 33,379           --           --     $    363     $ 33,379
------------------------------------------------------------------------------------------------------------------------
Total                                          $    659     $ 60,149     $     --     $     --     $    659     $ 60,149
========================================================================================================================
</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


                                      F-14
<PAGE>

flows of these securities. Since the decline in estimated market value is
attributable to changes in interest rates and not credit quality, and because
Monmouth Community Bank 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, 2004 and 2003 are summarized as follows (in thousands):

                                                             2004         2003
--------------------------------------------------------------------------------
Commercial and industrial loans                           $  22,392    $  20,380
Real estate loans - commercial                               96,291       77,799
Home equity and second mortgages                             22,014       17,734
Consumer loans                                                  638        1,270
--------------------------------------------------------------------------------
                                                            141,335      117,183
Less allowance for loan losses                                1,638        1,378
--------------------------------------------------------------------------------
Net loans                                                 $ 139,697    $ 115,805
================================================================================

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, 2004
and 2003 is summarized as follows (in thousands):

                                                             2004        2003
-------------------------------------------------------------------------------
Balance, beginning of year                                 $  1,378    $  1,228
Provision charged to expense                                    260         150
Charge-offs                                                      --          --
Recoveries                                                       --          --
-------------------------------------------------------------------------------
Balance, end of year                                       $  1,638    $  1,378
===============================================================================
Ratio of allowance for loan losses to total loans              1.16%       1.18%
===============================================================================
Ratio of net charge-offs to average loans outstanding          0.00%       0.00%
===============================================================================

At December 31, 2004 and 2003, the Company had non-accrual loans totaling
$128,000 and $40,000, respectively, and no impaired loans. There were no loans
ninety days or greater past due and still accruing interest at December 31, 2004
or 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.


                                      F-15
<PAGE>

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, 2004 and 2003 is as follows (in thousands):

                                                               2004        2003
--------------------------------------------------------------------------------
Standby letters of credit                                    $ 1,333     $   590

Outstanding loan and credit line commitments                 $35,238     $26,937
--------------------------------------------------------------------------------

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
Monmouth Community Bank's outstanding standby letters of credit are performance
standby letters within the scope of FASB Interpretation No. 45. These are
irrevocable undertakings by Monmouth Community Bank, as guarantor, to make
payments in the event a specified third party fails to perform under a
non-financial contractual obligation. Most of Monmouth Community Bank'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 Monmouth Community Bank could be required to make equals the face
amount of the letters of credit shown above. Monmouth Community Bank's
recognized liability for performance standby letters of credit was insignificant
at December 31, 2004.

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, 2004 and 2003 is summarized as follows
(in thousands):

                                                              2004        2003
-------------------------------------------------------------------------------
Land                                                        $   176     $   176
Buildings and improvements                                      377         377
Leasehold improvements                                        1,929       1,407
Equipment                                                     1,545       1,320
-------------------------------------------------------------------------------
                                                              4,027       3,280
Accumulated depreciation and amortization                    (1,531)     (1,109)
-------------------------------------------------------------------------------
                                                            $ 2,496     $ 2,171
===============================================================================

Depreciation and amortization expense amounted to $422,000 and $417,000 in 2004
and 2003, respectively.


                                      F-16
<PAGE>

(7) Deposits

Interest-bearing deposits at December 31, 2004 and 2003 consist of the following
(in thousands):

                                                             2004         2003
--------------------------------------------------------------------------------
Savings and N.O.W. accounts                               $ 122,225    $ 118,265
Certificates of deposit less than $100,000                   27,353       17,449
Certificates of deposit of $100,000 or more                  53,378       44,702
--------------------------------------------------------------------------------
Total                                                     $ 202,956    $ 180,416
================================================================================

At  December  31,  2004,  certificates  of  deposit  mature  as  follows:  2005-
$71,954,000; 2006- $2,845,000; 2007-$1,285,000 and 2008- $4,647,000.

(8) Subordinated Debentures

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% (2.66% +
2.85% = 5.51% at March 7, 2005). 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, 2004, 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
the Bank 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, 2004, 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.


                                      F-17
<PAGE>

(9) Income Taxes

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

                                                              2004        2003
-------------------------------------------------------------------------------
Current income tax expense:
     Federal                                                $   815     $   278
     State                                                      178          94
-------------------------------------------------------------------------------
                                                                993         372
-------------------------------------------------------------------------------

Deferred income tax expense (benefit)
     Federal                                                   (185)        (30)
     State                                                      (30)        (20)
-------------------------------------------------------------------------------
                                                               (215)        (50)
-------------------------------------------------------------------------------
                                                            $   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):

                                                              2004        2003
-------------------------------------------------------------------------------
Federal income tax                                          $   679     $   273
State income tax effect, net of federal tax effect               97          48
Meals and entertainment                                           2           3
Other                                                            --          (2)
-------------------------------------------------------------------------------
Provision charged to expense                                $   778     $   322
===============================================================================

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 2004 and
2003 are as follows (in thousands):

                                                              2004        2003
-------------------------------------------------------------------------------
Deferred tax assets:
Allowance for loan losses                                   $   604     $   501
Organizational and start-up costs                                --           3
Allowance for uncollected interest                               20          16
Unrealized loss - securities available for sale                 390         238
Net operating loss carryforwards                                  5          38
-------------------------------------------------------------------------------
Gross deferred tax asset                                      1,019         796
Less: valuation reserve                                          (5)         (1)
-------------------------------------------------------------------------------
Deferred tax assets, net                                      1,014         795
-------------------------------------------------------------------------------

Deferred tax liabilities:
Deferred loan costs                                              39          38
Depreciation                                                     33         116
Discount accretion                                                2          --
Accrual to cash adjustment                                      136         204
-------------------------------------------------------------------------------
Gross deferred tax liabilities                                  210         358
-------------------------------------------------------------------------------
Net deferred tax assets                                     $   804     $   437
===============================================================================


                                      F-18
<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. However, there
can be no assurances about the level of future earnings.

(10) Commitments and Contingencies

At December 31, 2004, the Company was obligated under non-cancelable lease
agreements for six 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):

                   2005                          $  378
                   2006                             369
                   2007                             258
                   2008                             220
                   2009                              92
                   2010 and thereafter              149
                   ------------------------------------
                   Total                         $1,466
                   ====================================

Total rent expense was $335,000 and $316,000 in 2004 and 2003, respectively.

Litigation

Monmouth Community Bank 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. Monmouth Community Bank may
also have various commitments and contingent liabilities which are not reflected
in the accompanying consolidated statement of condition. Management is not aware
of any present legal proceedings or contingent liabilities and commitments that
would have a material impact on Monmouth Community Bank'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
Monmouth Community Bank was determined by an independent appraiser to be at fair
market value. Total lease payments for 2004 and 2003 were $26,500 and $24,000,
respectively.

On August 1, 2003, Monmouth Community Bank exercised its option to purchase its
main office and branch (land and building) located at 627 Second Avenue, Long
Branch, New Jersey, pursuant to the terms of its lease with KFC Associates,
dated June 26, 1997. The purchase price was $550,000.


                                      F-19
<PAGE>

(11) Regulatory Matters

Subject to applicable law, the board of directors of Monmouth Community Bank 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 Monmouth
Community Bank in any calendar year exceeds 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.

Monmouth Community Bank 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,
Monmouth Community Bank and Central Jersey Bancorp must meet specific capital
guidelines that involve quantitative measures of Monmouth Community Bank'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, 2004, Monmouth
Community Bank and Central Jersey Bancorp meet all capital adequacy requirements
of their regulators. Further, the most recent regulatory notification
categorized Monmouth Community Bank and Central Jersey Bancorp as
well-capitalized under the prompt corrective action regulations.


                                      F-20
<PAGE>

The following is a summary of Monmouth Community Bank's and Central Jersey
Bancorp's actual capital amounts and ratios as of December 31, 2004 and 2003,
compared to the minimum capital adequacy requirements and the requirements for
classification as a "well-capitalized" institution (dollars in thousands):

<TABLE>
<CAPTION>
                                                  Tier I                     Tier I
                                                Capital to                 Capital to             Total Capital to
                                            Average Assets Ratio         Risk Weighted              Risk Weighted
              Bank                            (Leverage Ratio)             Asset Ratio               Asset Ratio
                                              2004         2003         2004         2003         2004         2003
                                           -------------------------------------------------------------------------
<S>                                           <C>          <C>         <C>          <C>          <C>          <C>
Monmouth Community Bank                       8.23%        6.86%       12.82%       11.01%       13.82%       12.01%

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

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

<CAPTION>
                                                  Tier I                    Tier I
                                                Capital to                Capital to             Total Capital to
                                            Average Assets Ratio        Risk Weighted              Risk Weighted
              Bank                           (Leverage Ratio)             Asset Ratio               Asset Ratio
                                             2004         2003         2004         2003         2004         2003
                                           -------------------------------------------------------------------------
<S>                                        <C>          <C>          <C>          <C>          <C>          <C>
Monmouth Community Bank                    $21,085      $15,107      $21,085      $15,107      $22,723      $16,485

"Adequately capitalized" institution
(under federal regulations)                 10,248        8,810        6,578        5,489       13,156       10,977

"Well capitalized" institution (under
federal regulations)                        12,810       11,013        9,867        8,233       16,445       13,722

<CAPTION>
                                                   Tier I                     Tier I
                                                 Capital to                 Capital to            Total Capital to
                                            Average Assets Ratio          Risk Weighted             Risk Weighted
      Central Jersey Bancorp                  (Leverage Ratio)             Asset Ratio               Asset Ratio
                                              2004         2003         2004         2003         2004         2003
                                           -------------------------------------------------------------------------
<S>                                           <C>          <C>         <C>          <C>          <C>          <C>
Central Jersey Bancorp                        8.15%        6.86%       12.70%       11.01%       13.70%       12.01%

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

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


                                      F-21
<PAGE>

<TABLE>
<CAPTION>
                                                   Tier I                    Tier I
                                                 Capital to                Capital to            Total Capital to
                                            Average Assets Ratio         Risk Weighted             Risk Weighted
      Central Jersey Bancorp                  (Leverage Ratio)            Asset Ratio               Asset Ratio
                                             2004         2003         2004         2003         2004         2003
                                           -------------------------------------------------------------------------
<S>                                        <C>          <C>          <C>          <C>          <C>          <C>
Central Jersey Bancorp                     $20,892      $15,107      $20,892      $15,107      $22,530      $16,485

"Adequately capitalized" institution
(under federal regulations)                 10,251        8,810        6,579        5,489       13,157       10,977

"Well capitalized" institution (under
federal regulations)                        12,814       11,013        9,868        8,233       16,447       13,722
</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 694,574 shares of the Company's common stock,
subject to adjustment for certain dilutive events such as stock distributions.
As of December 31, 2004 and 2003, 57,600 and 120,323 options, respectively, had
been granted during those years to employees and directors of the Company. The
options vest over a period of four years. Effective January 1, 2005, all
outstanding options granted under the Plan have become fully vested.


                                      F-22
<PAGE>

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

                                               2004                 2003
--------------------------------------------------------------------------------
                                                   Weighted             Weighted
                                                   average              average
                                                   exercise             exercise
                                         Shares     price     Shares     price
--------------------------------------------------------------------------------
Outstanding at beginning of year         333,349    $12.09    214,234    $ 8.78
Granted                                   57,600     22.92    120,323     17.95
Forfeited                                 (1,904)    15.19     (1,136)     9.73
Exercised                                   (261)     9.11        (72)     7.37
================================================================================
Outstanding at end of year               388,784     13.68    333,349     12.09
================================================================================
Options exercisable at year end          192,580      9.85    127,263      8.30
Weighted average fair value of options
   granted during the year                           $6.07               $ 4.90
================================================================================

The following table summarizes information about stock options outstanding at
December 31, 2004:

                       Options Outstanding and Exercisable
                                December 31, 2004
--------------------------------------------------------------------------------
                                               Weighted               Weighted
                                               average                 average
   Number                                     remaining               exercise
 outstanding         Exercisable           contractual life             price
--------------------------------------------------------------------------------
    41,935              41,935                68 Months                $ 7.19
    68,833              51,928                92 Months                $ 7.63
    33,336              33,336                73 Months                $ 7.92
     4,168               3,126                84 Months                $ 8.64
    31,752              15,876                86 Months                $11.34
    32,062              16,299                96 Months                $11.68
    30,240               7,560                98 Months                $12.30
    88,858              22,520                107 Months               $19.84
    57,600                  --                110 Months               $22.92
================================================================================

(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-23
<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. Fair values of loans held
for sale are based upon quoted market prices.

Commitments to Extend Credit

The majority of Monmouth Community Bank'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, 2004. 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.

Limitations

Fair value estimates were made at December 31, 2004 and 2003, 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, 2004 and
2003, no attempt was made to estimate the value of anticipated future business
or the value of non-financial statement assets or liabilities. 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.


                                      F-24
<PAGE>

The estimated fair values of the Company's financial instruments at December 31,
2004 and 2003 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                     2004                    2003
                                                     ----                    ----
                                               Book        Fair        Book        Fair
                                               value       value       value       value
                                               -----       -----       -----       -----
<S>                                          <C>         <C>         <C>         <C>
Financial Assets:
Cash and cash equivalents                    $ 18,594    $ 18,594    $ 14,364    $ 14,364
Investment securities available for sale       73,668      73,668      68,196      68,196
Investment securities held to maturity         16,484      16,549      15,079      15,278
Loans, net                                    139,697     137,602     115,805     115,279

Financial Liabilities:
Deposits                                      232,853     232,501     207,234     206,940
Subordinated debentures                      $  5,155    $  5,155    $     --    $     --
=========================================================================================
</TABLE>

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

The following information with respect to Central Jersey Bancorp is as of and
for the years ended December 31, 2004 and 2003, and should be read in
conjunction with the notes to the consolidated financial statements (in
thousands):

Balance Sheets                                              2004         2003
-------------------------------------------------------------------------------
Assets:
Investment in subsidiary                                  $ 21,203     $ 14,899
-------------------------------------------------------------------------------
     Total assets                                           21,203       14,899
-------------------------------------------------------------------------------

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

Shareholders' Equity:
Common stock                                                    19           19
Additional paid-in capital                                  15,237       15,238
Retained earnings                                            1,218           --
Accumulated other comprehensive loss                          (619)        (358)
-------------------------------------------------------------------------------
     Total shareholders' equity                           $ 15,855     $ 14,899
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
     Total liabilities and shareholders' equity           $ 21,203     $ 14,899
===============================================================================

Statements of Income                                          2004         2003
-------------------------------------------------------------------------------
Equity in undistributed earnings of the bank
    subsidiary                                            $  1,411     $    482
Interest expense on subordinated debt                         (193)          --
-------------------------------------------------------------------------------
Net income                                                $  1,218     $    482
===============================================================================

Statements of Cash Flows                                    2004         2003
-------------------------------------------------------------------------------
Cash Flow From Operating Activities
-------------------------------------------------------------------------------
Net income                                                $  1,218     $    482
Less equity in undistributed earnings of the bank
    subsidiary                                              (1,411)        (482)
Increase in other liabilities                                  193           --
-------------------------------------------------------------------------------


                                      F-25
<PAGE>

-------------------------------------------------------------------------------
Net cash provided by operating activities                       --           --
-------------------------------------------------------------------------------

-------------------------------------------------------------------------------
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                      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            $     --     $     --
===============================================================================

(15) Recent Accounting Pronouncements

In December 2004, the Financial Accounting Standards Board (the "FASB") issued
SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No.
29, Accounting for Nonmonetary Transactions. The amendments made by SFAS No. 153
are based on the principle that exchanges of nonmonetary assets should be
measured based on the fair value of the assets exchanged. Further, the
amendments eliminate the narrow exception for nonmonetary exchanges of similar
productive assets and replace it with a broader exception for exchanges of
nonmonetary assets that do not have commercial substance. The provisions of SFAS
No. 153 are to be applied prospectively and are effective for nonmonetary
exchanges occurring in fiscal periods beginning after June 15, 2005, with
earlier application permitted for nonmonetary asset exchanges occurring in
fiscal periods beginning after December 16, 2004. The adoption of SFAS No. 153
is not expected to have a material impact on the Company's financial condition
or results of operations.

In December 2004, the FASB issued SFAS No. 123 (revised 2004), Share-Based
Payment. This statement is a revision of SFAS No. 123, Accounting for
Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for
Stock Issued to Employees, and its related guidance. SFAS No. 123 (revised 2004)
established standards for the accounting for transactions in which an entity
exchanges its equity instruments for goods or services. This statement requires
that the cost resulting from all share-based payment transactions be recognized
in the financial statements. SFAS No. 123 (revised 2004) establishes fair value
as the measurement objective in accounting for share-based payment arrangements
and requires all entities to apply a fair-value-based measurement method in
accounting for share-based payment transactions with employees, except for
equity instruments held by employee share ownership plans. This statement is
effective for public entities that do not file as small business issuers as of
the beginning of the first interim or annual reporting period that begins after
June 15, 2005. We do not expect the adoption of SFAS No. 123 (revised 2004) will
have a material impact on our financial condition or results of operations.

In September 2004, the FASB approved issuing a Staff Position to delay the
requirement to record impairment losses under Emerging Issues Task Force Issue
No. 03-1, The Meaning of


                                      F-26
<PAGE>

Other Than Temporary Impairment and its Application to Certain Investments
("EITF 03-1"). The approved delay is applicable to all securities within the
scope of EITF 03-1 and will remain in effect until new guidance is issued and
comes into effect. The disclosure requirements originally prescribed by EITF
03-1 will remain in effect, and SEC Staff Accounting Bulletin No. 59, Accounting
for Noncurrent Marketable Equity Securities, September 1985, SAB Topic 5.M,
Other Than Temporary Impairment of Certain Investments in Debt and Equity
Securities remains in effect for public companies.


                                      F-27
<PAGE>

(16) Selected Quarterly Financial Data (Unaudited)

The following tables are a summary of certain quarterly financial data for the
years ended December 31, 2004 and 2003.

<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                                  $       0.15    $       0.17    $       0.16    $       0.17
                                       ============    ============    ============    ============
Diluted                                $       0.15    $       0.16    $       0.15    $       0.16
                                       ============    ============    ============    ============
Weighted average shares
    outstanding:

Basic                                     1,860,660       1,860,709       1,860,725       1,860,725
                                       ============    ============    ============    ============
Diluted                                   1,954,342       1,949,842       1,970,164       1,999,771
                                       ============    ============    ============    ============
</TABLE>


                                      F-28
<PAGE>

<TABLE>
<CAPTION>
                                                            2003 Quarter Ended
                                       ------------------------------------------------------------
                                         March 31         June 30      September 30     December 31
                                       ------------    ------------    ------------    ------------
                                               (dollars in thousands, except per share data)
<S>                                    <C>             <C>             <C>             <C>
Interest income                        $      2,224    $      2,253    $      2,041    $      2,593
Interest expense                                703             688             604             617
                                       ------------    ------------    ------------    ------------
      Net interest income                     1,521           1,565           1,437           1,976
Provision for loan losses                        18               5              16             111
                                       ------------    ------------    ------------    ------------
      Net interest income after
          provision for loan losses           1,503           1,560           1,421           1,865

Non-interest income                             208             182             180             210
Non-interest expense                          1,085           1,188           1,249           1,398
                                       ------------    ------------    ------------    ------------
Income before income taxes                      181             179               6             438
      Income taxes                               72              72               2             176
                                       ------------    ------------    ------------    ------------
Net income                             $        109    $        107    $          4    $        262
                                       ============    ============    ============    ============
Earnings per share:

Basic                                  $       0.06    $       0.06    $       0.00    $       0.14
                                       ============    ============    ============    ============
Diluted                                $       0.06    $       0.06    $       0.00    $       0.13
                                       ============    ============    ============    ============
Weighted average shares
    outstanding:

Basic                                     1,860,514       1,860,514       1,860,516       1,860,588
                                       ============    ============    ============    ============
Diluted                                   1,895,948       1,908,901       1,918,048       1,927,965
                                       ============    ============    ============    ============
</TABLE>


                                      F-29
<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.

3.2               By-laws of the Registrant,  as amended and restated on January
                  1, 2005.

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).

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).


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<PAGE>

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.

10.8*             Change of  Control  Agreement,  dated as of  January  1, 2005,
                  between the Registrant and Robert K. Wallace.

10.9*             Severance Agreement,  dated as of January 1, 2005, between the
                  Registrant and Carl F. Chirico

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, 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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