UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 20549

                                    FORM 10-K

                                   (Mark One)

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

      For the fiscal year ended December 31, 2006

                                       OR

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

      For the transition period from _________to _________

                         Commission file number 0-49925

                             CENTRAL JERSEY BANCORP
     ----------------------------------------------------------------------
             (Exact name of Registrant as specified in its charter)

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

 627 Second Avenue, Long Branch, New Jersey              07740
 ------------------------------------------            ----------
 (Address of principal executive offices)              (Zip Code)

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

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

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

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

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

<PAGE>

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

      Indicate by check mark  whether the  Registrant  (1) has filed all reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
Registrant was required to file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes |X| No |_|

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

      Indicate  by check mark  whether  the  Registrant  is a large  accelerated
filer, an accelerated  filer,  or a  non-accelerated  filer.  See definitions of
"accelerated  filer" and "large accelerated filer" in Rule 12b-2 of the Exchange
Act. (Check one):

  Large accelerated filer |_|  Accelerated filer |X|  Non-accelerated filer |_|

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

      As of June 30, 2006, the aggregate market value of the Registrant's common
stock held by non-affiliates was approximately $60,362,430.

      As of March 10, 2007,  8,254,553 shares of the  Registrant's  common stock
were outstanding.

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

Part III of this Annual Report on Form 10-K incorporates  certain information by
reference  from the  Registrant's  Proxy  Statement  for the  Annual  Meeting of
Shareholders  scheduled to be held on May 24, 2007. It is  anticipated  that the
Proxy  Statement will be filed with the  Securities  and Exchange  Commission by
April 30, 2007.

                                       ii
<PAGE>

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

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

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

                                      iii
<PAGE>

                             CENTRAL JERSEY BANCORP

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

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

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

Item 1B.     Unresolved Staff Comments ................................................17

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

Item 3.      Legal Proceedings ........................................................18

Item 4.      Submission of Matters to a Vote of Security Holders ......................18

PART II
-------

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

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

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

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk ...............47

Item 8.      Financial Statements and Supplementary Data ..............................49

Item 9.      Changes in and Disagreements with Accountants on Accounting
             and Financial Disclosure .................................................49

Item 9A.     Controls and Procedures ..................................................49

Item 9B.     Other Information ........................................................50

PART III
--------

Item 10.*    Directors, Executive Officers and Corporate Governance ...................51

Item 11.*    Executive Compensation ...................................................51

Item 12.*    Security Ownership of Certain Beneficial Owners and Management and
             Related Stockholder Matters ..............................................51
</TABLE>


                                       iv
<PAGE>

<TABLE>
<S>                                                                                   <C>
Item 13.*    Certain Relationships, Related Transactions and Director Independence ....51

Item 14.*    Principal Accountant Fees and Services ...................................51

Item 15.     Exhibits and Financial Statement Schedules ...............................51

Signatures ............................................................................53
</TABLE>

*     The  information  required  under  this  Item  is to be  contained  in the
      Registrant's  Proxy  Statement  for the  Annual  Meeting  of  Shareholders
      scheduled  to be held on May  24,  2007,  and is  incorporated  herein  by
      reference.  It is anticipated  that the Proxy Statement will be filed with
      the Securities and Exchange Commission by April 30, 2007.


                                       v
<PAGE>

                                     PART I

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

Business Development

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

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

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

Business Strategy

      Central Jersey Bancorp's strategy is to provide a competitive range of
community banking services to its market area, in a professional environment, at
fair and reasonable prices, at convenient operating hours, with a commitment to
prompt, quality and highly personalized


                                       1
<PAGE>

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 Bank, N.A., Central Jersey Bancorp's bank
subsidiary.

Market Area

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

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

Services Offered

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

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

Loans. Central Jersey Bank N.A.'s loan portfolio consists primarily of
variable-rate and short-term fixed rate loans, with a significant concentration
in commercial purpose transactions. Central Jersey Bank, N.A. believes that the
familiarity of its management and the members of its board of directors
appointed to its loan committee with prospective local borrowers enables Central
Jersey Bank, N.A. to better evaluate the character, integrity and
creditworthiness of prospective borrowers.


                                       2
<PAGE>

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

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

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

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

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


                                       3
<PAGE>

Competition

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

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

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

Employees

      George W. Callas (Chairman of the Board), James S. Vaccaro (President and
Chief Executive Officer), Robert S. Vuono (Senior Executive Vice President,
Chief Operating Officer and Secretary), and Anthony Giordano, III (Executive
Vice President, Chief Financial Officer, Treasurer and Assistant Secretary)
currently are the executive officers of the holding company, Central Jersey
Bancorp, and its banking subsidiary, Central Jersey Bank, N.A. Mr. Vaccaro, Mr.
Vuono, Mr. Giordano III, Robert K. Wallace (Executive Vice President of
Lending), Thomas J. Garrity (Executive Vice President of Lending) and Lisa A.
Borghese (Senior Vice President of Lending) each have a change of control
agreement. Including the aforementioned officers, Central Jersey Bancorp had a
total of 147 full time equivalent employees as of December 31, 2006.

Holding Company Operations

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


                                       4
<PAGE>

N.A and its participation in MCBK Capital Trust I, a special purpose business
trust established in March 2004 for the purpose of issuing $5.0 million of
preferred capital securities. See "Item 7. Management's Discussion and Analysis
of Financial Condition and Results of Operation - Guaranteed Preferred
Beneficial Interest in the Central Jersey Bancorp Subordinated Debt." The
holding company does not conduct, nor does management believe that it will
conduct, any business. All banking products and services are, and will be,
provided by Central Jersey Bancorp's bank subsidiary. Moreover, on March 9,
2004, Monmouth Community Bank, N.A., the original banking subsidiary of Central
Jersey Bancorp, formed MCB Investment Company, a New Jersey corporation. For
state tax purposes, MCB Investment Company was formed to hold and invest in
securities in support of Monmouth Community Bank, N.A. Further, on January 10,
2001, Allaire Community Bank, a former bank subsidiary of Central Jersey Bancorp
that was combined with Monmouth Community Bank, N.A. to form Central Jersey
Bank, N.A. in August 2005, formed Allaire Investment Co., Inc., a New Jersey
corporation, for the same purposes that Monmouth Community Bank, N.A. formed MCB
Investment Company. Central Jersey Bancorp combined the two New Jersey
investment subsidiaries effective January 1, 2006. The name of the combined
investment subsidiary is CJB Investment Company.

Government Regulation

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

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


                                       5
<PAGE>

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

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

Dividend Restrictions

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

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

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

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


                                       6
<PAGE>

      Central Jersey Bank, N.A. has never declared any cash dividends and
neither Central Jersey Bancorp nor any of its subsidiaries currently
contemplates the payment of such dividends in 2007.

Transactions with Affiliates

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

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

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

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

Deposit Insurance Reform Act of 2005

      As a result of the Federal Deposit Insurance Reform Act of 2005, the Bank
Insurance Fund and Savings Association Insurance Fund have been merged into a
new combined fund, called the Deposit Insurance Fund. The Federal Deposit
Insurance Reform Act also (i) increases deposit insurance coverage for
retirement accounts to $250,000, (ii) indexes the current $100,000 insurance
coverage limit for standard accounts and the new $250,000 limit for retirement
accounts to reflect inflation (with adjustments for inflation every five years,
commencing January 1, 2011), (iii) requires the FDIC to assess annual deposit
insurance premiums on all banks and savings institutions, (iv) gives a one-time
insurance assessment credit totaling $4.7 billion to banks and savings
institutions in existence on December 31, 1996 that can


                                       7
<PAGE>

be used to offset premiums otherwise due, (v) imposes a cap on the level of the
Deposit Insurance Fund and provide for dividends or rebates when the fund grows
beyond a specified threshold, (vi) adopts a historical basis concept for
distributing the aforementioned one-time credit and dividends (with each
institution's historical basis to be determined by a formula that looks back to
the institution's assessment base in 1996 and adds premiums paid since that
time) and (vii) authorizes revisions to the current risk-based system for
assessing premiums, including replacing the current fixed reserve ratio
requirement of 1.25% with a range of between 1.15% and 1.50% of insured
deposits.

Capital Adequacy

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

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

      Under the capital guidelines, a banking organization's total capital is
divided into tiers. "Tier I Capital" consists of common shareholders' equity,
qualifying preferred stock, and minority interests in the equity accounts of
consolidated subsidiaries, less certain goodwill items and other intangible
assets. No 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.


                                       8
<PAGE>

      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, 2006, Central Jersey Bancorp's ratios of Total Capital and Tier 1
Capital to risk-weighted assets were 12.62% and 11.71%, 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 loan loss reserve, goodwill, and certain other 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, 2006, Central Jersey Bancorp's
leverage ratio was 8.38%. Central Jersey Bank, N.A. is subject to similar
risk-based and leverage capital guidelines, as adopted by the OCC.

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

Prompt Corrective Action

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

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


                                       9
<PAGE>

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

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

      At December 31, 2006, Central Jersey Bank, N.A. was "well capitalized"
based on the ratios and guidelines noted above. However, the capital categories
of the bank are determined solely for the purpose of applying the Prompt
Corrective Action Regulations and may not constitute an accurate representation
of its overall financial condition or prospects. Additional information on
capital amounts and ratios of Central Jersey Bancorp and Central Jersey Bank,
N.A. is found in Note (11) to our consolidated financial statements included
herein.

Unsafe and Unsound Practices

      Notwithstanding its Prompt Corrective Action category dictated by
risk-based capital ratios, the Federal Deposit Insurance Act permits the
appropriate bank regulatory agency to reclassify an institution if it
determines, after notice and a hearing, that the condition of the institution is
unsafe or unsound, or if it deems the institution to be engaging in an unsafe or
unsound practice. Under the Financial Institutions Supervisory Act, the OCC has
the authority to prohibit national banks from engaging in any activity in the
conduct of their business which the OCC believes constitutes an unsafe or
unsound practice. The Federal Reserve Board has similar authority with regard to
bank holding companies and their non-bank subsidiaries.


                                       10
<PAGE>

The USA PATRIOT Act

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

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

Community Reinvestment Act

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

Consumer Privacy

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

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 and surplus, plus an additional 10% of capital and
surplus if the amount over the 15% general limit is fully 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.


                                       11
<PAGE>

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 States signed into law the
Sarbanes-Oxley Act of 2002. The stated goals of Sarbanes-Oxley Act of 2002 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 of 2002
generally applies to all companies, both domestic and foreign, that file or is
required to file periodic reports with the Securities and Exchange Commission
under the Exchange Act.

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

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

      o     audit committees for all reporting companies;

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

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

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

      o     disclosure of off-balance sheet transactions;

      o     expedited filing requirements for certain periodic and current
            reports;

      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.


                                       12
<PAGE>

Overall Impact of New Legislation and Regulations

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

Impact of Monetary Policies

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

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

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

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

      New Jersey is a competitive banking environment. Central Jersey Bank, N.A.
competes for deposits and for borrowers with larger and more established
in-state and out-of-state financial institutions, including large financial
service companies and other entities, in addition to traditional banking
institutions such as savings and loan associations, savings banks, commercial
banks and credit unions. Because of their greater capitalization and other
resources, larger institutions may have competitive advantages resulting from
their ability to offer more convenient facilities and higher lending limits.
Lending limits are primarily a function of a bank's capital base. Accordingly,
larger banks that have much larger capital bases than Central Jersey Bank, N.A.,
have lending limits which exceed those of Central Jersey Bank, N.A. Several
larger banks with branches in our market area have lending limits which exceed
$1 billion. At December 31, 2006, Central Jersey Bank, N.A.'s legal lending
limit was approximately $6.7 million.

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


                                       13
<PAGE>

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

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

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

Competition for deposits may impact our profitability.

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

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

      Our profitability depends in large part on the difference between the
interest Central Jersey Bank, N.A. pays on funds available to it, and the
interest Central Jersey Bank, N.A. earns on funds it makes available to others.
The price of funds may depend on many factors beyond our control, including
federal economic, fiscal and monetary policies, and general economic conditions.
These factors may be influenced by national and international economic and
political trends and events, including inflation, recession, unemployment and
international conflicts. Any of these events could trigger an increase in
interest rates, which will increase our cost of funds.

      Fluctuations in interest rates paid by Central Jersey Bank, N.A. for funds
it needs could affect our operating performance and condition, by affecting the
margin or "spread" between what Central Jersey Bank, N.A. pays for funds and
what it earns by charging interest to lend funds. Interest rates were recently
at historically low levels. However, the Federal Reserve has increased its
target for the federal funds rate several times. As a result, the yield curve
has remained flat or slightly inverted. Consequently, Central Jersey Bancorp and
Central Jersey


                                       14
<PAGE>

Bank, N.A. have experienced compression of its interest rate spread and net
interest margin, which has had, and likely will continue to have, a negative
effect on profitability.

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

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

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

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

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

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

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

      For example, many of the recent regulatory changes have increased
competition between banks and nonbanks, which now may offer similar products and
services. They have also increased merger activity between banks and nonbanks,
and elevated customer awareness of differences among competitors in products,
services and fees. These changes may result in


                                       15
<PAGE>

increased competitive efforts by Central Jersey Bank, N.A., resulting in
increased costs to Central Jersey Bank, N.A.

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

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

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

      At December 31, 2006, $272.7 million, or 86.5%, of Central Jersey Bank,
N.A.'s total loans consisted of commercial, industrial and commercial real
estate loans. This portfolio continues to grow and we intend to continue to
emphasize these types of lending. These types of loans generally expose a lender
to greater risk of non-payment and loss than the one-to-four family residential
mortgage loans because repayment of the loans often depends on the successful
operation of the property and the income stream of the borrowers. Such loans
typically involve larger loan balances to single borrowers or groups of related
borrowers as compared to one-to-four- family residential mortgage loans. Also,
many of our borrowers have more than one loan outstanding. Consequently, an
adverse development with respect to one loan or one credit relationship can
expose Central Jersey Bank, N.A. to a significantly greater risk of loss
compared to an adverse development with respect to a one-to-four family
residential loan.

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

      During the last five years, our total assets have grown substantially from
$118.0 million at December 31, 2001 to $516.3 million at December 31, 2006,
through internal growth and the combination with Allaire Community Bank. Our
business strategy calls for continued expansion, but we do not anticipate growth
to continue at this rate. Our ability to continue to grow depends, in part, upon
our ability to open new branch locations, successfully attract deposits to
existing and new branches, and identify favorable loan and investment
opportunities. In the event that we do not continue to grow, our results of
operations could be adversely impacted.

Unmanaged growth may adversely impact our financial results.

      As part of our expansion strategy, we plan to open new branches in our
existing and target markets. However, we may be unable to identify attractive
locations on terms favorable to us or to hire qualified management to operate
the new branches. In addition, the organizational


                                       16
<PAGE>

and overhead costs may be greater than we anticipated or we may not be able to
obtain the regulatory approvals necessary to open new branches. New branches may
take longer than expected to reach profitability, and we cannot assure that they
will become profitable. The additional costs of starting new branches may
adversely impact our financial results.

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

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

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

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

      In an attempt to mitigate any loan losses we may incur, we maintain an
allowance for loan losses based on, among other things, national and regional
economic conditions, and historical loss experience and delinquency trends among
loan types. However, we cannot predict loan losses with certainty and we cannot
assure you that charge offs in future periods will not exceed the allowance for
loan losses. In addition, regulatory agencies, as an integral part of their
examination process, review our allowance for loan losses and may require
additions to the allowance based on their judgment about information available
to them at the time of their examination. Factors that require an increase in
our allowance for loan losses could reduce our earnings.

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

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

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

      None.


                                       17
<PAGE>

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

Bank Buildings

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

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

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

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

      o     700 Branch Avenue, Little Silver, New Jersey.

      o     61 Main Avenue, Ocean Grove, New Jersey.

      o     3636 Highway 33, Neptune, New Jersey.

      o     444 Ocean Boulevard, Long Branch, New Jersey.

      o     2200 Highway 35, Sea Girt, New Jersey.

      o     155 Main Street, Manasquan, New Jersey.

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

      o     2201 Bridge Avenue, Point Pleasant, New Jersey.

      o     501 Main Street, Bradley Beach, New Jersey.

      o     611 Main Street, Belmar, New Jersey

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

      In addition, Central Jersey Bank, N.A. leases approximately 5,000 square
feet of office, storage and conference space at 6 West End Court, Long Branch,
New Jersey. Central Jersey Bank N.A. is in the process of constructing a 10,000
square foot office building for its new corporate headquarters located on Route
34, Wall Township, New Jersey. Central Jersey Bank N.A. also leases property on
Hurley Pond Road, Wall Township, New Jersey and anticipates opening its new
branch on Route 35 and Dow Avenue, Ocean Township, New Jersey, in the fourth
quarter of 2007.

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

      There are no material legal, governmental, administrative or other
proceedings pending against Central Jersey Bancorp and Central Jersey Bank, N.A.

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

      None.


                                       18
<PAGE>

                                     PART II

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

      Effective February 1, 2007, the common stock of Central Jersey Bancorp
commenced trading on the NASDAQ Global Market under the ticker symbol "CJBK."
Prior thereto, the common stock of Central Jersey Bancorp traded on the NASDAQ
Capital Market.

      The following table sets forth, for the periods indicated, the high and
low last sale information for Central Jersey Bancorp's common stock, as reported
on the NASDAQ Capital Market for the period commencing January 1, 2005 through
December 31, 2006. Please note that the information set forth below reflects
inter-dealer prices, without retail mark-up, mark-down or commission and may not
represent actual transactions, and has been adjusted to reflect the two-for-one
stock split, in the form of a stock dividend, paid on July 1, 2005 for
shareholders of record on June 15, 2005, and for the five percent stock
dividend, paid on July 1, 2006 for shareholders of record on June 15, 2006.

      Year Ended December 31, 2006                           High         Low
                                                            ------       ------
      First Quarter ..................................      $13.14       $10.64
      Second Quarter .................................       11.60         8.30
      Third Quarter ..................................       10.35         8.25
      Fourth Quarter .................................        9.48         8.15

      Year Ended December 31, 2005                           High         Low
                                                            ------       ------
      First Quarter ..................................      $15.74       $12.38
      Second Quarter .................................       14.85        13.10
      Third Quarter ..................................       16.62        14.09
      Fourth Quarter .................................       14.07        11.62

      As of March 2, 2007, the following were market makers for Central Jersey
Bancorp's common stock: UBS Securities LLC; Citadel Derivatives Group LLC;
Citigroup Global Markets Inc.; Susquehanna Capital Group; E*Trade Capital
Markets LLC; Ryan, Beck & Co., LLC; Hill Thompson; Magid, L.P.; Sandler, O'
Neill & Partners, L.P.; Knight Equity Markets, L.P.; Pacific Stock Exchange;
Keefe, Bruyette & Woods, Inc.; Sterne, Agee & Leach, Inc.; NASDAQ Execution
Services LLC; Automated Trading Desk; and Direct Edge ECN LLC.

      As of February 26, 2007, the approximate number of registered holders of
Central Jersey Bancorp's common stock was 684.

      Central Jersey Bancorp has not paid any cash dividends on its common stock
and does not presently intend to declare or pay cash dividends. Our dividend
policy is subject to certain regulatory considerations and the discretion of our
board of directors and depends upon a number of factors, including operating
results, financial condition and general business conditions. Holders of common
stock are entitled to receive dividends as, if and when declared by our board


                                       19
<PAGE>

of directors out of funds legally available therefor, subject to the
restrictions set forth under the Federal Bank Holding Company Act. We may pay
cash dividends without regulatory approval if net income available to
shareholders fully funds the proposed dividends, and the expected rate of
earnings retention is consistent with capital needs, asset quality and overall
financial condition.

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


                                       20
<PAGE>

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

      The following selected consolidated financial data of Central Jersey
Bancorp and Central Jersey Bank, N.A. as of and for the years ended December 31,
2002 through 2006 are derived from the audited financial statements of Central
Jersey Bancorp and Central Jersey Bank, N.A. The selected consolidated financial
data as of and for the years ended December 31, 2006, 2005, and 2004 should be
read in conjunction with the consolidated financial statements of Central Jersey
Bancorp and the related notes thereto and management's discussion and analysis
thereof appearing elsewhere in this document.

          CENTRAL JERSEY BANCORP - Summarized Statements of Operations

                    (in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                              Year Ended
                                                                             December 31,
                                                  -----------------------------------------------------------------

                                                     2006          2005         2004(1)       2003(1)      2002(1)
                                                  ---------     ---------     ---------     ---------     ---------
<S>                                               <C>           <C>           <C>           <C>           <C>
Interest and dividend income                      $  29,419     $  24,947     $  11,551     $   9,111     $   8,275
Interest expense                                     12,456         7,502         3,046         2,612         2,789
                                                  ---------     ---------     ---------     ---------     ---------
Net interest income                                  16,963        17,445         8,505         6,499         5,486
Provision for loan losses                               500           426           260           150           373
                                                  ---------     ---------     ---------     ---------     ---------
Net interest income after
  provision for loan losses                          16,463        17,019         8,245         6,349         5,113
                                                  ---------     ---------     ---------     ---------     ---------
Other income                                          1,740         1,624           849           780           661
Operating expenses, including
  salaries and employee
  benefits, professional and
  application fees, occupancy
  expenses, etc                                      14,309        14,550         7,098         6,325         4,920
                                                  ---------     ---------     ---------     ---------     ---------
Income before provision for
  income taxes                                        3,894         4,093         1,996           804           854
Income taxes                                          1,428         1,461           778           322            70
                                                  ---------     ---------     ---------     ---------     ---------
Net income                                        $   2,466     $   2,632     $   1,218     $     482     $     784
                                                  =========     =========     =========     =========     =========

Net income per share (2)
  Basic                                           $    0.30     $    0.32     $    0.31     $    0.12     $    0.26
  Diluted                                         $    0.28     $    0.30     $    0.30     $    0.12     $    0.26
</TABLE>

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

(2)   All per share amounts have been restated to reflect the 5% stock
      distributions paid on December 31, 2003, 2002, 2001 and 2000, the
      six-for-five stock split, in the form of a stock dividend, for
      shareholders of record on July 15, 2004, the two-for-one stock split, in
      the form of a stock dividend, for shareholders of record on June 15, 2005
      and the 5% stock dividend paid on July 1, 2006.


                                       21
<PAGE>

               CENTRAL JERSEY BANCORP - Summarized Balance Sheets

                                 (in thousands)

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

                                                        2006            2005           2004(1)        2003(1)         2002(1)
                                                     ---------       ---------       ---------       ---------       --------
<S>                                                  <C>             <C>             <C>             <C>             <C>
Assets:
Cash and due from banks                              $  16,162       $  21,228       $   9,169       $   9,689       $  8,880
Federal funds sold                                      21,634              --           9,425           4,675          7,500
Investment securities held-to-maturity                  20,820          22,567          16,484          15,079         25,539
Investment securities available-for-sale,
   at market value                                      95,735         111,175          73,668          68,196         44,791
Loans held-for-sale                                        242           3,127              --              --            302
Loans, net                                             312,093         307,168         139,697         115,805         89,026
Premises and equipment                                   5,357           6,006           2,496           2,171          1,638
Bank owned life insurance                                3,447           3,338              --              --             --
Goodwill                                                26,957          27,229              --              --             --
Core deposit intangibles                                 2,478           3,097              --              --             --

Other assets                                             7,847           9,628           3,176           2,037          1,861
Due from broker                                          3,527              --              --           4,961             --
                                                     ---------       ---------       ---------       ---------       --------
Total assets                                         $ 516,299       $ 514,563       $ 254,115       $ 222,613       $179,537
                                                     =========       =========       =========       =========       ========
Liabilities and Shareholders' Equity:
Deposits                                             $ 427,277       $ 407,554       $ 232,853       $ 207,234       $164,007
Accrued expenses and other liabilities                   1,273           1,885             252             480            599
Other borrowings                                        17,099          38,191              --              --             --
Subordinated debentures                                  5,155           5,155           5,155              --             --
                                                     ---------       ---------       ---------       ---------       --------
Total liabilities                                      450,804         452,785         238,260         207,714        164,606
                                                     ---------       ---------       ---------       ---------       --------
Shareholders' equity:
Common stock                                                83              82              38              19             18
Additional paid-in capital                              60,505          59,999          15,218          15,238         14,764
Accumulated other comprehensive (loss)/income           (1,409)         (2,153)           (619)           (358)           149
Retained earnings                                        6,316           3,850           1,218              --             --
                                                     ---------       ---------       ---------       ---------       --------
Total shareholders' equity                              65,495          61,778          15,855          14,899         14,931
                                                     ---------       ---------       ---------       ---------       --------
Total liabilities and shareholders' equity           $ 516,299       $ 514,563       $ 254,115       $ 222,613       $179,537
                                                     =========       =========       =========       =========       ========
</TABLE>

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


                                       22
<PAGE>

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

      The following discussion and analysis is intended to provide information
about Central Jersey Bancorp's financial condition for the years ended December
31, 2006 and 2005 and results of operations for the years ended December 31,
2006, 2005 and 2004. The following information should be read in conjunction
with Central Jersey Bancorp's audited consolidated financial statements for the
years ended December 31, 2006, 2005 and 2004, including the related notes
thereto, which begin on page F-1 of this report.

General

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

      The following discussion and analysis and the audited consolidated
financial statements for the years ended December 31, 2006, 2005 and 2004,
including the related notes thereto, except for Note 2, do not address or
reflect the financial performance of Allaire Community Bank for any periods
prior to January 1, 2005. Such discussion and analysis and financial statement
disclosure only addresses and reflects the financial performance of Central
Jersey Bancorp and Monmouth Community Bank, N.A. Inasmuch as the combination of
Central Jersey Bancorp and Allaire Community Bank took place on January 1, 2005,
the financial performance of Allaire Community Bank on and after said date has
been reflected in the consolidated financial statements of Central Jersey
Bancorp. For historical financial performance of Allaire Community Bank, and
certain pro-forma financial information with respect to Central Jersey Bancorp
and Allaire Community Bank, after giving effect to the combination, please see
Central Jersey Bancorp's current report on Form 8-K, dated as of January 1,
2005, as amended.

Critical Accounting Policies

      Note (1) to our consolidated financial statements for the years ended
December 31, 2006, 2005 and 2004, 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 are periodically reviewed by Central Jersey Bancorp's audit
committee and board of directors.


                                       23
<PAGE>

      Additional critical accounting policies relate to judgments about other
asset impairments, including goodwill, investment securities and deferred tax
assets. Central Jersey Bancorp performs an annual analysis to test the aggregate
balance of goodwill for impairment in accordance with Statement of Financial
Accounting Standards ("SFAS") No. 142, Goodwill and Other Intangible Assets. For
purposes of goodwill impairment evaluation, Central Jersey Bancorp is identified
as the reporting unit. The fair value of goodwill is determined in the same
manner as goodwill recognized in a business combination and uses standard
valuation methodologies including a review of comparable transactions. If the
carrying amount of goodwill pursuant to this analysis were to exceed the implied
fair value of goodwill, an impairment loss would be recognized. No impairment
loss was required to be recognized for the years ended December 31, 2006 and
2005. At December 31, 2006 and 2005, Central Jersey Bancorp had $27.0 million
and $27.2 million, respectively, of goodwill related to the combination with
Allaire Community Bank.

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

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


                                       24
<PAGE>

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

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

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

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

Overview

      Net income from operations for the year ended December 31, 2006 was $2.5
million, or $0.30 per basic share and $0.28 per diluted share, compared to net
income of $2.6 million, or $0.32 per basic share and $0.30 per diluted share,
for the year ended December 31, 2005. The decrease in net income was primarily
attributable to the decrease in net interest margin, which decreased to 3.67%
for the year ended December 31, 2006, as compared to 4.08% for the year ended
December 31, 2005. The net interest margin compression was due primarily to an
increase in interest rates paid on deposits and borrowed funds, as evidenced by
the cost of interest-bearing liabilities, which increased to 3.42% for the year
ended December 31, 2006, as compared to 2.24% for the year ended December 31,
2005. The yield on interest-earning assets only increased to 6.36% for the year
ended December 31, 2006, as compared to 5.83% for the year ended December 31,
2005. During the year ended December 31, 2006, Central Jersey Bancorp's
liabilities re-priced more quickly than its interest-earning assets, thus the
inverted yield curve, where short-term rates are higher than long-term rates,
combined with the competitive environment for deposits, has exacerbated the net
interest margin compression.

      Per share earnings have been adjusted in both periods to reflect the
two-for-one stock split, in the form of a stock dividend, to shareholders of
record on June 15, 2005, and for the five percent stock dividend, paid on July
1, 2006 for shareholders of record on June 15, 2006.

      Total assets of $516.3 million at December 31, 2006 were comprised
primarily of $116.6 million in investment securities, $312.1 million in net
loans and $37.8 million in cash and cash equivalents, as compared to total
assets of $514.6 million at December 31, 2005, which primarily


                                       25
<PAGE>

consisted of $133.7 million in investment securities, $307.2 million in net
loans and $21.2 million in cash and cash equivalents. Total assets at December
31, 2006 were funded primarily through deposits totaling $427.3 million, a 4.8%
increase over deposits totaling $407.6 million at December 31, 2005.

      At December 31, 2006, non-accrual loans totaled $91,000, as compared to
$79,000 for the year ended December 31, 2005. There were no loans ninety days or
greater past due and still accruing interest at December 31, 2006 or 2005. There
were $455,000 in loan charge-offs during the year ended December 31, 2006 as
compared to $92,000 in 2005. The increase in loan charge-offs for the year ended
December 31, 2006 is due primarily to the charge-off of $409,000 in unsecured
loans made to several individuals referred by Mr. Solomon Dwek. The repayment of
these loans has been adversely impacted by the May 2006 action commenced by PNC
Bank against Mr. Dwek. Mr. Dwek allegedly defrauded PNC Bank by depositing a
$25.0 million check drawn on a closed account with PNC Bank. In response to Mr.
Dwek's alleged fraud, PNC Bank commenced an action against Mr. Dwek, which
resulted in a court order freezing Mr. Dwek's assets. Recently, a U.S.
Bankruptcy judge granted Mr. Dwek's request to place his estate and properties
into a voluntary bankruptcy reorganization. Subsequent to the $409,000
charge-off at December 31, 2006, Central Jersey Bancorp agreed to settle this
matter with the unsecured borrowers for a lump sum payment of $90,000, which was
received on March 7, 2007. In exchange for the $90,000 payment, Central Jersey
Bancorp agreed to release the unsecured borrowers from all present and future
claims specifically related to these loans. Central Jersey Bancorp retained its
rights to pursue collection on these loans from Mr. Dwek or any Mr. Dwek related
entity.

<TABLE>
<CAPTION>
                                                                        At or For the
                                                                   Year ended December 31,
                                                               -----------------------------

     Performance Ratios:                                        2006        2005       2004
                                                                ----        ----       ----
<S>                                                             <C>         <C>        <C>
            Return on average assets                            0.48%       0.54%      0.50%
            Return on average tangible assets                   0.51%       0.58%      0.58%
            Return on average equity                            3.88%       4.31%      7.93%
            Return on average tangible equity                   7.32%       8.51%      8.51%
            Shareholders' equity to total assets               12.69%      12.01%      6.24%
</TABLE>

Results of Operations

General

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


                                       26
<PAGE>

For the years ended December 31, 2006 and 2005

Net Interest Income

      Net interest income for Central Jersey Bank, N.A. was $17.0 million for
the year ended December 31, 2006, as compared to $17.4 million for the year
ended December 31, 2005. Net interest income for the year ended December 31,
2006 was comprised primarily of $804,000 in interest on federal funds sold and
due from banks, $23.2 million in interest and fees on loans and $5.5 million in
interest on securities, less interest expense on deposits of $10.8 million,
interest expense on borrowed funds of $1.3 million and interest expense on
subordinated debentures of $429,000, whereas net interest income for the year
ended December 31, 2005 was comprised primarily of $239,000 in interest on
federal funds sold and due from banks, $18.7 million in interest on loans and
$6.0 million in interest on securities, less interest expense on deposits of
$6.6 million, interest expense on borrowed funds of $547,000 and interest
expense on subordinated debentures of $340,000.

      Average interest-earning assets were $462.3 million for the year ended
December 31, 2006, an 8.0% increase over average interest-earning assets of
$428.0 million for the year ended December 31, 2005. The increase in average
interest-earning assets was primarily due to an increase in the average balance
of gross loans, which increased to $316.6 million for the year ended December
31, 2006 from $278.2 million for the prior year. 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, 2006 averaged $415.3
million, of which $330.9 million, or 79.7%, were interest-bearing. This number
represents a 3.7% increase over average total deposits of $400.7 million for the
year ended December 31, 2005, of which $312.2 million, or 77.9%, were
interest-bearing. Subordinated debt and other borrowings as of December 31,
2006, averaged $5.2 million and $28.7 million, respectively, as compared to $5.2
million and $18.2 million, respectively, for the year ended December 31, 2005.

      Net interest margin, which represents net-interest income as a percentage
of average interest-earning assets, was 3.67% for the year ended December 31,
2006, as compared to 4.08% for the year ended December 31, 2005. The net
interest margin compression was due primarily to an increase in interest rates
paid on deposits and borrowed funds, as evidenced by the cost of
interest-bearing liabilities, which increased to 3.42% for the year ended
December 31, 2006, as compared to 2.24% for the year ended December 31, 2005.
The yield on interest-earning assets only increased to 6.36% for the year ended
December 31, 2006, as compared to 5.83% for the year ended December 31, 2005.
During the year ended December 31, 2006, Central Jersey Bancorp's liabilities
re-priced more quickly than its interest-earning assets, thus the inverted yield
curve, where short-term rates are higher than long-term rates, combined with the
competitive environment for deposits, has exacerbated the net interest margin
compression.


                                       27
<PAGE>

      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, 2006, 2005 and 2004. No tax equivalent adjustments were made:

<TABLE>
<CAPTION>
 (dollars in thousands)             Year ended December 31, 2006     Year ended December 31, 2005     Year ended December 31, 2004
                                   -------------------------------   ------------------------------   ------------------------------

                                   Average               Average     Average              Average     Average              Average
                                   Balance   Interest   Yield/Cost   Balance   Interest  Yield/Cost   Balance   Interest  Yield/Cost
                                   -------   --------   ----------   -------   --------  ----------   -------   --------  ----------
<S>                                <C>       <C>           <C>       <C>       <C>          <C>       <C>       <C>          <C>
Interest earning assets:
Federal funds sold                 $ 11,441  $    590      5.16%     $  2,129  $     48     2.25%     $  6,167  $     80     1.30%
Loans receivable, gross             316,609    23,159      7.31%      278,243    18,726     6.73%      129,706     8,206     6.33%
Deposits with banks                   4,611       214      4.64%        2,766       191     6.91%          589        34     5.77%
Securities                          129,655     5,456      4.21%      144,831     5,982     4.13%       93,945     3,231     3.44%
                                   --------  --------      ----      --------  --------     ----      --------  --------     ----
    Total interest earning
      assets                        462,316    29,419      6.36%      427,969    24,947     5.83%      230,407    11,551     5.01%
Cash and due from banks              14,787                            18,082                            9,454
Allowance for loan losses            (3,328)                           (2,982)                          (1,496)
Other assets                         40,802                            44,444                            3,912
                                   --------                          --------                         --------
Total assets                       $514,577                          $487,512                         $242,277
                                   ========                          ========                         ========

Interest bearing liabilities:

Interest bearing demand            $ 85,295  $  2,414      2.83%     $ 88,301  $  1,596     1.81%     $ 56,795  $    668     1.18%
Money market                         32,983     1,117      3.39%       24,905       447     1.79%       39,689       479     1.21%
Savings                              71,167     1,231      1.73%       71,282       676     0.95%       20,772       128     0.62%
Time                                141,449     5,998      4.24%      127,744     3,896     3.05%       75,134     1,561     2.08%
                                   --------  --------      ----      --------  --------     ----      --------  --------     ----
    Total interest bearing
      deposits                      330,894    10,760      3.25%      312,232     6,615     2.12%      192,390     2,836     1.47%
Other borrowings                     28,650     1,267      4.42%       18,216       547     3.00%        1,274        17     1.33%
Subordinated debentures               5,155       429      8.32%        5,155       340     6.60%        3,866       193     4.99%
                                   --------  --------      ----      --------  --------     ----      --------  --------     ----
    Total interest-bearing
      liabilities                   364,699    12,456      3.42%      335,603     7,502     2.24%      197,530     3,046     1.54%
Non-interest bearing demand          84,444                            88,435                           28,913
Other liabilities                     1,894                             2,467                              482
Shareholders' equity                 63,540                            61,007                           15,352
                                   --------                          --------                         --------
Total liabilities and
shareholders' equity               $514,577                          $487,512                         $242,277
                                   ========                          ========                         ========

Net interest income                          $ 16,963                          $ 17,445                         $  8,505
                                             ========                          ========                         ========

Net interest rate spread(1)                                2.94%                            3.59%                            3.47%

Net interest margin(2)                                     3.67%                            4.08%                            3.69%
</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.


                                       28
<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 Central Jersey Bank, N.A.'s interest income and
interest expense during the periods indicated. Information is provided in each
category with respect to: (1) changes attributable to changes in volume (changes
in volume multiplied by prior rate); (2) changes attributable to changes in rate
(changes 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, 2006            Year ended December 31, 2005
                                                                   Compared to                             Compared to
                                                          Year ended December 31, 2005            Year ended December 31, 2004
                                                     ------------------------------------      ------------------------------------

                                                       Increase (Decrease)                      Increase (Decrease)
                                                        Due to Change in:                         Due to Change in:
                                                     ----------------------      Total         ----------------------       Total
                                                                                Increase                                   Increase
                                                      Volume         Rate      (Decrease)       Volume        Rate        (Decrease)
                                                     --------      --------    ----------      --------      --------     ----------
(in thousands)
<S>                                                  <C>           <C>           <C>           <C>           <C>           <C>
Interest Income:
  Loans receivable, gross                            $  2,719      $  1,714      $  4,433      $  9,965      $    555      $ 10,520
  Securities                                             (637)          111          (526)        2,007           744         2,751
  Deposits with banks                                     100           (77)           23           149             8           157
  Federal funds sold                                      323           219           542           (32)           --           (32)
                                                     ------------------------------------      ------------------------------------
   Total interest-earning assets                        2,505         1,967         4,472        12,089         1,307        13,396

Interest Expense:
  Interest-bearing demand                                 (56)          874           818           472           456           928
  Savings deposits                                         (1)          556           555           448           100           548
  Money market deposits                                   180           490           670          (216)          184           (32)
  Time deposits                                           453         1,649         2,102         1,400           935         2,335
                                                     ------------------------------------      ------------------------------------
Total interest-bearing deposits                           576         3,569         4,145         2,104         1,675         3,779
  Other borrowings                                        394           326           720           485            45           530
  Subordinated debentures                                  --            89            89            75            72           147
                                                     ------------------------------------      ------------------------------------
   Total interest-bearing liabilities                     970         3,984         4,954         2,664         1,792         4,456
                                                     ------------------------------------      ------------------------------------

Net interest income                                  $  1,535      $ (2,017)     $   (482)     $  9,425      $   (485)     $  8,940
                                                     ====================================      ====================================
</TABLE>

Provision for Loan Losses

      The provision for loan losses was $500,000 for the year ended December 31,
2006, as compared to $426,000 for 2005. The increase was due primarily to the
decision to record a provision for $409,000 in unsecured loans that were
charged-off as of December 31, 2006. The repayment of these loans, which were
made to several individuals referred by Mr. Solomon Dwek, has been adversely
impacted by the May 2006 action commenced by PNC Bank against Mr. Dwek. Mr. Dwek
allegedly defrauded PNC Bank by depositing a $25.0 million check drawn on a
closed account with PNC Bank. In response to Mr. Dwek's alleged fraud, PNC Bank
commenced an action against Mr. Dwek, which resulted in a court order freezing
Mr. Dwek's assets. Recently, a U.S. Bankruptcy judge granted Mr. Dwek's request
to place his estate and properties into a voluntary bankruptcy reorganization.
Subsequent to the $409,000 charge-off at December 31, 2006, Central Jersey
Bancorp agreed to settle this matter with the unsecured borrowers for a lump sum
payment of $90,000, which was received on March 7, 2007. In exchange for the
$90,000 payment, Central Jersey Bancorp agreed to release the unsecured
borrowers from all present and


                                       29
<PAGE>

future  claims  specifically  related to these  loans.  Central  Jersey  Bancorp
retained its rights to pursue collection on these loans from Mr. Dwek or any Mr.
Dwek related entity.

Other Income

      Other income was $1.7 million for the year ended December 31, 2006, as
compared to $1.6 million for the year ended December 31, 2005, an increase of
$116,000, or 7.1%. The increase was due primarily to the gain on sale of loans
held-for-sale which was $213,000 for the year ended December 31, 2006, as
compared to $105,000 for the year ended December 31, 2005.

Operating Expenses

      Operating expenses include, among other costs and expenses, salaries,
costs of employee benefits, professional fees and occupancy expenses. Operating
expenses for the year ended December 31, 2006 were $14.3 million, as compared to
operating expenses of $14.6 million for the prior year. Central Jersey Bank,
N.A. incurred $619,000 in core deposit intangible amortization expense related
to the combination with Allaire Community Bank for the year ended December 31,
2006 as compared to $688,000 in 2005. Full-time equivalent employees totaled 147
at December 31, 2006 as compared to 152 at December 31, 2005. The table below
presents operating expenses, by major category, for the years ended December 31,
2006, 2005 and 2004, respectively (in thousands):

Operating Expenses:                              2006         2005         2004
-------------------                              ----         ----         ----

Salaries and employee benefits                 $ 7,345      $ 7,287      $ 3,619
Net occupancy expenses                           1,687        1,718          844
Outside service fees                               866        1,017          530
Data processing fees                               809          937          571
Professional fees                                  759          687          311
Furniture, fixtures and equipment                  690          599          290
Core deposit intangible amortization               619          688           --
Stationery, supplies and printing                  269          288          185
Insurance expense                                  200          192          106
Telephone                                          153          134          136
Advertising                                        150          220          236
Other operating expenses                           762          783          270
                                               -------      -------      -------
      Total                                    $14,309      $14,550      $ 7,098
                                               =======      =======      =======

Income Tax Expense

      For the year ended December 31, 2006, income tax expense was $1.4 million
on income before taxes of $3.9 million, resulting in an effective tax rate of
36.7%, as compared to income tax expense of $1.5 million on income before taxes
of $4.1 million for the year ended December 31, 2005, resulting in an effective
tax rate of 35.7%.


                                       30
<PAGE>

For the years ended December 31, 2005 and 2004

Net Interest Income

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

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

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

Provision for Loan Losses

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

Other Income

      Other income was $1.6 million for the year ended December 31, 2005, as
compared to $849 thousand for the year ended December 31, 2004, an increase of
$775 thousand, or 91.3%, due primarily to the combination with Allaire Community
Bank. The increase was due primarily to service charges on bank accounts which
were $1.4 million for the year ended December 31, 2005, as compared to $830
thousand for the prior year, an increase of $571 thousand, or 68.8%.


                                       31
<PAGE>

There were no gains on the sale of available-for-sale securities for the years
ended December 31, 2005 and 2004. There was a gain of $105 thousand on the sale
of loans held-for-sale for the period ended December 31, 2005 as compared to no
gain for the year ended December 31, 2004. In addition, the cash surrender value
of Bank Owned Life Insurance was $112 thousand for year ended December 31, 2005
as compared to $0 in the prior year.

Operating Expenses

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

Income Tax Expense

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

Financial Condition

Cash and Cash Equivalents

      Cash and cash equivalents consist of cash on hand, due from banks, and
federal funds sold. At December 31, 2006, cash and cash equivalents were $37.8
million, as compared to $21.2 million at December 31, 2005, an increase of $16.6
million, or 78.0%. The increase was due primarily to an increase in federal
funds sold as a result of deposit growth.

Intangible Assets

      Intangible assets of Central Jersey Bancorp consist of goodwill and core
deposit premiums. Goodwill represents the excess of the purchase price over the
estimated fair value of identifiable net assets acquired through purchase
acquisitions. In accordance with SFAS No. 142, goodwill with an indefinite
useful life is not amortized, but is evaluated for impairment on an annual
basis. For the years ended December 31, 2006 and 2005, Central Jersey Bancorp
had $27.0 million and $27.2 million, respectively, of goodwill related to the
combination with Allaire Community Bank.

      Core deposit premiums represent the intangible value of depositor
relationships assumed in purchase acquisitions and are amortized on an
accelerated basis over a period of ten years.


                                       32
<PAGE>

The amortization of the core deposit premium is recorded as a component of
operating expenses. For the years ended December 31, 2006 and 2005, Central
Jersey Bancorp had $2.5 million and $3.1 million, respectively, of core deposit
intangible related to the combination with Allaire Community Bank.

Securities Portfolio

      At December 31, 2006, Central Jersey Bank, N.A.'s securities portfolio
consisted of obligations of United States Government sponsored agencies and
mortgaged-backed securities of United States Government sponsored agencies.
Securities held-to-maturity of $20.8 million at December 31, 2006, represented a
decrease of $1.7 million over the year ended December 31, 2005 total of $22.5
million. Securities available-for-sale had a market value of $95.7 million at
December 31, 2006, representing a decrease of $15.5 million over the December
31, 2005 total of $111.2 million. The decrease in the securities portfolio is
due primarily to the maturity of fixed rate bonds and cash flows received from
the principal amortization of mortgage-backed securities.

The following table summarizes the maturity and weighted average yields in each
of Central Jersey Bank, N.A.'s securities portfolios at December 31, 2006:

<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                           $       --      $    1,938      $    1,991      $    4,218      $    8,147
   Weighted average yield                           --            4.19%           4.56%           4.99%           4.69%
Obligations of U.S. Government agencies
   Amortized cost                                2,000           1,996           6,783           1,894          12,673
   Weighted average yield                         3.04%           4.00%           4.82%           4.70%           4.39%
                                            ---------------------------------------------------------------------------
Total securities held-to-maturity
   Amortized cost                           $    2,000      $    3,934      $    8,774      $    6,112      $   20,820
   Weighted average yield                         3.04%           4.09%           4.76%           4.90%           4.51%
                                            ===========================================================================

Securities available-for-sale:

Mortgage-backed securities
   Market value                             $       --      $   18,682      $    4,084      $       --      $   22,766
   Weighted average yield                           --            3.55%           4.04%             --            3.64%
Obligations of U.S. Government agencies
   Market value                                  2,258          23,476          39,052           7,605          72,391
   Weighted average yield                         3.16%           3.36%           5.05%           5.54%           4.49%
Other debt securities
   Market value                                    474             104              --              --             578
   Weighted average yield                         3.75%           5.69%             --              --            4.10%
                                            ---------------------------------------------------------------------------
Total securities available-for-sale
   Market value                             $    2,732      $   42,262      $   43,136      $    7,605      $   95,735
   Weighted average yield                         3.26%           3.45%           4.95%           5.54%           4.29%
                                            ===========================================================================
</TABLE>

Investment Policy

      The board of directors has adopted an investment policy to govern the
investment function of Central Jersey Bank, N.A., which includes the purchase of
securities for the held-to-


                                       33
<PAGE>

maturity and available-for-sale portfolios and the sale of securities from the
available-for-sale portfolio.

      The basic objectives of the investment function are:

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

      o     to minimize exposure to credit risk; and

      o     to provide liquidity required by current circumstances.

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

      Investment management therefore emphasizes:

      o     preservation of principal;

      o     strong cash-flow characteristics;

      o     ready availability of credit information;

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

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

      o     broad marketability, as an indicator of quality.

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

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


                                       34
<PAGE>

Loan Portfolio

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

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

      The analysis includes, among other things, the following:

            o     a description of the borrower;

            o     the loan purpose and use of proceeds;

            o     the requested loan amount;

            o     the recommended term;

            o     the recommended interest rate;

            o     primary, secondary and tertiary sources of repayment;

            o     proposed risk rating;

            o     full collateral description;

            o     fees (if any);

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

            o     inherent strengths and weaknesses of the requested credit
                  accommodation.

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

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

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


                                       35
<PAGE>

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

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

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

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

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


                                       36
<PAGE>

      The following table summarizes net loans outstanding by loan category and
amount at December 31, 2006, 2005, 2004, 2003 and 2002.

<TABLE>
<CAPTION>
(in thousands)                         2006          2005        2004         2003         2002
                                       ----          ----        ----         ----         ----

--------------------------------------------------------------------------------------------------
<S>                                  <C>          <C>          <C>          <C>          <C>
Commercial and industrial loans      $ 35,476     $ 32,708     $ 22,392     $ 20,380     $ 17,060

Real estate loans - commercial        237,234      232,570       96,291       77,799       57,079

1-4 family real estate loans            4,182        4,858           --           --           --

Home equity and second mortgages       35,573       38,153       22,014       17,734       14,816

Consumer loans                          2,857        2,054          638        1,270        1,601
--------------------------------------------------------------------------------------------------

Total loans                          $315,322     $310,343     $141,335     $117,183     $ 90,556

Less allowance for loan losses          3,229        3,175        1,638        1,378        1,228
--------------------------------------------------------------------------------------------------

Net loans                            $312,093     $307,168     $139,697     $115,805     $ 89,328
==================================================================================================

Loans held-for-sale                  $    242     $  3,127     $      0     $      0     $    302
==================================================================================================
</TABLE>

      For the year ended December 31, 2006, net loans increased by $4.9 million
to $312.1 million, which represents a 1.6% increase from the balance of $307.2
million at December 31, 2005.

      For the year ended December 31, 2006, commercial and industrial loans and
commercial real estate loans increased by $7.4 million to $272.7 million, which
represents a 2.8% increase from the balance of $265.3 million at December 31,
2005.

      During 2006, home equity and second mortgages decreased by $2.6 million to
$35.6 million at December 31, 2006, which represents a 6.8% decrease from the
balance of $38.2 million at December 31, 2005.


                                       37
<PAGE>

      The following table summarizes the maturities of loans by category and
whether such loans are at a fixed or floating rate at December 31, 2006.

<TABLE>
<CAPTION>
                                                                                     December 31, 2006
                                                       -----------------------------------------------------------------------------

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

    Fixed rate                                         $     187    $     845     $   4,610      $   8,013    $   5,028    $  18,683

    Adjustable rate                                       14,453          441           249             --           --       15,143

All other loans secured by real estate

    Fixed rate                                            16,142       39,207        63,475         25,709       29,302      173,835

    Adjustable rate                                       88,084        4,586        14,294            697           --      107,661

                                                       -----------------------------------------------------------------------------
Total                                                  $ 118,866    $  45,079     $  82,628      $  34,419    $  34,330    $ 315,322
                                                       =============================================================================
</TABLE>

Non-Performing Loans

A loan is considered to be non-performing if it (1) is on a non-accrual basis,
(2) is past due ninety days or more and still accruing interest, or (3) has been
renegotiated to provide a reduction or deferral of interest or principal because
of a weakening in the financial position of the borrower. A loan, which is past
due ninety days or more and still accruing interest, remains on accrual status
only where it is both adequately secured as to principal and is in the process
of collection. Central Jersey Bank, N.A. had non-performing loans totaling
$91,000 and $79,000 at December 31, 2006 and 2005, respectively. If the
non-accrual loans had performed in accordance with their original terms,
interest income would have increased by $477, $6,365 and $9,475, for the years
ended December 31, 2006, 2005 and 2004, respectively. At December 31, 2006,
there are no commitments to lend additional funds to borrowers whose loans are
on non-accrual.

Potential Problem Loans

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

      As of December 31, 2006 and 2005, 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, 2006 and 2005 was $5.0 million and $4.1 million,
respectively.


                                       38
<PAGE>

Allowance for Loan Losses and Related Provision

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

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

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

      The loss factors applied to each loan risk rating are inherently
subjective in nature, and, in Central Jersey Bank, N.A.'s circumstances, even
more so due to the lack of any meaningful charge-off experience. Loss factors
are assigned to loan risk rating categories on the basis of our assessment of
the potential risk inherent in each loan type. Key factors we consider in
determining loss factors for each loan type include the current real estate
market conditions, changes in the trend of delinquencies and non-performing
loans, the current state of the local and national economy, loan portfolio
growth and changes in composition and concentrations within the portfolio. The
loss factors are evaluated by management on a quarterly basis and any
adjustments are approved by the board of directors of Central Jersey Bancorp.
There have been no significant changes in loss factors in 2006 as compared to
2005.

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

      Our primary lending emphasis is the origination of commercial real estate
loans, commercial and industrial loans, and to a lesser extent, home equity and
second mortgages. As a result of our strategic plans and lending emphasis, we
have a loan concentration in commercial loans at December 31, 2006 and 2005, the
majority of which are secured by real property located in New Jersey.


                                       39
<PAGE>

      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 $500,000 for the year ended December 31,
2006, as compared to $426,000 for 2005. The 2006 provision was required based
upon credit characteristics of the net loan growth for the year ended December
31, 2006. The increase was due primarily to the decision to record a provision
relating to $409,000 in unsecured loans that were charged-off as of December 31,
2006. The repayment of these loans, which were made to several individuals
referred by Mr. Solomon Dwek, has been adversely impacted by the May 2006 action
commenced by PNC Bank against Mr. Dwek. Mr. Dwek allegedly defrauded PNC Bank by
depositing a $25.0 million check drawn on a closed account with PNC Bank. In
response to Mr. Dwek's alleged fraud, PNC commenced an action against Mr. Dwek,
which resulted in a court order freezing Mr. Dwek's assets. Recently, a U.S.
Bankruptcy judge granted Mr. Dwek's request to place his estate and properties
into a voluntary bankruptcy reorganization. Subsequent to the $409,000
charge-off at December 31, 2006, Central Jersey Bancorp agreed to settle this
matter with the unsecured borrowers for a lump sum payment of $90,000, which was
received on March 7, 2007. In exchange for the $90,000 payment, Central Jersey
Bancorp agreed to release the unsecured borrowers from all present and future
claims specifically related to these loans. Central Jersey Bancorp retained its
rights to pursue collection on these loans from Mr. Dwek or any Mr. Dwek related
entity.

      Central Jersey Bank, N.A.'s initial credit exposure to Mr. Solomon Dwek
and related entities totaled approximately $3.0 million, consisting of a $2.0
million commercial mortgage loan and approximately $1.0 million of unsecured
loans. The $1.0 million of unsecured loans had been paid down to $409,000 as of
June 30, 2006 and was subsequently charged-off at December 31, 2006, as
described in the preceding paragraph. The $2.0 million commercial mortgage loan
is presently performing and fully secured. There is an offer to purchase the
property which would result in the full payoff of the commercial mortgage loan.
However, it is unclear how Mr. Dwek's pending bankruptcy will affect this offer.

      Loan portfolio composition remained consistent in 2006, as compared to
2005, with commercial loans comprising 86.5% of total loans outstanding at
December 31, 2006, as compared to 85.5% at December 31, 2005. In addition,
Central Jersey Bank, N.A. had non-accrual or impaired loans totaling $91,000 at
December 31, 2006, as compared to $79,000 at December 31, 2005. Gross loans
outstanding totaled $315.3 million at December 31, 2006, as compared to $310.3
million at December 31, 2005, an increase of $5.0 million, or 1.6%. The
allowance for loan losses was $3.23 million, at December 31, 2006, as compared
to $3.18 million at December 31, 2005.


                                       40
<PAGE>

      The following table summarizes Central Jersey Bank, N.A.'s allowance for
loan losses for the years ended December 31, 2006, 2005, 2004, 2003 and 2002.

<TABLE>
<CAPTION>
(in thousands)                                            2006          2005         2004         2003         2002
                                                         --------     --------      --------     --------    --------

---------------------------------------------------------------------------------------------------------------------
<S>                                                      <C>          <C>           <C>          <C>         <C>
Balance, beginning of year                               $  3,175     $  1,638      $  1,378     $  1,228    $   855

Provision charged to expense                                  500          426           260          150        373

Charge-offs                                                  (455)         (92)           --           --         (1)

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

Recoveries                                                      9           --            --           --          1

---------------------------------------------------------------------------------------------------------------------
Balance, end of year                                     $  3,229     $  3,175      $  1,638     $  1,378    $ 1,228

=====================================================================================================================
Ratio of allowance for loan losses to total loans            1.02%        1.02%         1.16%        1.10%      1.36%

Ratio of net charge-offs to average loans outstanding        0.14%        0.03%         0.00%        0.00%      0.00%
</TABLE>

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

<TABLE>
<CAPTION>
                           December 31, 2006                December 31, 2005                   December 31, 2004

                              Percent of    Percent             Percent of    Percent              Percent of      Percent
                              allowance     of loans            allowance     of loans              allowance     of loans
                               to total     to total             to total     to total              to total      to total
  Loan Type       Amount      allowance      loans     Amount   allowance      loans     Amount     allowance       loans
  ---------       ------      ---------      -----     ------   ---------      -----     ------     ---------       -----
<S>               <C>            <C>          <C>      <C>         <C>          <C>      <C>           <C>          <C>
Commercial        $2,811         87.1%        86.5%    $2,749      86.6%        85.5%    $1,403        85.7%        84.0%

Consumer             418         12.9%        13.5%       426      13.4%        14.5%       235        14.3%        16.0%
                  ------        -----        -----     ------     -----        -----     ------       -----        -----

Total             $3,229        100.0%       100.0%    $3,175     100.0%       100.0%    $1,638       100.0%       100.0%
                  ======        =====        =====     ======     =====        =====     ======       =====        =====

<CAPTION>
                           December 31, 2003                  December 31, 2002

                              Percent of    Percent               Percent of   Percent
                              allowance     of loans              allowance    of loans
                               to total     to total               to total    to total
  Loan Type       Amount      allowance      loans     Amount     allowance     loans
  ---------       ------      ---------      -----     ------     ---------     -----
<S>              <C>              <C>         <C>      <C>           <C>        <C>
Commercial       $ 1,151          83.5%       83.8%    $ 1,007       82.0%      81.9%

Consumer             227          16.5%       16.2%        221       18.0%      18.1%
                 -------         -----       -----     -------      -----      -----

Total            $ 1,378         100.0%      100.0%    $ 1,228      100.0%     100.0%
                 =======         =====       =====     =======      =====      =====
</TABLE>

Deposits

      One of Central Jersey Bank, N.A.'s primary strategies is the accumulation
and retention of core deposits. Core deposits are defined as all deposits except
certificates of deposits with balances in excess of $100,000.

      Total deposits were $427.3 million at December 31, 2006, an increase of
$19.7 million, or 4.8%, from the year ended December 31, 2005 total of $407.6
million. Core deposits as a


                                       41
<PAGE>

percentage of total deposits were 84.7% at December 31, 2006, as compared to
81.7% at December 31, 2005.

      The following table represents categories of Central Jersey Bank, N.A.'s
deposits at December 31, 2006, 2005 and 2004.

<TABLE>
<CAPTION>
                                                             December 31,   December 31,    December 31,
                                                             ------------   ------------    ------------
        (in thousands)                                           2006           2005            2004
                                                                 ----           ----            ----
<S>                                                          <C>             <C>            <C>
        Demand deposits, non-interest bearing                $  83,482       $  91,297      $  29,897

        Savings, N.O.W. and money market accounts              202,650         173,993        122,225

        Certificates of deposit of less than $100,000           75,842          67,813         27,353

        Certificates of deposit of $100,000 or more             65,303          74,451         53,378
                                                             ---------       ---------      ---------

        Total deposits                                       $ 427,277       $ 407,554      $ 232,853
                                                             =========       =========      =========
</TABLE>

      The following table represents categories of Central Jersey Bank, N.A.'s
average deposit balances and weighted average interest rates for the years ended
December 31, 2006, 2005 and 2004 (in thousands):

<TABLE>
<CAPTION>
                                                      December 31,            December 31,            December 31,
                                                      ------------            ------------            ------------
                                                         2006                    2005                     2004
                                                         ----                    ----                     ----
                                                              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             $ 84,444         --%     $ 88,435         --%     $ 28,913         --%

Savings, N.O.W. and money market accounts          189,445       2.51%      184,488       1.47%      117,256       1.09%

Certificates of deposit of less than $100,000       72,960       4.11%       60,040       3.04%       26,859       2.07%

Certificates of deposit of $100,000 or more         68,489       4.42%       67,704       3.05%       48,275       2.08%
                                                  --------     ------      --------     ------      --------     ------
Total deposits                                    $415,338       2.59%     $400,667       1.65%     $221,303       1.28%
                                                  ========     ======      ========     ======      ========     ======
</TABLE>

      At December 31, 2006, Central Jersey Bank, N.A. had $141.1 million in time
deposits maturing as follows (in thousands):

<TABLE>
<CAPTION>
                                   3 months or    Over 3 to   Over 1 year      Over 3
                                      less        12 months    to 3 years      years          Total
                                   ------------------------------------------------------------------
<S>                                <C>            <C>           <C>           <C>           <C>
Less than $100,000                 $  22,333      $  43,655     $   9,692     $     162     $  75,842

Equal to or more than $100,000        13,489         41,507        10,307            --        65,303
                                   ------------------------------------------------------------------

Total                              $  35,822      $  85,162     $  19,999     $     162     $ 141,145
                                   ==================================================================
</TABLE>

Liquidity and Capital Resources

      Liquidity defines the ability of Central Jersey Bank, N.A. to generate
funds to support asset growth, meet deposit withdrawals, maintain reserve
requirements and otherwise operate on an ongoing basis. An important component
of a bank's asset and liability management structure is the level of liquidity,
which are net liquid assets available to meet the needs of its customers and
regulatory requirements. The liquidity needs of Central Jersey Bank, N.A. have
been primarily met by cash on hand, loan and investment amortizations and
borrowings. Central


                                       42
<PAGE>

Jersey Bank, N.A. invests funds not needed for operations (excess liquidity)
primarily in daily federal funds sold. During 2006, Central Jersey Bank, N.A.
continued to maintain a large secondary source of liquidity known as Investment
Securities available-for-sale. The market value of that portfolio was $95.7
million at December 31, 2006 and $111.2 million at December 31, 2005.

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

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

      Central Jersey Bank, N.A. is subject to various regulatory capital
requirements administered by federal banking agencies. Failure to meet minimum
capital requirements can initiate certain mandatory and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on Central Jersey Bank, N.A.'s financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, Central Jersey Bank, N.A. must meet specific capital guidelines that
involve quantitative measures of Central Jersey Bank, N.A.'s assets, liabilities
and certain off-balance-sheet items as calculated under regulatory accounting
practices. Central Jersey Bank, N.A.'s capital amounts and classification are
also subject to qualitative judgments by the regulators about components, risk
weightings and other factors. See "Item 1. Business-Government Regulation."

      Quantitative measures established by regulation to ensure capital adequacy
require Central Jersey Bank, N.A. to maintain minimum amounts and ratios (set
forth in the following table) of Total Capital and Tier 1 Capital to risk
weighted assets and of Tier 1 Capital to average


                                       43
<PAGE>

assets (leverage ratio). As of December 31, 2006, Central Jersey Bank, N.A. met
all capital adequacy requirements to which it is subject.

      As of December 31, 2006, the most recent notification from the OCC
categorized Central Jersey Bank, N.A. as "well capitalized" under the regulatory
framework for prompt corrective action. There are no conditions or events since
that notification that we believe have changed Central Jersey Bank, N.A.'s
category.

      The following is a summary of Central Jersey Bank, N.A.'s and Central
Jersey Bancorp's actual capital ratios as of December 31, 2006 and 2005,
compared to the minimum capital adequacy requirements and the requirements for
classification as a "well-capitalized" institution:

<TABLE>
<CAPTION>
                                                       Tier I                   Tier I
                                                    Capital to                Capital to             Total Capital to
                                              Average Assets Ratio          Risk Weighted              Risk Weighted
                                                 (Leverage Ratio)             Asset Ratio                Asset Ratio
                                              2006            2005        2006            2005        2006            2005
                                           ------------------------------------------------------------------------------------
<S>                                           <C>             <C>        <C>             <C>         <C>             <C>
Central Jersey Bancorp                        8.38%           7.60%      11.71%          10.15%      12.62%          11.05%
Central Jersey Bank, N.A                      8.47%           7.85%      11.81%          10.57%      12.72%          11.48%

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

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

Guaranteed  Preferred Beneficial Interest in Central Jersey Bancorp Subordinated
Debt

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

      The entire proceeds to MCBK Capital Trust I from the sale of the trust
preferred securities were used by MCBK Capital Trust I in order to purchase $5.1
million of subordinated debentures from Central Jersey Bancorp. The subordinated
debentures bear a variable interest rate equal to LIBOR plus 285 basis points.
Although the subordinated debentures are treated as debt of Central Jersey
Bancorp, they currently qualify as Tier I Capital investments, subject to the
25% limitation under risk-based capital guidelines of the Federal Reserve. The
portion of the trust preferred securities that exceeds this limitation qualifies
as Tier II Capital of Central Jersey Bancorp. At December 31, 2006, $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


                                       44
<PAGE>

Subordinated Debentures to support the general balance sheet growth of Central
Jersey Bancorp and to help ensure that Central Jersey Bank, N.A. maintains the
required regulatory capital ratios.

      On March 1, 2005, the Federal Reserve adopted a final rule that allows the
continued inclusion of outstanding and prospective issuances of trust preferred
securities in the Tier I Capital of bank holding companies, subject to stricter
quantitative limits and qualitative standards. The new quantitative limits
become effective after a five-year transition period ending March 31, 2009.
Under the final rules, trust preferred securities and other restricted core
capital elements are limited to 25% of all core capital elements. Amounts of
restricted core capital elements in excess of these limits may be included in
Tier II Capital. At December 31, 2006, the only restricted core capital element
owned by Central Jersey Bancorp is trust preferred securities. Central Jersey
Bancorp believes that its trust preferred issues qualify as Tier I Capital.
However, in the event that the trust preferred issues do not qualify as Tier I
Capital, Central Jersey Bank, N.A. would remain well capitalized.

Recent Accounting Pronouncements

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

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


                                       45
<PAGE>

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

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

      In September 2006, the Emerging Issues Task Force ("EITF") of the FASB
discussed public comments received on two issues: (1) EITF Issue No. 06-4,
Accounting for Deferred Compensation and Post-Retirement Benefit Aspects of
Endorsement Split-Dollar Life Insurance Arrangements, and (2) EITF Issue 06-5,
Accounting for Purchases of Life Insurance -- Determining the Amount that could
be Realized in Accordance with FASB Technical Bulletin 85-4 (Accounting for
Purchases of Life Insurance). On September 7, the EITF agreed to clarify certain
points based on public comments. The EITF reached a consensus that an employer
should recognize a liability for future benefits under FASB Statement No. 106,
Employers' Accounting for Postretirement Benefits Other Than Pensions, or APB
Opinion No. 12, Omnibus Opinion - 1967, for an endorsement split-dollar life
insurance arrangement subject to the EITF Issue No. 06-4. This liability is to
be based on the substantive agreement with the employee. The consensus is
effective for fiscal years beginning after December 15, 2007. Early adoption is
permitted as of the beginning of an entity's fiscal year. Entities should
recognize the effects of applying the consensus on this issue as a change in
accounting principle through a cumulative-effect adjustment to retained earnings
or to other components of equity or net assets in the statement of financial
position as of the beginning of the year of adoption. Retrospective application
to all prior periods is permitted. Central Jersey Bancorp is evaluating the
impact of adoption of EITF 06-4 on its consolidated financial statements.

      The Securities and Exchange  Commission  released SEC Accounting  Bulletin
("SAB")  No.  108,  Considering  the  Effects of Prior Year  Misstatements  when
Quantifying  Misstatements  in Current Year Financial  Statements,  in September
2006. SAB No. 108 requires  registrants to consider the effect of all carry over
and reversing  effects of prior year  misstatements  when quantifying  errors in
current-year  financial  statements.  SAB No. 108 does not  change  the  staff's
previous  guidance on evaluating the  materiality of errors.  SAB No. 108 allows
registrants to record the effect of adopting the guidance as a cumulative-effect
adjustment  to retained  earnings.  This  adjustment  must be reported as of the
beginning  of the first fiscal year ending  after


                                       46
<PAGE>

November 15, 2006. Central Jersey Bancorp's adoption of SAB No. 108 on December
31, 2006 did not have a material impact on its consolidated financial
statements.

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

      SFAS No. 159 is effective for years beginning after November 15, 2007.
Early adoption by Central Jersey Bancorp within 120 days of the beginning of its
2007 fiscal year is permissible, provided Central Jersey Bancorp has not yet
issued interim financial statements for 2007 and has adopted SFAS No. 157. If
Central Jersey Bancorp does not elect early adoption of SFAS No. 159, it will be
required to adopt the provisions of SFAS No. 159, as applicable, beginning
January 1, 2008. Central Jersey Bancorp is evaluating the impact of the adoption
of SFAS No. 159 on its consolidated financial statements.

Impact of Inflation

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

Item 7A. Quantitative and Qualitative Disclosures about Market Risk
         ----------------------------------------------------------

Qualitative Analysis

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

                                       47
<PAGE>

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

      Central Jersey Bank, N.A.'s strategy for liabilities has been to maintain
a stable core-funding base by focusing on core deposit account acquisition and
increasing products and services per household. Time deposit accounts as a
percentage of total deposits were 33.0% at December 31, 2006, as compared to
34.9% at December 31, 2005. Time deposits are generally short term in nature. As
of December 31, 2006, 85.7% of all time deposits had maturities of one year or
less, as compared to 89.7% at December 31, 2005. Central Jersey Bank, N.A.'s
ability to retain maturing time deposit accounts is the result of a strategy to
remain competitive priced within the marketplace. Central Jersey Bank, N.A.'s
pricing strategy may vary depending upon funding needs and Central Jersey Bank,
N.A.'s ability to fund operations through alternative sources, primarily by
accessing short term lines of credit with the Federal Home Loan Bank during
periods of pricing dislocation.

Quantitative Analysis

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

      The  following  table sets forth the results of the projected net interest
income simulation model for the twelve month period commencing December 31, 2006
and ending December 31, 2007:

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

+200                              $ 18,593        $  1,628          9.60%
+100                                17,798             833          4.91%
Base Case                           16,965              --            --
-100                                16,012            (953)        (5.62%)
-200                              $ 14,762        $ (2,203)       (12.99%)

      The preceding  table  indicates that for the year ended December 31, 2007,
in the event of an  immediate  200 basis  point  parallel  increase  in interest
rates,  Central  Jersey Bank,  N.A. would  experience a 9.60%,  or $1.6 million,
increase in net  interest  income for that  period.  In the event of a 200 basis
point decrease in interest rates,  Central Jersey Bank, N.A. would  experience a
(12.99%),  or $2.2 million,  decrease in net interest  income for the year ended
December 31, 2007.


                                       48
<PAGE>

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

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

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

      None.

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

      As required by Rule 13a-15 under the Exchange Act, as of the end of the
period covered by this Annual Report on Form 10-K, Central Jersey Bancorp
carried out an evaluation of the effectiveness of the design and operation of
Central Jersey Bancorp's disclosure controls and procedures. This evaluation was
carried out under the supervision and with the participation of Central Jersey
Bancorp's management, including Central Jersey Bancorp's President and Chief
Executive Officer and Central Jersey Bancorp's Executive Vice President and
Chief Financial Officer, who concluded that Central Jersey Bancorp's disclosure
controls and procedures are effective. There has been no significant change in
Central Jersey Bancorp's internal controls during the last fiscal quarter that
has materially affected, or is reasonably likely to materially affect, Central
Jersey Bancorp's internal control over financial reporting.

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

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

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

      Central Jersey Bancorp's internal control over financial reporting
includes policies and procedures that pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect transactions and
dispositions of assets; provide reasonable assurances that transactions are
recorded as necessary to permit preparation of financial statements in
accordance with U.S. generally accepted accounting principles, and that receipts
and expenditures are being made only in accordance with authorizations of
management and the directors of Central Jersey Bancorp; and provide reasonable
assurance regarding prevention or timely detection of


                                       49
<PAGE>

unauthorized acquisition, use or disposition of Central Jersey Bancorp's assets
that could have a material effect on our consolidated financial statements.

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

      Management assessed the effectiveness of Central Jersey Bancorp's internal
control over financial reporting as of December 31, 2006. In making this
assessment, we used the criteria set forth by the Committee of Sponsoring
Organizations of the Treadway Commission in Internal Control-Integrated
Framework (COSO). Based on the assessment management believes that, as of
December 31, 2006, Central Jersey Bancorp's internal control over financial
reporting is effective based on those criteria.

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

      Central Jersey Bancorp's independent registered public accounting firm
that audited the consolidated financial statements has issued an audit report on
our assessment of, and the effectiveness of, Central Jersey Bancorp's internal
control over financial reporting as of December 31, 2006. This report appears on
page F-3.

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

      None


                                       50
<PAGE>

                                    PART III

Item 10. Directors, Executive Officers and Corporate Governance
         ------------------------------------------------------

      The information required under this Item with respect to Central Jersey
Bancorp's directors and executive officers will be contained in Central Jersey
Bancorp's Proxy Statement for the Annual Meeting of Shareholders scheduled to be
held on May 24, 2007, under the captions "Election of Directors," "Compliance
with Section 16(a) of the Exchange Act" and "Executive Officers" and is
incorporated herein by reference.

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

      The information required under this Item with respect to executive
compensation will be contained in Central Jersey Bancorp's Proxy Statement for
the Annual Meeting of Shareholders scheduled to be held on May 24, 2007, under
the captions "Executive Compensation" and "Director Compensation" and is
incorporated herein by reference.

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

      The information required by Items 201(d) and 403 of Regulation S-B will be
contained in Central Jersey Bancorp's Proxy Statement for the Annual Meeting of
Shareholders scheduled to be held on May 24, 2007, under the captions
"Securities Authorized for Issuance under Equity Compensation Plan" and
"Security Ownership of Certain Beneficial Owners and Management" and is
incorporated herein by reference.

Item 13. Certain Relationships, Related Transactions and Director Independence
         ---------------------------------------------------------------------

      The information required by this item will be contained in Central Jersey
Bancorp's Proxy Statement for the Annual Meeting of Shareholders scheduled to be
held on May 24, 2007, under the caption "Certain Relationships and Related Party
Transactions" and is incorporated herein by reference.

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

      The information required by this item will be contained in Central Jersey
Bancorp's Proxy Statement for the Annual Meeting of Shareholders scheduled to be
held on May 24, 2007, under the captions "Transactions with Related Persons,
Promoters and Certain Control Persons" and "Director Independence" and is
incorporated herein by reference.

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

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

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


                                       51
<PAGE>

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

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


                                       52
<PAGE>

                                   SIGNATURES

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

                                           CENTRAL JERSEY BANCORP


Date: March 14, 2007                   By:    /s/ James S. Vaccaro
                                           -------------------------------------
                                           James S. Vaccaro
                                           President and Chief Executive Officer

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

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

<TABLE>
<CAPTION>
          Signatures                              Title                               Date
          ----------                              -----                               ----
<S>                                <C>                                           <C>
    /s/ George S. Callas           Chairman of the Board of Directors            March 14, 2007
-------------------------------
      George S. Callas

    /s/ James S. Vaccaro           President and Chief Executive Officer         March 14, 2007
-------------------------------    (Principal Executive Officer)
      James S. Vaccaro             and Director

    /s/ Robert S. Vuono            Senior Executive Vice President,              March 14, 2007
-------------------------------    Chief Operating Officer, Secretary
       Robert S. Vuono             and Director
</TABLE>


                                       53
<PAGE>

<TABLE>
<CAPTION>
          Signatures                              Title                               Date
          ----------                              -----                               ----
<S>                                <C>                                           <C>
  /s/ Anthony Giordano, III        Executive Vice President,  Chief              March 14, 2007
--------------------------------   Financial Officer, Treasurer and
    Anthony Giordano, III          Assistant Secretary (Principal
                                   Financial and Accounting Officer)

     /s/ James G. Aaron
--------------------------------                 Director                        March 14, 2007
       James G. Aaron

     /s/ Mark R. Aikins
--------------------------------                 Director                        March 14, 2007
       Mark R. Aikins

  /s/ Nicholas A. Alexander
--------------------------------                 Director                        March 14, 2007
    Nicholas A. Alexander

  /s/ John A. Brockriede
--------------------------------                 Director                        March 14, 2007
     John A. Brockriede

     /s/ James P. Dugan
--------------------------------                 Director                        March 14, 2007
       James P. Dugan

    /s/ M. Claire French
--------------------------------                 Director                        March 14, 2007
      M. Claire French

   /s/ William H. Jewett
--------------------------------                 Director                        March 14, 2007
      William H. Jewett

   /s/ Paul A. Larson, Jr.
--------------------------------                 Director                        March 14, 2007
     Paul A. Larson, Jr.

     /s/ John F. McCann
--------------------------------                 Director                        March 14, 2007
       John F. McCann

    /s/ Carmen M. Penta
--------------------------------                 Director                        March 14, 2007
       Carmen M. Penta

     /s/ Mark G. Solow
--------------------------------                 Director                        March 14, 2007
        Mark G. Solow
</TABLE>


                                       54
<PAGE>

                             CENTRAL JERSEY BANCORP
                                 AND SUBSIDIARY

                        Consolidated Financial Statements

                                    Contents

                                December 31, 2006

<TABLE>
<S>                                                                                  <C>
Reports of Independent Registered Public Accounting Firm ............................F-2
Consolidated Statements of Financial Condition at December 31, 2006 and 2005.........F-5
Consolidated Statements of Income for the years ended December 31, 2006,
     2005 and 2004...................................................................F-6
Consolidated Statements of Changes in Shareholders' Equity for the years
     ended December 31, 2006, 2005 and 2004..........................................F-7
Consolidated Statement of Cash Flows for the years ended
     December 31, 2006, 2005 and 2004................................................F-8
Notes to Consolidated Financial Statements...........................................F-10
</TABLE>


                                      F-1
<PAGE>

             Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders
Central Jersey Bancorp:

We have audited the accompanying consolidated statements of financial condition
of Central Jersey Bancorp and subsidiary as of December 31, 2006 and 2005, and
the related consolidated statements of income, changes in shareholders' equity,
and cash flows for each of the years in the three-year period ended December 31,
2006. 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, 2006 and 2005, and the results of
their operations and their cash flows for each of the years in the three-year
period ended December 31, 2006, in conformity with U.S. generally accepted
accounting principles.

We also have audited in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the effectiveness of Central Jersey
Bancorp and subsidiary's internal control over financial reporting as of
December 31, 2006, based on criteria established in Internal Control -
Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO), and our report dated March 14, 2007 expressed an
unqualified opinion on management's assessment of, and the effective operation
of, internal control over financial reporting.


/s/ KPMG LLP
Short Hills, New Jersey
March 14, 2007


                                      F-2
<PAGE>

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

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

The Board of Directors and Shareholders
Central Jersey Bancorp:

We have audited management's assessment, included on page 49, Item 9A., Control
Procedures - Management Report on Internal Control Over Financial Reporting,
that Central Jersey Bancorp and subsidiary (the "Company") maintained effective
internal control over financial reporting as of December 31, 2006, based on
criteria established in Internal Control-Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Management of the Company is responsible for maintaining effective internal
control over financial reporting and for its assessment of the effectiveness of
internal control over financial reporting. Our responsibility is to express an
opinion on management's assessment and an opinion on the effectiveness of the
Company's internal control over financial reporting based on our audit.

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

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

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

In our opinion, management's assessment that Central Jersey Bancorp and
subsidiary maintained effective internal control over financial reporting as of
December 31, 2006, is fairly stated, in all material respects, based on criteria
established in Internal Control--Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO). Also, in our
opinion, Central Jersey Bancorp and subsidiary maintained, in all material
respects, effective internal control over financial reporting as of December 31,
2006, based on criteria established in Internal Control--Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission
(COSO).


                                      F-3
<PAGE>

We also have audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated statements of
financial position of Central Jersey Bancorp and subsidiary as of December 31,
2006 and 2005, and the related consolidated statements of income, changes in
shareholders' equity, and cash flows for each of the years in the three-year
period ended December 31, 2006, and our report dated March 14, 2007 expressed an
unqualified opinion on those consolidated financial statements.


/s/ KPMG LLP
Short Hills, New Jersey
March 14, 2007


                                      F-4
<PAGE>

                 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
                           DECEMBER 31, 2006 AND 2005
                (dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
ASSETS                                                                       2006              2005
------                                                                   -----------       -----------
<S>                                                                      <C>               <C>
Cash and due from banks                                                  $    16,162       $    21,228
Federal funds sold                                                            21,634                --
                                                                         -----------       -----------
Cash and cash equivalents                                                     37,796            21,228
Investment securities available-for-sale, at market value                     95,735           111,175
Investment securities held-to-maturity (market value of $20,454 and
     $22,058 at December 31, 2006 and 2005, respectively)                     20,820            22,567
Federal Reserve Bank Stock                                                     1,952             1,957
Federal Home Loan Bank Stock                                                     542             2,090
Loans held-for-sale                                                              242             3,127

Loans                                                                        315,322           310,343
     Less: Allowance for loan losses                                           3,229             3,175
                                                                         -----------       -----------
          Loans, net                                                         312,093           307,168

Accrued interest receivable                                                    2,613             2,636
Premises and equipment                                                         5,357             6,006
Bank owned life insurance                                                      3,447             3,338
Goodwill                                                                      26,957            27,229
Core deposit intangible                                                        2,478             3,097
Due from broker                                                                3,527                --
Other assets                                                                   2,740             2,945
                                                                         -----------       -----------
          Total assets                                                   $   516,299       $   514,563
                                                                         ===========       ===========

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

Deposits:
     Non-interest bearing                                                $    83,482       $    91,297
     Interest bearing                                                        343,795           316,257
                                                                         -----------       -----------
                                                                             427,277           407,554

Other borrowings                                                              17,099            38,191
Subordinated debentures                                                        5,155             5,155
Accrued expenses and other liabilities                                         1,273             1,885
                                                                         -----------       -----------
          Total liabilities                                                  450,804           452,785
                                                                         -----------       -----------

Shareholders' equity:
Common stock, par value $0.01 per share. Authorized
     100,000,000 shares and issued and outstanding
     8,254,553 and 8,169,844 shares at December 31, 2006 and
     2005, respectively                                                           83                82
Additional paid-in capital                                                    60,505            59,999
Accumulated other comprehensive loss                                          (1,409)           (2,153)
Retained earnings                                                              6,316             3,850
                                                                         -----------       -----------
          Total shareholders' equity                                          65,495            61,778
                                                                         -----------       -----------
          Total liabilities and shareholders' equity                     $   516,299       $   514,563
                                                                         ===========       ===========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-5
<PAGE>

                        CONSOLIDATED STATEMENTS OF INCOME
              FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
                (dollars in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                                                      2006            2005             2004
                                                                   ----------      ----------      ----------
<S>                                                                <C>             <C>             <C>
Interest and dividend income:
     Interest and fees on loans                                    $   23,159      $   18,726      $    8,206
     Interest on securities available-for-sale                          4,465           4,891           2,517
     Interest on securities held-to-maturity                              991           1,091             714
     Interest on federal funds sold and due from banks                    804             239             114
                                                                   ----------      ----------      ----------
          Total interest and dividend income                           29,419          24,947          11,551

Interest expense:
     Interest expense on deposits                                      10,760           6,615           2,836
     Interest expense on other borrowings                               1,267             547              17
     Interest expense on subordinated debentures                          429             340             193
                                                                   ----------      ----------      ----------
          Total interest expense                                       12,456           7,502           3,046

                                                                   ----------      ----------      ----------
          Net interest income                                          16,963          17,445           8,505

Provision for loan losses                                                 500             426             260
                                                                   ----------      ----------      ----------
          Net interest income after provision for loan losses          16,463          17,019           8,245
                                                                   ----------      ----------      ----------

Other income:
     Service charges on deposit accounts                                1,412           1,401             830
     Income on bank owned life insurance                                  109             112              --
     Gain on the sale of loans held-for-sale                              213             105              --
     Other service charges, commissions and fees                            6               6              19
                                                                   ----------      ----------      ----------
          Total other income                                            1,740           1,624             849
                                                                   ----------      ----------      ----------

Operating expenses:
     Salaries and employee benefits                                     7,345           7,287           3,619
     Net occupancy expenses                                             1,687           1,718             844
     Outside service fees                                                 866           1,017             530
     Data processing fees                                                 809             937             571
     Professional fees                                                    759             687             311
     Furniture, fixtures and equipment                                    690             599             290
     Core deposit intangible amortization                                 619             688              --
     Stationery, supplies and printing                                    269             288             185
     Insurance                                                            200             192             106
     Telephone                                                            153             134             136
     Advertising                                                          150             220             236
     Other operating expenses                                             762             783             270
                                                                   ----------      ----------      ----------
          Total other expenses                                         14,309          14,550           7,098
                                                                   ----------      ----------      ----------

Income before provision for income taxes                                3,894           4,093           1,996
Income taxes                                                            1,428           1,461             778
                                                                   ----------      ----------      ----------
     Net income                                                    $    2,466      $    2,632      $    1,218
                                                                   ==========      ==========      ==========

Basic earnings per share                                           $      .30      $      .32      $      .31
                                                                   ==========      ==========      ==========
Diluted earnings per share                                         $      .28      $      .30      $      .30
                                                                   ==========      ==========      ==========
Average basic shares outstanding                                    8,242,988       8,142,211       3,907,445
                                                                   ==========      ==========      ==========
Average diluted shares outstanding                                  8,720,408       8,909,112       4,119,110
                                                                   ==========      ==========      ==========
</TABLE>

See accompanying notes to consolidated financial statements.


                                      F-6
<PAGE>

           CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
              FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                               Accumulated
                                                                 Additional       other
                                                  Common          paid-in      comprehensive        Retained
                                                  stock           capital      (loss) income        earnings          Total
----------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>             <C>             <C>               <C>             <C>
Balance at December 31, 2003                     $    40         $  15,217       $   (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 - 548 shares                --                 3             --                --                3
----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2004                     $    40         $  15,216       $   (619)         $  1,218        $  15,855
----------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net income                                            --                --             --             2,632            2,632
Unrealized loss on securities
  available-for-sale, net of tax of ($881)            --                --         (1,534)               --           (1,534)
                                                                                                                   ---------
Total comprehensive income                                                                                             1,098
Allaire Community Bank combination                    40            44,375             --                --           44,415
Exercise of stock options - 51,742
  shares                                               2               408             --                --              410
----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2005                     $    82         $  59,999       $ (2,153)         $  3,850        $  61,778
----------------------------------------------------------------------------------------------------------------------------
Comprehensive income:
Net income                                            --                --             --             2,466            2,466
Unrealized gain on securities
  available-for-sale, net of tax of $437              --                --            744                --              744
                                                                                                                   ---------
Total comprehensive income                                                                                             3,210
Exercise of stock options - 107,762
  shares (including tax benefit $250)                  1               723             --                --              724

Common stock retired - 21,523                         --              (217)            --                --             (217)
----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2006                     $    83         $  60,505       $ (1,409)         $  6,316        $  65,495
============================================================================================================================
</TABLE>

See accompanying notes to consolidated financial statements


                                      F-7
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                         2006           2005              2004
                                                                                     ---------------------------------------------
<S>                                                                                  <C>             <C>               <C>
Cash flows from operating activities:
     Net income                                                                      $     2,466     $     2,632       $     1,218
Adjustments to reconcile net income to net cash provided by (used in) operating
activities:
     Increase in cash surrender value of life insurance                                     (109)           (112)               --
     Deferred taxes                                                                          478            (189)             (215)
     Tax benefit of stock option exercises                                                  (250)           (148)               --
     Provision for loan losses                                                               500             426               260
     Net premium amortization on held-to-maturity securities                                  (8)              7                77
     Net premium amortization on available-for-sale securities                               163             246               362
     Depreciation and amortization                                                           842             736               422
     Decrease (increase) in accrued interest receivable                                       23            (242)             (107)
     Core deposit intangible amortization                                                    619             688                --
     Gain on the sale of loans held-for-sale                                                (213)           (105)               --
     Origination of loans held-for-sale                                                  (25,390)        (11,591)               --
     Proceeds from sale of loans held-for-sale                                            28,488           8,569                --
     Decrease (increase) in other assets                                                   1,115          (4,510)             (650)
     Decrease in accrued expenses and other liabilities                                     (612)           (119)             (228)
                                                                                     ---------------------------------------------
          Net cash provided by (used in) operating activities                              8,112          (3,712)            1,139
                                                                                     ---------------------------------------------

Cash flows from investing activities:
     Purchase of investment securities held-to-maturity                                       --              --            (4,992)
     Purchase of investment securities available-for-sale                                   (474)             --           (21,127)
     Maturities of and paydowns on investment securities held-to-maturity                  1,755           2,995             3,510
     Maturities of and paydowns on investment securities available-for-sale               16,932          16,707            14,864
     (Increase) decrease in due from broker                                               (3,527)             --             4,961
     Net increase in loans                                                                (5,425)        (48,052)          (24,152)
     Cash/cash equivalents acquired in Allaire Community Bank combination                     --           6,886                --
     Purchases of premises and equipment, net                                               (193)           (710)             (746)
                                                                                     ---------------------------------------------
          Net cash provided by (used in) investing activities                              9,068         (22,174)          (27,682)
                                                                                     ---------------------------------------------

Cash flows from financing activities:
     Proceeds from stock options exercised, net                                              757             410                --
     Net (decrease) increase in non-interest bearing deposits                             (7,815)         22,163             3,079
     Net increase (decrease) in interest bearing deposits                                 27,538         (17,341)           22,540
     Issuance of subordinated debentures                                                      --              --             5,155
     Issuance of common stock, net                                                            --              --                 3
     Net (decrease) increase in other borrowings                                         (21,092)         23,288                --
     Cash paid for fractional shares                                                          --              --                (4)
                                                                                     ---------------------------------------------
          Net cash (used in) provided by financing activities                               (612)         28,520            30,773
                                                                                     ---------------------------------------------

          Increase in cash and cash equivalents                                           16,568           2,634             4,230

Cash and cash equivalents at beginning of period                                          21,228          18,594            14,364
                                                                                     ---------------------------------------------
Cash and cash equivalents at end of period                                           $    37,796     $    21,228       $    18,594
                                                                                     =============================================
</TABLE>


                                      F-8
<PAGE>

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
        FOR THE YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004 (CONTINUED)
                             (dollars in thousands)

<TABLE>
<CAPTION>
                                                                                          2006           2005              2004
                                                                                     ---------------------------------------------
<S>                                                                                  <C>              <C>              <C>
Cash paid during the period for:
     Interest                                                                        $    12,413      $     7,597      $     2,986
     Taxes                                                                           $     1,508      $     1,860      $       993
Non cash investing activities:
     Fair value of assets acquired in Allaire Community Bank combination             $        --      $   201,820      $        --
     Goodwill and core deposit intangible resulting from Allaire Community
         Bank combination                                                            $        --      $    31,014      $        --
     Liabilities assumed in Allaire Community Bank combination                       $        --      $   186,528      $        --
     Common stock issued  in Allaire Community Bank combination                      $        --      $    39,803      $        --
</TABLE>

See accompanying notes to consolidated financial statements


                                      F-9
<PAGE>

Central Jersey Bancorp and Subsidiary
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2006, 2005 and 2004

(1) Summary of Significant Accounting Policies

Business

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

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

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

Central Jersey Bancorp paid a 5% stock dividend on July 1, 2006. As of December
31, 2006, there were 8,254,553 issued and outstanding shares of Central Jersey
Bancorp common stock. Central Jersey Bancorp effected a two-for-one stock split,
in the form of a stock dividend, for shareholders of record on June 15, 2005. As
of December 31, 2005, there were 8,169,844 authorized and outstanding shares of
Central Jersey Bancorp common stock. Central Jersey Bancorp effected a
six-for-five stock split, in the form of a stock dividend, for shareholders of
record as of July 15, 2004. As of December 31, 2004, there were 3,907,523
authorized and outstanding shares of Central Jersey Bancorp common stock. All
prior period amounts have been retroactively restated to reflect the
aforementioned stock splits and stock distributions.


                                      F-10
<PAGE>

Basis of Financial Statement Presentation

The accompanying consolidated financial statements include the accounts of
Central Jersey Bancorp and its wholly-owned bank subsidiary, Central Jersey
Bank, N.A. All significant inter-company accounts and transactions have been
eliminated in consolidation. The consolidated financial statements of the
Company have been prepared in conformity with U.S. generally accepted accounting
principles. In preparing the financial statements, management is required to
make estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the balance sheet and results of operations for
the periods indicated. Actual results could differ significantly from those
estimates.

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

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

Cash and Cash Equivalents

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

Investment Securities

Investment securities held-to-maturity are comprised of debt securities that the
Company has the positive intent and ability to hold to maturity. Such securities
are stated at cost, adjusted for amortization of premiums and accretion of
discounts over the estimated remaining lives of the securities as an adjustment
to the yield using the level-yield method. On a quarterly basis, the Company
evaluates investment securities for other than temporary impairment.

Securities to be held for indefinite periods of time and not intended to be
held-to-maturity, including all equity securities, are classified as
available-for-sale. Securities available-for-sale include securities that
management intends to use as part of its asset/liability management strategy and
that may be sold in response to changes in interest rates, resultant prepayment
risk and other factors related to interest rate and resultant prepayment risk
changes. Securities available-for-sale are carried at estimated fair value.
Unrealized holding gains and losses on such securities available-for-sale are
excluded from earnings and reported as a separate component of shareholders'
equity. Gains and losses on sales of securities are based on the specific
identification method and are accounted for on a trade date basis. On a
quarterly basis, the Company evaluates investment securities for other than
temporary impairment.


                                      F-11
<PAGE>

Loans Held-for-Sale

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

Loans

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

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

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

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

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

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


                                      F-12
<PAGE>

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

The provision for loan losses charged to operating expense is determined by
management and is based upon a periodic review of the loan portfolio, past
experience, the economy, and other factors that may affect a borrower's ability
to repay a loan. The provision is based on management's estimates and actual
losses may vary from these estimates. Estimates are reviewed and adjustments, as
they become necessary, are reported in the periods in which they become known.

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.

Bank-Owned Life Insurance

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

401(k) Plan

The Company has a 401(k) plan covering substantially all of its employees. The
Company may contribute an amount equal to 100% of the first 3% of the employee
deferral and then 50% of the next 2% of the employee deferral. The Company's
matching contribution, if any, is determined by the Board of Directors in its
sole discretion.


                                      F-13
<PAGE>

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.

Comprehensive Income

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

Segment Reporting

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

Net Income Per Share

Basic and diluted net income per share for the year ended December 31, 2006 was
calculated by dividing the net income of $2.5 million by the weighted average
number of shares outstanding of 8,242,988 (as to the basic net income per share
determination) and 8,720,408 (as to the diluted net income per share
determination). Basic and diluted net income per share for the year ended
December 31, 2005 was calculated by dividing the net income of $2.6 million by
the weighted average number of shares outstanding of 8,142,211 (as to the basic
net income per share determination) and 8,909,112 (as to the diluted net income
per share determination). Basic and diluted net income per share for year ended
December 31, 2004 was calculated by dividing the net income of $1.2 million by
the weighted average number of shares outstanding of 3,907,445 (as to the basic
net income per share determination) and 4,119,110 (as to the diluted net income
per share determination). Diluted earnings per share reflects the potential
dilution that could occur if securities or other contracts to issue common stock
(such as stock options) were exercised or resulted in the issuance of common
stock. These potentially dilutive shares would then be included in the weighted
average number of shares outstanding for the period using the treasury stock
method. Shares issued and shares reacquired during the period are weighted for
the portion of the period that they were outstanding.


                                      F-14
<PAGE>

The following table reconciles shares outstanding for basic and diluted earnings
per share for the years ended December 31, 2006, 2005 and 2004:

<TABLE>
<CAPTION>
                                                         Year ended
                                                         December 31,
                                             2006             2005             2004
                                        ---------------------------------------------
<S>                                       <C>              <C>              <C>
Average basic shares outstanding          8,242,988        8,142,211        3,907,445
Add effect of dilutive securities:
       Stock options                        477,420          766,901          211,665
                                        ---------------------------------------------
Average diluted shares outstanding        8,720,408        8,909,112        4,119,110
                                        =============================================
</TABLE>

Options to purchase 105,840 shares of common stock and 153,933 shares of common
stock at a weighted average price of $10.91 per share and $9.45 per share,
respectively, were outstanding and were not included in the computation of
diluted earnings per share for the year ended December 31, 2006, because the
option price was greater than the average market price.

Intangible Assets

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

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

Impairment

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

Stock Based Compensation

Effective January 1, 2006, the Company began recording compensation expense
associated with stock options in accordance with SFAS No. 123(R), Share-Based
Payment ("SFAS No. 123(R)"). Prior to January 1, 2006 the Company accounted for
stock-based compensation related to stock options under the recognition and
measurement principles of Accounting Principle Board Opinion No. 25; therefore,
the Company measured compensation expense for its stock option plans using the
intrinsic value method, that is, the excess, if any, of the fair market value of
the Company's stock at the grant date over the amount required to be paid to
acquire the


                                      F-15
<PAGE>

stock, and provided the disclosures required by SFAS No. 123(R) and SFAS No.
148, Accounting for Stock-Based Compensation. The Company has adopted the
modified prospective transition method provided by SFAS 123(R), and as a result,
has not retroactively adjusted results from prior periods.

As a result of the adoption of SFAS No. 123(R), the Company has incurred no
compensation expense related to the Company's stock compensation plans for the
year ended December 31, 2006, as no stock options were granted during 2006 and
all stock options were fully vested prior to January 1, 2006.

For stock options granted prior to the adoption of SFAS No. 123(R), the
following table illustrates the pro forma effect on net income and earnings per
share as if the Company had accounted for all employee stock options granted
prior to January 1, 2006 under the fair value based accounting method of SFAS
No. 123(R) (in thousands except per share data):

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

Net income per share - basic:
     As reported                                        $    0.32      $    0.31
     Pro forma                                          $    0.21      $    0.23

Net income per share - diluted:
     As reported                                        $    0.30      $    0.30
     Pro forma                                          $    0.20      $    0.22

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 the 2004 stock option grants to directors: dividend yield
of 0%; expected volatility of 27.61%; risk free interest rate of 3.07%; and
expected lives of four years. There were no employee stock option grants during
2004. There were no new employee and director stock option grants during 2006
and 2005.

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


                                      F-16
<PAGE>

Stock Appreciation Rights

On January 31, 2006, the Company granted under its 2005 Equity Incentive Plan,
157,500 Stock Appreciation Rights ("SARS") (89,250 were granted to employees and
68,250 were granted to directors), each with an exercise price of $10.36. These
SARS can only be settled in cash. The SARS vest over a four year period and
expire February 1, 2016. The fair value of SARS granted was estimated on
December 31, 2006 using the Black-Scholes option pricing model with the
following weighted-average assumptions used: stock price $8.30, dividend yield
of 0%; expected volatility of 41.17%; risk free interest rate of 4.70%; and
expected lives of seven years. These SARS had a fair value of approximately
$3.69 per share at December 31, 2006. The Company recorded, as a component of
salaries and employee benefits expense, share based payment expense of
approximately $80,000, net of tax, related to the granting of SARS during the
year ended December 31, 2006. As of December 31, 2006, total unvested
compensation expense was approximately $433,000 (pre-tax) and will vest over 37
months.

A summary of the status of the Company's SARS as of December 31, 2006, is
presented below:

                                                        December 31, 2006
--------------------------------------------------------------------------------
                                                                      Weighted
                                                                      average
                                                                      exercise
                                                       SARS             price
--------------------------------------------------------------------------------
Outstanding at beginning of year                     $      --       $      --

Granted                                                157,500           10.36

Forfeited                                               (5,250)          10.36

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

Outstanding at period end                              152,250       $   10.36
================================================================================

SARS exercisable at period end                              --              --

Weighted average fair value of
     SARs granted                                    $    3.69
================================================================================

Reclassifications

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


                                      F-17
<PAGE>

(2) Strategic Business Combination

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

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

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

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

The net deferred tax asset resulting from adjustments of net assets acquired,
including the creation of the core deposit intangible, amounted to $72,000.


                                      F-18
<PAGE>

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

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

The following table presents pro forma condensed combined consolidated financial
information of the Company for the years presented as if the combination had
taken place on January 1, 2004 (dollars in thousands, except per share data):

                                                        Year ended
                                                    December 31, 2004
           -------------------------------------------------------------
           Net interest income                           $  17,020
           Net income                                        2,494
           Basic earnings per share                           0.32
           Diluted earnings per share                         0.31


                                      F-19
<PAGE>

(3) Cash and Due from Banks

As of December 31, 2006, the Company was not required to maintain any 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, 2006 and 2005 are as follows (in thousands):

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------------
                                                      2006
---------------------------------------------------------------------------------------------------------------------------
                                                                                     Gross        Gross          Estimated
                                                               Amortized          unrealized    unrealized         market
                                                                  cost               gains        losses           value
---------------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                <C>           <C>              <C>
Investment securities held-to-maturity:
Obligations of U.S. Government
     sponsored agencies                                         $  12,673          $      --     $     192        $  12,481
Mortgage-backed securities of U.S. Government
     sponsored agencies                                             8,147                 15           189            7,973
---------------------------------------------------------------------------------------------------------------------------
Total                                                           $  20,820          $      15     $     381        $  20,454
===========================================================================================================================
Investment securities available-for-sale:
Obligations of U.S. Government
     sponsored agencies                                         $  73,782          $      23     $   1,414        $  72,391
Mortgage-backed securities of U.S. Government
     sponsored agencies                                            23,642                 --           876           22,766
Other debt securities                                                 578                  2            --              578
---------------------------------------------------------------------------------------------------------------------------
Total                                                           $  98,000          $      25     $   2,290        $  95,735
===========================================================================================================================

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


                                      F-20
<PAGE>

The amortized cost and estimated market value of investment securities
held-to-maturity and debt securities available-for-sale at December 31, 2006 by
contractual maturity are shown below (in thousands). Expected maturities will
differ from contractual maturities because issuers may have the right to call or
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                                                                               Estimated
                                                                Amortized        market
                                                                  cost           value
     ------------------------------------------------------------------------------------
<S>                                                             <C>              <C>
     Investment securities held-to-maturity:
     Due in one year or less                                    $    2,000       $  1,982
     Due after one year through fifth year                           3,934          3,851
     Due after fifth year through tenth year                         8,774          8,602
     Due after tenth year                                            6,112          6,019
     ------------------------------------------------------------------------------------
     Total                                                      $   20,820      $  20,454
     ====================================================================================
     Investment securities available-for-sale:
     Due in one year or less                                    $    2,764      $   2,732
     Due after one year through fifth year                          43,625         42,262
     Due after fifth year through tenth year                        43,965         43,136
     Due after tenth year                                            7,646          7,605
     ------------------------------------------------------------------------------------
     Total                                                      $   98,000      $  95,735
     ====================================================================================
</TABLE>

There were no security sales during 2006, 2005 and 2004. At December 31, 2006
and 2005, there were $107.3 million and $91.7 million, respectively, of
investment securities pledged as collateral for short term borrowings, 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, 2006 and 2005, were as
follows (in thousands):

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                                                Less than 12 months          12 months or more                 Total
                                              -------------------------------------------------------------------------------
                                                             Estimated                  Estimated                   Estimated
                 2006                          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               $    2       $   485       $1,604       $ 82,470       $1,606       $ 82,955
Mortgage-backed securities                           --            --        1,065         29,538        1,065         29,538
-----------------------------------------------------------------------------------------------------------------------------
Total                                            $    2       $   485       $2,669       $112,008       $2,671       $112,493
=============================================================================================================================

<CAPTION>
-----------------------------------------------------------------------------------------------------------------------------
                                                Less than 12 months          12 months or more                 Total
                                              -------------------------------------------------------------------------------
                                                             Estimated                  Estimated                   Estimated
                 2005                          Unrealized      market    Unrealized       market      Unrealized      market
         Investment securities                   losses        value        losses         value        losses        value
-----------------------------------------------------------------------------------------------------------------------------
<S>                                              <C>          <C>           <C>          <C>            <C>          <C>
U.S. Government sponsored agencies               $1,553       $57,039       $1,114       $ 36,787       $2,667       $ 93,826
Mortgage-backed securities                          291        10,740        1,035         25,522        1,326         36,262
-----------------------------------------------------------------------------------------------------------------------------
Total                                            $1,844       $67,779       $2,149       $ 62,309       $3,993       $130,088
=============================================================================================================================
</TABLE>


                                      F-21
<PAGE>

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

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

(5)  Loans

Loans at December 31, 2006 and 2005 are summarized as follows (in thousands):

                                                           2006         2005
-----------------------------------------------------------------------------
Commercial and industrial loans                          $ 35,476    $ 32,708
Real estate loans - commercial                            237,015     232,348
1-4 family real estate loans                                4,182       4,858
Home equity and second mortgages                           35,573      38,153
Consumer loans                                              2,857       2,054
-----------------------------------------------------------------------------
Subtotal                                                  315,103     310,121
Net deferred fees                                             219         222
Less allowance for loan losses                              3,229       3,175
-----------------------------------------------------------------------------
Net loans                                                $312,093    $307,168
=============================================================================
Loans held-for-sale                                      $    242    $  3,127
=============================================================================

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, 2006,
2005 and 2004 is summarized as follows (in thousands):

<TABLE>
<CAPTION>
                                                            2006        2005        2004
-------------------------------------------------------------------------------------------
<S>                                                      <C>          <C>         <C>
Balance, beginning of year                               $  3,175     $  1,638    $  1,378
Allaire Community Bank combination                             --        1,203          --
Provision charged to expense                                  500          426         260
Charge-offs                                                  (455)         (92)         --
Recoveries                                                      9           --          --
-------------------------------------------------------------------------------------------
Balance, end of year                                     $  3,229     $  3,175    $  1,638
===========================================================================================
Ratio of allowance for loan losses to total loans            1.02%        1.02%       1.16%
===========================================================================================
</TABLE>


                                      F-22
<PAGE>

At December 31, 2006, 2005 and 2004, the Company had non-accrual loans totaling
$91,000, $79,000 and $128,000, respectively, and no impaired loans. There were
no loans ninety days or greater past due and still accruing interest at December
31, 2006, 2005 and 2004. If the non-accrual loans had performed in accordance
with their original terms, interest income would have increased by $477, $6,365
and $9,475, for the years ended December 31, 2006, 2005 and 2004, respectively.
At December 31, 2006, there were no commitments to lend additional funds to
borrowers whose loans are non-accrual.

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 consolidated financial statements. The contract or notional amounts of these
instruments express the extent of involvement the Company has in each category
of financial instruments.

The Company's exposure to credit loss from nonperformance by the other party to
the above-mentioned financial instruments is represented by the contractual
amount of those instruments. The Company uses the same credit policies in making
commitments and conditional obligations as it does for on-balance sheet
instruments. The contract or notional amount of financial instruments which
represent credit risk at December 31, 2006 and 2005 is as follows (in
thousands):

                                                            2006        2005
         ----------------------------------------------------------------------
         Standby letters of credit                        $  1,478    $  1,289
         Outstanding loan and credit line commitments     $ 62,705    $ 66,333
         ----------------------------------------------------------------------

Standby letters of credit are conditional commitments issued by the Company
which guarantee performance by a customer to a third party. The credit risk and
underwriting procedures involved in issuing letters of credit are essentially
the same as that involved in extending loan facilities to customers. All of
Central Jersey Bank, N.A.'s outstanding standby letters of credit are
performance standby letters within the scope of FASB Interpretation No. 45.
These are irrevocable undertakings by Central Jersey Bank, N.A., as guarantor,
to make payments in the event a specified third party fails to perform under a
non-financial contractual obligation. Most of Central Jersey Bank, N.A.'s
performance standby letters of credit arise in connection with lending
relationships and have terms of one year or less. The maximum potential future
payments Central Jersey Bank, N.A. could be required to make equals the face
amount of the letters of credit shown above. Central Jersey Bank, N.A.'s
liability for performance standby letters of credit was insignificant at
December 31, 2006.

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


                                      F-23
<PAGE>

and marketable securities. The credit risk involved in these financial
instruments is essentially the same as that involved in extending loan
facilities to customers.

At December 31, 2006 and 2005, loans to officers, directors and related parties
amounted to approximately $4.5 million and $4.7 million, respectively. During
the years ended December 31, 2006 and 2005, $93,000 and $3.9 million,
respectively, in new loans to officers, directors and related parties were
originated and repayments totaled approximately $289,000 and $4,000,
respectively.

(6) Premises and Equipment

Premises and equipment at December 31, 2006 and 2005 are summarized as follows
(in thousands):

                                                            2006          2005
      --------------------------------------------------------------------------
      Land                                                $  1,074     $  1,074
      Buildings and improvements                             1,374        1,382
      Leasehold improvements                                 3,615        3,551
      Equipment                                              3,899        3,746
      Auto                                                      50           78
      --------------------------------------------------------------------------
                                                            10,012        9,831
      Accumulated depreciation and amortization             (4,655)      (3,825)
      --------------------------------------------------------------------------
                                                          $  5,357     $  6,006
      ==========================================================================

Depreciation and amortization expense amounted to $842,000, $736,000 and
$422,000 in 2006, 2005 and 2004, respectively.

(7)  Intangible Assets

Intangible assets at December 31, 2006 and 2005 are summarized as follows (in
thousands):

                                                            2006          2005
      --------------------------------------------------------------------------
      Goodwill                                            $ 26,957     $ 27,229
      Core deposit intangible                                2,478        3,097
      --------------------------------------------------------------------------
      Total                                               $ 29,435     $ 30,326
      ==========================================================================

Amortization expense of intangible assets for the years ended December 31, 2006,
2005 and 2004 is as follows (in thousands):

                                                   2006        2005        2004
--------------------------------------------------------------------------------
Core deposit intangible amortization             $   619     $   688     $    --
================================================================================


                                      F-24
<PAGE>

Scheduled amortization of core deposit intangibles for each of the next five
years is as follows (in thousands):

          --------------------------------------------------------
          2007                                         $       551
          2008                                                 482
          2009                                                 413
          2010                                                 344
          2011                                                 275

(8)  Deposits

Interest-bearing deposits at December 31, 2006 and 2005 consist of the following
(in thousands):

                                                             2006       2005
          --------------------------------------------------------------------
          Savings, N.O.W. and money market accounts        $202,650   $173,993
          Certificates of deposit less than $100,000         75,842     67,813
          Certificates of deposit of $100,000 or more        65,303     74,451
          --------------------------------------------------------------------
          Total                                            $343,795   $316,257
          ====================================================================

At December 31, 2006, certificates of deposit mature as follows: 2007 - $120.9
million; 2008 - $18.8 million; 2009 - $1.2 million; 2010 - $94,000; and 2011 -
$68,000.

Interest expense on deposits for the years ended December 31, 2006, 2005 and
2004 is summarized as follows (in thousands):

                                                      2006      2005      2004
--------------------------------------------------------------------------------
Savings, N.O.W. and money market accounts            $ 4,762    $2,719    $1,275
Certificates of deposit                                5,998     3,896     1,561
--------------------------------------------------------------------------------
Total                                                $10,760    $6,615    $2,836
================================================================================

(9)  Borrowings

Borrowed funds at December 31, 2006 and 2005 are summarized as follows (in
thousands):

                                                              2006          2005
          ----------------------------------------------------------------------
          Securities sold under repurchase agreements      $ 17,099     $  3,191
          FHLB line of credit                                    --       35,000
          ----------------------------------------------------------------------
          Total                                            $ 17,099     $ 38,191
          ======================================================================

Other borrowings were $17.1 million at December 31, 2006, as compared to $38.2
million at December 31, 2005. These borrowings, which are short term in nature,
were used to fund loan growth during the years ended December 31, 2006 and 2005.
Securities sold under repurchase agreements include wholesale borrowing
arrangements as well as arrangements with deposit


                                      F-25
<PAGE>

customers of Central Jersey Bank, N.A. to sweep funds into short-term
borrowings. Central Jersey Bank, N.A. uses securities to pledge as collateral
for the repurchase agreements. At December 31, 2006 and 2005, Central Jersey
Bank, N.A. had unused lines of credit with the FHLB of $51.6 million and $22.6
million, respectively.

(10)  Subordinated Debentures

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

The entire proceeds to MCBK Capital Trust I from the sale of the trust preferred
securities were used by MCBK Capital Trust I in order to purchase $5.1 million
of subordinated debentures from Central Jersey Bancorp. The subordinated
debentures bear a variable interest rate equal to LIBOR plus 285 basis points.
Although the subordinated debentures are treated as debt of Central Jersey
Bancorp, they currently qualify as Tier I Capital investments, subject to the
25% limitation under risk-based capital guidelines of the Federal Reserve. The
portion of the trust preferred securities that exceeds this limitation qualifies
as Tier II Capital of Central Jersey Bancorp. At December 31, 2006, $5.0 million
of the trust preferred securities qualified for treatment as Tier I Capital.
Central Jersey Bancorp used the proceeds it received from the subordinated
debentures to support the general balance sheet growth of Central Jersey Bancorp
and to help ensure that Central Jersey Bank, N.A. maintains the required
regulatory capital ratios.

On March 1, 2005, the Federal Reserve adopted a final rule that allows the
continued inclusion of outstanding and prospective issuances of trust preferred
securities in the Tier I Capital of bank holding companies, subject to stricter
quantitative limits and qualitative standards. The new quantitative limits
become effective after a five-year transition period ending March 31, 2009.
Under the final rules, trust preferred securities and other restricted core
capital elements are limited to 25% of all core capital elements. Amounts of
restricted core capital elements in excess of these limits may be included in
Tier II Capital. At December 31, 2006, the only restricted core capital element
owned by Central Jersey Bancorp is trust preferred securities. Central Jersey
Bancorp believes that its trust preferred issues qualify as Tier I Capital.
However, in the event that the trust preferred issues do not qualify as Tier I
Capital, Central Jersey Bank, N.A. would remain well capitalized


                                      F-26
<PAGE>

(11) Income Taxes

Components of income tax expense for the years ended December 31, 2006, 2005 and
2004 are as follows (in thousands):

                                                       2006      2005      2004
--------------------------------------------------------------------------------
Current income tax expense:
          Federal                                    $ 1,640   $ 1,451    $ 815
          State                                          266       199      178
--------------------------------------------------------------------------------
                                                       1,906     1,650      993
--------------------------------------------------------------------------------

Deferred income tax expense (benefit)
          Federal                                       (386)     (145)    (185)
          State                                          (92)      (44)     (30)
--------------------------------------------------------------------------------
                                                        (478)     (189)    (215)
--------------------------------------------------------------------------------
                                                     $ 1,428   $ 1,461    $ 778
================================================================================

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):

                                                       2006      2005     2004
--------------------------------------------------------------------------------
Federal income tax                                   $ 1,324   $ 1,392    $ 679
State income tax effect, net of federal tax effect       114       102       97
Bank-owned life insurance                                (37)      (38)      --
Meals and Entertainment                                    5         4        2
Other                                                     22         1       --
--------------------------------------------------------------------------------
Provision charged to expense                         $ 1,428   $ 1,461    $ 778
================================================================================


                                      F-27
<PAGE>

The tax effects of temporary differences that give rise to significant portions
of the deferred tax assets and deferred tax liabilities at December 31, 2006 and
2005 are as follows (in thousands):

                                                           2006           2005
--------------------------------------------------------------------------------
Deferred tax assets:
Allowance for loan losses                                 $ 1,273       $ 1,216
New Jersey NOL carry forwards                                  36            20
Allowance for uncollected interest                             38            25
Unrealized loss - securities available-for-sale               855         1,292
Net purchase accounting adjustments                           169            41
Bank accrual to cash                                           --             7
Depreciation                                                   82            --
AMA                                                             4            --
Stock options / SARS                                           51            --
Other                                                           3             4
--------------------------------------------------------------------------------
Gross deferred tax asset                                    2,511         2,605
Less: valuation reserve                                       (36)          (20)
--------------------------------------------------------------------------------
Deferred tax assets, net                                    2,475         2,585
--------------------------------------------------------------------------------

Deferred tax liabilities:
Deferred loan costs                                            95            26
Depreciation                                                   --            87
Discount accretion                                             11             4
Accrual to cash adjustment                                     --           141
--------------------------------------------------------------------------------
Gross deferred tax liabilities                                106           258
--------------------------------------------------------------------------------
Net deferred tax assets                                   $ 2,369       $ 2,327
================================================================================

Based upon current facts concerning taxes paid in the carryback period and
projections of future taxable income, management has determined that it is more
likely than not that the deferred tax assets will be realized, except for
certain New Jersey net operating losses by Central Jersey Bancorp, and
management has reserved against these deferred tax assets. However, there can be
no assurances about the level of future earnings. There has been a change in the
valuation allowance in 2006 related to the net operating losses of Central
Jersey Bancorp of $16,000 as a result of the current year losses recognized by
Central Jersey Bancorp. Central Jersey Bancorp has New Jersey net operating
losses of $995,000 which begin to expire in 2007 and if unused, will completely
expire, by 2013.


                                      F-28
<PAGE>

(12) Commitments and Contingencies

At December 31, 2006, the Company was obligated under non-cancelable lease
agreements for 12 premises. The leases provide for increased rentals based upon
increases in real estate taxes and the cost of living index. Minimum rental
payments under the terms of these leases are as follows (in thousands):

                         2007                         $ 865
                         2008                           991
                         2009                           867
                         2010                           649
                         2011                           530
                         2012 and thereafter          1,311
                         ----------------------------------
                         Total                       $5,213
                         ==================================

Total rent expense was $769,000, $758,000 and $335,000 in 2006, 2005 and 2004,
respectively.

Litigation

Central Jersey Bank, N.A. may, in the ordinary course of business, become a
party to litigation involving collection matters, contract claims and other
legal proceedings relating to the conduct of its business. Central Jersey Bank,
N.A. may also have various commitments and contingent liabilities which are not
reflected in the accompanying consolidated balance sheets.

Related Party Transactions

The Company leases administrative office space at 6 West End Court, Long Branch,
New Jersey. Certain members of the board of directors of the Company hold an
ownership interest in the leased property. The negotiations with respect to the
leased space were conducted at arms-length and the lease amount to be paid by
Central Jersey Bank, N.A. was determined by an independent appraiser to be at
fair market value. Total lease payments for 2006, 2005 and 2004 were $55,000,
$55,000 and $26,000, respectively.

(13)  Regulatory Matters

Subject to applicable law, the board of directors of Central Jersey Bank, N.A.
may provide for the payment of cash dividends. Prior approval of the OCC is
required to the extent that the total of all cash dividends to be declared by
Central Jersey Bank, N.A. in any calendar year exceeds net profits, as defined,
for that year combined with its retained net profits from the preceding two
calendar years less any transfers to capital surplus.

Central Jersey Bank, N.A. and Central Jersey Bancorp are subject to various
regulatory capital requirements administered by federal banking agencies.
Failure to meet minimum requirements can initiate certain mandatory and possibly
additional discretionary actions by regulators that, if undertaken, could have a
direct material effect on the Company's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
Central Jersey Bank, N.A. and Central Jersey Bancorp must meet specific capital
guidelines that involve


                                      F-29
<PAGE>

quantitative measures of Central Jersey Bank, N.A.'s and Central Jersey
Bancorp's assets, liabilities and certain off-balance sheet items as calculated
under regulatory accounting practices. The capital amounts and classification
are also subject to qualitative judgments by the regulators about components,
risk weightings and other factors.

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

To be considered "well capitalized," an institution must generally have a
leverage ratio (Tier 1 capital to total assets) of at least 5%, a Tier 1
risk-based capital ratio of at least 6%, and a total risk-based capital ratio of
at least 10%. Management believes that, as of December 31, 2006, Central Jersey
Bank, N.A. and Central Jersey Bancorp meet all capital adequacy requirements of
their regulators. Further, the most recent regulatory notification categorized
Central Jersey Bank, N.A. and Central Jersey Bancorp as well-capitalized under
the prompt corrective action regulations.


                                      F-30
<PAGE>

The following is a summary of Central Jersey Bank, N.A.'s and Central Jersey
Bancorp's actual capital amounts and ratios as of December 31, 2006 and 2005,
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
                                           (Leverage Ratio)               Asset Ratio                      Asset Ratio
                                           2006        2005          2006            2005             2006             2005
                                        -----------------------------------------------------------------------------------------
<S>                                        <C>         <C>          <C>             <C>              <C>              <C>
Central Jersey Bank, N.A.                  8.47%       7.85%        11.81%          10.57%           12.72%           11.48%

"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
                                           (Leverage Ratio)               Asset Ratio                      Asset Ratio
                                           2006         2005          2006            2005            2006             2005
                                        -----------------------------------------------------------------------------------------
<S>                                      <C>          <C>          <C>             <C>             <C>              <C>
Central Jersey Bank, N.A.                $ 41,547     $ 36,895     $  41,547       $  36,895       $  44,776        $  40,070

"Adequately capitalized" institution
(under federal regulations)                19,625       18,795        14,077          13,964          28,154           27,927

"Well capitalized" institution (under
federal regulations)                       24,531       23,493        21,116          20,945          35,194           34,909
</TABLE>


                                      F-31
<PAGE>

<TABLE>
<CAPTION>
                                                 Tier I                        Tier I
                                               Capital to                    Capital to                  Total Capital to
                                          Average Assets Ratio             Risk Weighted                   Risk Weighted
                                            (Leverage Ratio)                Asset Ratio                     Asset Ratio
                                           2006          2005           2006            2005           2006            2005
                                        -----------------------------------------------------------------------------------------
<S>                                        <C>          <C>            <C>             <C>            <C>             <C>
Central Jersey Bancorp                     8.38%        7.60%          11.71%          10.15%         12.62%          11.05%

"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
                                            (Leverage Ratio)                Asset Ratio                     Asset Ratio
                                           2006          2005           2006            2005           2006            2005
                                        -----------------------------------------------------------------------------------------
<S>                                      <C>          <C>            <C>             <C>             <C>            <C>
Central Jersey Bancorp                   $ 41,110     $ 35,779       $  41,110       $  35,779       $  44,339      $  38,954

"Adequately capitalized" institution
(under federal regulations)                19,616       18,828          14,048          14,100          28,097         28,201

"Well capitalized" institution (under
federal regulations)                       24,520       23,535          21,073          21,150          35,121         35,251
</TABLE>

(14) Benefit Plans

Stock Option Plan

In 2000, the Company established an Employee and Director Stock Option Plan (the
"Plan"). The Plan currently provides for the granting of stock options to
purchase in aggregate up to 1,458,605 shares of the Company's common stock,
subject to adjustment for certain dilutive events such as stock distributions.
During 2006 and 2005, no options were granted and, during 2004, 120,960 options
were granted to directors of the Company. The options vest over a period of four
years. Effective January 1, 2005, as a result of the combination with Allaire
Community Bank, all outstanding options granted under the Plan became fully
vested.

In addition, as a result of the combination with Allaire Community Bank, options
to purchase 763,551 shares of Allaire Community Bank common stock were converted
into options to purchase 763,551 shares of Central Jersey Bancorp common stock,
all of which are fully vested.


                                      F-32
<PAGE>

A summary of the status of the Company's stock options as of and for the years
ended December 31, 2006, 2005 and 2004 is presented below:

<TABLE>
<CAPTION>
                                                2006                      2005                     2004
-------------------------------------------------------------------------------------------------------------------
                                                     Weighted                  Weighted                  Weighted
                                                      average                   average                   average
                                                     exercise                  exercise                  exercise
                                          Shares       price        Shares       price       Shares        price
-------------------------------------------------------------------------------------------------------------------
<S>                                     <C>            <C>          <C>          <C>         <C>          <C>
Outstanding at beginning of year        1,508,705      $5.25        816,446      $6.51       700,032      $ 5.76
-------------------------------------------------------------------------------------------------------------------
Allaire Community Bank
  combination                                  --         --        763,551       3.82            --          --

Granted                                        --         --             --         --       120,960       10.91

Forfeited                                 (39,228)      9.31           (865)      6.95        (3,998)       7.24

Exercised                                (107,762)      4.57        (70,427)      3.74          (548)       4.34
===================================================================================================================

Outstanding at end of year              1,361,715       5.18      1,508,705       5.25       816,446        6.51
===================================================================================================================

Options exercisable at year end         1,361,715       5.18      1,508,705       5.25       404,418        4.68

Weighted average fair value of
  options granted during the year                      $  --                     $  --                    $ 2.88
===================================================================================================================
</TABLE>

No additional compensation expense is projected for future years on stock
options outstanding at December 31, 2006.

The following table summarizes information about stock options outstanding at
December 31, 2006:

                       Options Outstanding and Exercisable
                                December 31, 2006

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------
                                                    Weighted
                                                    average                    Range of
      Number                                       remaining                   exercise
    outstanding          Exercisable            contractual life                prices
---------------------------------------------------------------------------------------------
<S>                        <C>                    <C>                       <C>        <C>
      540,860              540,860                45 Months                 $   3.00 - 3.74
      387,961              387,961                54 Months                 $   4.00 - 4.32
      166,163              166,163                69 Months                 $   5.40 - 5.86
      266,731              266,731                84 Months                 $   8.33 - 10.91
</TABLE>

The aggregate intrinsic value for stock options outstanding and stock options
exercisable at December 31, 2006 is $4.2 million for both, based upon a market
price of $8.30 per share and a weighted average exercise price of $5.18 per
share. The aggregate intrinsic value of options exercised during 2006, 2005 and
2004 was $701,000, $566,000 and $4,000, respectively.


                                      F-33
<PAGE>

The weighted average fair value of options granted during 2004 was $2.88 per
option. There were no options granted during 2006 and 2005. The fair value of
options granted in 2004 was estimated on the date of grant using the
Black-Scholes option-pricing model with the following weighted average
assumptions:

         For the year ended December 31, 2004
         -----------------------------------------------------
         Expected dividend yield..............           0.00%
         Expected volatility..................          27.61%
         Risk-free interest rate..............           3.07%
         Expected option life.................       48 months

401(k) Plan

The Company has a 401(k) plan covering substantially all of its employees. The
Company may contribute an amount equal to 100% of the first 3% of the employee
deferral and then 50% of the next 2% of the employee deferral. The Company's
matching contribution, if any, is determined by the Board of Directors in its
sole discretion. The Company's aggregate contributions to the 401(k) Plan for
2006, 2005 and 2004 were $163,000, $152,000 and $63,000, respectively.

(15) 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.

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.


                                      F-34
<PAGE>

Commitments to Extend Credit

The majority of Central Jersey Bank, N.A.'s commitments to extend credit carry
current market rates if converted to loans. Therefore, the estimated fair value
is approximated by the recorded deferred fee amounts. Such amounts are
immaterial to the consolidated 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, 2006 and 2005. The fair value of
certificates of deposit was based on the discounted value of contractual cash
flows. The discount rate was estimated utilizing the rates currently offered for
deposits of similar remaining maturities.

Subordinated Debentures

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

Borrowings

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

Limitations

Fair value estimates were made at December 31, 2006 and 2005, 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, 2006 and
2005, 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-35
<PAGE>

The estimated fair values of the Company's financial instruments at December 31,
2006 and 2005 are as follows (in thousands):

<TABLE>
<CAPTION>
                                                     2006                     2005
                                                     ----                     ----
                                               Book         Fair         Book        Fair
                                               value        value        value       value
                                               -----        -----        -----       -----
<S>                                          <C>          <C>          <C>          <C>
Financial Assets:
Cash and cash equivalents                    $ 37,796     $ 37,796     $ 21,228     $ 21,228

Investment securities available-for-sale       95,735       95,735      111,175      111,175

Investment securities held-to-maturity         20,820       20,454       22,567       22,058
Loans, net                                    312,093      322,596      307,168      312,109

Loans held-for-sale                               242          242        3,127        3,232
Due from broker                                 3,527        3,527           --           --

Financial Liabilities:
Deposits                                      427,277      447,756      407,554      411,878

Other borrowings                               17,099       17,099       38,191       38,191

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


                                      F-36
<PAGE>

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

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

<TABLE>
<CAPTION>
          Balance Sheets                                         2006           2005
          ------------------------------------------------------------------------------
<S>                                                           <C>            <C>
          Assets:
          Investment in subsidiary                            $   72,252     $   69,357
          ------------------------------------------------------------------------------
               Total assets                                       72,252         69,357
          ------------------------------------------------------------------------------

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

          Shareholders' Equity:
          Common stock                                                83             82
          Additional paid-in capital                              60,505         59,999
          Retained earnings                                        6,316          3,850

          ------------------------------------------------------------------------------
               Total shareholders' equity                     $   66,904     $   63,931
          ------------------------------------------------------------------------------

          ------------------------------------------------------------------------------
               Total liabilities and shareholders' equity     $   72,252     $   69,357
          ==============================================================================

<CAPTION>
          Statements of Income                                    2006          2005          2004
          --------------------------------------------------------------------------------------------
<S>                                                           <C>            <C>            <C>
          Equity in undistributed earnings of the bank
              subsidiary                                      $    2,895     $    2,972     $   1,411
          Interest expense on subordinated debt                     (429)          (340)         (193)
          --------------------------------------------------------------------------------------------
          Net income                                          $    2,466     $    2,632     $   1,218
          ============================================================================================
</TABLE>


                                      F-37
<PAGE>

<TABLE>
<CAPTION>
          Statements of Cash Flows                                                  2006          2005           2004
          ---------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>           <C>             <C>
          Cash Flow From Operating Activities
          ---------------------------------------------------------------------------------------------------------------
          Net income                                                             $    2,466    $    2,632      $   1,218
          Less equity in undistributed earnings of the bank
              subsidiary                                                             (2,895)       (2,972)        (1,411)
          (Decrease) increase in other liabilities                                      (78)           78            193
          ---------------------------------------------------------------------------------------------------------------
          Net cash used in operating activities                                        (507)         (262)            --
          ---------------------------------------------------------------------------------------------------------------

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

          ---------------------------------------------------------------------------------------------------------------
          Cash Flow From Financing Activities
          ---------------------------------------------------------------------------------------------------------------
          Proceeds from issuance of common stock, net                                   507           262              3
          Fractional shares paid in cash                                                 --            --             (4)
          Proceeds from issuance of subordinated debt                                    --            --          5,155
          ---------------------------------------------------------------------------------------------------------------
          Net cash provided by financing activities                                     507           262          5,154
          ---------------------------------------------------------------------------------------------------------------

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

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

(17)  Recent Accounting Pronouncements

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


                                      F-38
<PAGE>

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

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

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

In September 2006, the Emerging Issues Task Force ("EITF") of the FASB discussed
public comments received on two issues: (1) EITF Issue No. 06-4 Accounting for
Deferred Compensation and Post-Retirement Benefit Aspects of Endorsement
Split-Dollar Life Insurance Arrangements, and (2) EITF Issue 06-5, Accounting
for Purchases of Life Insurance -- Determining the Amount that could be Realized
in Accordance with FASB Technical Bulletin 85-4 (Accounting for Purchases of
Life Insurance). On September 7, the EITF agreed to clarify certain points based
on public comments. The EITF reached a consensus that an employer should
recognize a liability for future benefits under FASB Statement No. 106,
Employers' Accounting for Postretirement Benefits Other Than Pensions, or APB
Opinion No. 12, Omnibus Opinion - 1967, for an endorsement split-dollar life
insurance arrangement subject to the EITF Issue No. 06-4. This liability is to
be based on the substantive agreement with the employee. The consensus is
effective for fiscal years beginning after December 15, 2007. Early adoption is
permitted as of the beginning of an entity's fiscal year. Entities should
recognize the effects of applying the consensus on this issue as a change in
accounting principle through a cumulative-


                                      F-39
<PAGE>

effect adjustment to retained earnings or to other components of equity or net
assets in the statement of financial position as of the beginning of the year of
adoption. Retrospective application to all prior periods is permitted. The
Company is evaluating the impact of adoption of EITF 06-4, on its consolidated
financial statements.

The Securities and Exchange Commission released SEC Accounting Bulletin ("SAB")
No. 108, Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements, in September 2006. SAB No.
108 requires registrants to consider the effect of all carry over and reversing
effects of prior year misstatements when quantifying errors in current-year
financial statements. SAB No. 108 does not change the staff's previous guidance
on evaluating the materiality of errors. SAB No. 108 allows registrants to
record the effect of adopting the guidance as a cumulative-effect adjustment to
retained earnings. This adjustment must be reported as of the beginning of the
first fiscal year ending after November15, 2006. The Company's adoption of SAB
No. 108 at December 31, 2006 did not have a material impact on its consolidated
financial statements.

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

SFAS No. 159 is effective for years beginning after November 15, 2007. Early
adoption by the Company within 120 days of the beginning of the Company's 2007
fiscal year is permissible, provided the Company has not yet issued interim
financial statements for 2007 and has adopted SFAS No. 157. If the Company does
not elect early adoption of SFAS No. 159, the Company will be required to adopt
the provisions of SFAS No. 159, as applicable, beginning January 1, 2008. The
Company is evaluating the impact of the adoption of SFAS No. 159 on its
consolidated financial statements.


                                      F-40
<PAGE>

(18) Selected Quarterly Financial Data (Unaudited)

The following tables are a summary of certain quarterly financial data for the
years ended December 31, 2006 and 2005, respectively.

<TABLE>
<CAPTION>
                                                          2006 Quarter Ended
                                        -------------------------------------------------------
                                         March 31       June 30      September 30   December 31
                                        ----------     ----------    ------------   -----------
                                             (dollars in thousands, except per share data)
<S>                                     <C>            <C>            <C>            <C>
Interest income                         $    7,064     $    7,321     $    7,444     $    7,590
Interest expense                             2,799          2,979          3,225          3,453
                                        ----------     ----------     ----------     ----------

      Net interest income                    4,265          4,342          4,219          4,137
Provision for loan losses                       51             97            318             34
                                        ----------     ----------     ----------     ----------

      Net interest income after
          provision for loan losses          4,214          4,245          3,901          4,103

Non-interest income                            480            423            422            415
Non-interest expense                         3,541          3,594          3,647          3,527
                                        ----------     ----------     ----------     ----------

Income before income taxes                   1,153          1,074            676            991
      Income taxes                             428            399            239            362
                                        ----------     ----------     ----------     ----------
Net income                              $      725     $      675     $      437     $      629
                                        ==========     ==========     ==========     ==========

Earnings per share:

Basic                                   $     0.09     $     0.08     $     0.05     $     0.08
                                        ==========     ==========     ==========     ==========

Diluted                                 $     0.08     $     0.08     $     0.05     $     0.07
                                        ==========     ==========     ==========     ==========

Weighted average shares
    outstanding:

Basic                                    8,200,301      8,262,545      8,262,545      8,254,553
                                        ==========     ==========     ==========     ==========
Diluted                                  8,811,495      8,738,853      8,720,859      8,695,888
                                        ==========     ==========     ==========     ==========
</TABLE>


                                      F-41
<PAGE>

<TABLE>
<CAPTION>
                                                          2005 Quarter Ended
                                        -------------------------------------------------------
                                         March 31        June 30     September 30   December 31
                                        ----------     ----------    ------------   -----------
                                              (dollars in thousands, except per share data)

<S>                                     <C>            <C>            <C>            <C>
Interest income                         $    5,815     $    6,060     $    6,311     $    6,761
Interest expense                             1,479          1,706          1,981          2,336
                                        ----------     ----------     ----------     ----------

      Net interest income                    4,336          4,354          4,330          4,425
Provision for loan losses                      100             79             36            211
                                        ----------     ----------     ----------     ----------

      Net interest income after
          provision for loan losses          4,236          4,275          4,294          4,214

Non-interest income                            345            369            423            487
Non-interest expense                         3,626          3,689          3,703          3,532
                                        ----------     ----------     ----------     ----------

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

Earnings per share:

Basic                                   $     0.08     $     0.07     $     0.08     $     0.09
                                        ==========     ==========     ==========     ==========

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

Weighted average shares
    outstanding:

Basic                                    8,112,581      8,132,393      8,152,734      8,168,444
                                        ==========     ==========     ==========     ==========
Diluted                                  8,881,893      8,882,612      9,054,811      8,864,427
                                        ==========     ==========     ==========     ==========
</TABLE>


                                      F-42
<PAGE>

                                INDEX OF EXHIBITS

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

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

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


                                      E-1
<PAGE>

              4.13(c) - Buildings and Structures;  (Registrant) Schedule 4.14(a)
              and  4.14(b)  - Real  Estate  and  Leases  (Registrant);  Schedule
              4.16(a) -  Material  Contracts  (Registrant);  Schedule  4.16(c) -
              Certain Other Contracts (Registrant); Schedule 4.16(d) - Effect on
              Contracts and Consents (Registrant);  Schedule 4.18 - Registration
              Obligations (Registrant);  Schedule 4.20 - Insurance (Registrant);
              Schedule  4.21(b) - Benefit or  Compensation  Plans  (Registrant);
              Schedule 4.21(d) - Labor Relations  (Registrant);  Schedule 4.22 -
              Compliance  with  Applicable  Laws  (Registrant);  Schedule 4.23 -
              Transactions  with  Management   (Registrant);   Schedule  4.25  -
              Deposits  (Registrant);  Schedule  6.18(a) - Notice  of  Deadlines
              (Allaire); and Schedule 6.18(b) - Notice of Deadlines (Registrant)
              (Incorporated  by  reference  to Exhibit  2.2 to the  Registrant's
              Quarterly  Report on Form  10-QSB for the  quarter  ended June 30,
              2004).

3.1           Certificate of  Incorporation  of the  Registrant,  as amended and
              restated on January 4, 2005  (Incorporated by reference to Exhibit
              3.1 to the Registrant's  Annual Report on Form 10-KSB for the year
              ended December 31, 2004).

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

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

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

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

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

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

10.5*         Change of Control  Agreement,  dated as of August 1, 2006, between
              the Registrant and Robert S. Vuono  (Incorporated  by reference to
              Exhibit  10.12 to the  Registrant's  Current  Report  on Form 8-K,
              dated August 1, 2006).


                                      E-2
<PAGE>

10.5.1*       Amendment  No.  1 to  Change  of  Control  Agreement,  dated as of
              February 21, 2007, between the Registrant and Robert S. Vuono.

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

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

10.8*         Change of Control  Agreement,  dated as of August 1, 2006, between
              the Registrant and James S. Vaccaro  (Incorporated by reference to
              Exhibit  10.10 to the  Registrant's  Current  Report  on Form 8-K,
              dated August 1, 2006).

10.8.1*       Amendment  No.  1 to  Change  of  Control  Agreement,  dated as of
              February 21, 2007, between the Registrant and James S. Vaccaro.

10.9*         Change of Control  Agreement,  dated as of August 1, 2006, between
              the  Registrant  and  Anthony   Giordano,   III  (Incorporated  by
              reference to Exhibit 10.11 to the  Registrant's  Current Report on
              Form 8-K, dated August 1, 2006).

10.9.1*       Amendment  No.  1 to  Change  of  Control  Agreement,  dated as of
              February 21, 2007,  between the Registrant  and Anthony  Giordano,
              III.

10.10*        Change  of  Control  Agreement,  dated as of  February  21,  2007,
              between the Registrant and Thomas J. Garrity.

10.11*        Change  of  Control  Agreement,  dated as of  February  21,  2007,
              between the Registrant and Lisa A. Borghese.

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

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, 2006, 2005 and 2004.

31.1          Section 302 Certification of Chief Executive Officer.


                                      E-3
<PAGE>

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.

------------------------------------
*Constitutes a management contract.


                                      E-4