##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-K
  þ
    
    Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the fiscal year ended December 31, 2007
 o
    
    Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 for the transition period from  to .
 Commission
file number : 000-52749
 Bancorp of New Jersey, Inc.
  New Jersey
    
    20-8444387(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification)1365 Palisade Avenue, Fort Lee, NJ
    
    07024(Address of principal executive offices)
    
    (Zip Code)
 201-944-8600
 None
 Common stock
 o þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer   o
(Do not check if a smaller reporting company)
    
    Smaller Reporting Company þ
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



TABLE OF CONTENTS
 PAGEPART IItem 1 Business
    
    
    3Item 1A Risk Factors
    
    
    10Item 1B Unresolved Staff Comments
    
    
    10Item 2 Properties
    
    
    10Item 3 Legal Proceedings
    
    
    11Item 4 Submission of Matters to a Vote of Security Holders
    
    
    11PART IIItem 5 Market for Registrants Common Equity, Related Stockholder Matters
and Issuer Purchases of Equity Securities
    
    
    12Item 6 Selected Financial Data
    
    
    13Item 7 Managements Discussion and Analysis of
Financial Condition and Results of Operations
    
    
    14Item 7A Quantitative and Qualitative Disclosures about Market Risk
    
    
    34Item 8 Financial Statements and Supplementary Data
    
    
    35Item 9 Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure
    
    
    67Item 9A Controls and Procedures
    
    
    67Item 9B Other Information
    
    
    67PART IIIItem 10 Directors, Executive Officers and Corporate Governance
    
    
    68Item 11 Executive Compensation
    
    
    68Item 12 Security Ownership of Certain Beneficial Owners and
Management and Related Stock Matters
    
    
    68Item 13 Certain Relationships and Related Transactions, and
Director Independence
    
    
    68Item 14 Principal Accounting Fees and Services
    
    
    68PART IVItem 15 Exhibits, Financial Statement Schedules
    
    
    69Subsidiaries of the RegistrantRule 13a-14(a) Certification of the Principal Executive OfficerRule 13a-14(a) Certification of the Principal Financial OfficerSection 1350 Certifications
  2




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PART I
 FORWARD-LOOKING STATEMENTS
   
    
    Volatility in interest rates and shape of the yield curve;
    
    Increased credit risk;
    
    Operating, legal and regulatory risk;
    
    Economic, political and competitive forces affecting the Corporations line of
business; and
    
    The risk that the analysis of these risks and forces could be incorrect, and/or that
the strategies developed to address them could be unsuccessful.
  
 ITEM 1. BUSINESS
 General
   3




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Business of the Company
   
    
    To provide local businesses, professionals, and individuals with banking services
responsive to and determined by the local market;
 
    
    Direct access to Bank management by members of the community, whether during or after
business hours;
 
    
    To attract deposits and loans by competitive pricing; and
 
    
    To provide a reasonable return to shareholders on capital invested.
 Market Area
  4




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Extended Hours
  Competition
   Concentration
  Employees
  5




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Supervision and Regulation
 General
   Bank Holding Company Act
    Supervision and Regulation of the Bank
  6




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Securities and Exchange Commission
  Monetary Policy
  Deposit Insurance
   Dividend Restrictions
   7




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Capital Adequacy Guidelines
     Prompt Corrective Action
  8




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Community Reinvestment Act
  USA Patriot Act
   Sarbanes-Oxley Act of 2002
  9




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##### Table of Contents



Other Laws and Regulations
  Future Legislation and Regulation
  Statistical Disclosure by Bank Holding Companies
  
 ITEM 1A. RISK FACTORS
  
 ITEM 1B. UNRESOLVED STAFF COMMENTS
  
 ITEM 2. PROPERTIES
  Leased
    
    Date of LeaseLocation
    
    or Owned
    
    Expiration1365 Palisade Avenue
    
    Owned
    
    N/AFort Lee, NJ204 Main Street
    
    Leased
    
    March, 2010Fort Lee, NJ401 Hackensack Avenue
    
    Leased
    
    August, 2010Hackensack, NJ 07601458 West Street
    
    Leased
    
    December, 2025Fort Lee, NJ 07024
 
 10




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ITEM 3. LEGAL PROCEEDINGS
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  11




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PART II
 
 ITEM 5.
    
    MARKET FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF
EQUITY SECURITIES
 Market Information
  High
    
    LowYear Ended December 31, 2007Fourth quarter
    
    $
    11.50
    
    
    $
    11.50Third quarter
    
    
    11.50
    
    
    
    11.50Second quarter
    
    
    11.50
    
    
    
    11.50First quarter
    
    
    11.50
    
    
    
    9.09Year Ended December 31, 2006Fourth quarter
    
    $
    9.09
    
    
    $
    9.09Third quarter
    
    
    9.09
    
    
    
    9.09Second quarter
    
    
    9.09
    
    
    
    9.09First quarter
    
    
    N/A
    
    
    
    N/A
 Holders
  Dividends
    12




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Securities Authorized for Issuance under Equity Compensation Plans
  Number of
    
    
    
    
    
    Number ofshares of
    
    
    
    
    
    shares ofcommon stock
    
    Weighted-
    
    common stockto be issued
    
    average exercise
    
    remainingupon exercise of
    
    price of
    
    available foroutstanding
    
    outstanding
    
    future issuanceoptions,
    
    options,
    
    under equitywarrants and
    
    warrants and
    
    compensationPlan Category
    
    rights
    
    rights
    
    plansEquity Compensation
Plans approved by
security holders2006 Stock Option Plan
    
    
    198,300
    
    
    $
    10.26
    
    
    
    19,6842007 Non-Qualified
Stock Option Plan for
Directors
    
    
    460,000
    
    
    $
    11.50
    
    
    
    20,000Equity compensation
plans not approved by
security holders
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    658,300
    
    
    $
    11.16
    
    
    
    39,684
 
 ITEM 6. SELECTED FINANCIAL DATA
  13




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##### Table of Contents



ITEM 7. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
   OVERVIEW AND STRATEGY
    
    
    To provide local businesses, professionals, and individuals with banking services
responsive to and determined by the local market;
 
    
    Direct access to Bank management by members of the community, whether during or after
business hours;
 
    
    To attract deposits and loans by competitive pricing; and
 
    
    To provide a reasonable return to shareholders on capital invested.
 14




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Critical Accounting Policies and Judgments
  Allowance for Loan Losses
   Deferred Tax Assets and Valuation Allowance
  Impairment of Assets
  15




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Investments Securities Impairment
  RESULTS OF OPERATIONS    2007 versus 2006
  NET INCOME
   Analysis of Net Interest Income
  Average Balance Sheets
  16




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For the year ended December 31, 2007
    
    
    May 10, 2006 through December 31, 2006(Dollars inthousands)Average
    
    
    
    
    
    
    Average
    
    
    Average
    
    
    
    
    
    
    AverageBalance
    
    
    Interest
    
    
    Yield/Cost
    
    
    Balance
    
    
    Interest
    
    
    Yield/CostASSETS :Interest-Earning Assets:Loans
    
    $
    139,546
    
    
    $
    10,111
    
    
    
    7.24
    %
    
    $
    43,971
    
    
    $
    1,983
    
    
    
    6.77
    %Securities
    
    
    5,249
    
    
    
    264
    
    
    
    5.03
    
    
    
    7,915
    
    
    
    260
    
    
    
    4.99Federal Funds Sold
    
    
    4,072
    
    
    
    199
    
    
    
    4.89
    
    
    
    21,752
    
    
    
    818
    
    
    
    5.64Interest-earning cash accounts
    
    
    1,038
    
    
    
    16
    
    
    
    1.54
    
    
    
    
    
    
    
    0
    
    
    
    0.00Total Interest-earning Assets
    
    
    149,905
    
    
    
    10,590
    
    
    
    7.06
    %
    
    
    73,638
    
    
    
    3,061
    
    
    
    6.26
    %Non-interest earning Assets
    
    
    12,297
    
    
    
    
    
    
    
    
    
    
    
    5,011Allowance for Loan Losses
    
    
    (1,863
    )
    
    
    
    
    
    
    
    
    
    
    (486
    )TOTAL ASSETS
    
    $
    160,339
    
    
    
    
    
    
    
    
    
    
    $
    78,163LIABILITIES AND STOCKHOLDERS EQUITYInterest-Bearing Liabilities :Demand Deposits
    
    $
    7,447
    
    
    $
    194
    
    
    
    2.61
    %
    
    $
    3,910
    
    
    $
    60
    
    
    
    2.30
    %Savings Deposits
    
    
    2,569
    
    
    
    13
    
    
    
    0.51
    
    
    
    930
    
    
    
    5
    
    
    
    0.81Money Market Deposits
    
    
    38,781
    
    
    
    1,757
    
    
    
    4.53
    
    
    
    16,216
    
    
    
    422
    
    
    
    3.89Time Deposits
    
    
    41,114
    
    
    
    2,132
    
    
    
    5.18
    
    
    
    3,360
    
    
    
    77
    
    
    
    3.44Short Term Borrowings
    
    
    6,432
    
    
    
    339
    
    
    
    5.27
    
    
    
    0
    
    
    
    0
    
    
    
    0.00Total Interest-Bearing Liabilities
    
    
    96,343
    
    
    
    4,435
    
    
    
    4.60
    %
    
    
    24,416
    
    
    
    564
    
    
    
    3.46
    %Non-Interest Bearing Liabilities:Demand Deposits
    
    
    18,920
    
    
    
    
    
    
    
    
    
    
    
    10,384Other Liabilities
    
    
    1,031
    
    
    
    
    
    
    
    
    
    
    
    164Total Non-Interest Bearing Liabilities
    
    
    19,951
    
    
    
    
    
    
    
    
    
    
    
    10,548Stockholders Equity
    
    
    44,045
    
    
    
    
    
    
    
    
    
    
    
    43,199TOTAL LIABILITIES AND STOCKHOLDERS
EQUITY
    
    $
    160,339
    
    
    
    
    
    
    
    
    
    
    $
    78,163Net Interest Income (Tax Equivalent
Basis)
    
    
    
    
    
    $
    6,155
    
    
    
    
    
    
    
    
    
    
    $
    2,497Tax Equivalent Basis adjustment
    
    
    
    
    
    
    0
    
    
    
    
    
    
    
    
    
    
    
    0Net Interest Income
    
    
    
    
    
    $
    6,155
    
    
    
    
    
    
    
    
    
    
    $
    2,497Net Interest Rate Spread
    
    
    
    
    
    
    
    
    
    
    2.46
    %
    
    
    
    
    
    
    
    
    
    
    2.80
    %Net Interest Margin
    
    
    
    
    
    
    
    
    
    
    4.10
    %
    
    
    
    
    
    
    
    
    
    
    3.39
    %Ratio of Interest-Earning Assets to
Interest-Bearing Liabilities
    
    
    1.56
    
    
    
    
    
    
    
    
    
    
    
    3.02
 17




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Rate/Volume Analysis
  Year EndedDecember 31,2007 versus 2006Increase (Decrease)due to change inAverageVolume
    
    
    Rate
    
    
    NetInterest Income :Loans
    
    $
    7,472
    
    
    $
    656
    
    
    $
    8,128Securities
    
    
    2
    
    
    
    2
    
    
    
    4Fed Funds Sold
    
    
    (589
    )
    
    
    (30
    )
    
    
    (619
    )Interest earning cash accounts
    
    
    16
    
    
    
    0
    
    
    
    16Total Interest Income
    
    
    6,901
    
    
    
    628
    
    
    
    7,529Interest Expense :Demand Deposits
    
    
    111
    
    
    
    23
    
    
    
    134Savings Deposits
    
    
    15
    
    
    
    (7
    )
    
    
    8Money Market Deposits
    
    
    1,088
    
    
    
    248
    
    
    
    1,336Time Deposits
    
    
    1,339
    
    
    
    715
    
    
    
    2,054Short Term Borrowings
    
    
    339
    
    
    
    0
    
    
    
    339Total Interest Expense
    
    
    2,892
    
    
    
    979
    
    
    
    3,871Net change in Interest Income
    
    $
    4,009
    
    
    $
    (351
    )
    
    $
    3,658
 18




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PROVISION FOR LOAN LOSSES
  OTHER INCOME
  OTHER EXPENSES
  INCOME TAX EXPENSE
  19




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FINANCIAL CONDITION
  LOANS
    20




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December 31,2007
    
    
    2006Real Estate
    
    $
    123,335
    
    
    $
    50,787Commercial
    
    
    27,056
    
    
    
    14,678Credit Lines
    
    
    28,133
    
    
    
    13,519Consumer
    
    
    4,936
    
    
    
    1,654Total Loans
    
    $
    183,460
    
    
    $
    80,638
  WithinOne
    
    1 to 5
    
    After 5Year
    
    Years
    
    Years
    
    TotalLoans with Fixed RateCommercial
    
    
    2,354
    
    
    
    4,698
    
    
    
    2,383
    
    
    $
    9,435Real Estate
    
    
    2,135
    
    
    
    185
    
    
    
    44,310
    
    
    
    46,630Credit Lines
    
    
    428
    
    
    
    
    
    
    
    
    
    
    
    428Consumer
    
    
    1,207
    
    
    
    1,290
    
    
    
    2,044
    
    
    
    4,541Loans with Adjustable RateCommercial
    
    
    14,325
    
    
    
    3,296
    
    
    
    
    
    
    $
    17,621Real Estate
    
    
    32,984
    
    
    
    208
    
    
    
    43,513
    
    
    
    76,705Credit Lines
    
    
    106
    
    
    
    
    
    
    
    27,599
    
    
    
    27,705Consumer
    
    
    353
    
    
    
    
    
    
    
    42
    
    
    
    395
 LOAN QUALITY
    21




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ALLOWANCE FOR LOAN LOSSES
  22




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2007
    
    
    2006Balance, January 1
    
    $
    866
    
    
    $
    Charge-offsCommercial
    
    
    
    
    
    
    Real Estate
    
    
    
    
    
    
    Credit Lines
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    Total Charge-offs
    
    
    
    
    
    
    RecoveriesCommercial
    
    
    
    
    
    
    Real Estate
    
    
    
    
    
    
    Credit Lines
    
    
    
    
    
    
    Consumer
    
    
    
    
    
    
    Total Recoveries
    
    
    
    
    
    
    Net charge-offs
    
    
    
    
    
    
    Provision charged to expense
    
    
    1,046
    
    
    
    866Balance, December 31
    
    $
    1,912
    
    
    $
    866Ratio of net charge-offs to average loans Outstanding
    
    
    N/A
    
    
    
    N/A
 23




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2007
    
    
    2006% of
    
    
    
    
    
    
    
    
    
    
    % ofTotal
    
    
    
    
    
    
    
    
    
    
    TotalAmount
    
    
    % of ALL
    
    
    Loans
    
    
    Amount
    
    
    % of ALL
    
    
    LoansBalance applicable to:Real Estate
    
    $
    1,373
    
    
    
    71.76
    %
    
    
    67.23
    %
    
    $
    479
    
    
    
    55.31
    %
    
    
    62.98
    %Commercial
    
    
    241
    
    
    
    12.60
    %
    
    
    14.75
    %
    
    
    197
    
    
    
    22.75
    %
    
    
    18.20
    %Credit Lines
    
    
    152
    
    
    
    7.95
    %
    
    
    15.34
    %
    
    
    69
    
    
    
    7.97
    %
    
    
    16.77
    %Consumer
    
    
    5
    
    
    
    0.26
    %
    
    
    2.68
    %
    
    
    25
    
    
    
    2.89
    %
    
    
    2.05
    %Sub-total
    
    
    1,771
    
    
    
    92.63
    %
    
    
    100.00
    %
    
    
    770
    
    
    
    88.92
    %
    
    
    100.00
    %Unallocated Reserves
    
    
    141
    
    
    
    7.37
    %
    
    
    
    
    
    
    96
    
    
    
    11.09
    %TOTAL
    
    $
    1,912
    
    
    
    100.00
    %
    
    
    100.00
    %
    
    $
    866
    
    
    
    100.00
    %
    
    
    100.00
    %
 
 24




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INVESTMENT SECURITIES
     At December 31,(in thousands)2007
    
    
    2006Amortized
    
    
    Fair
    
    
    Amortized
    
    
    FairCost
    
    
    Value
    
    
    Cost
    
    
    ValueAvailable for saleU.S. Agency obligations
    
    $
    
    
    
    $
    
    
    
    $
    9,560
    
    
    $
    9,599Total available for sale
    
    $
    
    
    
    $
    
    
    
    $
    9,560
    
    
    $
    9,599Held to MaturityU.S. Treasury obligation
    
    $
    1,996
    
    
    $
    2,014
    
    
    $
    1,993
    
    
    $
    2,002Total held to maturity
    
    $
    1,996
    
    
    $
    2,014
    
    
    $
    1,993
    
    
    $
    2,002Total Investment Securities
    
    $
    1,996
    
    
    $
    2,014
    
    
    $
    11,553
    
    
    $
    11,601
 25




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Securities Held to MaturityWeightedAmortized
    
    
    Fair
    
    
    AverageCost
    
    
    Value
    
    
    YieldWithin 1 year
    
    $
    1,996
    
    
    $
    2,014
    
    
    
    5.12
    %1 to 5 years
    
    
    
    
    
    
    
    
    
    
    Over 5 years
    
    
    
    
    
    
    
    
    
    
    $
    1,996
    
    
    $
    2,014
  DEPOSITS
  26




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December 31,(Dollars in Thousands)2007
    
    
    2006Average
    
    
    
    
    
    
    AverageAmount
    
    
    Yield/Rate
    
    
    Amount
    
    
    Yield/RateNon-interest Bearing Demand
    
    $
    23,292
    
    
    
    
    
    
    $
    10,244
    
    
    
    Interest Bearing Demand
    
    
    52,215
    
    
    
    4.26
    %
    
    
    38,794
    
    
    
    3.58
    %Savings
    
    
    3,430
    
    
    
    0.51
    %
    
    
    1,873
    
    
    
    0.81
    %Time Deposits
    
    
    134,004
    
    
    
    5.18
    %
    
    
    10,956
    
    
    
    3.44
    %$
    212,941
    
    
    
    
    
    
    $
    61,867
  2007(in thousands)Three months or less
    
    $
    18,816Over three months through twelve months
    
    
    72,859Over one year through three years
    
    
    1,026Over three years
    
    
    0Total
    
    $
    92,701
 RETURN ON EQUITY AND ASSETS
  At or for the year endedDecember 31,Selected Financial Ratios:
    
    2007
    
    2006Return on Average Assets (ROA)
    
    
    0.51
    %
    
    
    (0.72
    )%Return on Average Equity (ROE)
    
    
    1.85
    %
    
    
    (1.31
    )%Equity to Total Assets at Year-End
    
    
    17.61
    %
    
    
    40.58
    %Dividend Payout Ratio
    
    
    N/A
    
    
    
    N/A
 27




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LIQUIDITY
     INTEREST RATE SENSITIVITY ANALYSIS
   28




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0  3
    
    
    0  6
    
    
    0  1
    
    
    0  5Months
    
    
    Months
    
    
    Year
    
    
    Years
    
    
    5 + Years
    
    
    All Others
    
    
    TOTALSecurities, excluding
equity securities
    
    $
    
    
    
    $
    1,996
    
    
    $
    1,996
    
    
    $
    1,996
    
    
    $
    
    
    
    $
    
    
    
    $
    1,996Loans :Commercial
    
    
    19,639
    
    
    
    19,727
    
    
    
    19,975
    
    
    
    24,673
    
    
    
    2,383
    
    
    
    
    
    
    
    27,056Real Estate
    
    
    33,045
    
    
    
    33,045
    
    
    
    34,130
    
    
    
    78,285
    
    
    
    5,322
    
    
    
    39,728
    
    
    
    123,335Credit Lines
    
    
    25,826
    
    
    
    28,133
    
    
    
    28,133
    
    
    
    28,133
    
    
    
    
    
    
    
    
    
    
    
    28,133Consumer
    
    
    1,228
    
    
    
    1,228
    
    
    
    1,603
    
    
    
    2,893
    
    
    
    489
    
    
    
    1,554
    
    
    
    4,936Federal Funds Sold
    
    
    57,091
    
    
    
    57,091
    
    
    
    57,091
    
    
    
    57,091
    
    
    
    
    
    
    
    
    
    
    
    57,091Other Assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,698
    
    
    
    17,705TOTAL ASSETS
    
    $
    136,829
    
    
    $
    141,220
    
    
    $
    142,928
    
    
    $
    193,071
    
    
    $
    8,194
    
    
    $
    58,980
    
    
    $
    260,245Transaction /
Demand Accounts
    
    $
    5,788
    
    
    $
    5,788
    
    
    $
    5,788
    
    
    $
    5,788
    
    
    $
    
    
    
    $
    
    
    
    $
    5,788Money Market
    
    
    46,427
    
    
    
    46,427
    
    
    
    46,427
    
    
    
    46,427
    
    
    
    
    
    
    
    
    
    
    
    46,427Savings
    
    
    3,430
    
    
    
    3,430
    
    
    
    3,430
    
    
    
    3,430
    
    
    
    
    
    
    
    
    
    
    
    3,430Time Deposits
    
    
    20,408
    
    
    
    49,042
    
    
    
    132,883
    
    
    
    134,004
    
    
    
    
    
    
    
    
    
    
    
    134,004Other Liabilities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,756
    
    
    
    24,756Equity
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    45,840
    
    
    
    45,840TOTAL LIABILITIES
AND EQUITY
    
    $
    76,053
    
    
    $
    104,687
    
    
    $
    188,528
    
    
    $
    189,649
    
    
    $
    
    
    
    $
    70,596
    
    
    $
    260,245Dollar Gap
    
    $
    60,776
    
    
    $
    36,533
    
    
    $
    (45,600
    )
    
    $
    3,415
    
    
    $
    Gap / Total Assets
    
    
    23.35
    %
    
    
    14.04
    %
    
    
    (17.52
    %)
    
    
    1.31
    %Target Gap Range
    
    
    +/- 35.00
    
    
    
    +/- 30.00
    
    
    
    +/- 25.00
    
    
    
    +/- 25.00RSA / RSL
    
    
    179.91
    %
    
    
    134.90
    %
    
    
    75.81
    %
    
    
    101.80
    %(Rate Sensitive
Assets to
Rate Sensitive
Liabilities)
 29




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MARKET RISK
     30




---



##### Table of Contents



Avg.Int.
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    There-
    
    
    
    
    
    FairRate
    
    2008
    
    2009
    
    2010
    
    2011
    
    2012
    
    After
    
    Total
    
    ValueInterest Rate
Sensitive Assets:Loans
    
    
    7.24
    %
    
    $
    53,726
    
    
    
    1,141
    
    
    
    1,829
    
    
    
    4,316
    
    
    
    4,992
    
    
    
    117,456
    
    
    $
    183,460
    
    
    $
    182,905Securities available
for sale, net of
equity securities
    
    
    N/A
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment Securities
    
    
    5.03
    %
    
    $
    1,996
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,996
    
    
    $
    2,014Fed Funds Sold
    
    
    4.89
    %
    
    $
    57,091
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    57,091
    
    
    $
    57,091Interest-earning Cash
    
    
    1.54
    %
    
    $
    543
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    543
    
    
    $
    543Interest Rate
Sensitive Liabilities:Demand Deposits
    
    
    2.61
    %
    
    $
    5,788
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    5,788
    
    
    $
    5,788Savings Deposits
    
    
    0.51
    %
    
    $
    3,430
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    3,430
    
    
    $
    3,430Money Market Deposits
    
    
    4.53
    %
    
    $
    46,427
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    46,427
    
    
    $
    46,427Time Deposits
    
    
    5.18
    %
    
    $
    132,883
    
    
    
    922
    
    
    
    141
    
    
    
    12
    
    
    
    46
    
    
    
    
    
    
    $
    134,004
    
    
    $
    133,996
  31




---



##### Table of Contents



CAPITAL
     MinimumDecember 31,
    
    Regulatory2007
    
    RequirementsRisk-Based Capital :Tier 1 Capital Ratio
    
    
    25.06
    %
    
    
    4.0
    %Total Capital Ratio
    
    
    26.11
    %
    
    
    8.0
    %Leverage Ratio
    
    
    22.27
    %
    
    
    4.0
    %
  32




---



##### Table of Contents



CONTRACTUAL OBLIGATIONS
  Contractual Obligations
 Payment due by PeriodTotalLess than 1
    
    
    1 to 3
    
    
    4 to 5
    
    
    After 5
    
    
    Amountsyear
    
    
    years
    
    
    years
    
    
    years
    
    
    CommittedMinimum annual rental under
Non-cancelable operating leases
    
    
    416
    
    
    
    704
    
    
    
    400
    
    
    
    3,245
    
    
    $
    4,765Remaining contractual maturities
of time deposits
    
    
    132,883
    
    
    
    1,063
    
    
    
    58
    
    
    
    
    
    
    $
    134,004Total Contractual Obligations
    
    $
    133,299
    
    
    
    1,767
    
    
    
    458
    
    
    
    3,245
    
    
    $
    138,769
  Commercial real estate, construction, and
Land development secured by land
    
    $
    35,541Home Equity Loans
    
    
    13,041Standby letters of credit and other
    
    
    1,103$
    49,685
 33




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##### Table of Contents



IMPACT OF INFLATION AND CHANGING PRICES
  RECENTLY ISSUED ACCOUNTING STANDARDS
  
 ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
  34




---



##### Table of Contents



ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 PageReport of Independent Registered Public Accounting Firm
    
    
    36Report of Independent Registered Public Accounting Firm
    
    
    37Consolidated Balance Sheets
as of December 31, 2007 and 2006
    
    
    38Consolidated Statements of Income for the years
ended December 31, 2007 and 2006
    
    
    39Consolidated Statements of Stockholders Equity
for the years ended December 31, 2007 and 2006
    
    
    40Consolidated Statements of Cash Flows for the years
ended December 31, 2007 and 2006,
    
    
    41Notes to Consolidated Financial Statements
    
    
    42
 35




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
     
 36




---



##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
  .
   
 37




---



##### Table of Contents



CONSOLIDATED BALANCE SHEETS
 
 2007
    
    
    2006AssetsCash and due from banks
    
    $
    8,481
    
    
    $
    284Interest bearing deposits in banks
    
    
    543
    
    
    
    1,569Federal funds sold
    
    
    57,091
    
    
    
    6,986Total cash and cash equivalents
    
    
    66,115
    
    
    
    8,839Securities available for sale
    
    
    
    
    
    
    9,599Securities held to maturity (fair value approximates
$2,014 and $2,002 at December 31, 2007 and 2006,
respectively)
    
    
    1,996
    
    
    
    1,993Restricted investment in bank stock, at cost
    
    
    328
    
    
    
    100Loans
    
    
    183,460
    
    
    
    80,638Deferred loan fees and costs, net
    
    
    76
    
    
    
    47Allowance for loan losses
    
    
    (1,912
    )
    
    
    (866
    )Net loans
    
    
    181,624
    
    
    
    79,819Premises and equipment, net
    
    
    8,300
    
    
    
    4,612Accrued interest receivable
    
    
    613
    
    
    
    439Other assets
    
    
    1,269
    
    
    
    646Total assets
    
    $
    260,245
    
    
    $
    106,047Liabilities and Stockholders EquityDeposits :Noninterest-bearing demand deposits
    
    $
    23,292
    
    
    $
    10,244Interest bearing deposits:Savings, money market and time deposits
    
    
    96,948
    
    
    
    41,856Time deposits of $100 or more
    
    
    92,701
    
    
    
    9,767Total deposits
    
    
    212,941
    
    
    
    61,867Accrued expenses and other liabilities
    
    
    1,464
    
    
    
    1,141Total liabilities
    
    
    214,405
    
    
    
    63,008Commitments and contingencies
    
    
    
    
    
    
    Stockholders equity :Common stock, no par value, authorized 20,000,000
shares; issued and outstanding 4,970,090 shares at
December 31, 2007; $10 par value, authorized
5,000,000 shares; issued and outstanding 4,799,692
at December 31, 2006
    
    
    45,689
    
    
    
    23,998Additional Paid in Capital
    
    
    
    
    
    
    19,667Retained Earnings (Accumulated Deficit)
    
    
    151
    
    
    
    (665
    )Accumulated other comprehensive income
    
    
    
    
    
    
    39Total stockholders equity
    
    
    45,840
    
    
    
    43,039Total liabilities and stockholders equity
    
    $
    260,245
    
    
    $
    106,047
  38




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF INCOME
 
 2007
    
    
    2006Interest income:Interest on escrow funds
    
    $
    
    
    
    $
    624Loans, including fees
    
    
    10,111
    
    
    
    1,983Securities
    
    
    264
    
    
    
    260Federal funds sold and other
    
    
    215
    
    
    
    818Total interest income
    
    
    10,590
    
    
    
    3,685Interest expense:Savings and money markets
    
    
    1,964
    
    
    
    487Time deposits
    
    
    2,132
    
    
    
    77Short term borrowings
    
    
    339
    
    
    
    43Total interest expense
    
    
    4,435
    
    
    
    607Net interest income
    
    
    6,155
    
    
    
    3,078Provision for loan losses
    
    
    1,046
    
    
    
    866Net interest income after
provision for loan losses
    
    
    5,109
    
    
    
    2,212Non interest incomeFees and service charges on deposit accounts
    
    
    140
    
    
    
    15Gains on sale of securities
    
    
    4
    
    
    
    Total non interest income
    
    
    144
    
    
    
    15Non interest expense:Salaries and employee benefits
    
    
    2,451
    
    
    
    1,825Occupancy and equipment expense
    
    
    810
    
    
    
    434Advertising and marketing expenses
    
    
    51
    
    
    
    67Data processing
    
    
    181
    
    
    
    17Legal fees
    
    
    156
    
    
    
    58Other operating expenses
    
    
    714
    
    
    
    226Total other expenses
    
    
    4,363
    
    
    
    2,627Income(loss) before income taxes
    
    
    890
    
    
    
    (400
    )Income tax expense
    
    
    74
    
    
    
    164Net Income(Loss)
    
    $
    816
    
    
    $
    (564
    )Earnings(loss) per share:Basic
    
    $
    0.17
    
    
    $
    (0.12
    )Diluted
    
    $
    0.17
    
    
    $
    (0.12
    )
   39




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 Years ended December 31, 2007 and 2006
(Dollars in Thousands)
 Retained
    
    
    AccumulatedAdditional
    
    
    Earnings
    
    
    OtherCommon
    
    
    Common
    
    
    Subscription
    
    
    Paid - In
    
    
    (Accumulated
    
    
    ComprehensiveStock
    
    
    Stock subscribed
    
    
    receivable
    
    
    Capital
    
    
    Deficit)
    
    
    (loss)income
    
    
    TotalBalance at December 31, 2005
    
    $
    
    
    
    $
    42,724
    
    
    $
    (42,724
    )
    
    $
    900
    
    
    $
    (101
    )
    
    $
    
    
    
    $
    799Issuance of common stock
    
    
    21,811
    
    
    
    (42,724
    )
    
    
    42,724
    
    
    
    20,873
    
    
    
    
    
    
    
    
    
    
    
    42,684Exercise of warrants (1,100 shares)
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    12Recognition of stock option expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    
    
    
    
    69Stock distribution (436,327 shares)
    
    
    2,182
    
    
    
    
    
    
    
    
    
    
    
    (2,182
    )
    
    
    
    
    
    
    
    
    
    
    Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (564
    )
    
    
    
    
    
    
    (564
    )Unrealized gains on securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39
    
    
    
    39Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (525
    )Balance at December 31, 2006
    
    
    23,998
    
    
    
    
    
    
    
    
    
    
    
    19,667
    
    
    
    (665
    )
    
    
    39
    
    
    
    43,039Exchange of common stock -
holding company reorganization
    
    
    19,667
    
    
    
    
    
    
    
    
    
    
    
    (19,667
    )
    
    
    
    
    
    
    
    
    
    
    Exercise of stock options (22,000 shares)
    
    
    200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    200Exercise of warrants (104,936 shares)
    
    
    1,141
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,141Recognition of stock option expense
    
    
    183
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    183Issuance of common stock (43,478 shares)
    
    
    500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    500Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    816
    
    
    
    
    
    
    
    816Unrealized losses on securities available for sale
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39
    )
    
    
    (39
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    777Balance at December 31, 2007
    
    $
    45,689
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    151
    
    
    $
    
    
    
    $
    45,840
  40




---



##### Table of Contents



CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 2007
    
    
    2006Cash flows from operating activities:Net income(loss)
    
    $
    816
    
    
    $
    (564
    )Adjustments to reconcile net income (loss) to net cash
provided by
Operating activities:Provision for loan losses
    
    
    1,046
    
    
    
    866Deferred tax benefit
    
    
    (607
    )
    
    
    (147
    )Depreciation and amortization
    
    
    193
    
    
    
    55Recognition of stock option expense
    
    
    183
    
    
    
    69Fees earned from mortgage referrals
    
    
    (12
    )
    
    
    Gain on sale of securities
    
    
    (4
    )
    
    
    Changes in operating assets and liabilities:(Increase)decrease in accrued interest receivable
    
    
    (174
    )
    
    
    159Increase in other assets
    
    
    (8
    )
    
    
    (646
    )Increase in accounts payable and accrued liabilities
    
    
    323
    
    
    
    1,053Net cash provided by operating activities
    
    
    1,756
    
    
    
    845Cash flows from investing activities:Purchases of investment securities held to maturity
    
    
    
    
    
    
    (1,993
    )Purchases of securities available for sale
    
    
    
    
    
    
    (11,460
    )Proceeds from called securities available for sale
    
    
    
    
    
    
    2,000Proceeds from sales of securities available for sale
    
    
    9,565
    
    
    
    Purchase of restricted investment in bank stock
    
    
    (228
    )
    
    
    (100
    )Net increase in loans
    
    
    (102,851
    )
    
    
    (80,638
    )Purchases of premises and equipment
    
    
    (3,881
    )
    
    
    (4,390
    )Net cash used in investing activities
    
    
    (97,395
    )
    
    
    (96,581
    )Cash flows from financing activities:Net increase in deposits
    
    
    151,074
    
    
    
    61,867Proceeds from issuance of common stock
    
    
    500
    
    
    
    42,684Proceeds from exercise of stock options
    
    
    200Warrants exercised
    
    
    1,141
    
    
    
    12Net cash provided by financing activities
    
    
    152,915
    
    
    
    104,563Increase in cash and cash equivalents
    
    
    57,276
    
    
    
    8,827Cash and cash equivalents at beginning of year
    
    
    8,839
    
    
    
    12Cash and cash equivalents at end of year
    
    $
    66,115
    
    
    $
    8,839Supplemental information:Cash paid during the year for:Interest
    
    $
    3,558
    
    
    $
    568Taxes
    
    $
    578
    
    
    $
    
  41




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1. Summary of Significant Accounting Policies
 Basis of Financial Statement Presentation
      Nature of Operations
   Use of Estimates
   42




---



##### Table of Contents



Significant Group of Concentration of Credit Risk
  Cash and Cash Equivalents
  Interest-bearing deposits in banks
  Regulators
  Securities
   Premises and Equipment
  Loans and Allowance for Loan Losses
  43




---



##### Table of Contents



Stock-Based Compensation
  44




---



##### Table of Contents



Income Taxes
  Earnings Per Share
  Comprehensive Income
  Advertising
  Transfer of Financial Assets
  Restricted Investment in Bank Stock
  45




---



##### Table of Contents



NOTE 2. Securities
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2006
   
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueGovernment Sponsored
Enterprise obligations
    
    $
    9,560
    
    
    $
    39
    
    
    $
    
    
    
    $
    9,599
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    FairDecember 31, 2007
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueU.S. Treasury Obligations
    
    $
    1,996
    
    
    $
    18
    
    
    $
    
    
    
    $
    2,014
 Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    MarketDecember 31, 2006
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueObligations of U.S. Treasury
    
    $
    1,993
    
    
    $
    9
    
    
    $
    
    
    
    $
    2,002
   46




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##### Table of Contents



NOTE 3. Loans and Allowance for Loan Losses
  December 31,2007
    
    2006Real estate
    
    $
    123,335
    
    
    $
    50,787Commercial
    
    
    27,056
    
    
    
    14,678Credit lines
    
    
    28,133
    
    
    
    13,519Consumer
    
    
    4,936
    
    
    
    1,654$
    183,460
    
    
    $
    80,638
   Years ended December 31,2007
    
    
    2006Balance at beginning of year
    
    $
    866
    
    
    $
    Provision charged to expense
    
    
    1,046
    
    
    
    866Loans charged off
    
    
    
    
    
    
    Recoveries
    
    
    
    
    
    
    Balance at end of year
    
    $
    1,912
    
    
    $
    866
  NOTE 4. Premises and Equipment
  2007
    
    
    2006Land
    
    $
    3,350
    
    
    $
    3,350Building
    
    
    4,409
    
    
    
    1,036Furniture and equipment
    
    
    375
    
    
    
    184Leasehold improvements
    
    
    414
    
    
    
    978,548
    
    
    
    4,667Less accumulated depreciation and amortization
    
    
    248
    
    
    
    55Total premises and equipment, net
    
    $
    8,300
    
    
    $
    4,612
  47




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NOTE 5. Deposits
  2007Three months or less
    
    $
    20,408Over three months through twelve months
    
    
    112,475Over 1 year through 2 years
    
    
    921Over 2 years through 3 years
    
    
    141Over 3 years through 4 years
    
    
    12Over 4 years through 5 years
    
    
    47Over 5 years
    
    
    $
    134,004
 NOTE 6. Short Term Borrowings
  48




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##### Table of Contents



NOTE 7. Income Taxes
  2007
    
    
    2006Federal:Current
    
    $
    519
    
    
    $
    564Deferred
    
    
    (349
    )
    
    
    (564
    )State:Current
    
    
    162
    
    
    
    164Deferred
    
    
    (258
    )
    
    
    Income tax expense
    
    $
    74
    
    
    $
    164
  2007
    
    
    2006Deferred tax assets:Start up expenses
    
    $
    468
    
    
    $
    503Allowance for loan losses
    
    
    744
    
    
    
    346Accrued expenses
    
    
    50
    
    
    
    54Other
    
    
    39
    
    
    
    2Total gross deferred tax assets
    
    
    1,301
    
    
    
    905Deferred tax liabilities:Deferred loan costs
    
    
    (63
    )
    
    
    (32
    )Prepaid expenses
    
    
    (36
    )
    
    
    (26
    )Unrealized gains on AFS securities
    
    
    
    
    
    
    (16
    )Other
    
    
    (31
    )
    
    
    (1
    )Total gross deferred tax liabilities
    
    
    (130
    )
    
    
    (75
    )LESS:Valuation Allowance
    
    
    
    
    
    
    (282
    )Net deferred tax asset
    
    $
    1,171
    
    
    $
    548
  49




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##### Table of Contents



2007
    
    
    2006Computed expected tax expense(benefit)
    
    $
    303
    
    
    $
    (93
    )Increase(decrease) in taxes resulting from:State taxes, net of federal income tax (benefit)expense
    
    
    (63
    )
    
    
    108Non-deductible penalties
    
    
    5
    
    
    
    Stock-based compensation
    
    
    28
    
    
    
    24Meals and entertainment
    
    
    3
    
    
    
    2Change in valuation allowance
    
    
    (202
    )
    
    
    123$
    74
    
    
    $
    164
   NOTE 8. Leases
   Year ending December 31:2008
    
    $
    4162009
    
    
    4212010
    
    
    2832011
    
    
    1982012
    
    
    202Thereafter
    
    
    3,245$
    4,765
 50




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##### Table of Contents



NOTE 9. Related-party Transactions
   Outstanding loans at beginning of the year
    
    $
    10,329New Loans
    
    
    9,941Repayments
    
    
    (6,421
    )Outstanding loans at end of the year
    
    $
    13,849
     51




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##### Table of Contents



NOTE 10. Earnings Per Share
 
 For the Year EndedDecember 31,(In thousands, except per share data)
    
    2007
    
    
    2006Net income (loss) applicable to common stock
    
    $
    816
    
    
    $
    (564
    )Weighted average number of common
shares outstanding  basic
    
    
    4,856
    
    
    
    4,799Basic earnings(loss) per share
    
    $
    0.17
    
    
    $
    (0.12
    )Net income (loss) applicable to common stock
    
    $
    816
    
    
    
    Weighted average number of common shares
outstanding    dilutedWeighted average number of common
shares outstanding
    
    
    4,856Effect of
dilutive warrants
    
    
    24Weighted average number of common
shares outstanding
    
    
    4,880Diluted earnings(loss) per share
    
    $
    0.17
    
    
    
    
  52




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NOTE 11. Stockholders Equity and Dividend Restrictions
       53




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NOTE 12. Benefit Plans
 2006 Stock Option Plan
    54




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##### Table of Contents



Weighted Average
    
    
    AverageNumber of
    
    
    Exercise price
    
    
    IntrinsicShares
    
    
    per share
    
    
    Value (1)Outstanding at December 31, 2005
    
    
    Granted
    
    
    124,300
    
    
    $
    9.09Forfeited
    
    
    Exercised
    
    
    Outstanding at December 31, 2006
    
    
    124,300
    
    
    $
    9.09Granted
    
    
    96,000
    
    
    $
    11.50Forfeited
    
    
    Exercised
    
    
    (22,000
    )
    
    $
    9.09Outstanding at December 31, 2007
    
    
    198,300
    
    
    $
    10.26
    
    
    $
    246,543Exercisable at December 31, 2007
    
    
    78,100
    
    
    $
    9.09
    
    
    $
    188,221Weighted-average fair value of
options granted during the year
    
    
    
    
    
    $
    3.07
 
 (1)
    
    The aggregate instirinsic value of a stock option in the table above represents
the total pre-tax intrinsic value (the amount by which the current market value of the
underlying stock exceeds the exercise price of the option) that would have been received by
the option holders had they exercised their options on December 31, 2007. This amount
changes based on the changes in the market value in the Companys stock.  Weighted AverageNumber
    
    Remaining
    
    Weighted AverageRange of Exercise Prices
    
    Outstanding
    
    Contractual life (years)
    
    Exercise Price$9.09
    
    
    102,300
    
    
    
    8.83
    
    
    $
    9.09$11.50
    
    
    96,000
    
    
    
    9.92
    
    
    $
    11.50198,300
  55




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##### Table of Contents



2007 Director Plan
    WeightedAverage
    
    
    
    
    
    
    Weighted AverageNumber
    
    
    Exercise
    
    
    Average
    
    
    Remainingof
    
    
    price per
    
    
    Intrinsic
    
    
    Contractual lifeShares
    
    
    share
    
    
    Value (1)
    
    
    (years)Outstanding at December 31, 2006
    
    
    Granted
    
    
    460,000
    
    
    $
    11.50
    
    
    $
    
    
    
    
    9.81Forfeited
    
    
    Exercised
    
    
    Outstanding at December 31, 2007
    
    
    460,000
    
    
    $
    11.50Exercisable at December 31, 2007
    
    
    Weighted-average fair value of options granted during the year
    
    
    
    
    
    $
    2.53
 
 (1)
    
    The aggregate instirinsic value of a stock option in the table above represents
the total pre-tax intrinsic value (the amount by which the current market value of the
underlying stock exceeds the exercise price of the option) that would have been received by
the option holders had they exercised their options on December 31, 2007. This amount
changes based on the changes in the market value in the Companys stock.  56




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##### Table of Contents



NOTE
12. Benefit Plans (continued)
 Weighted Average Assumptions for options granted
  2007
    
    2006Dividend yield
    
    
    0.00
    %
    
    
    0.00
    %Expected life
    
    4.50 years
    
    2.44 yearsExpected volatility
    
    
    17.72
    %
    
    
    17.75
    %Risk-free interest rate
    
    
    3.70
    %
    
    
    4.77
    %
  Defined Contribution Plan
  57




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NOTE 13. Regulatory Capital Requirements
   58




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##### Table of Contents



FDIC requirementsMinimum capital
    
    For classificationBank actual
    
    adequacy
    
    as well capitalizedAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioDecember 31, 2007:Leverage (Tier 1) Capital
    
    $
    45,840
    
    
    
    22.27
    %
    
    $
    8,235
    
    
    
    4.00
    %
    
    $
    10,293
    
    
    
    5.00
    %Risk-based capital:Tier 1
    
    $
    45,840
    
    
    
    25.06
    %
    
    $
    7,315
    
    
    
    4.00
    %
    
    $
    10,973
    
    
    
    6.00
    %Total
    
    $
    47,752
    
    
    
    26.11
    %
    
    $
    14,631
    
    
    
    8.00
    %
    
    $
    18,289
    
    
    
    10.00
    %December 31, 2006:Leverage (Tier 1) Capital
    
    $
    43,000
    
    
    
    55.01
    %
    
    $
    3,126
    
    
    
    4.00
    %
    
    $
    3,908
    
    
    
    5.00
    %Risk-based capital:Tier 1
    
    $
    43,000
    
    
    
    52.77
    %
    
    $
    3,260
    
    
    
    4.00
    %
    
    $
    4,889
    
    
    
    6.00
    %Total
    
    $
    43,866
    
    
    
    53.83
    %
    
    $
    6,519
    
    
    
    8.00
    %
    
    $
    8,149
    
    
    
    10.00
    %
   59




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##### Table of Contents



NOTE 14. Financial Instruments with Off-Balance Sheet Risk
    NOTE 15. Financial Information of Parent Company
  Balance Sheet
 December 31, 2007Assets:Investment in subsidiary, net
    
    $
    45,840Total assets
    
    $
    45,840Stockholders equity:
    
    $
    45,840
 60




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##### Table of Contents



Statement of Income
 Dividends from bank subsidiary
    
    $
    0Expenses
    
    
    0Income before equity in undistributed
earnings of subsidiary bank
    
    
    0Equity in undistributed
earnings of subsidiary bank
    
    
    816Net income
    
    $
    816
 Statement of Cash Flow
 Cash flows from operating activities:Net income
    
    $
    816Adjustments to reconcile net income to net cash
provided by operating activities:Equity in undistributed earnings of the
subsidiary bank
    
    
    (816
    )Decrease in other assets, net
    
    
    0Net cash provided by operating activities
    
    
    0Cash flows from investing activities:Capital contributed to subsidiary bank
    
    
    (1,585
    )Net cash used in financing activities
    
    
    (1,585
    )Cash flows from financing activities:Proceeds from exercise of warrants
    
    
    1,085Proceeds from issuance of common stock
    
    
    500Net cash provided by financing
activities
    
    
    1,585Net change in cash for the period
    
    
    Net cash at beginning of year
    
    
    Net cash at end of year
    
    $
    
 61




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##### Table of Contents



NOTE 16. Fair Value of Financial Instruments
  2007
    
    2006Carrying
    
    Estimated
    
    Carrying
    
    Estimatedamount
    
    Fair Value
    
    amount
    
    Fair ValueFinancial assets:Cash and cash equivalents
    
    $
    66,115
    
    
    $
    66,115
    
    
    $
    8,839
    
    
    $
    8,839Securities available for sale
    
    
    
    
    
    
    
    
    
    
    9,599
    
    
    
    9,599Securities held to maturity
    
    
    1,996
    
    
    
    2,014
    
    
    
    1,993
    
    
    
    2,002Restricted investment in bank stock
    
    
    328
    
    
    
    328
    
    
    
    100
    
    
    
    100Net loans
    
    
    181,624
    
    
    
    181,068
    
    
    
    79,819
    
    
    
    79,643Accrued interest receivable
    
    
    613
    
    
    
    613
    
    
    
    439
    
    
    
    439Financial liabilities:Deposits
    
    
    212,941
    
    
    
    212,933
    
    
    
    61,867
    
    
    
    61,858Accrued interest payable
    
    
    917
    
    
    
    917
    
    
    
    40
    
    
    
    40
  Cash and Cash Equivalents
  Securities
  Net loans
  62




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Restricted Investment in Bank Stock
  Deposits
  Commitments to Extend Credit and Letters of Credit
  Limitation
   63




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##### Table of Contents



NOTE 17. Quarterly Financial Data (unaudited)
  
 December 31
    
    
    September 30
    
    
    June 30
    
    
    March 312007Interest income
    
    $
    3,328
    
    
    $
    2,886
    
    
    $
    2,391
    
    
    $
    1,965Interest expense
    
    
    1,649
    
    
    
    1,242
    
    
    
    903
    
    
    
    641Net interest income
    
    
    1,679
    
    
    
    1,644
    
    
    
    1,488
    
    
    
    1,324Provision for loan losses
    
    
    140
    
    
    
    278
    
    
    
    239
    
    
    
    389Other expense, net
    
    
    1,290
    
    
    
    1,066
    
    
    
    963
    
    
    
    880Provision(benefit) for federal and state
income taxes
    
    
    111
    
    
    
    (144
    )
    
    
    80
    
    
    
    27Net income
    
    $
    138
    
    
    $
    444
    
    
    $
    206
    
    
    $
    28Earnings per share:Basic
    
    $
    0.03
    
    
    $
    0.09
    
    
    $
    0.04
    
    
    $
    0.01Diluted
    
    $
    0.03
    
    
    $
    0.09
    
    
    $
    0.04
    
    
    $
    0.012006Interest income
    
    $
    1,520
    
    
    $
    1,086
    
    
    $
    612
    
    
    $
    N/AInterest expense
    
    
    396
    
    
    
    149
    
    
    
    61
    
    
    
    N/ANet interest income
    
    
    1,124
    
    
    
    937
    
    
    
    551
    
    
    
    N/AProvision for loan losses
    
    
    302
    
    
    
    367
    
    
    
    197
    
    
    
    N/AOther expense, net
    
    
    819
    
    
    
    667
    
    
    
    660
    
    
    
    N/AProvision for income taxes
    
    
    164
    
    
    
    0
    
    
    
    0
    
    
    
    N/ANet loss
    
    $
    (161
    )
    
    $
    (97
    )
    
    $
    (306
    )
    
    $
    N/ALoss per share:Basic
    
    $
    (0.03
    )
    
    $
    (0.02
    )
    
    $
    (0.07
    )
    
    $
    N/ADiluted
    
    $
    (0.03
    )
    
    $
    (0.02
    )
    
    $
    (0.07
    )
    
    $
    N/A
 64




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##### Table of Contents



Note 18. Recent Accounting Pronouncements
       65




---



##### Table of Contents



"
  66




---



##### Table of Contents



ITEM 9.
    
    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
  
 ITEM 9A. CONTROLS AND PROCEDURES
 Evaluation of Disclosure Controls and Procedures
   Managements Annual Report On Internal Control Over Financial Reporting
  Changes in Internal Controls Over Financial Reporting
  
 ITEM 9B. OTHER INFORMATION
  67




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##### Table of Contents



PART III
 
 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
  
 ITEM 11. EXECUTIVE COMPENSATION
  
 ITEM 12.
    
    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT AND RELATED STOCKHOLDER MATTERS
  
 ITEM 13.
    
    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE
  
 ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
  68




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##### Table of Contents



PART IV
 
 ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
 (a)
    
    The following portions of the Companys consolidated financial statements are
set forth in Item 8 of this Annual Report:
 (i)
    
    Consolidated Balance Sheets as of December 31, 2007 and 2006.(ii)
    
    Consolidated Statements of Income for the years ended
December 31, 2007 and 2006.(iii)
    
    Consolidated Statements of Stockholders Equity for the
years ended December 31, 2007 and 2006.(iv)
    
    Consolidated Statements of Cash Flows for the years ended
December 31, 2007 and 2006.(v)
    
    Notes to Consolidated Financial Statement(vi)
    
    Reports of Independent Registered Public Accounting Firms
 (b)
    
    Financial Statement Schedules
  (c)
    
    Exhibits
  69




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##### Table of Contents



SIGNATURES
  BANCORP OF NEW JERSEY, INC.By:
    /s/ Albert F. BuzzettiAlbert F. BuzzettiChairman, President and CEO   Name
    
    Title
    
    Date/s/ Albert F. Buzzetti

Albert F. Buzzetti
    
    Chairman, President, and
Chief Executive Officer
    
    March 31, 2008/s/ Armand Leone, Jr.
    
    Vice Chairman and Director
    
    March 31, 2008Armand Leone, Jr./s/ Michael Belloe
    
    Director
    
    March 31, 2008Michael Bello/s/ Jay Blau
    
    Director
    
    March 31, 2008Jay Blau/s/ Albert L. Buzzetti
    
    Director
    
    March 31, 2008Albert L. Buzzetti/s/ Gerald A. Calabrese, Jr.
    
    Director
    
    March 31, 2008Gerald a. Calabrese, Jr./s/ Stephen Crevani
    
    Director
    
    March 31, 2008Stephen Crevani/s/ John K. Daily
    
    Director
    
    March 31, 2008John K. Daily/s/ Anthony M. Lo Conte
    
    Director
    
    March 31, 2008Anthony M. Lo Conte/s/ Carmelo Luppino
    
    Director
    
    March 31, 2008Carmelo Luppino/s/ Rosario Luppino
    
    Director
    
    March 31, 2008Rosario Luppino
 70




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##### Table of Contents



Name
    
    Title
    
    Date/s/ Howard Mann
    
    Director
    
    March 31, 2008Howard Mann/s/ Josephine Mauro
    
    Director
    
    March 31, 2008Josephine Mauro/s/ Joel P. Paritz
    
    Director
    
    March 31, 2008Joel P. Paritz/s/ Christopher M. Shaari
    
    Director
    
    March 31, 2008Christopher M. Shaari/s/ Anthony Siniscalchi
    
    Director
    
    March 31, 2008Anthony Siniscalchi/s/ Mark Sokolich
    
    Director
    
    March 31, 2008Mark Sokolich/s/ Diane M. Spinner

Diane M. Spinner
    
    Executive Vice President and
Director
    
    March 31, 2008
 71




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##### Table of Contents



ExhibitNo.
    
    Description2.1
    
    (A)
    
    Plan of Acquisition3.1
    
    (A)
    
    Certificate of Incorporation3.2
    
    (A)
    
    Amended and Restated Bylaws4.1
    
    (A)
    
    Specimen form of stock certificate10.1
    
    (A)
    
    Change In Control Agreement between the Bank and Albert F.
Buzzetti*10.2
    
    (A)
    
    Change In Control Agreement between the Bank and Michael Lesler*10.3
    
    (A)
    
    Change In Control Agreement between the Bank and Leo J. Faresich*10.4
    
    (A)
    
    Change In Control Agreement between the Bank and Diane M.
Spinner*10.5
    
    (A)
    
    2006 Stock Option Plan*10.6
    
    (A)
    
    Form of Stock Option Award Agreement*(B)
    
    2007 Non-Qualified Stock Option Plan For Directors(C)
    
    Form of Stock Option Award Agreement21
    
    
    
    Subsidiaries of the Registrant31.1
    
    
    
    Rule 13a-14(a) Certification of the Principal Executive Officer31.2
    
    
    
    Rule 13a-14(a) Certification of the Principal Financial Officer32
    
    
    
    Section 1350 Certifications
 
 *
    
    Management contract or compensatory plan, contract or arrangement.(A)
    
    Incorporated by reference to the exhibit to registrants Registration Statement on Form S-4
(Registration No. 333-141124), filed with the Securities and Exchange Commission on March 7,
2007, as amended by Amendment No. 1 on Form S-4/A, filed on April 27, 2007, and Amendment No.
2 on Form S-4/A, filed on May 15, 2007(B)
    
    Incorporated by reference to Exhibit A to the proxy statement/prospectus included in the
registrants Registration Statement on Form S-4 (Registration No. 333-141124), filed with the
Securities and Exchange Commission on March 7, 2007, as amended by Amendment No. 1 on Form
S-4/A, filed on April 27, 2007, and Amendment No. 2 on Form S-4/A, filed on May 15, 2007(C)
    
    Incorporated by reference to the registrants Quarterly Report on Form 10-Q, for the
quarterly period ended September 30, 2007, filed with the Securities and Exchange Commission
on November 14, 2007 72