| x   | Annual report pursuant to Section 13 or 15(d) of the Securities Exchange Act of  1934 |
|---------------|-------------------------------------------------------------------------------------------------|

| o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
|---|------------------------------------------------------------------------------------------|

| Bancorp of New Jersey, Inc.                            |
|--------------------------------------------------------|
| (Exact name of Registrant as specified in its charter) |
| New Jersey                                             |   |   | 20-8444387 |
| (State or other jurisdiction of                        |   | (I.R.S. Employer |
| incorporation or organization)                         |   |  Identification) |
|                                                   |   |   |
| 1365 Palisade Avenue, Fort Lee, NJ                     | 07024 |
| (Address of principal executive offices)               | (Zip Code) |

|   | Large accelerated filer | o |   | Accelerated filer         | o |
|--------|-------------------------|---|--------|---------------------------|---|
|   | Non-accelerated filer   | o |   | Smaller reporting company | x |

----

----

|     |                                                                                                               |   | PAGE   |
|----------|--------------------------------------------------------------------------------------------------------------------|--------|--------|
|     |                                                                                                               |   |   |
| PART I   |                                                                                                               |   |   |
| Item 1   | Business                                                                                                           |   | 4      |
| Item 1A  | Risk Factors                                                                                                       |   | 13     |
| Item 1B  | Unresolved Staff Comments                                                                                          |   | 13     |
| Item 2   | Properties                                                                                                         |   | 14     |
| Item 3   | Legal Proceedings                                                                                                  |   | 14     |
| Item 4   | Removed and Reserved                                                                                               |   | 14     |
|     |                                                                                                               |   |   |
| PART II  |                                                                                                               |   |   |
| Item 5   | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |   | 15     |
| Item 6   | Selected Financial Data                                                                                            |   | 16     |
| Item 7   | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        |   | 17     |
| Item 7A  | Quantitative and Qualitative Disclosures about Market Risk                                                         |   | 39     |
| Item 8   | Financial Statements and Supplementary Data                                                                        |   | 40     |
| Item 9   | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure                               |   | 76     |
| Item 9A  | Controls and Procedures                                                                                            |   | 76     |
| Item 9B  | Other Information                                                                                                  |   | 77     |
|     |                                                                                                               |   |   |
| PART III |                                                                                                               |   |   |
| Item 10  | Directors, Executive Officers and Corporate Governance                                                             |   | 78     |
| Item 11  | Executive Compensation                                                                                             |   | 78     |
| Item 12  | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                |   | 78     |
| Item 13  | Certain Relationships and Related Transactions, and Director Independence                                          |   | 78     |
| Item 14  | Principal Accounting Fees and Services                                                                             |   | 78     |
|     |                                                                                                               |   |   |
| PART IV  |                                                                                                               |   |   |
| Item 15  | Exhibits, Financial Statement Schedules                                                                            |   | 79     |

----

PART I

| ● | Current economic crisis affecting the financial industry; |
|---------|-----------------------------------------------------------|

| ● | Volatility in interest rates and shape of the yield curve; |
|---------|------------------------------------------------------------|

| ● | Increased credit risk and risks associated with the real estate market; |
|---------|-------------------------------------------------------------------------|

| ● | Operating, legal and regulatory risk; |
|---------|---------------------------------------|

| ● | Economic, political and competitive forces affecting the Company’s business; and |
|---------|----------------------------------------------------------------------------------------|

| ● | That management’s analysis of these risks and factors could be incorrect, and/or that the strategies developed to address them could be unsuccessful. |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

ITEM 1.                  BUSINESS

----

| ● | 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. |
|---------|---------------------------------------------------------------------|

----

----

----

----

----

----

----

----

ITEM 1A.               RISK FACTORS

ITEM 1B.               UNRESOLVED STAFF COMMENTS

----

ITEM 2.                  PROPERTIES

|                         |   | Leased   |   | Date of Lease  |   |
|------------------------------|--------|----------|--------|----------------|--------|
| Location                     |   | or Owned |   | Expiration     |   |
| 1365 Palisade Avenue         |   | Owned    |   | N/A            |   |
| Fort Lee, NJ                 |   |     |   |           |   |
|                         |   |     |   |           |   |
| 204 Main Street              |   | Leased   |   | March, 2015    |   |
| Fort Lee, NJ                 |   |     |   |           |   |
|                         |   |     |   |           |   |
| 401 Hackensack Avenue        |   | Leased   |   | August, 2020   |   |
| Hackensack, NJ 07601         |   |     |   |           |   |
|                         |   |     |   |           |   |
| 458 West Street              |   | Leased   |   | December, 2025 |   |
| Fort Lee, NJ 07024           |   |     |   |           |   |
|                         |   |     |   |           |   |
| 320 Haworth Avenue           |   | Owned    |   | N/A            |   |
| Haworth, NJ  07641 |   |     |   |           |   |
|                         |   |     |   |           |   |
| 4 Park Street                |   | Leased   |   | January, 2014  |   |
| Harrington Park, NJ, 07640   |   |     |   |           |   |

ITEM 3.                  LEGAL PROCEEDINGS

ITEM 4.                  (REMOVED AND RESERVED)

----

PART II

| ITEM 5. | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |
|---------|--------------------------------------------------------------------------------------------------------------------|

|                               |   | High   |   |   | Low    |   |
|------------------------------------|--------|--------|--------|--------|--------|--------|
|                               |   |   |   |   |   |   |
| Year Ended December 31, 2009       |   |   |   |   |   |   |
| Fourth quarter                     |   | $      | 10.97  |   |   | $      | 8.49 |   |
| Third quarter                      |   |   | 11.50  |   |   |   | 9.25 |   |
| Second quarter                     |   |   | 10.90  |   |   |   | 9.25 |   |
| First quarter                      |   |   | 11.25  |   |   |   | 8.52 |   |
|                               |   |   |   |   |   |   |   |   |
|  Year Ended December 31, 2008 |   |   |   |   |   |   |   |   |
| Fourth quarter                     |   | $      | 12.30  |   |   | $      | 8.48 |   |
| Third quarter                      |   |   | 15.97  |   |   |   | 10.51 |   |
| Second quarter                     |   |   | 25.25  |   |   |   | 13.44 |   |
| First quarter                      |   |   | 11.50  |   |   |   | 11.50 |   |
|                               |   |   |   |   |   |   |   |   |

----

| Plan Category                                              |   | Number ofshares ofcommon stockto be issuedupon exercise ofoutstandingoptions,warrants andrights |    |   | Weighted-average exerciseprice ofoutstandingoptions,warrants andrights |   |    | Number ofshares ofcommon stockremainingavailable forfuture issuanceunder equitycompensationplans |   |
|------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|---------|--------|------------------------------------------------------------------------|--------|---------|--------------------------------------------------------------------------------------------------|--------|
|                                                       |   |                                                                                            |    |   |                                                                   |   |    |                                                                                             |   |
| Equity Compensation Plans approved by security holders     |   |                                                                                            |    |   |                                                                   |   |    |                                                                                             |   |
| 2006 Stock Option Plan                                     |   |                                                                                            | 188,500 |   |                                                                   | $      | 10.26   |                                                                                             |   |   | 20,684 |   |
|                                                       |   |                                                                                            |    |   |                                                                   |   |    |                                                                                             |   |   |   |   |
| 2007 Non-Qualified Stock Option Plan for Directors         |   |                                                                                            | 412,668 |   |                                                                   | $      | 11.50   |                                                                                             |   |   | 43,334 |   |
|                                                       |   |                                                                                            |    |   |                                                                   |   |    |                                                                                             |   |   |   |   |
| Equity compensation plans not approved by security holders |   |                                                                                            | — |   |                                                                   |   | — |                                                                                             |   |   | — |   |
|                                                       |   |                                                                                            |    |   |                                                                   |   |    |                                                                                             |   |   |   |   |
| Total                                                      |   |                                                                                            | 601,168 |   |                                                                   | $      | 11.11   |                                                                                             |   |   | 64,018 |   |

ITEM 6.                  SELECTED FINANCIAL DATA

----

ITEM 7.                  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION

| ●   | 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. |
|---------------------|---------------------------------------------------------------------|

----

----

----

----

|                                                             |   | 2009                  |    | 2008   |            | 2007   |    |
|------------------------------------------------------------------|--------|-----------------------|---------|--------|-----------------|--------|---------|
|                                                             |   |   AverageBalance |    |   |   Interest |   |    |   AverageYield/Cost |   |   |   AverageBalance |   |   |   Interest |   |   |   AverageYield/Cost |   |   |   AverageBalance |   |   |   Interest |   |   |   AverageYield/Cost |   |
| ASSETS :                                                         |   |                  |    |   |            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Earning Assets:                                         |   |                  |    |   |            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                            |   | $                     | 251,695 |   |            | $      | 14,630  |   |   |   | 5.81 | % |   | $ | 209,498 |   |   | $ | 12,977 |   |   |   | 6.19 | % |   | $ | 139,546 |   |   | $ | 10,111 |   |   |   | 7.24 | % |
| Securities                                                       |   |                  | 26,800  |   |            |   | 778     |   |   |   | 2.90 |   |   |   | 17,147 |   |   |   | 708 |   |   |   | 4.13 |   |   |   | 5,249 |   |   |   | 264 |   |   |   | 5.03 |   |
| Federal Funds Sold                                               |   |                  | 5,369   |   |            |   | 7       |   |   |   | 0.15 |   |   |   | 24,185 |   |   |   | 725 |   |   |   | 3.00 |   |   |   | 4,072 |   |   |   | 199 |   |   |   | 4.89 |   |
| Interest-earning cash accounts*                                  |   |                  | 23, 062 |   |            |   | 75      |   |   |   | 0.33 |   |   |   | 9,091 |   |   |   | 45 |   |   |   | 0.49 |   |   |   | 1,038 |   |   |   | 16 |   |   |   | 1.54 |   |
| Total Interest-earning Assets                                    |   |                  | 306,926 |   |            |   | 15,491  |   |   |   | 5.05 | % |   |   | 259,921 |   |   |   | 14,455 |   |   |   | 5.56 | % |   |   | 149,905 |   |   |   | 10,590 |   |   |   | 7.06 | % |
| Non-interest earning Assets                                      |   |                  | 13,842  |   |            |   |    |   |   |   |   |   |   |   | 12,074 |   |   |   |   |   |   |   |   |   |   |   | 12,297 |   |   |   |   |   |   |   |   |   |
| Allowance for Loan Losses                                        |   |                  | (2,547  | )      |            |   |    |   |   |   |   |   |   |   | (2,135 | ) |   |   |   |   |   |   |   |   |   |   | (1,863 | ) |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                                                     |   | $                     | 318,221 |   |            |   |    |   |   |   |   |   |   | $ | 269,860 |   |   |   |   |   |   |   |   |   |   | $ | 160,339 |   |   |   |   |   |   |   |   |   |
|                                                             |   |                  |    |   |            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                       |   |                  |    |   |            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Liabilities:                                    |   |                  |    |   |            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand Deposits                                                  |   | $                     | 6,312   |   |            |   | 11      |   |   |   | 0.18 | % |   | $ | 5,632 |   |   |   | 63 |   |   |   | 1.12 | % |   | $ | 7,447 |   |   | $ | 194 |   |   |   | 2.61 | % |
| Savings Deposits                                                 |   |                  | 3,593   |   |            |   | 12      |   |   |   | 0.30 |   |   |   | 3,016 |   |   |   | 8 |   |   |   | 0.26 |   |   |   | 2,569 |   |   |   | 13 |   |   |   | 0.51 |   |
| Money Market Deposits                                            |   |                  | 46,757  |   |            |   | 228     |   |   |   | 0.49 |   |   |   | 53,831 |   |   |   | 1,189 |   |   |   | 2.21 |   |   |   | 38,781 |   |   |   | 1,757 |   |   |   | 4.53 |   |
| Time Deposits                                                    |   |                  | 178,749 |   |            |   | 5,681   |   |   |   | 3.18 |   |   |   | 133,266 |   |   |   | 6,273 |   |   |   | 4.71 |   |   |   | 41,114 |   |   |   | 2,132 |   |   |   | 5.18 |   |
| Short Term Borrowings                                            |   |                  | — |   |            |   | — |   |   |   | — |   |   |   | 378 |   |   |   | 11 |   |   |   | 2.91 |   |   |   | 6,432 |   |   |   | 339 |   |   |   | 5.27 |   |
| Total Interest-Bearing Liabilities                               |   |                  | 235,411 |   |            |   | 5,932   |   |   |   | 2.52 | % |   |   | 196,123 |   |   |   | 7,544 |   |   |   | 3.85 | % |   |   | 96,343 |   |   |   | 4,435 |   |   |   | 4.60 | % |
| Non-Interest Bearing Liabilities:                                |   |                  |    |   |            |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand Deposits                                                  |   |                  | 32,271  |   |            |   |    |   |   |   |   |   |   |   | 25,361 |   |   |   |   |   |   |   |   |   |   |   | 18,920 |   |   |   |   |   |   |   |   |   |
| Other Liabilities                                                |   |                  | 1,495   |   |            |   |    |   |   |   |   |   |   |   | 1,541 |   |   |   |   |   |   |   |   |   |   |   | 1,031 |   |   |   |   |   |   |   |   |   |
| Total Non-Interest Bearing Liabilities                           |   |                  | 33,766  |   |            |   |    |   |   |   |   |   |   |   | 26,902 |   |   |   |   |   |   |   |   |   |   |   | 19,951 |   |   |   |   |   |   |   |   |   |
| Stockholders’ Equity                                       |   |                  | 49,044  |   |            |   |    |   |   |   |   |   |   |   | 46,835 |   |   |   |   |   |   |   |   |   |   |   | 44,045 |   |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY                 |   | $                     | 318,221 |   |            |   |    |   |   |   |   |   |   | $ | 269,860 |   |   |   |   |   |   |   |   |   |   | $ | 160,339 |   |   |   |   |   |   |   |   |   |
| Net Interest Income(Tax Equivalent Basis)                        |   |                  |    |   |            | $      | 9,559   |   |   |   |   |   |   |   |   |   |   |   |  6,911 |   |   |   |   |   |   |   |   |   |   | $ | 6,155 |   |   |   |   |   |
| Tax Equivalent Basis adjustment                                  |   |                  |    |   |            |   | 0       |   |   |   |   |   |   |   |   |   |   |   | 0 |   |   |   |   |   |   |   |   |   |   |   | 0 |   |   |   |   |   |
| Net Interest Income                                              |   |                  |    |   |            | $      | 9,559   |   |   |   |   |   |   |   |   |   |   | $ | 6,911 |   |   |   |   |   |   |   |   |   |   | $ | 6,155 |   |   |   |   |   |
| Net Interest Rate Spread                                         |   |                  |    |   |            |   |    |   |   |   | 2.53 | % |   |   |   |   |   |   |   |   |   |   | 1.71 | % |   |   |   |   |   |   |   |   |   |   | 2.46 | % |
| Net Interest Margin                                              |   |                  |    |   |            |   |    |   |   |   | 3.11 | % |   |   |   |   |   |   |   |   |   |   | 2.66 | % |   |   |   |   |   |   |   |   |   |   | 4.10 | % |
| Ratio of Interest-Earning Assets to Interest-Bearing Liabilities |   |                  | 1.30    |   |            |   |    |   |   |   |   |   |   |   | 1.33 |   |   |   |   |   |   |   |   |   |   |   | 1.56 |   |   |   |   |   |   |   |   |   |

----

|                           |   | Year EndedDecember 31,2009 versus2008      |   |   | Year EndedDecember 31,2008 versus2007 |   |
|--------------------------------|--------|--------------------------------------------|--------|--------|---------------------------------------|--------|
|                           |   | Increase (Decrease)due to change inAverage |   |   |                                  |   |   |  Increase (Decrease)due to change inAverage |   |   |   |   |
|                           |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   |  Volume                               |   |   |  Rate                            |   |   |  Net |   |   |  Volume  |   |   |  Rate |   |   |  Net |   |
|                           |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Income :              |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                          |   | $                                          | 2,378  |   |                                  | $      | (725 | ) |   | $ | 1,653 |   |   | $ | 4,053 |   |   | $ | (1,163 | ) |   | $ | 2,890 |   |
| Securities                     |   |                                       | 149    |   |                                  |   | (79 | ) |   |   | 70 |   |   |   | 482 |   |   |   | (38 | ) |   |   | 444 |   |
| Fed Funds Sold                 |   |                                       | (323   | )      |                                  |   | (394 | ) |   |   | (717 | ) |   |   | 571 |   |   |   | (45 | ) |   |   | 526 |   |
| Interest earning cash accounts |   |                                       | 38     |   |                                  |   | (8 | ) |   |   | 30 |   |   |   | 32 |   |   |   | (3 | ) |   |   | 29 |   |
| Total Interest Income          |   |                                       | 2,242  |   |                                  |   | (1,206 | ) |   |   | 1,036 |   |   |   | 5,138 |   |   |   | (1,249 | ) |   |   | 3,889 |   |
|                           |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Expense :             |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand Deposits                |   |                                       | 9      |   |                                  |   | (61 | ) |   |   | (52 | ) |   |   | (39 | ) |   |   | (92 | ) |   |   | (131 | ) |
| Savings Deposits               |   |                                       | 2      |   |                                  |   | 2 |   |   |   | 4 |   |   |   | 3 |   |   |   | (8 | ) |   |   | (5 | ) |
| Money Market Deposits          |   |                                       | (139   | )      |                                  |   | (822 | ) |   |   | (961 | ) |   |   | 1,777 |   |   |   | (2,345 | ) |   |   | (568 | ) |
| Time Deposits                  |   |                                       | 1,786  |   |                                  |   | (2,378 | ) |   |   | (592 | ) |   |   | 4,319 |   |   |   | (178 | ) |   |   | 4,141 |   |
| Short Term Borrowings          |   |                                       | (6     | )      |                                  |   | (6 | ) |   |   | (12 | ) |   |   | (222 | ) |   |   | (106 | ) |   |   | (328 | ) |
|                           |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Interest Expense         |   |                                       | 1,652  |   |                                  |   | (3,265 | ) |   |   | (1,613 | ) |   |   | 5,838 |   |   |   | (2,729 | ) |   |   | 3,109 |   |
|                           |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net change in Interest Income  |   | $                                          | 590    |   |                                  | $      | 2,059 |   |   | $ | 2,649 |   |   | $ | (700 | ) |   | $ | (1,480 | ) |   | $ | 780 |   |
|                           |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   |                                       |   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

----

|         |   |  December 31, |    |
|--------------|--------|--------------------|---------|
|         |   |               |    |   |   |   |   |   |   |   |   |   |
|         |   | 2009               |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|         |   |               |    |   |   |   |   |   |   |   |   |   |
| Real Estate  |   | $                  | 177,031 |   |   | $ | 159,058 |   |   | $ | 123,335 |   |   | $ | 50,787 |   |
| Commercial   |   |               | 36,036  |   |   |   | 33,319 |   |   |   | 27,056 |   |   |   | 14,678 |   |
| Credit Lines |   |               | 47,536  |   |   |   | 37,962 |   |   |   | 28,133 |   |   |   | 13,519 |   |
| Consumer     |   |               | 3,328   |   |   |   | 4,507 |   |   |   | 4,936 |   |   |   | 1,654 |   |
|         |   |               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Loans  |   | $                  | 263,931 |   |   | $ | 234,846 |   |   | $ | 183,460 |   |   | $ | 80,638 |   |

|                           |   | WithinOne Year |    |   | 1 to 5Years |   |    | After 5Years |   |   | Total   |   |
|--------------------------------|--------|----------------|---------|--------|-------------|--------|---------|--------------|--------|--------|---------|--------|
|                           |   |           |    |   |        |   |    |         |   |   |    |   |
| Loans with Fixed Rate          |   |           |    |   |        |   |    |         |   |   |    |   |
|    Commercial   |   | $              | 24,549  |   |        | $      | 4,903   |         |   | $      | 2,189   |   |   | $ | 31,641 |   |
|    Real Estate  |   |           | 41,475  |   |        |   | 11,798  |         |   |   | 121,154 |   |   |   | 174,427 |   |
|    Credit Lines |   |           | 140     |   |        |   | — |         |   |   | 1,396   |   |   |   | 1,536 |   |
|    Consumer     |   |           | 276     |   |        |   | 2,158   |         |   |   | 894     |   |   |   | 3,328 |   |
|                           |   |           |    |   |        |   |    |         |   |   |    |   |   |   |   |   |
| Loans with Adjustable Rate     |   |           |    |   |        |   |    |         |   |   |    |   |   |   |   |   |
|    Commercial   |   | $              | 2,731   |   |        | $      | 1,664   |         |   | $      | — |   |   | $ | 4,395 |   |
|    Real Estate  |   |           | — |   |        |   | — |         |   |   | 2,604   |   |   |   | 2,604 |   |
|    Credit Lines |   |           | 45,635  |   |        |   | — |         |   |   | 365     |   |   |   | 46,000 |   |
|    Consumer     |   |           | — |   |        |   | — |         |   |   | — |   |   |   | — |   |

----

----

|                                                                            |   | 2009   |   |   | 2008   |   |    | 2007   |   |   | 2006    |   |
|---------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|---------|--------|--------|--------|---------|--------|
|                                                                            |   |   |   |   |   |   |    |   |   |   |    |   |
| Balance, January 1                                                              |   | $      | 2,371  |   |   | $      | 1,912   |   |   | $      | 866     |   |   | $ | — |   |
|           Charge –offs: |   |   |   |   |   |   |    |   |   |   |    |   |   |   |   |   |
|           Consumer loans      |   |   | (4     | )      |   |   | — |   |   |   | — |   |   |   | — |   |
|           Recoveries:         |   |   |   |   |   |   |    |   |   |   |    |   |   |   |   |   |
|           Consumer loans      |   |   | 1      |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                            |   |   |   |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net charge-offs                                                                 |   |   | 3      |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                                            |   |   |   |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Provision charged to expense                                                    |   |   | 424    |   |   |   | 459     |   |   |   | 1,046   |   |   |   | 866 |   |
| Balance, December 31                                                            |   | $      | 2,792  |   |   | $      | 2,371   |   |   | $      | 1,912   |   |   | $ | 866 |   |
|                                                                            |   |   |   |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Ratio of net charge-offs to average loans Outstanding                      |   |   | *      |   |   |   | N/A     |   |   |   | N/A     |   |   |   | N/A |   |

----

|                   |   | 2009   |   |   | 2008     |   |
|------------------------|--------|--------|--------|--------|----------|--------|
|                   |   | Amount |   |   | % of ALL |   |   | % ofTotalLoans |   |   | Amount |   |   | % of ALL |   |   | % ofTotalLoans |   |
| Balance applicable to: |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real Estate            |   | $      | 2,032  |   |     |   | 72.78 | % |   |   | 80.92 | % |   | $ | 1,774 |   |   |   | 74.82 | % |   |   | 78.85 | % |
| Commercial             |   |   | 213    |   |     |   | 7.63 | % |   |   | 8.48 | % |   |   | 244 |   |   |   | 10.29 | % |   |   | 10.84 | % |
| Credit Lines           |   |   | 249    |   |     |   | 8.92 | % |   |   | 9.92 | % |   |   | 205 |   |   |   | 8.65 | % |   |   | 9.11 | % |
| Consumer               |   |   | 17     |   |     |   | 0.61 | % |   |   | 0.68 | % |   |   | 27 |   |   |   | 1.14 | % |   |   | 1.20 | % |
|                   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Sub-total              |   |   | 2,511  |   |     |   | 89.94 | % |   |   | 100.00 | % |   |   | 2,250 |   |   |   | 94.90 | % |   |   | 100.00 | % |
| Unallocated Reserves   |   |   | 281    |   |     |   | 10.06 | % |   |   |   |   |   |   | 121 |   |   |   | 5.10 | % |   |   |   |   |
|                   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL                  |   | $      | 2,792  |   |     |   | 100.00 | % |   |   |   |   |   | $ | 2,371 |   |   |   | 100.00 | % |   |   |   |   |

|                   |   | 2007   |   |   | 2006     |   |
|------------------------|--------|--------|--------|--------|----------|--------|
|                   |   | Amount |   |   | % of ALL |   |   | % ofTotalLoans |   |   | Amount |   |   | % of ALL |   |   | % ofTotalLoans |   |
| Balance applicable to: |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real Estate            |   | $      | 1,373  |   |     |   | 71.81 | % |   |   | 67.23 | % |   | $ | 479 |   |   |   | 55.31 | % |   |   | 62.88 | % |
| Commercial             |   |   | 241    |   |     |   | 12.61 | % |   |   | 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 |   |   |   | 11.08 | % |   |   |   |   |
|                   |   |   |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL                  |   | $      | 1,912  |   |     |   | 100.00 | % |   |   |   |   |   | $ | 866 |   |   |   | 100.00 | % |   |   |   |   |

----

|                                                                        |   | 2009     |    |   | 2008  |   |    | 2007     |   |
|-----------------------------------------------------------------------------|--------|---------------|---------|--------|------------|--------|---------|---------------|--------|
|                                                                        |   |          |    |   |       |   |    |          |   |   |   |   |   |   |   |   |   |   |
|                                                                        |   | AmortizedCost |    |   | FairValue  |   |    | AmortizedCost |   |   | FairValue |   |   | AmortizedCost |   |   | FairValue |   |
| Available for sale                                                          |   |          |    |   |       |   |    |          |   |   |   |   |   |   |   |   |   |   |
| U.S. Agency obligations                                                     |   | $             | 19,000  |   |       | $      | 19,111  |          |   | $ | 17,641 |   |   | $ | 17,731 |   |   | $ | — |   |   | $ | — |   |
| U.S Treasury obligations                                                    |   |          | 2,005   |   |       |   | 2,000   |          |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|    Total available for sale                                  |   | $             | 21,005  |   |       | $      | 21,111  |          |   | $ | 17,641 |   |   | $ | 17,731 |   |   |   | — |   |   |   | — |   |
|                                                                        |   |          |    |   |       |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to Maturity                                                            |   |          |    |   |       |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of states and political subdivisions                            |   | $             | 4,296   |   |       | $      | 4,297   |          |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| U.S. Treasury obligations                                                   |   |          | — |   |       |   | — |          |   |   | — |   |   |   | — |   |   |   | 1,996 |   |   |   | 2,014 |   |
|    Total held to maturity                                    |   | $             | 4,296   |   |       | $      | 4,297   |          |   |   | — |   |   | $ | — |   |   | $ | 1,996 |   |   | $ | 2,014 |   |
|                                                                        |   |          |    |   |       |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|         Total Investment Securities |   | $             | 25,301  |   |       | $      | 25,408  |          |   | $ | 17,641 |   |   | $ | 17,731 |   |   | $ | 1,996 |   |   | $ | 2,014 |   |

----

|                  |   | Maturity of Debt Investment SecuritiesDecember 31, 2009(in thousands) |    |   |                          |   |
|-----------------------|--------|-----------------------------------------------------------------------|---------|--------|-------------------------------|--------|
|                  |   |                                                                  |    |   |                          |   |
|                  |   | Securities Held to Maturity                                           |    |   | Securities Available for Sale |   |   |   |   |
|                  |   | AmortizedCost                                                         |    |   | FairValue                     |   |   | AmortizedCost |   |   | FairValue |   |   | WeightedAverageYield |   |
|                  |   |                                                                  |    |   |                          |   |   |   |   |   |   |   |   |   |   |
| Within 1 year         |   | $                                                                     | 4,296   |   |                          | $      | 4,297 |   |   | $ | - |   |   | $ | - |   |   |   | 2.00 | % |
|                  |   |                                                                  |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1 to 5 years          |   |                                                                  | – |   |                          |   | – |   |   | $ | 19,005 |   |   | $ | 19,115 |   |   |   | 2.42 | % |
|                  |   |                                                                  |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 5-10  years |   |                                                                  | – |   |                          |   | – |   |   |   | 2,000 |   |   |   | 1,996 |   |   |   | 3.25 | % |
|                  |   |                                                                  |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  |   |                                                                  |    |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                  |   | $                                                                     | 4,296   |   |                          | $      | 4,297 |   |   | $ | 21,005 |   |   | $ | 21,111 |   |   |   | 2.42 | % |

|          |   |   Maturity of Debt Investment SecuritiesDecember 31, 2008(in thousands) |   |   |                          |   |   |          |   |
|---------------|--------|------------------------------------------------------------------------------|--------|--------|-------------------------------|--------|--------|---------------|--------|
|          |   |                                                                         |   |   |                          |   |   |          |   |
|          |   | Securities Held to Maturity                                        |   |   | Securities Available for Sale |   |   |          |   |
|          |   | AmortizedCost                                                                |   |   | FairValue                     |   |   | AmortizedCost |   |   | FairValue |   |   | WeightedAverageYield |   |
|          |   |                                                                         |   |   |                          |   |   |          |   |   |   |   |   |   |   |
| Within 1 year |   | $                                                                            | -      |   |                          | $      | -      |          |   | $ | - |   |   | $ | - |   |   |   | – |   |
|          |   |                                                                         |   |   |                          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| 1 to 5 years  |   |                                                                         | 13,391 |   |                          |   | 13,478 |          |   |   | - |   |   |   | - |   |   |   | 3.61 | % |
|          |   |                                                                         |   |   |                          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
| 5-10 years    |   |                                                                         | 4,250  |   |                          |   | 4,253  |          |   |   | - |   |   |   | - |   |   |   | 4.12 | % |
|          |   |                                                                         |   |   |                          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
|          |   |                                                                         |   |   |                          |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |
|          |   | $                                                                            | 17,641 |   |                          | $      | 17,731 |          |   | $ | - |   |   | $ | - |   |   |   | 3.73 | % |

----

|                        |   | December 31,(Dollars in Thousands) |    |   |              |   |    |         |   |
|-----------------------------|--------|------------------------------------|---------|--------|-------------------|--------|---------|--------------|--------|
|                        |   |                               |    |   |              |   |    |         |   |   |   |   |   |   |   |   |   |   |
|                        |   | 2009                               |    |   | 2008              |   |    | 2007         |   |
|                        |   |  Amount                       |    |   | AverageYield/Rate |   |    |  Amount |   |   | AverageYield/Rate |   |   |  Amount |   |   | AverageYield/Rate |   |
|                        |   |                               |    |   |              |   |    |         |   |   |   |   |   |   |   |   |   |   |
| Non-interest Bearing Demand |   | $                                  | 36,687  |   |              |   | – |         |   | $ | 28,187 |   |   |   | – |   |   | $ | 23,292 |   |   |   | – |   |
| Interest Bearing Demand     |   |                               | 45,899  |   |              |   | 0.45    | %            |   |   | 57,645 |   |   |   | 2.11 | % |   |   | 52,215 |   |   |   | 4.26 | % |
| Savings                     |   |                               | 4,473   |   |              |   | 0.30    | %            |   |   | 2,644 |   |   |   | 0.26 | % |   |   | 3,430 |   |   |   | 0.51 | % |
| Time Deposits               |   |                               | 180,084 |   |              |   | 3.18    | %            |   |   | 165,530 |   |   |   | 4.39 | % |   |   | 134,004 |   |   |   | 5.18 | % |
|                        |   |                               |    |   |              |   |    |         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   | $                                  | 267,143 |   |              |   |    |         |   | $ | 254,006 |   |   |   |   |   |   | $ | 212,941 |   |   |   |   |   |

| Three months or less                  |   | $      | 55,951  |   |
|---------------------------------------|--------|--------|---------|--------|
| Over three months through six months  |   |   | 21,523  |   |
| Over six months through twelve months |   |   | 46,027  |   |
| Over one year through three years     |   |   | 12,625  |   |
| Over three years                      |   |   | 9,169   |   |
|                                  |   |   |    |   |
| Total                                 |   | $      | 145,295 |   |

|                               |   | At or for the year ended December 31, |   |
|------------------------------------|--------|---------------------------------------|--------|
| Selected Financial Ratios:         |   | 2009                                  |   |   | 2008 |   |   | 2007 |   |
| Return on Average Assets (ROA)     |   |                                  | 0.40   | % |   |   | 0.20 | % |   |   | 0.51 | % |
| Return on Average Equity (ROE)     |   |                                  | 2.56   | % |   |   | 1.13 | % |   |   | 1.85 | % |
| Equity to Total Assets at Year-End |   |                                  | 15.50  | % |   |   | 16.24 | % |   |   | 17.61 | % |
| Dividend Payout Ratio              |   |                                  | 124.24 | % |   |   | N/A |   |   |   | N/A |   |

----

----

|                                                      |   | 0 - 3Months  |          |   | 0 – 6Months  |   |          |  0 – 1Year |   |   | 0 – 5Years |   |   | 5 + Years |          |   | All Others |   |     | TOTAL  |   |
|-----------------------------------------------------------|--------|-------------------|---------------|--------|-------------------------|--------|---------------|-----------------------|--------|--------|------------------|--------|--------|-----------|---------------|--------|------------|--------|----------|--------|--------|
|                                                      |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   |   |   |   |   |   |   |
| Securities, excluding equity securities                   |   | $                 | 4,296         |   |                    | $      | 4,296         |                  |   | $      | 4,296            |   |   | $         | 23,411        |   |       | $      | 1,996    |   |   | $ | - |   |   | $ | 25,407 |   |
|                                                      |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   |   |   |   |   |   |   |
| Loans :                                                   |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   |   |   |   |   |   |   |
|      Commercial                  |   |              | 26,373        |   |                    |   | 28,865        |                  |   |   | 29,679           |   |   |      | 33,849        |   |       |   | 2,187    |   |   |   | - |   |   |   | 36,036 |   |
|      Real Estate                 |   |              | 27,203        |   |                    |   | 35,883        |                  |   |   | 41,472           |   |   |      | 122,151       |   |       |   | 54,880   |   |   |   | - |   |   |   | 177,031 |   |
|      Credit Lines                |   |              | 47,536        |   |                    |   | 47,536        |                  |   |   | 47,536           |   |   |      | 47,536        |   |       |   | -        |   |   |   | - |   |   |   | 47,536 |   |
|      Consumer                    |   |              | 66            |   |                    |   | 111           |                  |   |   | 279              |   |   |      | 2,435         |   |       |   | 893      |   |   |   |   |   |   |   | 3,328 |   |
|                                                      |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   |   |   |   |   |   |   |
| Federal Funds Sold and Interest Bearing Deposits In Banks |   |              |   17,522 |   |                    |   |   17,522 |                  |   |   |   17,522    |   |   |      |   17,522 |   |       |   |   - |   |   |   |   - |   |   |   |   17,522 |   |
| Other Assets                                              |   |              | -             |   |                    |   | -             |                  |   |   | -                |   |   |      | -             |   |       |   | -        |   |   |   | 12,748 |   |   |   | 12,748 |   |
|                                                      |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                                              |   | $                 | 122,996       |   |                    | $      | 134,213       |                  |   | $      | 140,784          |   |   | $         | 246,904       |   |       | $      | 59,956   |   |   | $ | 12,748 |   |   | $ | 319,608 |   |
|                                                      |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   |   |   |   |   |   |   |
| Transaction / Demand Accounts                             |   | $                 | 5,753         |   |                    | $      | 5,753         |                  |   | $      | 5,753            |   |   | $         | 5,753         |   |       | $      | -        |   |   | $ | - |   |   | $  |  5,753 |   |
| Money Market                                              |   |              | 40,146        |   |                    |   | 40,146        |                  |   |   | 40,146           |   |   |      | 40,146        |   |       |   | -        |   |   |   | - |   |   |   |  40,146 |   |
| Savings                                                   |   |              | 4,473         |   |                    |   | 4,473         |                  |   |   | 4,473            |   |   |      | 4,473         |   |       |   | -        |   |   |   | - |   |   |   |  4,473 |   |
| Time Deposits                                             |   |              | 66,475        |   |                    |   | 92,932        |                  |   |   | 153,979          |   |   |      | 180,084       |   |       |   | -        |   |   |   | - |   |   |   |  180,084 |   |
| Other Liabilities                                         |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   | 39,617 |   |   |   |  39,617 |   |
| Equity                                                    |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   | 49,535 |   |   |   |  49,535 |   |
|                                                      |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND EQUITY                              |   | $                 | 116,847       |   |                    | $      | 143,304       |                  |   | $      | 204,351          |   |   | $         | 230,456       |   |       | $      | -        |   |   | $ | 89,152 |   |   | $  |  319,608 |   |
|                                                      |   |              |          |   |                    |   |          |                  |   |   |             |   |   |      |          |   |       |   |     |   |   |   |   |   |   |   |   |   |
| Dollar Gap                                                |   | $                 | 6,149         |   |                    | $      | (9,091        | )                     |   | $      | (63,567          | )      |   | $         | 16,448        |   |       |   |     |   |   |   |   |   |   |   |   |   |
| Gap / Total Assets                                        |   |              | 1.92          | %      |                    |   | -2.84         | %                     |   |   | -19.89           | %      |   |      | 5.15          | %      |       |   |     |   |   |   |   |   |   |   |   |   |
| Target Gap Range                                          |   |              | +/- 35.00     |   |                    |   | +/- 30.00     |                  |   |   | +/- 25.00        |   |   |      | +/- 25.00     |   |       |   |     |   |   |   |   |   |   |   |   |   |
| RSA / RSL                                                 |   |              | 105.26        | %      |                    |   | 93.66         | %                     |   |   | 68.89            | %      |   |      | 107.14        | %      |       |   |     |   |   |   |   |   |   |   |   |   |

----

----

|                                 |   | Avg.Int.Rate |   |   | 2010   |   |    | 2011   |   |   | 2012    |   |   | 2013   |    |   | 2014   |   |    | There-After |   |   | Total   |   |   | FairValue |    |
|--------------------------------------|--------|--------------|--------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|-------------|--------|--------|---------|--------|--------|-----------|---------|
| Interest Rate Sensitive Assets:      |   |         |   |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |        |   |   |    |   |   |      |    |
| Loans                                |   |         | 5.81   | %      |   | $      | 118,966 |   |   | $      | 15,415  |   |   | $      | 23,780  |   |   | $      | 20,233  |        |   | $      | 27,823  |   |   | $         | 57,714  |   |   | $ | 263,931 |   |   | $ | 264,121 |   |
| Securities net of equity securities  |   |         | 2.90   | %      |   | $      | 4,296   |   |   | $      | 2,000   |   |   | $      | 8,000   |   |   | $      | 3,000   |        |   | $      | 6,005   |   |   | $         | 2,000   |   |   | $ | 25,301 |   |   | $ | 25,408 |   |
| Fed Funds Sold                       |   |         | 0.15   | %      |   | $      | 467     |   |   |   | – |   |   |   | – |   |   |   | – |        |   |   | – |   |   |      | – |   |   | $ | 467 |   |   | $ | 467 |   |
| Interest-earning Cash                |   |         | 0.33   | %      |   | $      | 17,055  |   |   |   | – |   |   |   | – |   |   |   | – |        |   |   | – |   |   |      | – |   |   | $ | 17,055 |   |   | $ | 17,055 |   |
|                                 |   |         |   |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |        |   |   |    |   |   |      |    |   |   |   |   |   |   |   |   |   |
| Interest Rate Sensitive Liabilities: |   |         |   |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |        |   |   |    |   |   |      |    |   |   |   |   |   |   |   |   |   |
|  Demand Deposits                |   |         | 0.30   | %      |   | $      | 5,753   |   |   |   | – |   |   |   | – |   |   |   | – |        |   |   | – |   |   |      | – |   |   | $ | 5,753 |   |   | $ | 5,753 |   |
|  Savings Deposits               |   |         | 0.18   | %      |   | $      | 4,473   |   |   |   | – |   |   |   | – |   |   |   | – |        |   |   | – |   |   |      | – |   |   | $ | 4,473 |   |   | $ | 4,473 |   |
| Money Market Deposits                |   |         | 0.49   | %      |   | $      | 40,146  |   |   |   | – |   |   |   | – |   |   |   | – |        |   |   | – |   |   |      | – |   |   | $ | 40,146 |   |   | $ | 40,146 |   |
|  Time Deposits                  |   |         | 3.18   | %      |   | $      | 153,979 |   |   | $      | 15,897  |   |   | $      | 812     |   |   | $      | 2,439   |        |   | $      | 6,957   |   |   |      | – |   |   | $ | 180,084 |   |   | $ | 181,042 |   |
|                                 |   |         |   |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |        |   |   |    |   |   |      |    |   |   |   |   |   |   |   |   |   |

----

|                                               |   |    December 31, 2009 |   |          | Minimum Requirementsto be“AdequatelyCapitalized” |   |   |  Minimum Requirementsto be“Well Capitalized” |   |
|----------------------------------------------------|--------|-------------------------------------|--------|---------------|--------------------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|
| Risk-Based Capital :                               |   |                                |   |          |                                                         |   |   |                                                          |   |
|      Tier 1 Capital Ratio |   |                                | 19.13  | %   |                                                         |   | 4.00   | %                                                   |   |   | 6.00 | % |
|      Total Capital Ratio  |   |                                | 20.21  | %             |                                                         |   | 8.00   | %                                                             |   |   | 10.00 | % |
| Leverage Ratio                                     |   |                                | 15.10  | %             |                                                         |   | 4.00   | %                                                             |   |   | 5.00 | % |

----

|                                                             |   |                  |    |   |        |   |   |        |   |   |         |   |   |                  |          |
|------------------------------------------------------------------|--------|-----------------------|---------|--------|-------------|--------|--------|-------------|--------|--------|--------------|--------|--------|-----------------------|---------------|
|                                                             |   | Payment due by Period |    |
|                                                             |   |  Less than 1year |    |   | 1 to 3years |   |   | 4 to 5years |   |   | After 5years |   |   | TotalAmountsCommitted |          |
| Minimum annual rental under non-cancelable operating leases |   | $                     | 513     |   |        | $      | 1,083  |        |   | $      | 1,031        |   |   | $                     | 3,394         |   |   | $ | 6,021 |   |
| Remaining contractual maturities of time deposits                |   |                  | 153,980 |   |        |   | 16,708 |        |   |   | 9,396        |   |   |                  |  – |   |   |   | 180,084 |   |
|      Total Contractual Obligations      |   | $                     | 154,493 |   |        | $      | 17,791 |        |   | $      | 10,427       |   |   | $                     | 3,394         |   |   | $ | 186,105 |   |
|                                                             |   |                  |    |   |        |   |   |        |   |   |         |   |   |                  |          |   |   |   |   |   |

| Commercial real estate, construction, and land development secured by land |   | $      | 17,223 |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|
| Home equity loans                                                          |   |   | 17,890 |   |
| Standby letters of credit and other                                        |   |   | 488    |   |
|                                                                       |   | $      | 35.601 |   |

----

ITEM 7A.             QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

----

ITEM 8.                FINANCIALSTATEMENTSAND SUPPLEMENTARY DATA

|                                                                                                 |   | Page   |
|------------------------------------------------------------------------------------------------------|--------|--------|
|                                                                                                 |   |   |
|                                                                                                 |   |   |
| Report of Independent Registered Public Accounting Firm                                              |   | 41     |
|                                                                                                 |   |   |
| Consolidated Balance Sheets as of December 31, 2009 and 2008                                         |   | 42     |
|                                                                                                 |   |   |
| Consolidated Statements of Income for the years ended December 31, 2009 and 2008                     |   | 43     |
|                                                                                                 |   |   |
| Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2009 and 2008 |   | 44     |
|                                                                                                 |   |   |
| Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008                 |   | 45     |
|                                                                                                 |   |   |
| Notes to Consolidated Financial Statements                                                           |   | 46     |

----

Report of Independent Registered Public Accounting Firm

----

CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                                       |   | 2009   |    |   | 2008   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                                                                                                                       |   |   |    |   |   |   |
|                               Assets |   |   |    |   |   |   |
| Cash and due from banks                                                                                                                                                                    |   | $      | 576     |   |   | $      | 304 |   |
| Interest bearing deposits in banks                                                                                                                                                         |   |   | 17,055  |   |   |   | 40,107 |   |
| Federal funds sold                                                                                                                                                                         |   |   | 467     |   |   |   | 69 |   |
|                Total cash and cash equivalents                                                                  |   |   | 18,098  |   |   |   | 40,480 |   |
|                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
| Securities available for sale                                                                                                                                                              |   |   | 21,111  |   |   |   | 17,731 |   |
| Securities held to maturity (fair value approximates $4,297 and $0 at December 31, 2009 and 2008 respectively)                                                                             |   |   | 4,296   |   |   |   | – |   |
| Restricted investment in bank stock, at cost                                                                                                                                               |   |   | 419     |   |   |   | 346 |   |
|                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
| Loans                                                                                                                                                                                      |   |   | 263,931 |   |   |   | 234,846 |   |
|    Deferred loan fees and costs, net                                                                                                                                        |   |   | 13      |   |   |   | 90 |   |
|    Allowance for loan losses                                                                                                                                                |   |   | (2,792  | )      |   |   | (2,371 | ) |
|                Net loans                                                                                        |   |   | 261,152 |   |   |   | 232,565 |   |
|                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
| Premises and equipment, net                                                                                                                                                                |   |   | 10,214  |   |   |   | 10,284 |   |
| Accrued interest receivable                                                                                                                                                                |   |   | 1,173   |   |   |   | 847 |   |
| Other assets                                                                                                                                                                               |   |   | 3,145   |   |   |   | 1,851 |   |
|                Total assets                                                                                     |   | $      | 319,608 |   |   | $      | 304,104 |   |
|                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
|           Liabilities and Stockholders’ Equity                                                                                     |   |   |    |   |   |   |   |   |
| Deposits :                                                                                                                                                                                 |   |   |    |   |   |   |   |   |
|    Noninterest-bearing demand deposits                                                                                                                                      |   | $      | 36,687  |   |   | $      | 28,187 |   |
|                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
|    Interest bearing deposits:                                                                                                                                               |   |   |    |   |   |   |   |   |
|         Savings, money market and time deposits                                                                                                    |   |   | 85,161  |   |   |   | 102,144 |   |
|         Time deposits of $100 or more                                                                                                              |   |   | 145,295 |   |   |   | 123,675 |   |
|                Total deposits                                                                                   |   |   | 267,143 |   |   |   | 254,006 |   |
| Short term borrowings                                                                                                                                                                      |   |   | – |   |   |   | 853 |   |
| Accrued expenses and other liabilities                                                                                                                                                     |   |   | 2,930   |   |   |   | 1,381 |   |
|                  Total liabilities                                                                         |   |   | 270,073 |   |   |   | 256,240 |   |
|                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
| Commitments and contingencies                                                                                                                                                              |   |   | – |   |   |   | – |   |
|                                                                                                                                                                                       |   |   |    |   |   |   |   |   |
| Stockholders’ equity :                                                                                                                                                               |   |   |    |   |   |   |   |   |
| Common stock, no par value.  Authorized 20,000,000 shares; issued and outstanding 5,206,932 shares at December 31, 2009;  and 5,065,283 at December31, 2008  |   |   | 49,096  |   |   |   | 47,133 |   |
| Retained Earnings                                                                                                                                                                          |   |   | 373     |   |   |   | 678 |   |
| Accumulated other comprehensive income                                                                                                                                                     |   |   | 66      |   |   |   | 53 |   |
|                Total stockholders’ equity                                                                 |   |   | 49,535  |   |   |   | 47,864 |   |
|                Total liabilities and stockholders’ equity                                                 |   | $      | 319,608 |   |   | $      | 304,104 |   |

----

CONSOLIDATED STATEMENTS OF INCOME

|                                                                                                                                          |   |  2009 |    |   |  2008 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|---------|--------|------------|--------|
|                                                                                                                                          |   |       |    |   |       |   |
| Interest income:                                                                                                                              |   |       |    |   |       |   |
|    Loans, including fees                                                                                                       |   | $          | 14,630  |   |       | $      | 12,977 |   |
|    Securities                                                                                                                  |   |       | 779     |   |       |   | 708 |   |
|    Interest-earning deposits in banks                                                                                          |   |       | 75      |   |       |   | 45 |   |
|    Federal funds sold                                                                                                          |   |       | 7       |   |       |   | 725 |   |
|                Total interest income                               |   |       | 15,491  |   |       |   | 14,455 |   |
| Interest expense:                                                                                                                             |   |       |    |   |       |   |   |   |
|    Savings and money markets                                                                                                   |   |       | 251     |   |       |   | 1,260 |   |
|    Time deposits                                                                                                               |   |       | 5,681   |   |       |   | 6,273 |   |
|    Short term borrowings                                                                                                       |   |       | – |   |       |   | 11 |   |
|                Total interest expense                              |   |       | 5,932   |   |       |   | 7,544 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
|                Net interest income                                 |   |       | 9,559   |   |       |   | 6,911 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
| Provision for loan losses                                                                                                                     |   |       | 424     |   |       |   | 459 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
|                Net interest income after provision for loan losses |   |       | 9,135   |   |       |   | 6,452 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
| Non interest income                                                                                                                           |   |       |    |   |       |   |   |   |
|    Fees and service charges on deposit accounts                                                                                |   |       | 173     |   |       |   | 220 |   |
|    Fees earned from mortgage referrals                                                                                         |   |       | 10      |   |       |   | 15 |   |
|    Gains on sale of securities                                                                                                 |   |       | – |   |       |   | 2 |   |
|                 Total non interest income                     |   |       | 183     |   |       |   | 237 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
| Non interest expense:                                                                                                                         |   |       |    |   |       |   |   |   |
|    Salaries and employee benefits                                                                                              |   |       | 3,785   |   |       |   | 3,276 |   |
|    Occupancy and equipment expense                                                                                             |   |       | 1,397   |   |       |   | 1,124 |   |
|    FDIC and state assessments                                                                                                  |   |       | 545     |   |       |   | 126 |   |
|    Advertising and marketing expenses                                                                                          |   |       | 71      |   |       |   | 44 |   |
|    Data processing                                                                                                             |   |       | 367     |   |       |   | 303 |   |
|    Legal fees                                                                                                                  |   |       | 62      |   |       |   | 46 |   |
|    Other operating expenses                                                                                                    |   |       | 956     |   |       |   | 823 |   |
|                Total other expenses                                |   |       | 7,183   |   |       |   | 5,742 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
|                Income before income taxes                          |   |       | 2,135   |   |       |   | 947 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
| Income tax expense                                                                                                                            |   |       | 878     |   |       |   | 420 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
|               Net Income                                                |   | $          | 1,257   |   |       | $      | 527 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |
| Earnings per share:                                                                                                                           |   |       |    |   |       |   |   |   |
|    Basic                                                                                                                       |   | $          | 0.25    |   |       | $      | 0.10 |   |
|    Diluted                                                                                                                     |   | $          | 0.25    |   |       | $      | 0.10 |   |
|                                                                                                                                          |   |       |    |   |       |   |   |   |

----

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND COMPREHENSIVE INCOME

|                                              |   | CommonStock |    |   | RetainedEarnings |   |    | AccumulatedOtherComprehensiveincome |   |   | Total   |   |
|---------------------------------------------------|--------|-------------|---------|--------|------------------|--------|---------|-------------------------------------|--------|--------|---------|--------|
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |
| Balance at January 1, 2008                        |   | $           | 45,689  |   |             | $      | 151     |                                |   | $      | – |   |   | $ | 45,840 |   |
| Exercise of warrants (76,195 shares)              |   |        | 821     |   |             |   | – |                                |   |   | – |   |   |   | 821 |   |
| Exercise of stock options (19,998 shares)         |   |        | 230     |   |             |   | – |                                |   |   | – |   |   |   | 230 |   |
| Recognition of stock option expense               |   |        | 393     |   |             |   | – |                                |   |   | – |   |   |   | 393 |   |
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
| Comprehensive income:                             |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
| Net income                                        |   |        | – |   |             |   | 527     |                                |   |   | – |   |   |   | 527 |   |
| Unrealized gains on securities available for sale |   |        | – |   |             |   | – |                                |   |   | 53      |   |   |   | 53 |   |
|    Total comprehensive income      |   |        |    |   |             |   |    |                                |   |   |    |   |   |   | 580 |   |
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
| Balance at December 31, 2008                      |   | $           | 47,133  |   |             | $      | 678     |                                |   | $      | 53      |   |   | $ | 47,864 |   |
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
| Exercise of warrants (139,651 shares)             |   |        | 1,524   |   |             |   |    |                                |   |   |    |   |   |   | 1,524 |   |
| Exercise of stock options (2,000 shares)          |   |        | 23      |   |             |   |    |                                |   |   |    |   |   |   | 23 |   |
| Recognition of stock option expense               |   |        | 416     |   |             |   |    |                                |   |   |    |   |   |   | 416 |   |
| Dividends on common stock                         |   |        |    |   |             |   | (1,562  | )                                   |   |   |    |   |   |   | (1,562 | ) |
| Comprehensive income:                             |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
| Net income                                        |   |        |    |   |             |   | 1,257   |                                |   |   |    |   |   |   | 1,257 |   |
| Unrealized gains on securities available for sale |   |        |    |   |             |   |    |                                |   |   | 13      |   |   |   | 13 |   |
|    Total comprehensive income      |   |        |    |   |             |   |    |                                |   |   |    |   |   |   | 1,270 |   |
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
| Balance at December 31, 2009                      |   | $           | 49,096  |   |             | $      | 373     |                                |   | $      | 66      |   |   | $ | 49,535 |   |
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |
|                                              |   |        |    |   |             |   |    |                                |   |   |    |   |   |   |   |   |

----

CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                                                                                                              |   |  2009 |    |   | 2008   |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|---------|--------|--------|--------|
| Cash flows from operating activities:                                                                                                                             |   |       |    |   |   |   |
|    Net income                                                                                                                                      |   | $          | 1,257   |   |   | $      | 527 |   |
|    Adjustments to reconcile net income to net cash provided by Operating activities:                                                          |   |       |    |   |   |   |   |   |
|           Provision for loan losses                                                                             |   |       | 424     |   |   |   | 459 |   |
|           Deferred tax benefit                                                                                  |   |       | (283    | )      |   |   | (206 | ) |
|           Depreciation and amortization                                                                         |   |       | 425     |   |   |   | 345 |   |
|           Recognition of stock option expense                                                                   |   |       | 416     |   |   |   | 393 |   |
|           Fees earned from mortgage referrals                                                                   |   |       | (10     | )      |   |   | (15 | ) |
|           Gain on sale of securities                                                                            |   |       | – |   |   |   | (2 | ) |
|           Changes in operating assets and liabilities:                                                          |   |       |    |   |   |   |   |   |
|              Increase in accrued interest receivable                                             |   |       | (326    | )      |   |   | (234 | ) |
|              Increase in other assets                                                            |   |       | (1,005  | )      |   |   | (398 | ) |
|              Decrease in accrued expenses and other liabilities                                  |   |       | (13     | )      |   |   | (82 | ) |
|                     Net cash provided by operating activities |   |       | 885     |   |   |   | 787 |   |
|                                                                                                                                                              |   |       |    |   |   |   |   |   |
| Cash flows from investing activities:                                                                                                                             |   |       |    |   |   |   |   |   |
|    Purchases of securities available for sale                                                                                                      |   |       | (34,005 | )      |   |   | (32,641 | ) |
|    Purchases of securities held to maturity                                                                                                        |   |       | (4,296  | )      |   |   | – |   |
|    Proceeds from maturity of securities held to maturity                                                                                           |   |       | – |   |   |   | 1,996 |   |
|    Proceeds from called and matured securities available for sale                                                                                  |   |       | 30,642  |   |   |   | 13,000 |   |
|    Proceeds from sales of securities available for sale                                                                                            |   |       | – |   |   |   | 2,002 |   |
|    Purchase of restricted investment in bank stock                                                                                                 |   |       | (73     | )      |   |   | (18 | ) |
|    Net increase in loans                                                                                                                           |   |       | (29,011 | )      |   |   | (51,400 | ) |
|    Purchases of premises and equipment                                                                                                             |   |       | (355    | )      |   |   | (2,329 | ) |
|                     Net cash used in investing activities     |   |       | (37,098 | )      |   |   | (69,390 | ) |
|                                                                                                                                                              |   |       |    |   |   |   |   |   |
| Cash flows from financing activities:                                                                                                                             |   |       |    |   |   |   |   |   |
|    Net increase in deposits                                                                                                                        |   |       | 13,137  |   |   |   | 41,064 |   |
|    Net (decrease) increase in short term borrowings                                                                                                |   |       | (853    | )      |   |   | 853 |   |
|                                                                                                                                                              |   |       |    |   |   |   |   |   |
|    Proceeds from exercise of stock options                                                                                                         |   |       | 23      |   |   |   | 230 |   |
|    Proceeds from exercise of warrants                                                                                                              |   |       | 1,524   |   |   |   | 821 |   |
|                     Net cash provided by financing activities |   |       | 13,831  |   |   |   | 42,968 |   |
|                                                                                                                                                              |   |       |    |   |   |   |   |   |
|                     Decrease in cash and cash equivalents     |   |       | (22,382 | )      |   |   | (25,635 | ) |
|                                                                                                                                                              |   |       |    |   |   |   |   |   |
| Cash and cash equivalents at beginning of year                                                                                                                    |   |       | 40,480  |   |   |   | 66,115 |   |
|                                                                                                                                                              |   |       |    |   |   |   |   |   |
| Cash and cash equivalents at end of year                                                                                                                          |   | $          | 18,098  |   |   | $      | 40,480 |   |
|                                                                                                                                                              |   |       |    |   |   |   |   |   |
| Supplemental information:                                                                                                                                         |   |       |    |   |   |   |   |   |
|    Cash paid during the year for:                                                                                                                  |   |       |    |   |   |   |   |   |
|       Interest                                                                                                                      |   | $          | 6,099   |   |   | $      | 7,920 |   |
|       Taxes                                                                                                                         |   | $          | 930     |   |   | $      | 372 |   |

----

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

|  NOTE 1. | Summary of Significant Accounting Policies |
|---------------|--------------------------------------------|

|   | Basis of Financial Statement Presentation |
|--------|-------------------------------------------|

----

|   | Cash and Cash Equivalents |
|--------|---------------------------|

|   | Securities |
|--------|------------|

|   | Premises and Equipment |
|--------|------------------------|

----

----

----

|   | Income Taxes |
|--------|--------------|

|   | Earnings Per Share |
|--------|--------------------|

|   | Comprehensive Income |
|--------|----------------------|

----

|   | Advertising |
|--------|-------------|

----

| NOTE 2. | Securities |
|---------|------------|

| December 31, 2009                                     |   |  AmortizedCost |               |   | GrossUnrealizedGains |   |            | GrossUnrealizedLosses |   |   |  FairValue |   |
|-------------------------------------------------------|--------|---------------------|--------------------|--------|----------------------|--------|-----------------|-----------------------|--------|--------|-----------------|--------|
| Securities Held to Maturity:                          |   |                |               |   |                 |   |            |                  |   |   |            |   |
| Obligations of states and political subdivisions |   | $                   | 4,296              |   |                 | $      | 1               |                  |   | $      | -               |   |   | $ | 4,297 |   |
|                                                  |   |                |               |   |                 |   |            |                  |   |   |            |   |   |   |   |   |
| Securities Available for Sale:                        |   |                |               |   |                 |   |            |                  |   |   |            |   |   |   |   |   |
| U.S. Treasury obligations                             |   |                | 2,005              |   |                 |   | -               |                  |   |   | 5               |   |   |   | 2,000 |   |
| Government Sponsored Enterprise obligations      |   |                |   19,000 |   |                 |   |   127 |                  |   |   |   16  |   |   |   |   19,111 |   |
|                                                  |   |                |  21,005       |   |                 |   |  127       |                  |   |   | 21              |   |   |   |  21,111 |   |
|                                                  |   |                |               |   |                 |   |            |                  |   |   |            |   |   |   |   |   |
| Total securities                                      |   | $                   | 25,301             |   |                 | $      | 128             |                  |   | $      | 21              |   |   | $ | 25,408 |   |

|   December 31, 2008                    |   |  AmortizedCost |   |   | GrossUnrealizedGains |   |     | GrossUnrealizedLosses |   |   |  FairValue |   |
|--------------------------------------------------|--------|---------------------|--------|--------|----------------------|--------|----------|-----------------------|--------|--------|-----------------|--------|
| Securities Available for Sale:                   |   |                |   |   |                 |   |     |                  |   |   |            |   |
| Government Sponsored Enterprise obligations |   | $                   | 17,641 |   |                 | $      |  90 |                  |   | $      |  –   |   |   | $ | 17,731 |   |

|          |   | 2009                        |   |
|---------------|--------|-----------------------------|--------|
|          |   | Securities Held to Maturity |   |   | Securities Available for Sale |   |
|          |   | AmortizedCost               |   |   | FairValue |   |   | AmortizedCost |   |   | FairValue |   |
|          |   |                        |   |   |   |   |   |   |   |   |   |   |
| Within 1 year |   | $                           | 4,296  |   |   | $ | 4,297 |   |   | $ | - |   |   | $ | - |   |
|          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1 to 5 years  |   |                        | -      |   |   |   | - |   |   |   | 19,005 |   |   |   | 19,115 |   |
|          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Over 5 years  |   |                        | -      |   |   |   | - |   |   |   | 2,000 |   |   |   | 1,996 |   |
|          |   | $                           | 4,296  |   |   | $ | 4,297 |   |   | $ | 21,005 |   |   | $ | 21,111 |   |

----

|         |   | December 31,  |    |
|--------------|--------|--------------------|---------|
|         |   | 2009               |    |   | 2008 |   |
| Real estate  |   | $                  | 177,031 |   |   | $ | 159,058 |   |
| Commercial   |   |               | 36,036  |   |   |   | 33,319 |   |
| Credit lines |   |               | 47,536  |   |   |   | 37,962 |   |
| Consumer     |   |               | 3,328   |   |   |   | 4,507 |   |
|         |   |               |    |   |   |   |   |   |
|         |   | $                  | 263,931 |   |   | $ | 234,846 |   |

|                         |   | Years ended December 31,  |   |
|------------------------------|--------|--------------------------------|--------|
|                         |   | 2009                           |   |   | 2008 |   |
|                         |   |                           |   |   |   |   |
| Balance at beginning of year |   | $                              | 2,371  |   |   | $ | 1,912 |   |
|                         |   |                           |   |   |   |   |   |   |
| Provision charged to expense |   |                           | 424    |   |   |   | 459 |   |
| Loans charged off            |   |                           | (4     | ) |   |   | – |   |
| Recoveries                   |   |                           | 1      |   |   |   | – |   |
|                         |   |                           |   |   |   |   |   |   |
| Balance at end of year       |   | $                              | 2,792  |   |   | $ | 2,371 |   |

----

|                                                    |   | 2009   |   |   | 2008   |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                    |   |   |   |   |   |   |
|                                                    |   |   |   |   |   |   |
| Impaired loans without a valuation allowance            |   | $      | 1,181  |   |   | $      | - |   |
| Impaired loans with a valuation allowance               |   |   | 2,777  |   |   |   | 1,997 |   |
|                                                    |   |   | 3,958  |   |   |   | 1,997 |   |
| Valuation allowance related to impaired loans           |   |   | 99     |   |   |   | 20 |   |
|                                                    |   |   |   |   |   |   |   |   |
| Total non-accrual loans                                 |   | $      | 3,859  |   |   | $      | 1,977 |   |
| Total loans past due ninety days or more still accruing |   | $      | -      |   |   | $      | - |   |

| NOTE 4. | Premises and Equipment |
|---------|------------------------|

|                                           |   | 2009   |   |   | 2008   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                           |   |   |   |   |   |   |
| Land                                           |   | $      | 4,828  |   |   | $      | 4,828 |   |
| Building                                       |   |   | 5,076  |   |   |   | 4,966 |   |
| Furniture and fixtures                         |   |   | 551    |   |   |   | 507 |   |
| Equipment                                      |   |   | 777    |   |   |   | 576 |   |
|                                           |   |   | 11,232 |   |   |   | 10,877 |   |
| Less accumulated depreciation and amortization |   |   | 1,018  |   |   |   | 593 |   |
| Total premises and equipment, net              |   | $      | 10,214 |   |   | $      | 10,284 |   |

----

| NOTE 5. | Deposits |
|---------|----------|

|                                    |   | 2009   |    |   | 2008   |   |
|-----------------------------------------|--------|--------|---------|--------|--------|--------|
|                                    |   |   |    |   |   |   |
| Three months or less                    |   | $      | 66,514  |   |   | $      | 48,760 |   |
| Over three months through twelve months |   |   | 87,466  |   |   |   | 113,028 |   |
| Over 1 year through 2 years             |   |   | 15,896  |   |   |   | 1,815 |   |
| Over 2 years through 3 years            |   |   | 812     |   |   |   | 127 |   |
| Over 3 years through 4 years            |   |   | 2,439   |   |   |   | – |   |
| Over 4 years through 5 years            |   |   | 6,957   |   |   |   | 1,800 |   |
| Over 5 years                            |   |   | – |   |   |   | – |   |
|                                    |   | $      | 180,084 |   |   | $      | 165,530 |   |

| NOTE 6. | Short Term Borrowings |
|---------|-----------------------|

----

| NOTE 7. | Income Taxes |
|---------|--------------|

|                                  |   | 2009   |   |   | 2008   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|
| Current tax expense:                  |   |   |   |   |   |   |
|      Federal |   | $      | 894    |   |   | $      | 480 |   |
|      State   |   |   | 267    |   |   |   | 146 |   |
| Deferred income tax benefit:          |   |   |   |   |   |   |   |   |
|      Federal |   |   | (219   | )      |   |   | (160 | ) |
|      State   |   |   | (64    | )      |   |   | (46 | ) |
|                                  |   |   |   |   |   |   |   |   |
| Income tax expense                    |   | $      | 878    |   |   | $      | 420 |   |
|                                  |   |   |   |   |   |   |   |   |
|                                  |   |   |   |   |   |   |   |   |

|                                                             |   | 2009   |   |   | 2008   |   |
|------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Deferred tax assets:                                             |   |   |   |   |   |   |
|      Start up expenses                  |   | $      | 398    |   |   | $      | 433 |   |
|      Allowance for loan losses          |   |   | 1,025  |   |   |   | 854 |   |
|      Accrued expenses                   |   |   | 97     |   |   |   | 76 |   |
|      Stock compensation plans           |   |   | 277    |   |   |   | 162 |   |
|                                                             |   |   |   |   |   |   |   |   |
|   Total gross deferred tax assets                      |   |   | 1,797  |   |   |   | 1,525 |   |
|                                                             |   |   |   |   |   |   |   |   |
| Deferred tax liabilities:                                        |   |   |   |   |   |   |   |   |
|      Deferred loan costs                |   |   | (68    | )      |   |   | (68 | ) |
|      Prepaid expenses                   |   |   | (47    | )      |   |   | (57 | ) |
|      Unrealized gains on AFS securities |   |   | (40    | )      |   |   | (36 | ) |
|      Other                              |   |   | (21    | )      |   |   | (23 | ) |
|                                                             |   |   |   |   |   |   |   |   |
|   Total gross deferred tax liabilities                 |   |   | (176   | )      |   |   | (184 | ) |
|                                                             |   |   |   |   |   |   |   |   |
|      Net deferred tax asset             |   | $      | 1,621  |   |   | $      | 1,341 |   |
|                                                             |   |   |   |   |   |   |   |   |

----

|                                                                       |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                       |   |   |   |   |   |   |
| Computed “expected” tax expense                                |   | $      | 726    |   |   | $      | 322 |   |
| Increase (decrease) in taxes resulting from:                               |   |   |   |   |   |   |   |   |
|    State taxes, net of federal income tax (benefit) expense |   |   | 134    |   |   |   | 66 |   |
|    Tax exempt income                                        |   |   | (20    | )      |   |   | – |   |
|    Stock-based compensation                                 |   |   | 34     |   |   |   | 29 |   |
|    Meals and entertainment                                  |   |   | 3      |   |   |   | 3 |   |
|    Other                                                    |   |   | 1      |   |   |   | – |   |
|                                                                       |   | $      | 878    |   |   | $      | 420 |   |

| Year ending December 31: |   |   |   |
|--------------------------|--------|--------|--------|
|                     |   |   |   |
| 2010                     |   | $      | 513    |   |
| 2011                     |   |   | 538    |   |
| 2012                     |   |   | 545    |   |
| 2013                     |   |   | 553    |   |
| 2014                     |   |   | 478    |   |
| Thereafter               |   |   | 3,394  |   |
|                     |   | $      | 6,021  |   |

----

| NOTE 9. | Related-party Transactions |
|---------|----------------------------|

|                                       |   | 2009   |   |   | 2008   |   |
|--------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                       |   |   |   |   |   |   |
| Outstanding loans at beginning of the year |   | $      | 17,635 |   |   | $      | 11,679 |   |
| New Loans                                  |   |   | 12,995 |   |   |   | 11,959 |   |
| Repayments                                 |   |   | (3,440 | )      |   |   | (6,003 | ) |
| Outstanding loans at end of the year       |   | $      | 27,190 |   |   | $      | 17,635 |   |

----

| NOTE 10. | Earnings Per Share |
|----------|--------------------|

|                                                                                 |   | For the Year EndedDecember 31, |   |
|--------------------------------------------------------------------------------------|--------|-----------------------------------------------|--------|
|                                                                                 |   |                                          |   |   |   |   |   |   |
|                                                                                 |   |                                          | 2009   |   |   |   | 2008 |   |
| (In thousands, except per share data)                                                |   |                                          |   |   |   |   |   |   |
|                                                                                 |   |                                          |   |   |   |   |   |   |
| Net income applicable to common stock                                                |   | $                                             | 1,257  |   |   | $ | 527 |   |
| Weighted average number of common shares outstanding – basic                   |   |                                          | 5,112  |   |   |   | 5,023 |   |
|                                                                                 |   |                                          |   |   |   |   |   |   |
| Basic earnings per share                                                             |   | $                                             | 0.25   |   |   | $ | 0.10 |   |
|                                                                                 |   |                                          |   |   |   |   |   |   |
| Net income applicable to common stock                                                |   | $                                             | 1,257  |   |   | $ | 527 |   |
| Weighted average number of common shares outstanding  -  diluted |   |                                          |   |   |   |   |   |   |
| Weighted average number of common shares outstanding                                 |   |                                          | 5,112  |   |   |   | 5,023 |   |
|                                                                                 |   |                                          |   |   |   |   |   |   |
| Effect of dilutive warrants                                                          |   |                                          | -      |   |   |   | 67 |   |
| Weighted average number of common shares outstanding - diluted                       |   |                                          | 5,112  |   |   |   | 5,090 |   |
| Diluted earnings per share                                                           |   | $                                             | 0.25   |   |   | $ | 0.10 |   |

|                                                                                                                  |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                  |   |   |   |   |   |   |
| Net income                                                                                                            |   | $      | 1,257  |   |   | $      | 527 |   |
|                                                                                                                  |   |   |   |   |   |   |   |   |
| Unrealized holding gains on secuirites available for sale, net of taxes Of $4 and $36 for 2009 and 2008, respectively |   |   | 13     |   |   |   | 53 |   |
|                                                                                                                  |   |   |   |   |   |   |   |   |
| Total comprehensive income                                                                                            |   | $      | 1,270  |   |   | $      | 580 |   |

----

| NOTE 12. | Stockholders’ Equity and Dividend Restrictions |
|----------|------------------------------------------------------|

----

| NOTE 13. | Benefit Plans |
|----------|---------------|

----

|                             |   | Number ofShares |    |   | Weighted AverageExercise priceper share |   |    | AverageIntrinsicValue (1) |   |
|----------------------------------|--------|-----------------|---------|--------|-----------------------------------------|--------|---------|---------------------------|--------|
|                             |   |            |    |   |                                    |   |    |                      |   |
| Outstanding at December 31, 2007 |   |            | 198,300 |   |                                    | $      | 10.26   |                      |   | $ | 246,543 |   |
|                             |   |            |    |   |                                    |   |    |                      |   |   |   |   |
| Granted                          |   |            | – |   |                                    |   | – |                      |   |   |   |   |
| Forfeited                        |   |            | (9,400  | )      |                                    | $      | 10.37   |                      |   |   |   |   |
| Exercised                        |   |            | – |   |                                    |   | – |                      |   |   |   |   |
|                             |   |            |    |   |                                    |   |    |                      |   |   |   |   |
| Outstanding at December 31, 2008 |   |            | 188,900 |   |                                    | $      | 10.26   |                      |   | $ | 139,786 |   |
|                             |   |            |    |   |                                    |   |    |                      |   |   |   |   |
| Granted                          |   |            | – |   |                                    |   | – |                      |   |   |   |   |
| Forfeited                        |   |            | (400    | )      |                                    |   |    |                      |   |   |   |   |
| Exercised                        |   |            | – |   |                                    |   | – |                      |   |   |   |   |
|                             |   |            |    |   |                                    |   |    |                      |   |   |   |   |
| Outstanding at December 31, 2009 |   |            | 188,500 |   |                                    | $      | 10.26   |                      |   |   |   |   |
|                             |   |            |    |   |                                    |   |    |                      |   |   |   |   |
| Exercisable at December 31, 2009 |   |            | 106,673 |   |                                    | $      | 9.53    |                      |   | $ | 156,810 |   |
|                             |   |            |    |   |                                    |   |    |                      |   |   |   |   |
|                             |   |            |    |   |                                    |   |    |                      |   |   |   |   |

| Range of Exercise Prices |   |  NumberOutstanding |    |   | Weighted AverageRemainingContractuallife (years) |   |   | WeightedAverageExercisePrice |   |
|--------------------------|--------|-------------------------|---------|--------|--------------------------------------------------|--------|--------|------------------------------|--------|
|                     |   |                    |    |   |                                             |   |   |                         |   |
| $9.09                    |   |                    | 97,900  |   |                                             |   | 7.83   |                         |   | $ | 9.09 |   |
| $11.50                   |   |                    | 90,600  |   |                                             |   | 8.92   |                         |   | $ | 11.50 |   |
|                     |   |                    |    |   |                                             |   |   |                         |   |   |   |   |
|                     |   |                    | 188,500 |   |                                             |   |   |                         |   |   |   |   |

----

|                             |   | NumberofShares |    |   | WeightedAverageExerciseprice pershare |   |    | AverageIntrinsicValue (1) |   |   | Weighted AverageRemainingContractual life(years) |   |
|----------------------------------|--------|----------------|---------|--------|---------------------------------------|--------|---------|---------------------------|--------|--------|--------------------------------------------------|--------|
|                             |   |           |    |   |                                  |   |    |                      |   |   |                                             |   |
| Outstanding at December 31, 2007 |   |           | 460,000 |   |                                  | $      | 11.50   |                      |   | $      | –                                          |   |   |   | 8.81 |   |
|                             |   |           |    |   |                                  |   |    |                      |   |   |                                             |   |   |   |   |   |
| Granted                          |   |           | – |   |                                  |   | – |                      |   |   |                                             |   |   |   |   |   |
| Forfeited                        |   |           | (23,334 | )      |                                  | $      | 11.50   |                      |   |   |                                             |   |   |   |   |   |
| Exercised                        |   |           | (21,998 | )      |                                  | $      | 11.50   |                      |   |   |                                             |   |   |   |   |   |
|                             |   |           |    |   |                                  |   |    |                      |   |   |                                             |   |   |   |   |   |
| Outstanding at December 31, 2008 |   |           | 414,668 |   |                                  | $      | 11.50   |                      |   | $      | –                                          |   |   |   | 7.81 |   |
|                             |   |           |    |   |                                  |   |    |                      |   |   |                                             |   |   |   |   |   |
| Granted                          |   |           | – |   |                                  |   | – |                      |   |   |                                             |   |   |   |   |   |
| Forfeited                        |   |           | – |   |                                  |   | – |                      |   |   |                                             |   |   |   |   |   |
| Exercised                        |   |           | (2,000  | )      |                                  | $      | 11.50   |                      |   |   |                                             |   |   |   |   |   |
|                             |   |           |    |   |                                  |   |    |                      |   |   |                                             |   |   |   |   |   |
| Outstanding at December 31, 2009 |   |           | 412,668 |   |                                  | $      | 11.50   |                      |   | $      | –                                          |   |   |   | 6.81 |   |
|                             |   |           |    |   |                                  |   |    |                      |   |   |                                             |   |   |   |   |   |
| Exercisable at December 31, 2009 |   |           | 231,316 |   |                                  |   |    |                      |   |   |                                             |   |   |   |   |   |

----

| NOTE 13. | Benefit Plans (continued) |
|----------|---------------------------|

|                    |   | 2007 Stock Option Plan |   |   | 2006 Stock Option Plan |   |
|-------------------------|--------|------------------------|--------|--------|------------------------|--------|
|                    |   |                   |   |   |                   |   |
| Dividend yield          |   |                   | 0.00%  |   |                   |   | 0.00% |   |
|                    |   |                   |   |   |                   |   |   |   |
| Expected life           |   | 4.50 years             |   |   | 2.44 years             |   |
|                    |   |                   |   |   |                   |   |   |   |
| Expected volatility     |   |                   | 17.72% |   |                   |   | 17.75% |   |
|                    |   |                   |   |   |                   |   |   |   |
| Risk-free interest rate |   |                   | 3.70%  |   |                   |   | 4.77% |   |
|                    |   |                   |   |   |                   |   |   |   |

----

| NOTE 14. | Regulatory Capital Requirements |
|----------|---------------------------------|

----

|                                                         |   |        |   |   |                    |   |   |                                  |   |   | FDIC requirements |   |
|--------------------------------------------------------------|--------|-------------|--------|--------|-------------------------|--------|--------|---------------------------------------|--------|--------|-------------------|--------|
|                                                         |   | Bank actual |   |   | Minimum capitaladequacy |   |   | For classificationas well capitalized |   |
|                                                         |   | Amount      |   |   | Ratio                   |   |   | Amount                                |   |   | Ratio             |   |   | Amount |   |   | Ratio |   |
| December 31, 2009:                                           |   |        |   |   |                    |   |   |                                  |   |   |              |   |   |   |   |   |   |   |
| Leverage (Tier 1)      Capital |   | $           | 49,469 |   |                    |   | 15.10  | %                                     |   | $      | 13,102            |   |   |   | 4.00 | % |   | $ | 16,377 |   |   |   | 5.00 | % |
| Risk-based capital:                                          |   |        |   |   |                    |   |   |                                  |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1                                                       |   | $           | 49,469 |   |                    |   | 19.13  | %                                     |   | $      | 10,342            |   |   |   | 4.00 | % |   | $ | 15,513 |   |   |   | 6.00 | % |
| Total                                                        |   | $           | 52,261 |   |                    |   | 20.21  | %                                     |   | $      | 20,685            |   |   |   | 8.00 | % |   | $ | 25,856 |   |   |   | 10.00 | % |
|                                                         |   |        |   |   |                    |   |   |                                  |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |        |   |   |                    |   |   |                                  |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008:                                           |   | $           | 47,811 |   |                    |   | 16.95  | %                                     |   | $      | 11,281            |   |   |   | 4.00 | % |   | $ | 14,101 |   |   |   | 5.00 | % |
| Leverage (Tier 1)      Capital |   |        |   |   |                    |   |   |                                  |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk-based capital:                                          |   | $           | 47,811 |   |                    |   | 21.16  | %                                     |   | $      | 9,040             |   |   |   | 4.00 | % |   | $ | 13,560 |   |   |   | 6.00 | % |
| Tier 1                                                       |   | $           | 50,182 |   |                    |   | 22.20  | %                                     |   | $      | 18,080            |   |   |   | 8.00 | % |   | $ | 22,600 |   |   |   | 10.00 | % |
| Total                                                        |   |        |   |   |                    |   |   |                                  |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |        |   |   |                    |   |   |                                  |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| NOTE 15. | Financial Instruments with Off-Balance Sheet Risk |
|----------|---------------------------------------------------|

| NOTE 16. | Financial Information of Parent Company |
|----------|-----------------------------------------|

| Balance Sheet(in thousands)                                                                                                                 |
|---------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                        |   | December 31, |   |
|                                                                                                                                        |   | 2009 |   |   | 2008 |   |
| Assets:                                                                                                                                     |   |   |   |   |   |   |
|                                                                                                                                        |   |   |   |   |   |   |
|      Investment in subsidiary, net                                                                                 |   | $ | 49,535 |   |   | $ | 47,864 |   |
|      Dividends receivable from Bank of New Jersey                                                                  |   |   | 1,562 |   |   | $ | – |   |
|                Total assets                                      |   | $ | 51,097 |   |   | $ | 47,864 |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
|     Liabilities and stockholders’ equity:                                                                         |   |   |   |   |   |   |   |   |
|     Dividends payable to shareholders                                                                                   |   | $ | 1,562 |   |   | $ | – |   |
|                Total liabilities                                 |   |   | 1,562 |   |   |   | – |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |
| Stockholders’ equity:                                                                                                                 |   |   | 49,535 |   |   |   | 47,864 |   |
|                Total liabillities and stockholders’ equity |   | $ | 51,097 |   |   | $ | 47,864 |   |
|                                                                                                                                        |   |   |   |   |   |   |   |   |

----

|                                                                                                 |   | 2009   |   |   |  2008 |   |
|------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|------------|--------|
| Equity in undistributed earnings of subsidiary bank                                             |   | $      | 1,257  |   |       | $      | 527 |   |
|                                                                                                 |   |   |   |   |       |   |   |   |
|                Net income |   | $      | 1,257  |   |       | $      | 527 |   |

|                                                                                                                                                                                                               |   | 2009   |        |   |  2008 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|------------|--------|
| Cash flows from operating activities:                                                                                                                                                                              |   |   |        |   |       |   |
|      Net income                                                                                                                                                                           |   | $      | 1,257       |   |       | $      | 527 |   |
|      Adjustments to reconcile net income to net cash        provided by operating activities:                                                     |   |   |        |   |       |   |   |   |
|            Equity in undistributed earnings of the               subsidiary bank |   |   | (1,257      | )      |       |   | (527 | ) |
|            Increase in other assets, net                                                                                                                    |   |   | (1,562      | )      |       |   |   |   |
|            Increase in other liabilities, net                                                                                                               |   |   | 1,562       |   |       |   | – |   |
|               Net cash provided by operating activities                                                                                      |   |   | –     |   |       |   | – |   |
|                                                                                                                                                                                                               |   |   |        |   |       |   |   |   |
| Cash flows from investing activities:                                                                                                                                                                              |   |   |        |   |       |   |   |   |
|      Capital contributed to subsidiary bank                                                                                                                                               |   |   | (1,547      | )      |       |   | (1,051 | ) |
|           Net cash used in financing activities                                                                                                                  |   |   | (1,547      | )      |       |   | (1,051 | ) |
|                                                                                                                                                                                                               |   |   |        |   |       |   |   |   |
| Cash flows from financing activities:                                                                                                                                                                              |   |   |        |   |       |   |   |   |
|      Proceeds from exercise of warrants                                                                                                                                                   |   |   | 1,524       |   |       |   | 821 |   |
|      Proceeds from issuance of common stock                                                                                                                                               |   |   | 23          |   |       |   | 230 |   |
|           Net cash provided by financing           activities                                             |   |   |  1,547 |   |       |   | 1,051 |   |
|                                                                                                                                                                                                               |   |   |        |   |       |   |   |   |
|           Net change in cash for the period                                                                                                                      |   |   | –     |   |       |   | – |   |
|                                                                                                                                                                                                               |   |   |        |   |       |   |   |   |
|           Net cash at beginning of year                                                                                                                          |   |   | –     |   |       |   | – |   |
|                                                                                                                                                                                                               |   |   |        |   |       |   |   |   |
|           Net cash at end of year                                                                                                                                |   | $      | –     |   |       | $      | – |   |

----

| ● | Level 1 Inputs - Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Level 2 Inputs -  Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ● | Level 3 Inputs -  Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e. supported with little or nomarket activity). |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Description                   |   |     December 31,2009 |   |   | (Level 1)QuotedPrices inActiveMarkets forIdenticalAssets |   |   | (Level 2)  SignificantOtherObservableInputs |   |   | (Level 3)   SignificantUnobservableInputs |   |
|-------------------------------|--------|------------------------------------------|--------|--------|----------------------------------------------------------|--------|--------|-------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|
| Securities available for sale |   | $                                        | 21,111 |   |                                                     | $      | 2,000  |                                                  |   | $      | 19,111                                                   |   |   | $ | – |   |

----

|      Description |   |     December 31,2009 |   |   | (Level 1)QuotedPrices inActiveMarkets forIdenticalAssets |   |    | (Level 2)  SignificantOtherObservableInputs |   |   | (Level 3)   SignificantUnobservableInputs |   |
|-------------------------------------------|--------|------------------------------------------|--------|--------|----------------------------------------------------------|--------|---------|-------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|
| Impaired loans                            |   |                                     |   |   |                                                     |   |    |                                                  |   |   |                                                     |   |
|                                      |   | $                                        | 3,859  |   |                                                     | $      | – |                                                  |   | $      | –                                                  |   |   | $ | 3,859 |   |

|      Description |   |    December 31,2009 |   |   | (Level 1)QuotedPrices inActiveMarkets forIdenticalAssets |   |    | (Level 2)  SignificantOtherObservableInputs |   |   | (Level 3)   SignificantUnobservableInputs |   |
|-------------------------------------------|--------|------------------------------------|--------|--------|----------------------------------------------------------|--------|---------|-------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|
| Securities Available for sale             |   | $                                  | 17,731 |   |                                                     | $      | – |                                                  |   | $      | 17,731                                                   |   |   | $ | – |   |

|      Description |   |     December 31,2008 |   |   | (Level 1)QuotedPrices inActiveMarkets forIdenticalAssets |   |    | (Level 2)  SignificantOtherObservableInputs |   |   | (Level 3)   SignificantUnobservableInputs |   |
|-------------------------------------------|--------|------------------------------------------|--------|--------|----------------------------------------------------------|--------|---------|-------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|
|                                      |   |                                     |   |   |                                                     |   |    |                                                  |   |   |                                                     |   |   |   |   |   |
| Impaired loans                            |   | $                                        | 1,977  |   |                                                     | $      | – |                                                  |   | $      | –                                                  |   |   | $ | 1,977 |   |

----

----

|                                |   |     2009 |    |   |     2008 |   |
|-------------------------------------|--------|-------------------------|---------|--------|-------------------------|--------|
|                                |   | Carryingamount          |    |   | EstimatedFairValue      |   |   | Carryingamount |   |   | EstimatedFairValue |   |
|                                |   |                    |    |   |                    |   |   |   |   |   |   |   |
| Financial assets:                   |   |                    |    |   |                    |   |   |   |   |   |   |   |
| Cash and cash equivalents           |   | $                       | 18,098  |   |                    | $      | 18,098 |   |   | $ | 40,480 |   |   | $ | 40,480 |   |
| Securities available for sale       |   |                    | 21,005  |   |                    |   | 21,111 |   |   |   | 17,641 |   |   |   | 17,731 |   |
| Securities held to maturity         |   |                    | 4,296   |   |                    |   | 4,297 |   |   |   | – |   |   |   | – |   |
| Restricted investment in bank stock |   |                    | 419     |   |                    |   | 419 |   |   |   | 346 |   |   |   | 346 |   |
| Net loans                           |   |                    | 261,152 |   |                    |   | 261,329 |   |   |   | 232,565 |   |   |   | 232,744 |   |
| Accrued interest receivable         |   |                    | 1,173   |   |                    |   | 1,173 |   |   |   | 847 |   |   |   | 847 |   |
| Financial liabilities:              |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                            |   |                    | 267,143 |   |                    |   | 268,101 |   |   |   | 254,005 |   |   |   | 255,935 |   |
| Short term borrowings               |   |                    | – |   |                    |   | – |   |   |   | 853 |   |   |   | 853 |   |
| Accrued interest payable            |   |                    | 372     |   |                    |   | 372 |   |   |   | 541 |   |   |   | 541 |   |

----

| NOTE 18. | Quarterly Financial Data  (unaudited) |
|----------|-------------------------------------------------|

|                                                        |   | December 31 |   |   | September 30 |   |   | June 30 |   |   | March 31 |   |
|-------------------------------------------------------------|--------|-------------|--------|--------|--------------|--------|--------|---------|--------|--------|----------|--------|
|                                                        |   |        |   |   |         |   |   |    |   |   |     |   |
| 2009                                                        |   |        |   |   |         |   |   |    |   |   |     |   |
| Interest income                                             |   | $           | 4,031  |   |         | $      | 4,052  |    |   | $      | 3,810    |   |   | $ | 3,598 |   |
| Interest expense                                            |   |        | 1,320  |   |         |   | 1,398  |    |   |   | 1,489    |   |   |   | 1,729 |   |
| Net interest income                                         |   |        | 2,711  |   |         |   | 2,659  |    |   |   | 2,321    |   |   |   | 1,869 |   |
| Provision for loan losses                                   |   |        | 145    |   |         |   | 74     |    |   |   | 144      |   |   |   | 61 |   |
| Other expense, net                                          |   |        | 1,834  |   |         |   | 1,718  |    |   |   | 1,850    |   |   |   | 1,598 |   |
| Provision for federal and state income taxes           |   |        | 297    |   |         |   | 351    |    |   |   | 136      |   |   |   | 94 |   |
| Net income                                                  |   | $           | 435    |   |         | $      | 515    |    |   | $      | 191      |   |   | $ | 116 |   |
|                                                        |   |        |   |   |         |   |   |    |   |   |     |   |   |   |   |   |
| Earnings per share:                                         |   |        |   |   |         |   |   |    |   |   |     |   |   |   |   |   |
| Basic                                                       |   | $           | 0.08   |   |         | $      | 0.10   |    |   | $      | 0.04     |   |   | $ | 0.03 |   |
| Diluted                                                     |   | $           | 0.08   |   |         | $      | 0.10   |    |   | $      | 0.04     |   |   | $ | 0.03 |   |
|                                                        |   |        |   |   |         |   |   |    |   |   |     |   |   |   |   |   |
| 2008                                                        |   |        |   |   |         |   |   |    |   |   |     |   |   |   |   |   |
| Interest income                                             |   | $           | 3,653  |   |         | $      | 3,543  |    |   | $      | 3,530    |   |   | $ | 3,729 |   |
| Interest expense                                            |   |        | 1,779  |   |         |   | 1,689  |    |   |   | 1,862    |   |   |   | 2,214 |   |
| Net interest income                                         |   |        | 1,874  |   |         |   | 1,854  |    |   |   | 1,668    |   |   |   | 1,515 |   |
| Provision for loan losses                                   |   |        | 146    |   |         |   | 88     |    |   |   | 67       |   |   |   | 158 |   |
| Other expense, net                                          |   |        | 1,422  |   |         |   | 1,349  |    |   |   | 1,422    |   |   |   | 1,312 |   |
| Provision (benefit) for federal and state income taxes |   |        | 132    |   |         |   | 179    |    |   |   | 77       |   |   |   | 32 |   |
| Net income                                                  |   | $           | 174    |   |         | $      | 238    |    |   | $      | 102      |   |   | $ | 13 |   |
|                                                        |   |        |   |   |         |   |   |    |   |   |     |   |   |   |   |   |
| Earnings per share:                                         |   |        |   |   |         |   |   |    |   |   |     |   |   |   |   |   |
| Basic                                                       |   | $           | 0.03   |   |         | $      | 0.05   |    |   | $      | 0.02     |   |   | $ | 0.00 |   |
| Diluted                                                     |   | $           | 0.03   |   |         | $      | 0.05   |    |   | $      | 0.02     |   |   | $ | 0.00 |   |

----

----

----

| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE |
|---------|--------------------------------------------------------------------------------------|

ITEM 9A.             CONTROLS AND PROCEDURES

----

ITEM 9B.             OTHER INFORMATION

----

PART III

ITEM 10.             DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

ITEM 11.             EXECUTIVECOMPENSATION

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

----

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, 2009 and 2008. |
|-----------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------|

|                    (ii)   | Consolidated Statements of Income for the years ended December 31, 2009 and 2008. |
|------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------|

|                     (iii)   | Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2009 and 2008. |
|--------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|

|                      (iv)   | Consolidated Statements of Cash Flows for the years ended December 31, 2009 and 2008. |
|-------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|

|                     (v)   | Notes to Consolidated Financial Statement |
|------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|

|                      (vi)   | Reports of Independent Registered Public Accounting Firms |
|-------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|

| (b)   | Financial Statement Schedules |
|-----------------|-------------------------------|

| (c)   | Exhibits |
|-----------------|----------|

----

|   | BANCORP OF NEW JERSEY, INC. |                   |
|--------|-----------------------------|------------------------|
|   | By:                         | /s/ Albert F. Buzzetti |   |
|   |                        | Albert F. Buzzetti     |   |
|   |                        | Chairman, and CEO      |   |

|                         |   |                       |   |           |   |
|------------------------------|--------|----------------------------|--------|----------------|--------|
|                         |   |                       |   |           |   |
| Name                         |   | Title                      |   | Date           |   |
|                         |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Albert F. Buzzetti       |   | Chairman and               |   | March 31, 2010 |   |
| Albert F. Buzzetti           |   | Chief Executive Officer    |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Armand Leone, Jr.        |   | Vice Chairman and Director |   | March 31, 2010 |   |
| Armand Leone, Jr.            |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Michael Bello            |   | Director                   |   | March 31, 2010 |   |
| Michael Bello                |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Jay Blau                 |   | Director                   |   | March 31, 2010 |   |
| Jay Blau                     |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Albert L. Buzzetti       |   | Director                   |   | March 31, 2010 |   |
| Albert L. Buzzetti           |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Gerald A. Calabrese, Jr. |   | Director                   |   | March 31, 2010 |   |
| Gerald a. Calabrese, Jr.     |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Stephen Crevani          |   | Director                   |   | March 31, 2010 |   |
| Stephen Crevani              |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ John K. Daily            |   | Director                   |   | March 31, 2010 |   |
| John K. Daily                |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Michael Lesler           |   | Director, President and    |   | March 31, 2010 |   |
| Michael Lesler               |   | Chief Operating Officer    |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Anthony M. Lo Conte      |   | Director                   |   | March 31, 2010 |   |
| Anthony M. Lo Conte          |   |                       |   |           |   |
|                         |   |                       |   |           |   |
| /s/ Carmelo Luppino, Jr.     |   | Director                   |   | March 31, 2010 |   |
| Carmelo Luppino, Jr.         |   |                       |   |           |   |

----

|                      |   |                     |   |           |   |
|---------------------------|--------|--------------------------|--------|----------------|--------|
| /s/ Rosario Luppino       |   | Director                 |   | March 31, 2010 |   |
| Rosario Luppino           |   |                     |   |           |   |
|                      |   |                     |   |           |   |
| /s/ Howard Mann           |   | Director                 |   | March 31, 2010 |   |
| Howard Mann               |   |                     |   |           |   |
|                      |   |                     |   |           |   |
| /s/ Josephine Mauro       |   | Director                 |   | March 31, 2010 |   |
| Josephine Mauro           |   |                     |   |           |   |
|                      |   |                     |   |           |   |
| /s/ Joel P. Paritz        |   | Director                 |   | March 31, 2010 |   |
| Joel P. Paritz            |   |                     |   |           |   |
|                      |   |                     |   |           |   |
| /s/ Christopher M. Shaari |   | Director                 |   | March 31, 2010 |   |
| Christopher M. Shaari     |   |                     |   |           |   |
|                      |   |                     |   |           |   |
| /s/ Anthony Siniscalchi   |   | Director                 |   | March 31, 2010 |   |
| Anthony Siniscalchi       |   |                     |   |           |   |
|                      |   |                     |   |           |   |
| /s/ Mark Sokolich         |   | Director                 |   | March 31, 2010 |   |
| Mark Sokolich             |   |                     |   |           |   |
|                      |   |                     |   |           |   |
| /s/ Diane M. Spinner      |   | Director and             |   | March 31, 2010 |   |
| Diane M. Spinner          |   | Executive Vice President |   |           |   |
|                      |   |                     |   |           |   |

----

| ExhibitNo. |   |                                                                 | Description |
|------------|--------|----------------------------------------------------------------------|-------------|
| 2.1        | (A)    | Plan of Acquisition                                                  |
|       |   |                                                                 |
| 3.1        | (A)    | Certificate of Incorporation                                         |
|       |   |                                                                 |
| 3.2        | (A)    | Amended and Restated Bylaws                                          |
|       |   |                                                                 |
| 4.1        | (A)    | Specimen form of stock certificate                                   |
|       |   |                                                                 |
| 10.1       | (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*                                |
|       |   |                                                                 |
| 10.7       | (B)    | 2007 Non-Qualified Stock Option Plan For Directors                   |
|       |   |                                                                 |
| 10.8       | (C)    | Form of Stock Option Award Agreement                                 |
|       |   |                                                                 |
| 21         |   | Subsidiaries of the Registrant                                       |
|       |   |                                                                 |
| 23         |   | Consent of ParenteBeard LLC                                          |
|       |   |                                                                 |
| 31.1       |   | Rule 13a-14(a) Certification of the Principal Executive Officer      |
|       |   |                                                                 |
| 31.2       |   | Rule 13a-14(a) Certification of the Principal Financial Officer      |
|       |   |                                                                 |
| 32         |   | 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 |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----