UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the fiscal year ended December 31, 2007.
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934.
For the transition period from ____ to ____.
Commission file number 0-49925
A. Full title of the plan and the address of the
plan, if different from that of the issuer named below:
Central Jersey Bank, N.A.
Employees' Savings & Profit Sharing Plan and Trust
B. Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office:
Central Jersey Bancorp
627 Second Avenue
Long Branch, New Jersey 07740
INDEX TO FINANCIAL STATEMENTS
CENTRAL JERSEY BANK, N.A. EMPLOYEES' SAVINGS
& PROFIT SHARING PLAN AND TRUST
Financial Statements
December 31, 2007 and 2006
Page
----
REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMS....................1-2
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits
December 31, 2007 and 2006...................................3
Statements of Changes in Net Assets Available for Plan Benefits
Years Ended December 31, 2007 and 2006.......................4
Notes to Financial Statements.........................................5
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SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
As of December 31, 2007.............................Schedule 1
Report of Independent Registered Public Accounting Firm
The Board of Directors
Central Jersey Bancorp:
We have audited the accompanying statement of net assets available for plan
benefits of Central Jersey Bank, N.A. Employees' Savings & Profit Sharing Plan
and Trust (the "Plan") as of December 31, 2007, and the related statement of
changes in net assets available for plan benefits for the year then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Plan is not required to have,
nor were we engaged to perform, an audit of its internal control over financial
reporting. An audit includes consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Plan's internal control over financial reporting.
Accordingly, we express no such opinion. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe our audit provides a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2007, and the changes in net assets available for benefits for the
year then ended, in conformity with accounting principles generally accepted in
the United States of America.
Our audit was conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary schedule of assets
(held at end of year) is presented for the purpose of additional analysis and is
not a required part of the basic financial statements but is supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. This supplementary schedule is the responsibility of the Plan's
management. The supplementary schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, is fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ Beard Miller Company LLP
Beard Miller Company LLP
Malvern, Pennsylvania
June 26, 2008
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1
Report of Independent Registered Public Accounting Firm
The Board of Directors
Central Jersey Bancorp:
We have audited the accompanying statement of net assets available for plan
benefits of Central Jersey Bank, N.A. Employees' Savings & Profit Sharing Plan
and Trust (the "Plan") (formerly known as The Monmouth Community Bank, N.A.
Employees' Savings & Profit Sharing Plan) as of December 31, 2006, and the
related statement of changes in net assets available for plan benefits for the
year then ended. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Central
Jersey Bank, N.A. Employees' Savings & Profit Sharing Plan and Trust as of
December 31, 2006, and the changes in net assets available for plan benefits for
the year then ended, in conformity with U.S. generally accepted accounting
principles.
/s/ KPMG LLP
KPMG LLP
Short Hills, New Jersey
June 29, 2007
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2
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Statements of Net Assets Available for Plan Benefits
December 31, 2007 and 2006
2007 2006
---------- ----------
Investments:
Investments, at fair value $1,690,505 $1,491,010
Investments in Central Jersey Bancorp common stock, at fair
value 711,961 731,346
---------- ----------
Total investments 2,402,466 2,222,356
---------- ----------
Receivables:
Employer receivables 16,754 13,930
Participant loans receivable 48,243 43,014
Accrued income 175 231
---------- ----------
65,172 57,175
Payables:
Accrued expenses 11,076 14,229
---------- ----------
Net assets available for plan benefits at fair value 2,456,562 2,265,302
Adjustment from fair value to contract value for fully
benefit-responsive investment contracts 7,942 --
---------- ----------
Net assets available for plan benefits $2,464,504 $2,265,302
========== ==========
See accompanying notes to financial statements.
3
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CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2007 and 2006
2007 2006
----------- -----------
Contributions:
Employer $ 152,895 $ 207,213
Participant 264,871 265,455
Participant rollovers 4,538 19,949
----------- -----------
Total contributions 422,304 492,617
----------- -----------
Investment income (loss):
Interest income 13,976 10,827
Net realized losses on sales of investments (53,669) (10,532)
Net appreciation (depreciation) of investments 138,081 (184,194)
----------- -----------
Total investment income (loss) 98,388 (183,899)
----------- -----------
Contributions and investment income 520,692 308,718
Deductions:
Administrative expenses 15,023 13,979
Payments to participants 306,467 168,524
----------- -----------
Net change in assets available for plan benefits 199,202 126,215
Net assets available for plan benefits, beginning of year 2,265,302 2,139,087
----------- -----------
Net assets available for plan benefits, end of year $ 2,464,504 $ 2,265,302
=========== ===========
See accompanying notes to financial statements.
4
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CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2007 and 2006
(1) Plan Description
The following description of the Central Jersey Bank, N.A. Employees'
Savings & Profit Sharing Plan and Trust (the "Plan") provides only
general information. Participants should refer to the Plan documents
for a more complete description of the Plan's provisions. The Plan is
subject to the provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
(a) General
The Plan was established as of January 1, 2000 as a defined
contribution plan. Generally, an employee becomes eligible to
participate in the Plan on the first day of the month which
follows three months of continuous service at Central Jersey
Bank, N.A. (the "Bank") by the employee.
(b) Employee Contributions
An eligible employee may elect to have a percentage of
compensation contributed to the Plan on a pre-tax salary
reduction basis. A participant may elect to defer between 1%
and 75% of his or her compensation under a Salary Reduction
Agreement to the Plan. Additionally, participants may allocate
their contributions to 19 different investment funds and to
the common stock of Central Jersey Bancorp. This contribution
amount is limited by the Internal Revenue Code of 1986, as
amended (the "Code"), on a pretax basis to $15,500 in 2007. In
addition, certain eligible participants can make "catch-up"
contributions if the maximum amount of regular contributions
are made and the participant is age 50 or older, thereby
increasing the total elective deferrals to $20,500 for 2007.
(c) Employer Contributions
With the adoption of the Safe Harbor Amendment, effective
January 1, 2007, the Bank will make a safe harbor basic
matching contribution to the Plan on behalf of each
participant in the amount of 100% of the participant's 401(k)
deferrals that do not exceed 3% of the participant's salary
plus 50% of the participant's deferrals that exceed 3% of the
participant's salary but that do not exceed 5% of the
participant's salary.
(d) Vesting
With the adoption of the Safe Harbor Amendment, effective
January 1, 2007, the Plan amended the vesting schedule to
reflect 100% vesting for all plan participants effective
January 1, 2007.
(e) Participant Loans
Participants may borrow from the vested portion of their
accounts. The loan must be no less than $1,000 and no more
than $50,000. Participants may not borrow more than 50% of the
vested balance in their accounts. Any loan made must generally
be repaid within a period not to exceed five years. The term
of the loan may exceed five years for the purchase of a
primary residence; however, it may not exceed 15 years. Loan
interest rates are determined at the time of the loan and
remain in effect for the term of the loan. Principal and
interest are paid according to the participant amortization
schedule through bi-weekly payroll deductions.
5
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2007 and 2006
(f) Participants' Accounts
Individual accounts are maintained for each Plan participant.
Each participant's account is credited with the participant's
contribution and the Bank's matching contribution on behalf of
that participant. Allocations of Plan earnings or losses are
based on the participant's earnings or account balances, as
defined. The benefit to which each participant is entitled is
the benefit that can be provided from the participant's vested
account.
Participants have the option to invest in a self-directed
brokerage account. Assets may be transferred from their Plan
accounts only. A minimum of $1,000 is required with a maximum
investment of 25% of total account balance.
(g) Benefit Payments/Withdrawals
Upon retirement, death, disability or termination of
employment, participants or their designated beneficiaries may
elect to receive their vested account balance in a lump-sum,
partial lump-sum or in installment payments.
During employment, participants may request an in-service
withdrawal under certain circumstances. Rollover contributions
and earnings thereof may be requested for distribution at any
time. In-service withdrawals of employer contributions may be
requested according to the Plan's provisions. Additionally,
participants may request an in-service withdrawal of pre-tax
elective deferrals upon attainment of age 59 1/2 or for a Plan
defined hardship withdrawal reason. In the event of hardship,
the distribution cannot exceed the amount required to relieve
the hardship. Such withdrawals are subject to approval by the
Plan administrator along with payment of applicable taxes.
(h) Forfeitures
Forfeitures of non-vested 401(k) contributions used to reduce
employer contributions for the years ended December 31, 2007
and 2006 amounted to $8,207 and $1,638, respectively.
(i) Investment Valuation
Investments were valued at fair market value, except for the
Pentegra Stable Value Fund. The Pentegra Stable Value Fund is
reported at contract value. Investment transactions were
recorded on a settlement date basis. There were no material
unsettled trades at December 31, 2007 and 2006.
The Pentegra Stable Value Fund is stated according to the
Financial Accounting Standards Board ("FASB") Staff Position
FSP AAG INV-1 and Statement of Position No. 94-4-1, Reporting
of Fully Benefit-Responsive Investment Contracts Held by
Certain Investment Companies Subject to the AICPA Investment
Company Guide and Defined-Contribution Health and Welfare and
Pension Plans ("FSP"), which states that contract value is the
relevant measurement attribute for that portion of the net
assets available for benefits of a defined-contribution plan
attributable to fully benefit-responsive investment contracts
because contract value is the amount participants would
receive if they were to initiate permitted transactions under
the terms of the plan. The FSP requires the Statement of Net
Assets Available for Plan Benefits to present the fair value
of the Plan's investments as well as the adjustment from fair
value to contract value for the fully benefit-responsive
investment contracts. The Statement of Changes in Net Assets
Available for Plan Benefits is also
6
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2007 and 2006
required to be prepared on a contract value basis for the
fully benefit-responsive investment contracts.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The financial statements of the Plan have been prepared on the
accrual basis of accounting.
(b) Funds and Accounts Managed by State Street Global Advisors
State Street Global Advisors ("State Street") held the Plan's
investment assets and executed transactions therein as
determined by each of the Plan's participants. The investments
in the funds were reported to the Bank by State Street as
having been determined through the use of current values for
all assets.
(c) Use of Estimates
In preparing the Plan's financial statements, estimates and
assumptions have been made relating to the reporting of assets
and liabilities and changes therein, and the disclosure of
contingent assets and liabilities to prepare these financials
statements in conformity with U.S. generally accepted
accounting principles. Actual results could differ from those
estimates.
(d) Concentration of Risk
The assets of the Plan are primarily financial instruments,
which are monetary in nature. As a result, interest rates have
a more significant impact on the Plan's performance than do
the effects of general levels of inflation. Interest rates do
not necessarily move in the same direction or in the same
magnitude as the prices of goods and services as measured by
the consumer price index. Investment securities, in general,
are exposed to various risks such as interest rate, credit,
and overall market volatility. Due to the level of risk
associated with certain investment securities, it is
reasonably possible that changes in values of the investment
securities will occur in the near term and that such changes
could materially affect the amounts reported in the financial
statements.
(e) Investment Valuation
Investments in index funds are managed by State Street with
the Bank of New York acting as the trustee. Additionally,
investments are made in Central Jersey Bancorp common stock
which is valued and recorded at market value as determined by
quoted market prices, which represent the net asset value of
the shares held by the Plan at the end of the year. The Plan
is valued daily and participants' accounts are credited with a
proportional share of investment income or loss. Loans
receivable from participants are valued at their outstanding
balance, which approximates fair value.
Investment contracts are presented at fair value on the
Statements of Net Assets Available for Plan Benefits.
Investments in fully benefit-responsive investment contracts
are stated at contract value which is equal to principal
balance plus accrued interest. As provided in the FSP, an
investment contract is generally valued at contract value,
rather than fair value, to the extent it is fully
benefit-responsive. The fair value of fully benefit-responsive
investment contracts is calculated using a discounted cash
flow model which considers recent fee bids as
7
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2007 and 2006
determined by recognized dealers, discount rate and the
duration of the underlying portfolio securities.
(f) Income Recognition
Interest income is recorded as earned on the accrual basis.
Dividend income is recorded on the ex-dividend date.
(g) New Accounting Pronouncements
In September 2006, the FASB issued Statement No. 157, Fair
Value Measurement. This Statement defines fair value,
establishes a framework for measuring fair value and expands
disclosures about fair value measurements. This Statement also
establishes a fair value hierarchy about the assumptions used
to measure fair value and clarifies assumptions about risk and
the effect of a restriction on the sale or use of an asset.
This Statement is effective for fiscal years beginning after
November 15, 2007. In February 2008, the FASB issued Staff
Position 157-2, Effective Date of FASB Statement No. 157. This
Staff Position delays the effective date of Statement No. 157
for all nonfinancial assets and nonfinancial liabilities,
except those that are recognized or disclosed at fair value on
a recurring basis (at least annually) to fiscal years
beginning after November 15, 2008, and interim periods within
those fiscal years. The impact of the Plan's adoption of
Statement No. 157 on the Plan's net assets available for
benefits and changes in net assets available for benefits is
anticipated to be immaterial.
In February 2007, the FASB issued Statement No. 159, The Fair
Value Option for Financial Assets and Financial Liabilities.
This Statement provides reporting entities with an option to
report selected financial assets and liabilities at fair value
and establishes presentation and disclosure requirements
designed to facilitate comparisons between reporting entities
that choose different measurement attributes for similar types
of assets and liabilities. The provisions of this Statement
became available to the Plan on January 1, 2008. However, the
Plan did not elect the fair value option provided by this
Statement for any financial assets or financial liabilities as
of January 1, 2008.
(3) Plan Expenses
Certain costs of administrative services rendered on behalf of the Plan
were paid by the Bank.
(4) Plan Termination
Although it has not expressed any intention to do so, the Bank has the
right under the Plan to discontinue its contributions at any time and
to terminate the Plan subject to the provisions of ERISA. In the event
of the termination of the Plan, no further allocations shall be made,
and no eligible employee shall become a participant after the date of
termination.
(5) Federal Tax Status
The Internal Revenue Service issued its latest determination letter on
March 31, 2008 to the Plan, which states that the Plan and its
underlying trust qualify under the applicable provisions of the Code
and, therefore, are exempt from federal income taxes.
8
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2007 and 2006
(6) Investments
Except as noted below, the values of individual investments that
represent 5% or more of the Plan's total assets at December 31, 2007
and 2006 are as follows:
2007 2006
--------- ---------
Investments, at fair value:
Central Jersey Bancorp, investment in common stock $ 711,961 $ 731,346
State Street Bank and Trust Company S&P 500 Flagship
Securities Lending Fund 250,913 208,840
Pentegra Stable Value Fund 205,633 173,939
State Street Bank and Trust Company Moderate
Strategic Balanced 202,199 190,896
State Street Bank and Trust Company Conservative
Strategic Balanced Securities Lending Fund 179,533 190,820
State Street Bank and Trust Company Government
Money Market Account 163,947 140,557
State Street Bank and Trust Company Passive Long
Treasury Fund 118,092* 127,794
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* Current value represents less than 5% of the Plan's total assets at
December 31, 2007.
For the years ended December 31, 2007 and 2006, the Plan's net
appreciation (depreciation) of investments is as follows:
2007 2006
--------- ---------
Commingled funds $ 47,345 $ 102,624
Investment in Central Jersey Bancorp common stock 90,736 (286,818)
--------- ---------
Net appreciation (depreciation) of investments $ 138,081 $(184,194)
========= =========
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(7) Related Parties
The Bank of New York is the trustee, as defined by the Plan. As a
result, the transactions with the trustee qualify as party-in-interest
transactions. Fees for the investment management services are paid by
the Plan sponsor.
(8) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of the employee contributions per the
financial statements at December 31, 2007 and 2006 to Form 5500:
9
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2007 and 2006
2007 2006
--------- ---------
Employee contributions per the financial statements $ 264,871 $ 265,455
Corrective distributions 8,152 8,152
--------- ---------
Total employee contributions per the Form 5500 $ 273,023 $ 273,607
========= =========
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The following is a reconciliation of net assets available for plan
benefits per the financial statements at December 31, 2007 to the Form
5500:
2007
-----------
Net assets available for Plan benefits per the financial
statements $ 2,464,504
Adjustment from fair value to contract value for fully benefit-
responsive investment contracts (7,942)
-----------
Net assets available for Plan benefits per the Form 5500 $ 2,456,562
===========
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10
SCHEDULE 1
CENTRAL JERSEY BANK, N.A.
EMPLOYEE SAVINGS & PROFIT SHARING PLAN AND TRUST
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2007
Identity of Issuer Description of Investment Cost Current value
------------------------------------------- ------------------------------------------ -------------- -------------
Pentegra Services, Inc.* Pentegra Stable Value Fund $ 191,084 $ 205,633
State Street Bank and Trust Company* Moderate Strategic Balanced 171,566 202,199
State Street Bank and Trust Company* Conservative Strategic Balanced
Securities Lending Fund 157,552 179,533
State Street Bank and Trust Company* Aggressive Strategic Balanced
Securities Lending Fund 22,597 24,629
State Street Bank and Trust Company* Russell 2000 Index Securities Lending
Series Fund 40,506 45,147
State Street Bank and Trust Company* S&P 500 Flagship Securities Lending
Series Fund 216,123 250,913
State Street Bank and Trust Company* S&P Growth Index Securities Lending Fund 59,845 66,588
State Street Bank and Trust Company* S&P Midcap Index Securities Lending
Series Fund 101,490 116,035
State Street Bank and Trust Company* NASDAQ 100 Index Non-Lending Series Fund 41,014 47,849
State Street Bank and Trust Company* REIT Index Non-Lending Securities Fund 59,723 55,542
State Street Bank and Trust Company* S&P Value Index Securities Lending Fund 101,152 116,129
State Street Bank and Trust Company* Daily EAFE Index Securities Lending
Series Fund 25,384 28,729
Schwab Window 22,654 22,654
Collective Short Term Investment Fund 46,886 46,886
State Street Bank and Trust Company* Government Money Market Account 163,947 163,947
State Street Bank and Trust Company* Passive Long Treasury Fund 103,601 118,092
-------------
Total mutual funds 1,690,505
*Central Jersey Bancorp, investment in
common stock 711,961
*Participant loans receivable (a) 48,243
-------------
Total other investments 760,204
Total investments $ 2,450,709
=============
* A party-in-interest as defined by ERISA
(a) As of December 31, 2007, the interest rates on these loans ranged from 5.00% to 9.25%.
See accompanying independent auditors' report.
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities and Exchange Act of
1934, the trustees (or other person who administers the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT
SHARING PLAN AND TRUST
Date: June 26, 2008 By: /s/ Gail M. Corrigan
----------------------------
Gail M. Corrigan
Plan Administrator
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EXHIBIT INDEX
Exhibit Number Description Method of Filing
-------------- ----------- ----------------
23 Consents of Independent Registered Public Accounting Firms. Filed herewith.
23.1 Consent of Beard Miller Company LLP.
23.2 Consent of KPMG LLP.
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