Cape Bancorp 10-Q 2008 Q2 Quarterly report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x Quarterly Report Pursuant To Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2008

OR

¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from            to            

Commission File No. 001-33934

Cape Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Maryland	26-1294270
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
225 North Main Street, Cape May Court House, New Jersey	08210
(Address of Principal Executive Offices)	Zip Code

(609) 465-5600

(Registrant’s telephone number)

N/A

(Former name or former address, if changed since last report)

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one)

Large accelerated filer  ¨	Accelerated filer  ¨	Non-accelerated filer  x	Smaller Reporting Company  ¨
		(Do not check if smaller reporting company)

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    YES  ¨    NO  x

As of August 13, 2008 there were 13,313,521 shares of the Registrant’s common stock, par value $0.01 per share, outstanding.

CAPE BANCORP, INC.

FORM 10-Q

Index

		Page
Part I. Financial Information
Item 1.	Financial Statements	3
	Consolidated Balance Sheets as of June 30, 2008 (unaudited) and December 31, 2007	3
	Consolidated Statements of Income for the Three and Six Months Ended June 30, 2008 and June 30, 2007 (unaudited)	4
	Consolidated Statements of Changes in Stockholders’ Equity for the Six Months Ended June 30, 2008 (unaudited)	5
	Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2008 and June 30, 2007 (unaudited)	6
	Notes to Consolidated Financial Statements (unaudited)	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4.	Controls and Procedures	27
Part II. Other Information
Item 1.	Legal Proceedings	28
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 3.	Defaults upon Senior Securities	28
Item 4.	Submission of Matters to a Vote of Security Holders	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
	Signature Page	30

2

CAPE BANCORP, INC. AND CAPE BANK

Item 1. Financial Statements

CAPE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of June 30, 2008 and December 31, 2007

(unaudited)

	June 30, 2008			December 31, 2007
	(in thousands)
ASSETS
Cash & due from financial institutions	$	13,834		$	14,596
Federal funds sold		265			1,035
Cash and cash equivalents		14,099			15,631
Interest-earning time deposits in other financial institutions		8,851			5,721
Investment securities available for sale, at fair value		148,052			62,128
Investment securities held to maturity (fair value of $47,647 at June 30, 2008 and $45,427 at December 31, 2007		48,444			45,140
Loans held for sale		—			350
Loans, net of allowance of $8,708 and $4,121		799,566			459,936
Accrued interest receivable		4,990			3,081
Premise and equipment, net		29,487			16,131
Federal Home Loan Bank (FHLB) stock, at cost		11,179			3,848
Bank owned life insurance (BOLI)		25,929			15,421
Deferred stock issuance and acquisition costs		—			1,916
Goodwill		54,478			—
Intangible assets		930			45
Other assets		12,917			4,463
Total assets	$	1,158,922		$	633,811
LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Deposits	$	745,362		$	465,648
Stock subscriptions		—			21,500
Borrowings		225,152			65,000
Advances from borrowers for taxes and insurance		725			651
Accrued interest payable		902			401
Other liabilities		4,090			7,782
Total liabilities		976,231			560,982
Stockholders’ Equity
Common stock, $.01 par value: authorized 100,000,000 shares and 13,313,521 issued and outstanding in 2008		133			—
Additional paid in capital		126,780			—
Unearned ESOP shares		(10,465	)		—
Accumulated other comprehensive (loss) gain		(5,383	)		293
Retained earnings		71,626			72,536
Total stockholders’ equity		182,691			72,829
Total liabilities & stockholders’ equity	$	1,158,922		$	633,811

See Notes to unaudited consolidated financial statements.

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CAPE BANCORP, INC. AND CAPE BANK

CAPE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Three and Six months ended June 30, 2008 and June 30, 2007

(unaudited)

	For the three months, ended June 30,					For the six months, ended June 30,
	2008			2007		2008			2007
	(Dollars in thousands, except share data)
Interest income:
Interest on loans	$	12,317		$	7,765	$	23,365		$	15,431
Interest and dividends on investments
Taxable		1,407			539		2,642			1,071
Tax-exempt		328			145		596			276
Interest on mortgage-backed securities		996			668		1,899			1,313
Total interest income		15,048			9,117		28,502			18,091
Interest expense:
Interest on deposits		4,565			3,331		9,354			6,306
Interest on borrowings		1,723			989		3,151			2,216
Total interest expense		6,288			4,320		12,505			8,522
Net interest income before provision		8,760			4,797		15,997			9,569
Provision for loan losses		558			78		840			156
Net interest income after provision for loan losses		8,202			4,719		15,157			9,413
Non-interest income:
Service fees		826			621		1,492			1,214
Net gains on sale of loans		6			90		25			212
Net income from BOLI		261			158		490			291
Net rental income		91			85		174			170
Gain on sales of investment securities available for sale, net		2			—		2			—
Other than temporary impairment		(201	)		—		(201	)		—
Loss on disposal of other assets		(132	)		—		(132	)		—
Other		122			51		224			163
Total non-interest income		975			1,005		2,074			2,050
Non-interest expense:
Salaries and employee benefits		3,954			2,391		7,308			4,914
Occupancy & equipment		966			487		1,709			972
Federal insurance premiums		80			13		232			27
Data processing		408			234		726			471
Charitable foundation contribution		—			—		6,256			—
Advertising		216			156		398			321
Telecommunications		283			133		458			261
Professional services		238			47		448			137
Investor relations		44			—		68			—
Other operating		1,281			743		2,142			1,302
Total non-interest expense		7,470			4,204		19,745			8,405
Income (loss) before income taxes		1,707			1,520		(2,514	)		3,058
Income tax expense (benefit)		370			540		(1,604	)		1,005
Net income (loss)	$	1,337		$	980	$	(910	)	$	2,053
Earnings (loss) per share (see Note 4):
Basic	$	0.11			n/a	$	(0.11	)		n/a
Diluted	$	0.11			n/a	$	(0.11	)		n/a
Weighted average number of shares outstanding:
Basic		12,262,048			n/a		12,281,769			n/a
Diluted		12,262,048			n/a		12,281,769			n/a

See Notes to unaudited consolidated financial statements.

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CAPE BANCORP, INC. AND CAPE BANK

CAPE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Six months ended June 30, 2008

(unaudited)

	Common Stock		Paid-In Capital			Unearned ESOP Shares			Retained Earnings			Accumulated Other Comprehensive Income (Loss)			Total Stockholders’ Equity
	(in thousands)
Balance, December 31, 2007	$	—	$	—		$	—		$	72,536		$	293		$	72,829
Net loss		—		—			—			(910	)		—			(910	)
Other comprehensive income (loss), net of reclassification adjustments and taxes		—		—			—			—			(5,676	)		(5,676	)
Total comprehensive income (loss)																(6,586	)
Conversion from mutual to stock company and simultaneous acquisition of Boardwalk Bancorp		133		126,783			(10,658	)		—			—			116,258
ESOP shares earned		—		(3	)		193			—			—			190
Balance, June 30, 2008	$	133	$	126,780		$	(10,465	)	$	71,626		$	(5,383	)	$	182,691

See Notes to unaudited consolidated financial statements.

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CAPE BANCORP, INC. AND CAPE BANK

CAPE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six months ended June 30, 2008 and 2007

(unaudited)

	Six Months Ended June 30,
	2008			2007
	(in thousands)
Cash Flows from Operating Activities
Net income (loss)	$	(910	)	$	2,053
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Provision for loan losses		840			156
Net gain on the sale of loans		(25	)		(212	)
Other than temporary impairment charge		201			—
Net gain on called investments		(2	)		—
Earnings on BOLI		(490	)		(291	)
Depreciation and amortization		699			460
ESOP compensation expense		190			—
Stock issuance for charitable contribution		5,474			—
Deferred income taxes		(1,411	)		(373	)
Net gain on called investments
Changes in assets and liabilities that (used) provided cash:
Loans held for sale		350			(629	)
Accrued interest receivable		531			44
Other assets (Prepaid and Accounts Receivable)		2,094			429
Accrued interest payable		(21	)		12
Other liabilities		(4,017	)		751
Net cash (used) provided by operating activities	$	3,503		$	2,400
Cash Flows from Investing Activities
Proceeds from calls, maturities, and principal repayments of investment securities and mortgage-backed securities	$	41,721		$	25,786
Purchases of investment securities and mortgage-backed securities		(46,749	)		(23,360	)
Purchase of Federal Home Loan Bank stock		(3,502	)		—
Decrease in interest bearing deposits		535			252
Increase in loans, net		(25,975	)		(1,873	)
Purchase of property and equipment, net		(803	)		(2,531	)
Acquisition of Boardwalk Bancorp		(46,839	)		—
Purchase of BOLI policy		—			(325	)
Net cash used in investing activities	$	(81,612	)	$	(2,051	)
Cash Flows from financing activities
Net increase (decrease) in deposits	$	(40,990	)	$	36,503
Increase in advances from borrowers for taxes and insurance		75			40
Borrowings		96,775			25,000
Payments on borrowings		(19,106	)		(59,000	)
Net proceeds from stock issuance in conversion		39,823			—
Net cash provided by financing activities	$	76,577		$	2,543
Net increase (decrease) in cash and cash equivalents		(1,532	)		2,892
Cash and cash equivalents at beginning of period		15,631			17,492
Cash and cash equivalents at end of period	$	14,099		$	20,384
Supplemental disclosure of cash flow information:
Cash paid during period for
Income taxes, net of refunds	$	247		$	1,326
Interest	$	12,004		$	8,510
Non-cash disclosure of financing activities
Stock subscriptions applied to equity	$	21,500		$	—
Issuance of stock to charitable foundation	$	5,474		$	—
Issuance of stock for acquisition of Boardwalk Bancorp	$	49,461		$	—

See Notes to unaudited consolidated financial statements.

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CAPE BANCORP, INC. AND CAPE BANK

Notes to Financial Statements (Unaudited)

NOTE 1 - BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X and, therefore, do not include all disclosures necessary for a complete presentation of the financial statements in conformity with U.S. generally accepted accounting principles. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation of the results of operations for the interim periods. The results of operations for the three and six months ended June 30, 2008 are not necessarily indicative of the results that may be expected for the entire year or any other interim period. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission.

Cape Bancorp, Inc. did not become the holding company for Cape Bank until January 31, 2008. Accordingly the information presented as of and for the year ended December 31, 2007 is for Cape Bank and its subsidiaries.

NOTE 2 - ORGANIZATION

On January 31, 2008, Cape Bancorp completed its initial public stock offering in connection with the mutual to stock conversion of Cape Bank and the simultaneous acquisition by Cape Bancorp of Boardwalk Bancorp, Inc. (“Boardwalk Bancorp”), Linwood, New Jersey and its wholly owned New Jersey-chartered bank subsidiary, Boardwalk Bank (“Boardwalk”).

In the offering, the Company sold 7,820,000 shares of its common stock at $10.00 per share to depositors, Cape Bank’s tax qualified employee benefit plans and the general public in subscription, community and syndicated offerings. The Company also issued 547,400 shares of its common stock and contributed $782,000 in cash to The CapeBank Charitable Foundation. Cape Bancorp loaned $10,658,253 to the Bank’s employee stock ownership plan and the ESOP used these funds to acquire 1,065,082 shares of common stock at an average price of $10.01 per share.

As a result of the transactions, Cape Bancorp has 13,313,521 issued and outstanding shares of common stock.

In the acquisition of Boardwalk Bancorp, Cape Bancorp issued merger consideration of approximately $99.0 million, consisting of 4,946,121 shares of Cape Bancorp common stock and approximately $49.5 million in cash. With the acquisition of Boardwalk Bank, Cape Bank now operates 18 full service branches in Cape May and Atlantic Counties, New Jersey. On March 17, 2008, the Boardwalk’s Cape May branch office was consolidated with Cape Bank’s Cape May branch office, and on June 16, 2008, Boardwalk’s Galloway branch was consolidated with Cape Bank’s Galloway branch office. Both unoccupied properties are currently listed for sale. On June 30, 2008, the former Boardwalk loan production office in Vineland, Cumberland County, New Jersey was closed.

Cape Bank is a New Jersey chartered stock savings bank. The Bank provides a complete line of business and personal banking products through its eighteen full service branch offices located throughout Atlantic and Cape May counties in southern New Jersey.

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CAPE BANCORP, INC. AND CAPE BANK

NOTE 2 - ORGANIZATION(Continued)

The Bank competes with other banking and financial institutions in its primary market areas. Commercial banks, savings banks, savings and loan associations, credit unions and money market funds actively compete for savings and time certificates of deposit and all types of loans. Such institutions, as well as consumer financial and insurance companies, may be considered competitors of the Bank with respect to one or more of the services it renders.

The Bank is subject to regulations of certain state and federal agencies, and accordingly, the Bank is periodically examined by such regulatory authorities. As a consequence of the regulation of commercial banking activities, the Bank’s business is particularly susceptible to future state and federal legislation and regulations.

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Financial Statement Presentation: The accounting and reporting policies of the Bank conform to accounting principles generally accepted in the United States of America (US GAAP) and predominant practices within the banking industry.

The consolidated financial statements include the accounts of Cape Bancorp, Inc. and its wholly-owned subsidiary Cape Bank and Cape Bank’s wholly-owned subsidiaries, Cape New Jersey Investment Company, Cape Delaware Investment Company, Cape May County Savings Service Corporation and CASABA Real Estate Holding Corporation. Cape May County Savings Service Corporation and CASABA Real Estate Holding Corporation are presently inactive. Intercompany transactions and balances are eliminated in consolidation.

In preparing financial statements in conformity with US GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The principal estimate that is particularly susceptible to significant change in the near term relates to the allowance for loan losses. The evaluation of the adequacy of the allowance for loan losses includes an analysis of the individual loans and overall risk characteristics and size of the different loan portfolios, and takes into consideration current economic and market conditions, the capability of specific borrowers to pay specific loan obligations, as well as current loan collateral values. However, actual losses on specific loans, which are also encompassed in the analysis, may vary from estimated losses.

Cash and Cash Equivalents: For purposes of reporting cash flows, cash and cash equivalents include cash on hand, amounts due from banks, overnight deposits and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, and federal funds purchased and repurchase agreements.

Investment Securities: The Bank classifies investment securities as either held to maturity or available for sale. Investment securities held to maturity are carried at cost adjusted for amortization of premium and accretion of discount over the term of the related investments using the interest method. Investment securities classified as available for sale are carried at fair value with unrealized gains and losses excluded from earnings and reported in a separate component of equity, net of related income tax effects. The Bank holds a number of securities in portfolio that may be particularly susceptible to changes in Fair Value in the near term as a result of market volatility. Gains and losses on sales of investment securities are recognized upon realization utilizing the specific identification method.

Premium or discount on investment securities is recognized as an adjustment of yield by use of the interest method over the life of the investment security.

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CAPE BANCORP, INC. AND CAPE BANK

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)

Declines in the fair value of securities below their cost that are other than temporary are reflected as realized losses. In estimating other-than-temporary losses, management considers: the length of time and extent that fair value has been less than cost, the financial condition and near term prospects of the issuer, cash flow and stress testing analysis on securities when applicable, and the Company’s ability and intent to hold the security for a period sufficient to allow for any anticipated recovery in fair value.

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or market, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Loans and Allowance for Loan Losses: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at the amount of unpaid principal, net of unearned interest, deferred loan fees and costs, and reduced by an allowance for loan losses. Interest on loans is accrued and credited to operations based upon the principal amounts outstanding. The allowance for loan losses is established through a provision for loan losses charged to operations. Loans are charged against the allowance for loan losses when management believes that the collectibility of the principal is unlikely.

Income recognition of interest is discontinued when, in the opinion of management, the collectibility of such interest becomes doubtful. A commercial loan is generally classified as nonaccrual when the loan is 90 days or more delinquent. Consumer and residential loans are classified as nonaccrual when the loan is 90 days or more delinquent with a loan to value ratio greater than 70 percent. Loan origination fees and certain direct origination costs are deferred and amortized over the life of the related loans as an adjustment to the yield on loans receivable in a manner which approximates the interest method.

All interest accrued but not received for loans placed on nonaccrual is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

The allowance for loan losses is maintained at an amount management deems adequate to cover probable incurred losses. In determining the level to be maintained, management evaluates many factors including current economic trends, industry experience, historical loss experience, industry loan concentrations, the borrowers’ ability to repay and repayment performance and estimated collateral values. In the opinion of management, the present allowance is adequate to absorb reasonable, foreseeable loan losses. While management uses the best information available to make such evaluations, future adjustments to the allowance may be necessary based on changes in economic conditions or any of the other factors used in management’s determination. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Bank’s allowance for losses on loans. Such agencies may require the Bank to recognize additions to the allowance based on their judgments about information available to them at the time of their examination. Charge-offs to the allowance are made when the loan is transferred to other real estate owned or a determination of loss is made.

A loan is impaired when full payment under the loan terms is not expected. Commercial and commercial real estate loans are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows

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CAPE BANCORP, INC. AND CAPE BANK

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

Bank Owned Life Insurance (BOLI): The Bank has an investment of bank owned life insurance (BOLI). BOLI involves the purchasing of life insurance by the Bank on a chosen group of employees. The Bank is the owner and beneficiary of the policies and the amount recorded is the cash surrender value, which is the amount realizable.

Defined Benefit Plan: The Bank participates in a multi-employer defined benefit plan. The plan was amended to freeze participation to new employees commencing January 1, 2008. Employees who became eligible to participate prior to January 1, 2008, will continue to accrue a benefit under the plan. The Bank accrues pension costs as incurred.

401(k) Plan: The Bank maintains a tax-qualified defined contribution plan for all salaried employees of Cape Bank who have satisfied the 401(k) Plan’s eligibility requirements. The Plan was amended to modify the matching contribution formula effective January 1, 2008, so that matching contributions will be equal to 100% of the participants’ contribution on up to 3% of the participants’ salary contributed to the plan and 50% of the participants’ additional contributions on the next 2% of salary contributed by the participants, with a maximum potential matching contribution of 4%.

Income Taxes: Under the liability method, deferred tax assets and liabilities are determined based on the difference between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates which will be in effect when these temporary differences are estimated to reverse. Deferred tax expense is the result of changes in deferred tax assets and liabilities. The principal types of accounts resulting in differences between assets and liabilities for financial statement and tax return purposes are allowance for loan losses, deferred compensation, deferred loan fees, charitable contribution carry forwards and accumulated depreciation.

Employee Stock Ownership Plan: The cost of shares issued to the ESOP, but not yet allocated to participants is shown as a reduction of equity. Compensation expense is based on the market price of shares as they are committed to be released to participant accounts.

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CAPE BANCORP, INC. AND CAPE BANK

Comprehensive Income (Loss): Comprehensive income includes net income as well as certain other items which result in a change to equity during the period. Other comprehensive income includes unrealized gains and losses on securities available for sale which are also recognized as separate components of equity as follows:

NOTE 3 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)
For the three months ended June 30, 2008
Unrealized gains (losses) on securities
Unrealized holding losses arising during period	$	(7,925	)	$	2,731		$	(5,194	)
Reclassification adjustment for losses realized in net income		199			(69	)		130
Other comprehensive income (loss), net	$	(7,726	)	$	2,662		$	(5,064	)
For the three months ended June 30, 2007
Unrealized gains (losses) on securities
Unrealized holding losses arising during period	$	(125	)	$	41		$	(84	)
Reclassification adjustment for losses realized in net income		—			—			—
Other comprehensive income (loss), net	$	(125	)	$	41		$	(84	)

	Before Tax Amount			Tax Benefit (Expense)			Net of Tax Amount
	(in thousands)
For the six months ended June 30, 2008
Unrealized gains (losses) on securities
Unrealized holding losses arising during period	$	(8,879	)	$	3,073		$	(5,806	)
Reclassification adjustment for losses realized in net income		199			(69	)		130
Other comprehensive income (loss), net	$	(8,680	)	$	3,004		$	(5,676	)
For the six months ended June 30, 2007
Unrealized gains (losses) on securities
Unrealized holding gains arising during period	$	97		$	(33	)	$	64
Reclassification adjustment for losses realized in net income		—			—			—
Other comprehensive income (loss), net	$	97		$	(33	)	$	64

Recent Accounting Prounouncements: In September 2006, the Financial Accounting Standards Board (FASB) issued Statement No. 157,Fair Value Measurements. This Statement defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This Statement 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. The standard is effective for fiscal years beginning after November 15, 2007. In February 2008, the FASB issued Staff Position (“FSP”) 157-2, “Effective Date of FASB Statement No. 157.” This FSP delays the effective date of FAS 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 adoption was not material.

In February 2007, the FASB issued Statement No. 159,The Fair Value Option for Financial Assets and Financial Liabilities. The standard provides companies with an option to report selected financial assets and liabilities at fair value and establishes presentation and disclosure requirements designed to facilitate comparisons between companies that choose different measurement attributes for similar types of assets and liabilities. The new standard is effective for the Bank on January 1, 2008. The Bank did not elect the fair value option for any financial assets or financial liabilities as of January 1, 2008.

In September 2006, the FASB Emerging Issues Task Force finalized Issue No. 06-4,Accounting for Deferred Compensation and Postretirement Benefit Aspect of Endorsement Split-Dollar Life Insurance Arrangements. This issue requires that a liability be recorded during the service period when a split-dollar life insurance agreement continues after participants’ employment or retirement. The required accrued liability will be based on either the post-employment benefit cost for the continuing life insurance or based on the future death benefit depending on the contractual terms of the underlying agreement. This issue is effective for fiscal years beginning after December 15, 2007. The impact of adoption was not material.

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CAPE BANCORP, INC. AND CAPE BANK

NOTE 4 – EARNINGS PER SHARE

Earnings Per Common Share:Basic earnings per common share is net income divided by the weighted average number of common shares outstanding during the period. ESOP shares are not considered outstanding for this calculation unless earned. Diluted earnings per share includes the dilutive effect of additional potential common shares issuable under stock option and restricted stock awards, if any. Earnings per share is calculated on earnings since the date of conversion on January 31, 2008.

The following is a reconciliation of the calculation of basic earnings per share for the periods January 31, 2008 through June 30, 2008, and April 1, 2008 through June 30, 2008. There are no potentially dilutive common shares at June 30, 2008.

	For the three months ended June 30, 2008		For the six months ended June 30, 2008
	(Dollars in thousands, except share data)
Net income (loss)	$	1,337	$	(910	)
Less net income from January 1 to January 31		—		(402	)
Net income (loss) post conversion for earnings per share	$	1,337	$	(1,312	)
Weighted average shares outstanding		12,262,048		12,281,769
Basic earnings (loss) per share	$	0.11	$	(0.11	)

NOTE 5 – FAIR VALUE

Statement 157 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Statement 157 also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value:

Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of items:

Securities: The fair values of securities available for sale are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities, but rather by relying on the securities relationship to other benchmark quoted securities (Level 2 inputs).

Loans: Impaired loans are carried at fair value utilizing Level 3 inputs, consisting of appraisals of underlying collateral and discounted cash flow analysis. A loan is impaired when full payment under the loan terms is not expected. Commercial business and commercial real estate loans are individually evaluated for impairment. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported net, at present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Large groups of smaller balance homogeneous loans, such as consumer and residential real estate loans, are collectively evaluated for impairment, and accordingly, they are not separately identified for impairment disclosures.

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CAPE BANCORP, INC. AND CAPE BANK

NOTE 5 – FAIR VALUE(Continued)

Assets and liabilities measured at fair value on a recurring basis, are summarized below:

			Fair Value Measurements at June 30, 2008 Using
	June 30, 2008		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Assets:	(in thousands)
Available for sale securities	$	148,052	$	—	$	148,052	$	—
Impaired loans	$	25,738	$	—	$	—	$	25,738

NOTE 6 – LOANS RECEIVABLE

Loans receivable consists of the following;

	June 30, 2008			June 30, 2007
	(in thousands)
Commercial mortgage	$	429,223		$	190,624
Residential mortgage		214,514			175,796
Construction		55,315			39,640
Home equity loans and lines of credit		46,428			36,702
Commercial business loans		61,786			9,183
Other consumer loans		1,506			990
Total loans		808,772			452,935
Less
Allowance for loan losses		(8,708	)		(3,933	)
Deferred loan fees		(498	)		(694	)
Loans receivable, net	$	799,566		$	448,308
Activity in the allowance for loan losses is as follows:
	June 30, 2008			June 30, 2007
	(in thousands)
Balance at beginning of year	$	4,121		$	4,009
Allowance from acquired entity		3,791			—
Provisions charged to operations		840			156
Reserve on loan commitments re-classified as other liabilities		—			(56	)
Charge-offs		(57	)		(196	)
Recoveries		13			20
Balance at end of period	$	8,708		$	3,933

Individually impaired loans were as follows:

	June 30, 2008
	(in thousands)
Period-end loans with no allocated allowance for loan losses	$	2,778
Period-end loans with allocated allowance for loan losses		22,960
Total	$	25,738
Amount of the allowance for loan losses allocated	$	2,052

NOTE 7 – ACQUISITION OF BOARDWALK BANCORP

On January 31, 2008, Cape Bancorp, Inc. acquired 100 percent of the outstanding shares of Boardwalk Bancorp, Inc, as previously discussed in Note 1. As a result of the acquisition, Cape Bancorp expects to further solidify its market share in the South Jersey market, expand it customer base to enhance deposit fee income and provide an opportunity to market additional products and services to new customers, including expansion of services to commercial loan customers.

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CAPE BANCORP, INC. AND CAPE BANK

Under the terms of the merger agreement, the shareholders of Boardwalk Bancorp received total merger consideration of approximately $99.0 million, consisting of 4,946,121 shares of Cape Bancorp common stock and approximately $49.5 million in cash. Based on the total elections made by Boardwalk Bancorp shareholders, Boardwalk Bancorp shareholders who properly elected to receive Cape Bancorp, Inc. common stock received 2.3 Cape Bancorp shares for each share of Boardwalk Bancorp common stock, and Boardwalk Bancorp shareholders who properly elected to receive cash received $23 in cash for each share of Boardwalk Bancorp common stock. The purchase price resulted in approximately $54.2 million in goodwill, and $1.0 million in core deposit and customer relationship intangible, none of which is deductible for tax purposes. The intangible asset(s) will be amortized over 7-10 years, using an accelerated method. Goodwill will not be amortized but instead evaluated periodically for impairment. Purchase accounting adjustments are subject to refinement as management finalizes their calculations.

Boardwalk Bancorp shareholders holding approximately 350,000 shares that did not make proper elections or did not participate in the election received a combination of 0.347775 shares of the Company’s common stock and $19.5245 in cash for each share of Boardwalk Bancorp common stock. The Company paid cash in lieu of fractional shares at a rate of $10 per share.

Net assets acquired are shown in the table below (in thousands).

NOTE 7 – ACQUISITION OF BOARDWALK BANCORP(Continued)

Securities available for sale	$	92,949
Loans, net		314,471
Goodwill		54,478
Core deposit and other intangibles		1,050
Other assets		40,072
Total assets acquired		503,020
Deposits		(320,520	)
Borrowings		(82,729	)
Other liabilities		(848	)
Total liabilities assumed		(404,097	)
Net assets acquired	$	98,923

Boardwalk Bancorp Inc’s results of operations have been reflected in Cape Bancorp’s consolidated statements of income beginning as of the acquisition date. Pro forma condensed consolidated income statements for the quarter ended June 30, 2008 and 2007 are shown as if the merger occurred at the beginning of each period presented as follows (in thousands):

	For the three months, ended June 30,				For the six months, ended June 30,
	2008		2007		2008			2007
Interest and dividend income	$	15,048	$	16,343	$	28,502		$	32,373
Interest expense		6,288		8,249		12,505			16,418
Net interest income		8,760		8,094		15,997			15,955
Provision for loan losses		558		293		840			578
Net interest income after provision for loan losses		8,202		7,801		15,157			15,377
Non-interest income		975		1,609		2,074			1,144
Non-interest expense		7,470		6,871		19,745			13,578
Income (loss) before income taxes		1,707		2,539		(2,514	)		2,943
Income tax expense (benefit)		370		802		(1,604	)		798
Net income (loss)	$	1,337	$	1,737	$	(910	)	$	2,145
Basic EPS	$	0.11		N/A	$	(0.11	)		N/A

Non-interest expense for the six months ended June 30, 2008 includes a $6.3 million expense ($3.8 million net of tax) for a contribution to the charitable foundation in relation to the stock conversion and a $201 thousand charge ($133 thousand net of tax) for other than temporary impairment. Non-interest expense for the six months ended June 30, 2007 includes a $1.5 million charge for other than temporary impairment.

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CAPE BANCORP, INC. AND CAPE BANK

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

When used in this Form 10-Q, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in our market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans in our market area, and competition that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution you not to place undue reliance on any such forward-looking statements, which only speak as of the date made. The Company wishes to advise you that the factors listed above could affect the Company’s financial performance and could cause the Company’s actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Overview

Cape Bank was organized in 1923. Over the years, we have expanded primarily through internal growth, reaching $633.8 million in assets at December 31, 2007. On January 31, 2008, we completed our mutual-to-stock conversion and initial public stock offering, and our acquisition of Boardwalk Bancorp and Boardwalk Bank. At December 31, 2007, Boardwalk Bancorp had total assets of $450.2 million. As of June 30, 2008 Cape Bank had $1.16 billion in total assets.

Comparison of Financial Condition at June 30, 2008 and December 31, 2007

At June 30, 2008, the Company’s total assets increased to $1.16 billion from $633.8 million at December 31, 2007, an increase of $525.1 million or 83.0%. Assets increased by $450.2 million as a result of our acquisition of Boardwalk Bancorp on January 31, 2008. As a result of the acquisition, goodwill and intangible assets increased by $55.4 million. Subsequent to the closing of the acquisition, asset growth for the remainder of the six months ended June 30, 2008, totaled $20.3 million or 1.78%.

Cash and cash equivalents decreased $1.5 million, or (9.6)%, to $14.1 million at June 30, 2008 from $15.6 million at December 31, 2007. This decrease was primarily attributable to the decrease in Federal Funds Sold.

At June 30, 2008, the Company’s total net loans increased to $799.6 million from $459.9 million at December 31, 2007, an increase of $339.7 million or 73.9%. Net loans increased by $314.5 million, net of an allowance for loan losses of $3.8 million, as a result of our acquisition of Boardwalk Bancorp on January 31, 2008. Subsequent to the closing of the acquisition, loan growth for the remainder of the six months ended June 30, 2008, totaled $24.1 million or 3.1%. Commercial loans accounted for $15.7 million of this growth.

At June 30, 2008, Cape Bancorp had $31.1 million in total delinquent loans (includes non-performing) or 3.8% of total gross loans, an increase from $15.7 million or 3.4% at December 31, 2007. Total delinquent loans increased by $16.0 million as a result of Cape Bancorp’s acquisition of Boardwalk Bancorp on January 31, 2008, and

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CAPE BANCORP, INC. AND CAPE BANK

decreased $0.6 million subsequent to the closing of the acquisition. Total delinquent loans by portfolio were $28.0 million of commercial mortgages, $2.2 million of residential mortgages and $884 thousand of consumer loans. Delinquent loan balance by number of days delinquent was as follows: 30 to 59 days – $4.5 million, 60 to 89 days – $903 thousand, and 90 days and greater – $25.7 million. During the second quarter, 30 to 90 day delinquent loans declined and shifted to 90 days and greater classification that includes non-performing.

At June 30, 2008, Cape Bancorp had $25.7 million in non-performing loans or 3.2% of total gross loans, an increase from $4.0 million or 0.9% at December 31, 2007. Total non-performing loans increased by $6.2 million as a result of Cape Bancorp’s acquisition of Boardwalk Bancorp on January 31, 2008 and increased an additional $15.5 million subsequent to the closing of the acquisition. Total non-performing loans by portfolio were $24.6 million of commercial mortgages, $1.2 million of residential mortgages, and $1 thousand of consumer loans. All of the non-performing loans are collateralized, and management is of the view that the collateral adequately secures such loans. Where necessary, Cape Bank will apply its loan workout experience to protect its collateral position and actively negotiating with mortgagors to bring resolution to these non-performing loans.

Commercial non-performing loans had collateral type concentrations of 25% in residential, duplex and multi-family related loans, 20% in land and building lot related loans, 20% in retail store and restaurant related loans, 17% in marina and auto dealership related loans, 11% in B&B and hotel related loans and 7% commercial building and equipment related loans. The three largest relationships in this category of non-performing loans are $6.2 million, $3.0 million, and $2.7 million, respectively.

At June 30, 2008, the Company’s total investment securities increased to $196.5 million ($152.2 million classified as available-for-sale or 77%) from $107.3 million at December 31, 2007, an increase of $85.9 million or 138.3%. Securities increased by $98.1 million as a result of our acquisition of Boardwalk Bancorp on January 31, 2008. For the period January 31, 2008 through June 30, 2008, investment securities decreased $(8.1) million or (3.98)%. During this period, the collateralized debt obligation portion of the investment portfolio declined in value by approximately $(8.0) million. At June 30, 2008, the cost basis of such securities was $26.3 million with a fair market value of $18.3 million. As a result of the decline in market value of the CDO portfolio, management evaluated discounted cash flows for each security and performed stress testing on selected securities. Credit ratings were reviewed and no securities have been downgraded since acquisition. Were applicable, several external sources were utilized to ascertain market pricing. Based on our analysis we determined that no impairment was required at this time. In the event any of these securities are downgraded below investment grade (BBB), projected cash flows are not adequate to meet contractual obligations, or the market value of such securities declines further and remains depressed for a substantial period of time, the Company will evaluate them for other-than-temporary impairment at that time. For the quarter ending June 30, 2008, the Company recognized an other- than-temporary impairment charge of $201 thousand on the equity securities of two financial institutions (Freddie Mac and Fannie Mae), leaving a current market value of $1.1 million.

At June 30, 2008, the Company’s total deposits increased to $745.4 million from $465.6 million at December 31, 2007, an increase of $279.8 million or 60.1%. Deposits increased by $320.5 million as a result of our acquisition of Boardwalk Bancorp on January 31, 2008, and includes purchase accounting adjustments of $1.1 million. Subsequent to the closing of the acquisition, deposit decline for the six months ended June 30, 2008, totaled $30.6 million or 3.9%. This decline was attributable to a high volume of certificate of deposit maturities that did not renew with Cape Bank, as management determined to increase borrowings as a funding source in lieu of renewing high cost certificates of deposit.

Certificates of deposit increased $182.8 million, or 104.0%, to $358.5 million at June 30, 2008 from $175.7 million at December 31, 2007, and NOW and money market accounts increased $57.7 million, or 34.0%, to $227.2 million at June 30, 2008 from $169.5 million at December 31, 2007.

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CAPE BANCORP, INC. AND CAPE BANK

Savings accounts increased $3.5 million, or 4.4%, to $83.0 million at June 30, 2008 from $79.5 million at December 31, 2007. Non-interest bearing deposits increased $35.8 million, or 87.5%, to $76.7 million at June 30, 2008 from $40.9 million at December 31, 2007. Total non-certificate deposit balances increased $16.1 million, or 4.3%, to $392.3 million at June 30, 2008 from $376.2 million at January 31, 2008.

Borrowings increased $160.2 million, or 246.5%, to $225.2 million at June 30, 2008 from $65.0 million at December 31, 2007. Borrowings increased by $82.3 million as a result of our acquisition of Boardwalk Bancorp on January 31, 2008. The increase in borrowings was at a lower cost compared to funding through certificate of deposits. At June 30, 2008, Cape Bancorp’s borrowings to assets ratio increased to 19.4% from 10.3% at December 31, 2007. Borrowings to total liabilities increased to 23.1% at June 30, 2008 from 11.6% at December 31, 2007.

At June 30, 2008, the Company’s total equity increased to $182.7 million from $72.8 million at December 31, 2007, an increase of $109.9 million or 151.0%. Equity increased by $61.5 million from the net proceeds of 7,820,000 shares of stock sold in the initial public offering, net of a loan to our ESOP of $10.7 million, $49.5 million as a result of the issuance of 4,946,121 shares for the purchase of Boardwalk Bancorp stock, and $5.5 million as a result of the issuance of stock to the charitable foundation. These increases were offset by a net income loss of $910 thousand and a decline in accumulated other comprehensive income of $5.7 million. Stockholders’ equity totaled $182.7 million or 15.78% of period end assets, and tangible equity totaled $127.2 million or 11.5% of period end tangible assets.

The following table sets forth average balance sheets, average yields and costs, and certain other information for the periods indicated. All average balances are daily average balances. Non-accrual loans were included in the computation of average balances, but have been reflected in the table as loans carrying a zero yield. The yields set forth below include the effect of deferred fees, discounts and premiums that are amortized or accreted to interest income or expense. Yields and rates have been annualized.

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CAPE BANCORP, INC. AND CAPE BANK

	For the Three Months Ended June 30,
	2008							2007
	Average Balance			Interest Income/ Expense		Average Yield		Average Balance			Interest Income/ Expense		Average Yield
	(dollars in thousands)
Interest Earning Assets
Interest bearing deposits	$	12,235		$	89	2.93	%	$	3,545		$	42	4.75	%
Investments		132,739			1,646	4.99	%		55,868			642	4.61	%
Mortgage-backed securities		77,187			996	5.19	%		53,132			668	5.04	%
Loans		801,739			12,317	6.18	%		453,731			7,765	6.86	%
Total interest earning assets		1,023,900			15,048	5.91	%		566,276			9,117	6.46	%
Non-interest earning assets		143,923							49,557
Allowance for loan losses		(8,298	)						(3,968	)
Total assets	$	1,159,525						$	611,865
Interest Bearing Liabilities
Interest bearing demand accounts	$	106,815			217	0.82	%	$	70,214			212	1.21	%
Savings accounts		83,038			258	1.25	%		78,304			301	1.54	%
Money market accounts		120,621			776	2.59	%		83,798			811	3.88	%
Certificates of deposit		384,067			3,315	3.47	%		176,105			2,007	4.57	%
FHLB borrowings		203,513			1,722	3.40	%		81,517			989	4.87	%
Total interest bearing liabilities		898,054			6,288	2.82	%		489,938			4,320	3.54	%
Non-interest bearing deposits		68,184							43,631
Other liabilities		6,007							7,705
Total liabilities		972,245							541,274
Stockholders’ equity		187,280							70,591
Total liabilities & stockholders’ equity	$	1,159,525			—			$	611,865			—
Net interest income				$	8,760						$	4,797
Net interest spread						3.09	%						2.92	%
Net interest margin						3.44	%						3.40	%
Net interest income and margin (tax equivalent basis)(1)				$	8,905	3.50	%				$	4,857	3.44	%
Ratio of average interest earning assets to average interest bearing liabilities		114.01	%						115.58	%

(1) In order to present pre-tax income and resultant yields on tax exempt investments on a basis comparable to those on taxable investments, a tax equivalent yield adjustment is made to interest income. The tax equivalent adjustment has been computed using a Federal income tax rate of 34%, and has the effect of increasing interest income by $145,000 and $60,000 for the three month period ended June 30, 2008 and 2007 respectively. The average yield on investments increased to 5.41% from 4.99% for the three month period ended June 30, 2008 and increased to 5.04% from 4.61% for the three month period ended June 30, 2007.

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CAPE BANCORP, INC. AND CAPE BANK

	For the Six Months Ended June 30,
	2008							2007
	Average Balance			Interest Income/ Expense		Average Yield		Average Balance			Interest Income/ Expense		Average Yield
	(dollars in thousands)
Interest Earning Assets
Interest bearing deposits	$	9,682		$	163	3.39	%	$	3,791		$	89	4.73	%
Investments		121,122			3,075	5.11	%		56,129			1,258	4.52	%
Mortgage-backed securities		73,711			1,899	5.18	%		52,872			1,313	5.01	%
Loans		740,071			23,365	6.35	%		453,354			15,431	6.86	%
Total interest earning assets		944,586			28,502	6.07	%		566,146			18,091	6.44	%
Non-interest earning assets		130,641							47,962
Allowance for loan losses		(7,507	)						(3,987	)
Total assets	$	1,067,720						$	610,121
Interest Bearing Liabilities
Interest bearing demand accounts	$	107,337			526	0.99	%	$	64,874			295	0.92	%
Savings accounts		82,161			571	1.40	%		77,965			575	1.49	%
Money market accounts		115,359			1,680	2.93	%		82,592			1,574	3.84	%
Certificates of deposit		354,931			6,576	3.73	%		172,821			3,862	4.51	%
FHLB borrowings		172,863			3,152	3.67	%		91,249			2,216	4.90	%
Total interest bearing liabilities		832,651			12,505	3.02	%		489,501			8,522	3.51	%
Non-interest bearing deposits		61,839							43,243
Other liabilities		5,344							7,342
Total liabilities		899,834							540,086
Stockholders’ equity		167,886							70,035
Total liabilities & stockholders’ equity	$	1,067,720			—			$	610,121			—
Net interest income				$	15,997						$	9,569
Net interest spread						3.05	%						2.93	%
Net interest margin						3.41	%						3.41	%
Net interest income and margin (tax equivalent basis)(1)				$	16,256	3.46	%				$	9,684	3.43	%
Ratio of average interest earning assets to average interest bearing liabilities		113.44	%						115.66	%

(1) In order to present pre-tax income and resultant yields on tax-exempt investments on a basis comparable to those on taxable investments, a tax equivalent yield adjustment is made to interest income. The tax equivalent adjustment has been computed using a Federal income tax rate of 34%, and has the effect of increasing interest income by $259,000 and $115,000 for the six month period ended June 30, 2008 and 2007 respectively. The average yield on investments increased to 5.52% from 5.11% for the six month period ended June 30, 2008 and increased to 4.90% from 4.52% for the six month period ended June 30, 2007.

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CAPE BANCORP, INC. AND CAPE BANK

Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately, based on the changes due to rate and the changes due to volume.

	For the Three Months Ended June 30, 2008 Compared to June 30, 2007
	Increase (Decrease) due to changes in:
	Average Volume		Average Rate			Net Change
	(in thousands)
Interest Earning Assets
Interest bearing deposits	$	63	$	(16	)	$	47
Investments		953		51			1,004
Mortgage-backed securities		310		18			328
Loans		5,346		(794	)		4,552
Total interest income		6,672		(741	)		5,931
Interest Bearing Liabilities
Interest bearing demand accounts		74		(69	)		5
Savings accounts		15		(58	)		(43	)
Money market accounts		237		(272	)		(35	)
Certificates of deposit		1,795		(487	)		1,308
FHLB borrowings		1,032		(299	)		733
Total interest expense		3,153		(1,185	)		1,968
Total net interest income	$	3,519	$	444		$	3,963

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CAPE BANCORP, INC. AND CAPE BANK

	For the Six Months Ended June 30, 2008 Compared to June 30, 2007
	Increase (Decrease) due to changes in:
	Average Volume		Average Rate			Net Change
	(in thousands)
Interest Earning Assets
Interest bearing deposits	$	100	$	(26	)	$	74
Investments		1,656		161			1,817
Mortgage-backed securities		544		42			586
Loans		9,149		(1,215	)		7,934
Total interest income		11,449		(1,038	)		10,411
Interest Bearing Liabilities
Interest bearing demand accounts		210		21			231
Savings accounts		11		(15	)		(4	)
Money market accounts		517		(411	)		106
Certificates of deposit		3,401		(687	)		2,714
FHLB borrowings		1,508		(572	)		936
Total interest expense		5,647		(1,664	)		3,983
Total net interest income	$	5,802	$	626		$	6,428

Comparison of Operating Results for the Three and Six Months Ended June 30, 2008 and 2007

General.Net income increased $357 thousand or 36.4%, to $1.3 million for the three months ended June 30, 2008 from $980 thousand for the three months ended June 30, 2007. The six months ended June 30, 2008 reflected a net loss of $910 thousand, a decrease of $3.0 million from net income of $2.1 million reported for the six months ended June 30, 2007. The decrease was primarily the result of the Bank’s donation to its charitable foundation of $3.8 million, net of taxes, and approximately $785 thousand of expenses, net of taxes, associated with the Bank’s name change and costs related to the acquisition of Boardwalk Bank. These expenses were partially offset by increased net income resulting from the acquisition of Boardwalk Bank.

Interest Income.Interest income increased $5.9 million, or 65.1%, to $15.0 million for the three months ended June 30, 2008 from $9.1 million for the three months ended June 30, 2007. For the six months ended June 30, 2008, interest income totaled $28.5 million, an increase of $10.4 million, or 57.5%, from the $18.1 million reported for the six months ended June 30, 2007. The increase for the quarter resulted primarily from a $4.6 million, or 58.6%, increase in interest income on loans. The increase for the six month period resulted primarily from a $7.9 million, or 51.4%, increase in interest income on loans. Average loans for the six months ended June 30, 2008 increased $286.7 million, or 63.2%, to $740.1 million, compared to $453.4 million for the six months ended June 30, 2007. The average yield on the loan portfolio decreased 51 basis points to 6.35% for the six months ended June 30, 2008 from 6.86% for the six months ended June 30, 2007, resulting from the decline in short term interest rates, indexed loans repricing at lower rates, and strong competition in a declining market for new loan originations. The increase in average balance of loans was the result of the acquisition of Boardwalk Bank during the period.

The average balance of investments and mortgage-backed securities increased $76.9 million, or 137.6% and $24.1 million, or 45.3% respectively, to $132.7 million and $77.2 million for the three

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CAPE BANCORP, INC. AND CAPE BANK

months ended June 30, 2008, compared to $55.8 million and $53.1 million respectively for the three months ended June 30, 2007. The average balance of investments and mortgage-backed securities increased $65.0 million, or 115.8% and $20.8 million, or 39.4% respectively, to $121.1 million and $73.7 million for the six months ended June 30, 2008, compared to $56.1 million and $52.9 million respectively for the six months ended June 30, 2007. The average yield on investments increased 59 basis points to 5.11% from 4.52% for the six month period ended June 30, 2008. Mortgage-backed securities increased 17 points from 5.01% to 5.18% for the six month period ended June 30, 2008.The increase in the average balance of investments and mortgage-backed securities was the result of the acquisition of Boardwalk Bank during the period.

Interest Expense.Interest expense increased $2.0 million, or 45.6%, to $6.3 million for the three months ended June 30, 2008 from $4.3 million for the three months ended June 30, 2007. Interest expense increased $4.0 million, or 46.7%, to $12.5 million for the six months ended June 30, 2008 from $8.5 million for the six months ended June 30, 2007. The increase in interest expense primarily resulted from the acquisition of Boardwalk Bank, and higher rates paid for certificate of deposits as a result of strong competition among financial institutions.

Interest expense on NOW (interest bearing demand accounts) and money market accounts decreased $30 thousand, or 2.9%, to $993 thousand for the three months ended June 30, 2008 from $1.023 million for the three months ended June 30, 2007, and interest expense on certificates of deposit increased $1.3 million, or 65.2%, to $3.3 million for the three months ended June 30, 2008 from $2.0 million for the three months ended June 30, 2007. For the six months ended June 30, 2008, interest expense on NOW and money market accounts increased $337 thousand, or 18.0%, to $2.2 million from $1.9 million for the six month period ended June 30, 2007. Interest expense on certificates of deposit increased $2.7 million, or 70.3%, to $6.6 million for the six months ended June 30, 2008 from $3.9 million for the six months ended June 30, 2007. The average rate paid on certificates of deposit decreased 78 basis points to 3.73 % for the six months ended June 30, 2008 from 4.51% for the six months ended June 30, 2007, while the average balance of certificates of deposit increased $182.1 million, or 105.4%, to $354.9 million for the six months ended June 30, 2008 from $172.8 million for the six months ended June 30, 2007. Similarly, the average rate paid on NOW and money market accounts decreased 56 basis points to 1.99% for the six months ended June 30, 2008 from 2.56% for the six months ended June 30, 2007. The average balance of NOW and money market accounts increased $75.2 million, or 18.0% to $222.7 million for the six months ended June 30, 2008 from $147.5 million for the six months ended June 30, 2007. We decreased rates on maturing certificates of deposit, and money market accounts in response to the decline in short term interest rates. The NOW and money market accounts average balance for the six months ended June 30, 2008 includes indexed priced municipal accounts, which did not exist in the prior year period, with an average balance of $23.5 million and an average rate of 2.37%. The overall increase in average total deposits was the result of the acquisition of Boardwalk Bank.

Interest expense on borrowings (Federal Home Loan Bank of New York advances) increased $734 thousand, or 74.2%, to $1.7 million for the three months ended June 30, 2008 from $1.0 million for the three months ended June 30, 2007.Interest expense on borrowings increased $936 thousand, or 42.2%, to $3.2 million for the six months ended June 30, 2008 from $2.2 million for the six months ended June 30, 2007.The average balance of borrowings increased $81.6 million, or 89.4%, to $172.9 million for the six months ended June 30, 2008 from $91.3 million for the six months ended June 30, 2007. These increases resulted primarily from the addition of $82.3 million in borrowings from the acquisition of Boardwalk Bank and replacement funding for certificate of deposit runoff.The average rate we paid on borrowings decreased 123 basis points to 3.67% for the six months ended June 30, 2008 from 4.90% for the six months ended June 30, 2007 resulting from the decline in short-term interest rates, and a higher proportional balance of overnight versus fixed rate advances.

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CAPE BANCORP, INC. AND CAPE BANK

Net Interest Income.Net interest income increased $4.0 million, or 82.6%, to $8.8 million for the three months ended June 30, 2008 from $4.8 million for the three months ended June 30, 2007. For the six months ended June 30, 2008, net interest income increased $6.4 million, or 67.2%, to $16.0 million from $9.6 million for the six months ended June 30, 2007.

We experienced an increase in our net interest rate spread of 17 basis points, to 3.09% for the three months ended June 30, 2008 from 2.92% for the three months ended June 30, 2007, and an increase in our net interest margin of 4 basis points, to 3.44% for the three months ended June 30, 2008 from 3.40% for the three months ended June 30, 2007. The increase in our net interest spread was a result of having more rate-sensitive liabilities than assets tied to short term interest rates, which declined during the period. The smaller increase in our net interest margin was due to the decline in the ratio of average interest earning assets to average interest bearing liabilities to 114.01% during the period ended June 30, 2008 from 115.58% for the period ended June 30, 2007.

We experienced an increase in our net interest rate spread of 12 basis points, to 3.05% for the six months ended June 30, 2008 from 2.93% for the six months ended June 30, 2007, and maintained our net interest margin of 3.41% for the six months ended June 30, 2008 and June 30, 2007. The increase in our net interest spread was a result of having more rate-sensitive liabilities than assets tied to short term interest rates, which declined during the period. The stable net interest margin was the result of the increase in net interest spread being offset by a decline in the ratio of average interest earning assets to average interest bearing liabilities to 113.44% during the period ended June 30, 2008 from 115.66% for the period ended June 30, 2007.

Provision for Loan Losses.We establish provisions for loan losses, which are charged to operations, in order to maintain the allowance for loan losses at a level we consider necessary to absorb credit losses incurred in the loan portfolio that are both probable and reasonably estimable at the balance sheet date. In determining the level of the allowance for loan losses, we consider, among other things, past and current loss experience, evaluations of real estate collateral, current economic conditions, volume and type of lending, adverse situations that may affect a borrower’s ability to repay a loan and the levels of delinquent loans. The amount of the allowance is based on estimates, and the ultimate losses may vary from such estimates as more information becomes available or conditions change. We assess the allowance for loan losses and make provisions for loan losses on a monthly basis.

At June 30, 2008, Cape Bancorp’s loan loss reserves increased to $8.7 million from $8.2 million at March 31, 2008, an increase of $533 thousand or 6.5%. The loan loss ratio increased to 1.08% of gross loans from 1.02% of gross loans at March 31, 2008. The loan loss reserve to non-performing coverage ratio decreased to 33.9% at June 30, 2008 from 56.2% at March 31, 2008. The increase in the provision is the result of certain loans moving from risk weighting classification of special mention to substandard. The factors affecting the year-to-date changes, also affect quarter-to-date. For the quarter ended June 30, 2008, charge-offs were $31 thousand compared to $26 thousand for the quarter ended March 31, 2008, and were related to overdraft checking accounts reported as consumer loans.

Based on our evaluation of the above factors, we recorded a provision for loan losses of $558 thousand and $840 thousand for the three and six months ended June 30, 2008, respectively and $78 thousand and $156 thousand for the three and six months ended June 30, 2007, respectively

Non-Interest Income.Non-interest income decreased $30 thousand or 3.0%, to $975 thousand for the three months ended June 30, 2008 from $1.0 million for the three months ended June 30, 2007. For the six months ended June 30, 2008, non-interest income increased $24 thousand or 1.2%, to $2.1 million from $2.1 million for the six months ended June 30, 2007. The increase resulted from higher service fee income ($205 thousand) and an increase in net income from BOLI ($103 thousand) as a result of higher balances of BOLI associated with the acquisition of Boardwalk Bank. These increases were offset by a

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CAPE BANCORP, INC. AND CAPE BANK

reduction in net gains on the sale of loans of $84 thousand and $187 thousand for the three and six month periods, respectively. For the quarter ending June 30, 2008, the Company recognized an other-than-temporary impairment charge to non-interest income totaling $201 thousand on equity securities of two financial institutions (Freddie Mac and Fannie Mae). In addition, for the quarter ending June 30, 2008, a $132 thousand charge to non-interest income was recognized resulting from the retirement of old equipment and replacement of signage associated with the acquisition of Boardwalk Bank. The six month period ended June 30, 2007 included a $50 thousand loss recovery on real estate foreclosed on in a prior year.

Non-Interest Expense.Non-interest expense increased $3.3 million to $7.5 million for the three months ended June 30, 2008. Non-interest expense increased $11.3 million to $19.7 million for the six months ended June 30, 2008. The year-to-date increase resulted primarily from a $6.3 million previously reported expense related to the formation of “The CapeBank Charitable Foundation”, and increased expenses directly related to the Boardwalk acquisition: increase compensation expense of $2.4 million, increase of $269 thousand in general advertising costs primarily as a result of Cape Bank’s name change, increased legal and audit fees of $311 thousand, occupancy and equipment expense of $737 thousand, office supplies of $207 thousand, and increased FDIC expense of $205 thousand were all factors in the year to year increase in expenses

Income Tax Expense.Income tax expense for the three months ended June 30, 2008 was $370 thousand, a decrease of $170 thousand, or 31.5%, from the $540 thousand recorded for the three months ended June 30, 2007. The provision for income taxes decreased $2.6 million to a tax benefit of $1.6 million for the six months ended June 30, 2008, compared to tax expense of $1.0 million for the six months ended June 30, 2007 as a result of the Bank’s contribution of $6.3 million to “The CapeBank Charitable Foundation”. Our effective tax rate was 21.7% for the three months ended June 30, 2008 compared to 35.5% for the three months ended June 30, 2007. Our effective tax rate was a benefit of 63.8% for the six months ended June 30, 2008 compared to 32.9% for the six months ended June 30, 2007, primarily a result of the net loss created by the Bank’s Charitable Foundation contribution.

Critical Accounting Policies

Certain accounting policies involve significant judgments and assumptions by us that have a material impact on the carrying value of certain assets and liabilities. We consider these accounting policies to be critical accounting policies. The judgments and assumptions we use are based on historical experience and other factors, which we believe to be reasonable under the circumstances. Actual results could differ from these judgments and estimates under different conditions, resulting in a change that could have a material impact on the carrying values of our assets and liabilities and our results of operations.

Allowance for Loan Losses.We consider the allowance for loan losses to be a critical accounting policy. The allowance for loan losses is the amount estimated by management as necessary to cover losses inherent in the loan portfolio at the balance sheet date. The allowance is established through the provision for loan losses, which is charged to income. Determining the amount of the allowance for loan losses necessarily involves a high degree of judgment.

In evaluating the allowance for loan losses, management considers historical loss factors, the mix of the loan portfolio (types of loans and amounts), geographic and industry concentrations, current national and local economic conditions and other factors related to the collectibility of the loan portfolio, including underlying collateral values and estimated future cash flows. All of these estimates are susceptible to significant change. Large groups of smaller balance homogeneous loans, such as residential real estate, home equity loans, and consumer loans, are evaluated in the aggregate under

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CAPE BANCORP, INC. AND CAPE BANK

Statement of Financial Accounting Standards (SFAS) No. 5, “Accounting for Contingencies, using historical loss factors adjusted for economic conditions and other environmental factors. Other environmental factors include trends in delinquencies and classified loans, loan concentrations by loan category and by property type, seasonality of the portfolio, internal and external analysis of credit quality, peer group data, and single and total credit exposure. Large balance and/or more complex loans, such as multi-family and commercial real estate loans, commercial business loans, and construction loans are evaluated individually for impairment in accordance with SFAS No. 114 “Accounting by Creditors for Impairment of a Loan, an Amendment of FASB Statements No. 5 and 15”and SFAS No. 118,“Accounting by Creditors for Impairment of a Loan – Income Recognition and Disclosures, an Amendment of SFAS No. 114”. If a loan is impaired, a portion of the allowance is allocated so that the loan is reported, net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. This evaluation is inherently subjective, as it requires estimates that are susceptible to significant revision as more information becomes available or as projected events change.

Management reviews the level of the allowance monthly. Although we believe that we use the best information available to establish the allowance for loan losses, future adjustments to the allowance may be necessary if economic conditions differ substantially from the assumptions used in making the evaluation. In addition, the Federal Deposit Insurance Corporation and the New Jersey Department of Banking and Insurance, as an integral part of their examination process, periodically review our allowance for loan losses. Such agencies may require us to recognize adjustments to the allowance based on judgments about information available to them at the time of their examination. A large loss could deplete the allowance and require increased provisions to replenish the allowance, which would adversely affect earnings.

Securities Impairment. We periodically perform analyses to determine whether there has been an other-than-temporary decline in the value of one or more of our securities. Our available-for-sale securities portfolio is carried at estimated fair value, with any unrealized gains or losses, net of taxes, reported as accumulated other comprehensive income or loss in stockholder’s equity. Our held-to-maturity securities portfolio, consisting of debt securities for which we have a positive intent and ability to hold to maturity, is carried at amortized cost. We conduct a quarterly review and evaluation of the securities portfolio to determine if the value of any security has declined below its cost or amortized cost, and whether such decline is other-than-temporary. If such decline is deemed other-than-temporary, we would adjust the cost basis of the security by writing down the security to estimated fair market value through a charge to current period operations. The market values of our securities are affected by changes in interest rates.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

General. The majority of our assets and liabilities are monetary in nature. Consequently, our most significant form of market risk is interest rate risk. Our assets, consisting primarily of mortgage-related assets, have longer maturities than our liabilities, consisting primarily of deposits. As a result, a principal part of our business strategy is to manage interest rate risk and limit the exposure of our net interest income to changes in market interest rates. Accordingly, we have an Interest Rate Risk Management Committee of the Board as well as an Asset/Liability Committee, comprised of our Chief Executive Officer, EVP/Chief Financial Officer, EVP/Chief Operating Officer, EVP/Chief Lending Officer, SVP of Residential Lending, Vice President Accounting/Finance and our Controller. The Interest Rate Risk Management Committee is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for recommending to our Board of Directors the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.

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CAPE BANCORP, INC. AND CAPE BANK

We have sought to manage our interest rate risk in order to minimize the exposure of our earnings and capital to changes in interest rates. As part of our ongoing asset-liability management, we currently use the following strategies to manage our interest rate risk:

• originating commercial mortgage loans that generally tend to have shorter maturities and higher interest rates;

• investing in shorter duration investment grade corporate securities and mortgage-backed securities;

• originating adjustable-rate and short-term consumer loans;

• selling our long-term residential mortgage loans to our correspondent banks; and

• obtaining general financing through lower cost deposits and laddered maturities of Federal Home Loan Bank advances.

Shortening the average maturity of our interest-earning assets by increasing our investments in shorter-term loans, as well as loans with variable interest rates, helps to better match the maturities and interest rates of our assets and liabilities, thereby reducing the exposure of our net interest income to changes in market interest rates.

Net Interest Income Analysis.We analyze our sensitivity to changes in interest rates through our net interest income model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. In our model, we estimate what our net interest income would be for a twelve-month period. We then calculate what the net interest income would be for the same period under the assumption that interest rates experience an instantaneous and sustained increase of 100 or 200 basis points or decrease of 100 or 200 basis points.

The table below sets forth, as of June 30, 2008, our calculation of the estimated changes in our net interest income that would result from the designated instantaneous and sustained changes in interest rates. Computations of prospective effects of hypothetical interest rate changes are based on numerous assumptions, including relative levels of market interest rates, loan prepayments and deposit decay, and should not be relied upon as indicative of actual results.

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CAPE BANCORP, INC. AND CAPE BANK

	Net Interest Income
Change in Interest Rates	Estimated Net Interest Income		Increase (decrease) in Estimated Net Interest Income
			Amount			Percent
(basis points)(1)	(dollars in thousands)
+200	$	37,754	$	(434	)	-1.14	%
+100	$	38,064	$	(124	)	-0.32	%
0	$	38,188	$	—		—
-100	$	38,044	$	(144	)	-0.38	%
-200	$	37,097	$	(1,091	)	-2.86	%

⁽¹⁾ Assumes an instantaneous and sustained uniform change in interest rates at all maturities.

The table above indicates that at June 30, 2008, in the event of a 100 basis point increase in interest rates, we would experience a $124 thousand decrease in net interest income. In the event of a 100 basis point decrease in interest rates, we would experience a $144 thousand decrease in net interest income.

Certain shortcomings are inherent in the methodologies used in determining interest rate risk through changes in net interest income. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the net interest income information presented assumes that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although interest rate risk calculations provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on our net interest income and will differ from actual results.

Item 4. Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this report, our disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.

During the quarter ended June 30, 2008, there were no changes in the Company’s internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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CAPE BANCORP, INC. AND CAPE BANK

Part II – Other Information

Item 1. Legal Proceedings

The Company and its subsidiaries are subject to various legal actions arising in the normal course of business. In the opinion of management, the resolution of these legal actions is not expected to have a material adverse effect on the Company’s financial condition or results of operations.

Item 1A. Risk Factors

There have been no material changes in the “Risk Factors” disclosed in the Company’s Form 10-K filed with the Securities and Exchange Commission on March 30, 2008.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a) There were no sales of unregistered securities during the period covered by this Report.

(b) The Company commenced its initial stock offering on or about November 23, 2007, and the offering closed on January 31, 2008. Subscriptions received in the offering earned interest at Cape Bank’s passbook savings rate. There have been no material changes in the Company’s projected use of the offering proceeds as from what was disclosed in the section entitled “Use of Proceeds” in the Company’s Registration Statement on Form S-1 (Commission File No. 333-146178).

(c) There were no issuer repurchases of securities during the period covered by this Report.

Item 3. Defaults Upon Senior Securities

Not applicable.

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

During the period covered by this report, the Company did not submit any matters to the vote of security holders.

Item 5. Other Information

Not applicable

Item 6. Exhibits

The following exhibits are either filed as part of this report or are incorporated herein by reference:

3.1	Charter of Cape Bancorp, Inc. *
3.2	Bylaws of Cape Bancorp, Inc. *
4	Form of Common Stock Certificate of Cape Bancorp, Inc. *
10.1	Form of Employee Stock Ownership Plan *
10.2	Existing Employment Agreement for Chief Executive Officer *

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CAPE BANCORP, INC. AND CAPE BANK

10.3	Existing Employment Agreement for Chief Financial Officer *
10.4	Proposed Employment Agreement for Chief Operating Officer *
10.5	Proposed Employment Agreement for Chief Lending Officer *
10.6	Form of Change in Control Agreement *
10.7	Change in Control Agreement for Wayne S. Hardenbrook *
10.8	Amended and Restated Phantom Incentive Stock Option Plan *
10.9	Amended and Restated Phantom Restricted Stock Plan *
10.10	Form of Director Retirement Plan *
10.11	Benefit Equalization Plan *
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

* Filed as exhibits to the Company’s Registration Statement on Form S-1, and any amendments thereto, with the Securities and Exchange Commission (Registration No. 333-146178).

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CAPE BANCORP, INC. AND CAPE BANK

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CAPE BANCORP, INC.
Date: August 14, 2008	/s/ Herbert L. Hornsby, Jr.
	Herbert L. Hornsby, Jr.
	President and Chief Executive Officer

Date: August 14, 2008	/s/ Robert J. Boyer
	Robert J. Boyer
	Executive Vice President and Chief Financial Officer

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