Cape Bancorp 10Q 2009 Q1 Quarterly report

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


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

For the quarterly period ended March 31, 2009


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

For the transition period from to

Commission File 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. YESo NOþ

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yeso Noo

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 filero	Accelerated filerþ	Non-accelerated filero	Smaller Reporting Companyo
		(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). YESo NOþ

As of May 11, 2009 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 March 31, 2009 (unaudited) and December 31, 2008		3

Consolidated Statements of Income for the Three Months Ended March 31, 2009 and March 31, 2008 (unaudited)		4

Consolidated Statements of Changes in Stockholders’ Equity for the Twelve Months Ended December 31, 2008 and Three Months Ended March 31, 2009 (unaudited)		5

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2009 and March 31, 2008 (unaudited)		6

Notes to Consolidated Financial Statements (unaudited)		7

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		20

Item 3. Quantitative and Qualitative Disclosures About Market Risk		26

Item 4. Controls and Procedures		27

Part II. Other Information

Item 1. Legal Proceedings		27

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		29

Signature Page		30

Exhibit 31.1
Exhibit 31.2
Exhibit 32

Item 1. Financial Statements

CAPE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	(unaudited)
	March 31,			December 31,
	2009			2008
	(in thousands)
ASSETS
Cash & due from financial institutions	$	12,176		$	10,117
Federal funds sold		—			—

Cash and cash equivalents		12,176			10,117
Interest-earning deposits in other financial institutions		10,332			17,918
Investment securities available for sale, at fair value (amortized cost of $133,186 at March 31, 2009 and $123,831 at December 31, 2008)		124,792			114,655
Investment securities held to maturity (fair value of $51,568 at March 31, 2009 and $49,938 at December 31, 2008)		50,337			48,825
Loans held for sale		576			—
Loans, net of allowance of $11,924 and $11,240		794,226			783,869
Accrued interest receivable		5,048			4,736
Premises and equipment, net		27,233			27,342
Other real estate owned		538			798
Federal Home Loan Bank (FHLB) stock, at cost		8,614			11,602
Deferred income taxes		17,557			17,247
Bank owned life insurance (BOLI)		26,701			26,446
Goodwill		22,575			22,575
Intangible assets, net		731			786
Assets held for sale		2,026			2,026
Other assets		2,248			1,793

Total assets	$	1,105,710		$	1,090,735


LIABILITIES AND STOCKHOLDERS’ EQUITY
Liabilities
Deposits
Noninterest-bearing deposits	$	64,628		$	63,258
Interest-bearing deposits		725,718			647,872
Borrowings		168,058			234,484
Advances from borrowers for taxes and insurance		600			585
Accrued interest payable		827			778
Other liabilities		4,656			3,033

Total liabilities		964,487			950,010


Stockholders’ Equity
Common stock, $.01 par value: authorized 100,000,000 shares; issued and outstanding 13,313,521 shares		133			133
Additional paid-in capital		126,775			126,801
Unearned ESOP shares		(10,126	)		(10,232	)
Accumulated other comprehensive income (loss), net		(5,505	)		(6,022	)
Retained earnings		29,946			30,045

Total stockholders’ equity		141,223			140,725

Total liabilities & stockholders’ equity	$	1,105,710		$	1,090,735

See accompanying notes to unaudited consolidated financial statements.

CAPE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)


	Three months ended March 31,
	2009			2008
	(dollars in thousands, except share data)

Interest income:
Interest on loans	$	11,627		$	11,048
Interest and dividends on investments
Taxable		855			1,235
Tax-exempt		345			268
Interest on mortgage-backed securities		1,116			903

Total interest income		13,943			13,454

Interest expense:
Interest on deposits		3,611			4,788
Interest on borrowings		1,596			1,429

Total interest expense		5,207			6,217

Net interest income before provision for loan losses		8,736			7,237
Provision for loan losses		745			283

Net interest income after provision for loan losses		7,991			6,954

Non-interest income:
Service fees		709			666
Net gains on sale of loans		27			19
Net income from BOLI		292			266
Net rental income		86			84
Gain/ (loss) on sales of investment securities available for sale, net		—			—
Other than temporary impairment		(1,539	)		—
Loss on disposal of other assets		—			—
Loss on sale of OREO		(29	)		—
Other		21			64

Total non-interest income		(433	)		1,099

Non-interest expense:
Salaries and employee benefits		4,727			3,353
Occupancy and equipment		856			743
Federal insurance premiums		854			152
Data processing		279			318
Charitable foundation contribution		—			6,256
Advertising		51			182
Telecommunications		202			175
Professional services		223			210
OREO write-down		68			—
Other operating		824			885

Total non-interest expense		8,084			12,274

Income (loss) before income taxes		(526	)		(4,221	)
Income tax expense (benefit)		(427	)		(1,975	)

Net income (loss)	$	(99	)	$	(2,246	)


Earnings (loss) per share (see Note 9):
Basic	$	(0.01	)	$	(0.22	)
Diluted	$	(0.01	)	$	(0.22	)

Weighted average number of shares outstanding:
Basic		12,296,879			12,311,190
Diluted		12,296,879			12,311,190

See accompanying notes to unaudited consolidated financial statements.

CAPE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

Year ended December 31, 2008 and three months ended March 31, 2009
(unaudited)


												Accumulated
												Other			Total
	Common		Paid-In			Unearned ESOP			Retained			Comprehensive			Stockholders’
	Stock		Capital			Shares			Earnings			Income (Loss)			Equity
	(in thousands)

Balance, January 1, 2008	$	—	$	—		$	—		$	72,536		$	293		$	72,829

Net income (loss)		—		—			—			(42,491	)		—			(42,491	)

Net unrealized losses, net of reclassification adjustments and taxes		—		—			—			—			(6,315	)		(6,315	)

Total comprehensive income (loss)		—		—			—									(48,806	)

Conversion from mutual to stock company and simultaneous acquisition of Boardwalk Bancorp		133		126,832			(10,658	)		—			—			116,307
ESOP shares earned		—		(31	)		426			—			—			395


Balance, December 31, 2008		133		126,801			(10,232	)		30,045			(6,022	)		140,725

Net income (loss)		—		—			—			(99	)					(99	)

Net unrealized losses, net of reclassification adjustments and taxes		—		—			—			—			517			517

Total comprehensive income (loss)		—		—			—									418

ESOP shares earned		—		(26	)		106									80


Balance, March 31, 2009	$	133	$	126,775		$	(10,126	)	$	29,946		$	(5,505	)	$	141,223

See accompanying notes to unaudited consolidated financial statements.

CAPE BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)


	Three months ended March 31,
	2009			2008
	(in thousands)
Cash flows from operating activities
Net income (loss)	$	(99	)	$	(2,246	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Provision for loan losses		745			283
Net gain on the sale of loans		(27	)		(19	)
Net loss on the sale of other real estate owned		29			—
Write-down of other real estate owned		68			—
Loss on impairment of securities		1,539			—
Earnings on BOLI		(255	)		(229	)
Depreciation and amortization		519			135
ESOP compensation expense		80			76
Stock issuance for charitable contribution		—			5,474
Deferred income taxes		(576	)		(1,486	)
Changes in assets and liabilities that (used) provided cash:
Origination of loans held for sale		(2,586	)		(939	)
Proceeds from sale of loans		2,010			1,289
Accrued interest receivable		(312	)		(1	)
Other assets		(420	)		336
Accrued interest payable		49			34
Other liabilities		1,623			(4,368	)

Net cash provided by operating activities		2,387			(1,661	)

Cash flows from investing activities
Proceeds from calls, maturities, and principal repayments of investment securities and mortgage-backed securities		14,454			11,523
Purchases of investment securities and mortgage-backed securities		(26,835	)		(11,257	)
Redemption of Federal Home Loan Bank stock		2,988			(1,439	)
Proceeds from sale of other real estate owned		163			—
(Increase) decrease in interest-earning deposits in other financial institutions		7,586			(909	)
Increase in loans, net		(11,287	)		(15,814	)
Purchase of property and equipment, net		(277	)		(504	)
Acquisition of Boardwalk Bancorp		—			(46,839	)

Net cash used in investing activities		(13,208	)		(65,239	)

Cash flows from financing activities
Net increase in deposits		79,265			2,540
Increase in advances from borrowers for taxes and insurance		15			34
Borrowings		35,000			37,758
Payments on borrowings		(101,400	)		(5,000	)
Net proceeds from stock issuance in conversion		—			39,883

Net cash provided by financing activities		12,880			75,215

Net increase (decrease) in cash and cash equivalents		2,059			8,315
Cash and cash equivalents at beginning of period		10,117			15,631

Cash and cash equivalents at end of period	$	12,176		$	23,946


Supplementary disclosure of cash flow information:
Cash paid during period for:
Interest	$	5,158		$	5,660
Income taxes, net of refunds	$	(586	)	$	—

Supplementary disclosure of non-cash financing and investing activities:
Stock subscriptions applied to equity		n/a		$	21,500
Issuance of stock to charitable foundation		n/a		$	5,474
Issuance of stock for acquisition of Boardwalk Bancorp		n/a		$	49,461

See accompanying notes to unaudited consolidated financial statements.

Notes to Financial Statements (Unaudited)

NOTE 1 — ORGANIZATION

On January 31, 2008, Cape Bancorp (“Company”) 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 Cape Bank Charitable Foundation. Cape Bancorp loaned $10,658,253 to the Bank’s employee stock ownership plan (ESOP) 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, 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 which leased space in Vineland, Cumberland County, New Jersey was closed. On September 30, 2008 the leased office space of the former Boardwalk loan center in Linwood, Atlantic 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.

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 2 — 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 is presently inactive. Intercompany transactions and balances are eliminated in consolidation.

Use of Estimates:To prepare financial statements in conformity with accounting principles generally accepted in the United States of America (or with U.S. generally accepted accounting principles), management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The allowance for loan losses, deferred taxes, evaluation of investment securities for other-than-temporary impairment and fair values of financial instruments are particularly subject to change.

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.

Interest-Bearing Deposits in Other Financial Institutions:Interest-bearing deposits in other financial institutions are held to maturity and are carried at cost.

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 its 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.

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, 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 collectability of the principal is unlikely.

Income recognition of interest is discontinued when, in the opinion of management, the collectability 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 are 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 probable 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 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.

Other Real Estate Owned:Real estate acquired as a result of foreclosure or by deed in lieu of foreclosure is classified as other real estate owned and is initially recorded at the lower of cost or estimated fair market value, less the cost to sell, at the date of foreclosure, establishing a new cost basis. If fair value declines subsequent to foreclosure, a valuation allowance is recorded through expense. Operating costs after acquisition are expensed.

Premises and Equipment:Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Buildings and related components are depreciated using the straight-line method with useful lives ranging from 15 to 39 years. Furniture, fixtures and equipment are depreciated using the straight-line (or accelerated) method with useful lives ranging from 3 to 7 years.

Federal Home Loan Bank (FHLB) Stock:The Bank is a member of the FHLB system. Members are required to own a certain amount of stock based on the level of borrowings and other factors. FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income.

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 and directors. The Bank is the owner and beneficiary of the policies and in accordance with EITF 06-5, the amount recorded is the cash surrender value, which is the amount realizable.

Goodwill and Other Intangible Assets:Goodwill results from business acquisitions and represents the excess of the purchase price over the fair value of acquired tangible assets and liabilities and identifiable intangible assets. Goodwill is assessed at least annually for impairment and any such impairment is recognized in the period identified.

Other intangible assets consist of core deposit and acquired customer relationship intangible assets arising from whole bank acquisitions. They are initially measured at fair value and then are amortized on an accelerated method over their estimated useful lives, which range from 5 to 13 years.

Loan Commitments and Related Financial Instruments:Financial instruments include off-balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs. The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

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. The plan was further amended to freeze benefits as of December 31, 2008 for all employees eligible to participate prior to January 1, 2008.

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%.

Employee Stock Ownership Plan (ESOP):The cost of shares issued to the ESOP, but not yet earned 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.

Income Taxes:Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. The principal types of accounts resulting in differences between assets and liabilities for financial statement and tax purposes are allowance for loan losses, deferred compensation, deferred loan fees, charitable contribution carryforwards, depreciation and other-than-temporary impairment charges. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Beginning with the adoption of FASB Interpretation No. 48,Accounting for Uncertainty in Income Taxesas of January 1, 2007, the Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Prior to the adoption of FIN 48, the Company recognized the effect of income tax positions only if such positions were probable of being sustained.

The Company records interest related to unrecognized tax benefits in interest expense and penalties in non-interest expense.

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:


	Before Tax			Tax Benefit			Net of Tax
	Amount			(Expense)			Amount
	(in thousands)
Three months ended March 31, 2009
Unrealized losses on securities
Unrealized holding losses arising during the period	$	(756	)	$	257		$	(499	)
Reclassification adjustment for net losses realized in net income		1,539			(523	)		1,016

Other comprehensive income, net	$	783		$	(266	)	$	517


Three months ended March 31, 2008
Unrealized losses on securities
Unrealized holding losses arising during the period	$	(954	)	$	342		$	(612	)
Reclassification adjustment for net losses realized in net income		—			—			—

Other comprehensive loss, net	$	(954	)	$	342		$	(612	)

Operating Segments:While the chief decision makers monitor the revenue streams of the various products and services, operations are managed and financial performance is evaluated on a Company-wide basis. Operating segments are aggregated into one as operating results for all segments are similar. Accordingly, all of the financial service operations are considered by management to be aggregated in one reportable operating segment.

Recent Accounting Pronouncements: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 non-financial assets and non-financial 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 October 2008, the FASB issued Staff Position (FSP) 157-3,Determining the Fair Value of a Financial Asset when the Market for That Asset Is Not Active.This FSP clarifies the application of FAS 157 in a market that is not active. 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 Post-Retirement 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.

Effect of Newly Issued Accounting Standards:In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS No. 141(R)”), which establishes principles and requirements for how an acquirer recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed, and any non-controlling interest in an acquiree, including the recognition and measurement of goodwill acquired in a business combination. SFAS No. 141(R) is effective for fiscal years beginning on or after December 15, 2008. Earlier adoption is prohibited. The adoption of this standard did not have a material effect on the Corporation’s results of operations or financial position.

In April 2009, the FASB issued FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly,” or “FSP FAS 157-4,” to provide additional guidance for estimating fair value in accordance with SFAS No. 157 when the volume and level of market activity for the asset and liability have significantly decreased. FSP FAS 157-4 is effective for interim and annual periods ending after June 15, 2009. Management is currently evaluating the impact of FSP FAS 157-4 on the Company’s consolidated financial statements.

In April 2009, the FASB issued FASB Staff Position (“FSP”) FAS 115-2 and FAS 124-2, “Recognition and Presentation of Other-Than-Temporary Impairments,” or “FSP FAS 115-2 and FAS 124-2.” The FSP modified the requirement in existing accounting guidance to demonstrate the intent and ability to hold an investment security for a period of time sufficient to allow for any anticipated recovery in fair value. When the fair value of a debt security has declined below the amortized cost at the measurement date, an entity that intends to sell a security or is more-likely-than-not to sell the security before the recovery of the security’s cost basis must recognize the other-than-temporary impairment in earnings. For a debt security with a fair value below the amortized cost at the measurement date where it is more-likely-than-not that an entity will not sell the security before the recovery of its cost basis, but an entity does not expect to recover the entire cost basis of the security, the security is considered other-than-temporarily impaired. The related other-than-temporary impairment loss on the debt security will be recognized in earnings to the extent of the credit losses with the remaining impairment loss recognized in accumulated other comprehensive income. FSP FAS 115-2 and FAS 124-2 is effective for interim and annual periods ending after June 15, 2009. Management is currently evaluating the impact of FSP FAS 115-2 and FAS 124-2 on the Company’s consolidated financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value of Financial Instruments,” or “FSP FAS 107-1 and APB 28-1”. The FSP amends SFAS No. 107, “Disclosures about Fair Value of Financial Instruments,” or “SFAS No. 107,” to require an entity to provide disclosures about fair value of financial instruments in interim financial statements. FSP FAS 107-1 and APB 28-1 is effective for interim and annual periods ending after June 15, 2009. Management is currently evaluating the impact of FSP FAS 107-1 and APB 28-1 on the Company’s consolidated financial statements.

NOTE 3 — INVESTMENT SECURITIES

The amortized cost, gross unrealized gains or losses and the fair value of the Bank’s investment securities available for sale and held to maturity are as follows:


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(in thousands)
March 31, 2009
Investment securities held to maturity
Municipal bonds	$	24,566	$	598	$	(33	)	$	25,131
Mortgage-backed securities
GNMA pass-through certificates		17		1		—			18
FHLMC pass-through certificates		2,060		51		—			2,111
FNMA pass-through certificates		10,584		431		—			11,015
Collateralized mortgage obligations		12,372		289		(106	)		12,555
Grantor Trust (certificates of deposit)		738		—		—			738


Total securities held to maturity	$	50,337	$	1,370	$	(139	)	$	51,568


Investment securities available for sale
Debt securities
U.S. Government and agency obligations	$	42,248	$	470	$	(29	)	$	42,689
Municipal bonds		11,054		19		(505	)		10,568
Collateralized debt obligations		10,301		—		(8,937	)		1,364
Corporate bonds		7,011		8		(163	)		6,856

Total debt securities		70,614		497		(9,634	)		61,477


Mortgage-backed securities
GNMA pass-through certificates	$	747	$	7	$	(1	)	$	753
FHLMC pass-through certificates		19,538		544		(12	)		20,070
FNMA pass-through certificates		32,797		852		(291	)		33,358
Collateralized mortgage obligations		9,490		90		(446	)		9,134

Total mortgage-backed securities		62,572		1,493		(750	)		63,315


Total securities available for sale	$	133,186	$	1,990	$	(10,384	)	$	124,792


			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
	(in thousands)
December 31, 2008
Investment securities held to maturity
Municipal bonds	$	24,582	$	604	$	(32	)	$	25,154
Mortgage-backed securities
GNMA pass-through certificates		17		1		—			18
FHLMC pass-through certificates		2,670		45		—			2,715
FNMA pass-through certificates		10,897		323		(17	)		11,203
Collateralized mortgage obligations		9,922		199		(10	)		10,111
Grantor Trust (certificates of deposit)		737		—		—			737


Total securities held to maturity	$	48,825	$	1,172	$	(59	)	$	49,938


Investment securities available for sale
Debt securities
U.S. Government and agency obligations	$	31,296	$	480	$	(10	)	$	31,766
Municipal bonds		11,024		26		(336	)		10,714
Collateralized debt obligations		11,832		—		(8,799	)		3,033
Corporate bonds		4,975		—		(197	)		4,778

Total debt securities		59,127		506		(9,342	)		50,291


Mortgage-backed securities
GNMA pass-through certificates	$	773	$	2	$	(12	)	$	763
FHLMC pass-through certificates		20,449		352		(31	)		20,770
FNMA pass-through certificates		33,465		472		(539	)		33,398
Collateralized mortgage obligations		10,017		31		(615	)		9,433

Total mortgage-backed securities		64,704		857		(1,197	)		64,364


Total securities available for sale	$	123,831	$	1,363	$	(10,539	)	$	114,655

The Company recognized an other-than-temporary impairment (OTTI) charge of $1.5 million during the first quarter of 2009 related to 14 collateralized debt obligation (CDO) securities. There are a total of 24 securities in the Company’s CDO portfolio. As required by SFAS 115, when a decline in fair value below cost is deemed to be other-than-temporary, the related loss must be recognized as a charge to earnings and the amortized cost is adjusted to fair value. CDOs are backed by trust preferred securities issued by banks, insurance companies and REITs. The market for these securities is not active. The new issue market is also inactive as no new CDOs have been issued since 2007. There are currently very few market participants who are willing or able to transact in these securities. As a result of the illiquidity in the current debt markets, the market values of these securities are very depressed relative to historical levels. Thus, in the current market, a low market price for a particular CDO may be indicative of a limited trading market for these types of securities rather than an indicator of the credit quality of a particular issuer.

At March 31, 2009, the Bank’s investment securities portfolio consisted of 362 securities, 83 of which were in an unrealized loss position. The total unrealized loss on the Bank’s investment securities portfolio related primarily to 10 collateralized debt obligation (CDO) securities, which had unrealized losses totaling $8,937,000 as of March 31, 2009. Management evaluates investment securities to determine if they are other-than-temporarily impaired on at least a quarterly basis. The evaluation process applied to each security includes but is not limited to the following factors: whether the security is performing according to its contractual terms, determining if there has been an adverse change in the expected cash flows for investments within the scope of EITF 99-20, the length of time and the extent to which the fair value has been less than cost, the intent and ability of the Bank to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value, credit rating downgrades, the percentage of performing collateral that would need to default or defer to cause a break in yield and/or a temporary interest shortfall, and a review of the underlying issuers when deemed appropriate. The result of management’s evaluation determined that the CDOs which are currently in an unrealized loss position are not other-than-temporarily impaired since payments are current, there was no adverse change in the expected cash flows, and management has the intent and ability to hold these securities until a recovery of fair value.

The majority of the remaining securities where OTTI was not recognized consists of investments that are backed by the U.S. Government or U.S. sponsored agencies which the government has affirmed its commitment to support. Because the decline in market value of these securities is largely attributable to changes in interest rates and other market conditions, and because the Bank has the intent and ability to hold them until a recovery in fair value, which may be at maturity, they are not considered to be OTTI.

NOTE 4 — LOANS RECEIVABLE

Loans receivable consists of the following;


	March 31,		December 31,
	2009		2008
	(in thousands)

Commercial mortgage	$	429,380	$	411,809
Residential mortgage		235,474		226,963
Construction		41,261		54,187
Home equity loans and lines of credit		46,571		46,850
Commercial business loans		52,440		54,319
Other consumer loans		1,356		1,388

Total loans		806,482		795,516

Less:
Allowance for loan losses		11,924		11,240
Deferred loan fees		332		407

Loans receivable, net	$	794,226	$	783,869

Activity in the allowance for loan losses is as follows:


	March 31,			December 31,
	2009			2008
	(in thousands)

Balance at beginning of year	$	11,240		$	4,121
Allowance from acquired entity		—			3,791
Provisions charged to operations		745			9,009
Charge-offs		(70	)		(5,708	)
Recoveries		9			27

Balance at end of period	$	11,924		$	11,240

Individually impaired loans were as follows:


	March 31,		March 31,
	2009		2008
	(in thousands)
Period-end loans with no allocated allowance for loan losses	$	28,539	$	—
Period-end loans with allocated allowance for loan losses		991		14,637

Total	$	29,530	$	14,637

Amount of the allowance for loan losses allocated	$	127	$	1,331


	March 31,		March 31,
	2009		2008
	(in thousands)
Average of impaired loans during the period	$	27,264	$	10,659
Interest income recognized during impairment		21		—
Cash-basis interest income recognized		15		—

NOTE 5 — FAIR VALUE

Statement 157 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 reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

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).

Collateralized debt obligation securities which are issued by financial institutions and insurance companies were historically priced using Level 2 inputs, the decline in the level of observable inputs and market activity in this class of investments by the measurement date has been significant and resulted in unreliable external pricing. Broker pricing and bid/ask spreads, when available, vary widely. The once active market has become comparatively inactive. As such, these investments are now priced using Level 3 inputs.

The Bank obtained the pricing for these securities from an independent third party who prepared the valuations using a market valuation approach. Information such as historical and current performance of the underlying collateral, deferral/default rates, collateral coverage ratios, break in yield calculations, cash flow projections, liquidity and credit premiums required by a market participant, and financial trend analysis with respect to the individual issuing financial institutions and insurance companies, are utilized in determining individual security valuations. Due to current market conditions as well as the limited trading activity of these securities, the market value of the securities is highly sensitive to assumption changes and market volatility.

The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Financial Assets and Liabilities Measured on a Recurring Basis

Financial assets and liabilities measured at fair value on a recurring basis are summarized below:

Fair Value Measurements

at March 31, 2009

at December 31, 2008

Quoted

Prices

Prices in

in Active

Significant

Active

Significant

Markets for

Other

Markets for

Other

Identical

Observable

Unobservable

Identical

Observable

Unobservable

Assets

Inputs

Assets

Inputs

(Level 1)

(Level 2)

(Level 3)

(Level 1)

(Level 2)

(Level 3)

(in thousands)

Assets:

Available for sale securities

53,257

70,171

1,364

42,481

69,141

3,033

The table below presents a reconciliation and income statement classification of gains and losses for all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2009. There were no level 3 assets measured at fair value for the three months ended March 31, 2008:


	Fair Value Measurements
	Using Significant Unobservable
	Inputs (Level 3)
	CDO Securities
	Available for Sale
	(in thousands)

Beginning balance, January 1, 2009	$	3,033
Accretion/amortization of discount or premium		10
Payments received		(2	)
Decrease in market value of securities included in other comprehensive income		(138	)
Other-than-temporary impairment included in earnings		(1,539	)
Transfers in and/or out of Level 3		—


Ending balance, March 31, 2009	$	1,364

Financial Assets and Liabilities Measured on a Non-Recurring Basis

Financial assets and liabilities measured at fair value on a non-recurring basis are summarized below:

Fair Value Measurements

at March 31, 2009

at December 31, 2008

Quoted

Prices

Prices in

in Active

Significant

Active

Significant

Markets for

Other

Markets for

Other

Identical

Observable

Unobservable

Identical

Observable

Unobservable

Assets

Inputs

Assets

Inputs

(Level 1)

(Level 2)

(Level 3)

(Level 1)

(Level 2)

(Level 3)

(in thousands)

Assets:

Impaired loans

—

29,530

—

24,998

—

Non-Financial Assets and Liabilities Measured on a Non-Recurring Basis

Non-financial assets and liabilities measured at fair value on a non-recurring basis are summarized below:

Fair Value Measurements

at March 31, 2009

Quoted

Prices

in Active

Significant

Markets for

Other

Identical

Observable

Unobservable

Assets

Inputs

(Level 1)

(Level 2)

(Level 3)

(in thousands)

Assets:

Other real estate owned

—

538

Other real estate owned properties are recorded at the lower of cost or estimated fair market value, less the cost to sell, at the date of foreclosure. Fair market value is estimated by using professional real estate appraisals for like properties.

NOTE 6 — OTHER REAL ESTATE OWNED

Other real estate owned totaled $538,000 at March 31, 2009 and $798,000 at December 31, 2008 and consisted of residential property under development. Other real estate owned is presented net of an allowance for losses, if any. At March 31, 2009, the valuation allowance on foreclosed real estate totaled $68,000. At December 31, 2008, there was no valuation allowance on foreclosed real estate.

For the three months ended March 31, 2009, losses on the sale of foreclosed real estate totaled $29,000. Net expenses applicable to other real estate owned for the period ending March 31, 2009 were $71,000 which included a $68,000 provision for losses on foreclosed real estate. There were no expenses for the three months ended March 31, 2008.

NOTE 7 — ACQUISITION OF BOARDWALK BANCORP

On January 31, 2008, Cape Bancorp, Inc. acquired 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 southern New 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.

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.

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).


Securities available for sale	$	92,949
Loans, net		314,471
Goodwill		54,523
Core deposit and other intangibles		1,050
Other assets		40,027

Total assets acquired		503,020

Deposits		(320,520	)
Borrowings		(82,729	)
Other liabilities		(848	)

Total liabilities assumed		(404,097	)

Net assets acquired	$	98,923

NOTE 7 — ACQUISITION OF BOARDWALK BANCORP(Continued)

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 statement for the three months ended March 31, 2008 is shown as if the merger occurred at the beginning of the period presented:


	Three months ended
	March 31, 2008
	(in thousands)

Interest and dividend income	$	15,887
Interest expense		7,574

Net interest income		8,313
Provision for loan losses		282

Net interest income after provision for loan losses		8,031
Non-interest income		1,128
Non-interest expense		14,802

Income (loss) before income taxes		(5,643	)
Income tax expense (benefit)		(2,181	)

Net income (loss)	$	(3,462	)

Basic EPS	$	(0.22	)

Non-interest expense for the three months ended March 31, 2008 included a $6.3 million expense ($3.8 million net of tax) for a contribution to the Cape Bank Charitable Foundation established and funded in connection with the stock conversion.

NOTE 8 — DEPOSITS

Deposits are as follows:


	March 31,		December 31,
	2009		2008
	(in thousands)

Savings accounts	$	79,804	$	79,494
NOW accounts and money market funds		236,282		212,185
Non-interest bearing checking		64,628		63,258
Certificates of deposit of less than $100,000		244,777		229,533
Certificates of deposit of $100,000 or more		164,855		126,660

	$	790,346	$	711,130

NOTE 9 — EARNINGS PER 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 three months ended March 31, 2009 and the period January 31, 2008, the date the Company completed its initial public offering, through March 31, 2008. There are no potentially dilutive common shares at or for the periods ended March 31, 2009 or March 31, 2008.


	For the three months ended			For the two months ended
	March 31, 2009			March 31, 2008
	(dollars in thousands, except share data)

Net income (loss)	$	(99	)	$	(2,246	)
Less: Net income from January 1, 2008 to January 31, 2008		—			(402	)

Net income (loss) post conversion for earnings per share	$	(99	)	$	(2,648	)

Weighted average shares outstanding		12,296,879			12,311,190
Basic earnings (loss) per share	$	(0.01	)	$	(0.22	)

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. 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 March 31, 2009, the Company had total assets of $1.106 billion.

Our principal business is acquiring deposits from individuals and businesses in the communities surrounding our offices and using these deposits to fund loans and other investments. We offer personal and business checking accounts, commercial mortgage loans, residential mortgage loans, construction loans, home equity loans and lines of credit and other types of commercial and consumer loans. At March 31, 2009, our retail market area primarily included the area surrounding our 18 offices located in Cape May and Atlantic Counties, New Jersey.

Comparison of Financial Condition at March 31, 2009 and December 31, 2008

At March 31, 2009, the Company’s total assets increased to $1.106 billion from $1.091 billion at December 31, 2008, an increase of $15.0 million or 1.37%.

Cash and cash equivalents increased $2.1 million, or 20.4%, to $12.2 million at March 31, 2009 from $10.1 million at December 31, 2008.

Total loans increased to $794.2 million at March 31, 2009 from $783.9 million at December 31, 2008, an increase of $10.3 million or 1.3%. Delinquent loans increased $3.8 million to $37.1 million or 4.6% of total loans at March 31, 2009 from $33.3 million, or 4.2% of total loans at December 31, 2008. Total delinquent loans by portfolio at March 31, 2009 were $30.1 million of commercial loans, $5.8 million of mortgage loans and $1.2 million of consumer loans. Delinquent loan balances by number of days delinquent were: 31 to 59 days — $3.6 million; 60 to 89 days — $3.4 million; and 90 days and greater — $30.1 million.

At March 31, 2009, the Company had $30.1 million in non-performing loans or 3.73% of total gross loans, an increase from $21.1 million or 2.65% at December 31, 2008. Total non-performing loans by portfolio were $26.2 million of commercial loans, $3.5 million of residential loans and $0.4 million of consumer loans. Commercial non-performing loans had collateral type concentrations of 13% in residential, duplex and multi-family related loans, 21% in land and building lot related loans, 6% in retail store related loans, 19% in restaurant related loans, 8% in marina related loans, 7% in auto dealership related loans, 12% in B&B and hotel related loans and 14% in commercial building and equipment related loans. The three largest relationships in this category of non-performing loans are $2.9 million, $2.8 million, and $2.1 million.

We believe we have appropriately charged-off or established adequate loss reserves on problem loans that we have identified. However, we believe that non-performing and delinquent loans will continue to increase as the current recession persists. We are aggressively managing all loan relationships, and where necessary, we will apply our loan work-out experience to protect our collateral position and actively negotiate with borrowers to resolve these non-performing loans.

Total investment securities increased to $175.1 million at March 31, 2009 ($124.8 million classified as available-for-sale or 71.3%) from $163.5 million at December 31, 2008, an increase of $11.6 million or 7.1%. Management evaluates the portfolio for other-than-temporary impairment (OTTI) on a quarterly basis. Factors considered in the analysis include but are not limited to whether an adverse change in cash flows has occurred pursuant to EITF 99-20, the length of time and the extent to which the fair value has been less than cost, the intent and ability of the Company to retain its investment for a period of time sufficient to allow for any anticipated recovery in fair value, credit rating downgrades, the percentage of performing collateral that would need to default or defer to cause a break in yield or a temporary interest shortfall, and management’s assessment of the financial condition of the underlying creditors.

During the three month period ended March 31, 2009, the collateralized debt obligation portion of the investment portfolio declined in value by approximately $1.6 million. At March 31, 2009, the cost basis of such securities was $10.3 million with a fair market value of $1.4 million. Market value has been adversely affected by the prolonged existence of an illiquid market for these securities. For the quarter ended March 31, 2009, the Company recognized an other-than-temporary impairment (OTTI) charge of $1.5 million.

At March 31, 2009, the Bank’s total deposits increased to $790.3 million from $711.1 million at December 31, 2008, an increase of $79.2 million or 11.1%. Certificates of deposit increased $53.4 million, or 15.0%, to $409.6 million at March 31, 2009 from $356.2 million at December 31, 2008. Brokered deposits accounted for $29.8 million of the increase in certificates of deposit. NOW and money market accounts increased $24.1 million, or 11.4%, to $236.3 million at March 31, 2009 from $212.2 million at December 31, 2008. Savings accounts increased $300,000, or 0.4%, to $79.8 million at March 31, 2009 from $79.5 million at December 31, 2008. Non-interest bearing deposits increased $1.3 million, or 2.1%, to $64.6 million at March 31, 2009 from $63.3 million at December 31, 2008. Total non-certificate deposit balances increased $25.8 million, or 7.3%, to $380.7 million at March 31, 2009 from $354.9 million at December 31, 2008.

Borrowings decreased $66.4 million, or 28.3%, to $168.1 million at March 31, 2009 from $234.5 million at December 31, 2008. The decline in borrowings was partially attributable to the use of brokered deposits in the amount of $29.8 million as an alternative funding source. At March 31, 2009, the Company’s borrowings to assets ratio decreased to 15.2% from 21.5% at December 31, 2008. Borrowings to total liabilities decreased to 17.4% at March 31, 2009 from 24.7% at December 31, 2008.

At March 31, 2009, the Company’s total equity increased to $141.2 million from $140.7 million at December 31, 2008, an increase of $500,000, or 0.4%, primarily resulting from an accumulated other comprehensive loss reduction of $517,000 or 8.6%. Stockholders’ equity totaled $141.2 million or 12.77% of period end assets, and tangible equity totaled $117.9 million or 10.89% 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.


	For the Three Months Ended March 31,
	2009								2008
				Interest								Interest
	Average			Income/		Average			Average			Income/		Average
	Balance			Expense		Yield			Balance			Expense		Yield
	(dollars in thousands)

Assets
Interest-earning deposits	$	15,022		$	66		1.76	%	$	7,116		$	74		4.18	%
Investments		187,947			2,250		4.79	%		172,004			2,332		5.45	%
Loans		800,169			11,627		5.89	%		677,393			11,048		6.56	%

Total interest-earning assets		1,003,138			13,943		5.64	%		856,513			13,454		6.32	%
Noninterest-earning assets		106,462								124,783
Allowance for loan losses		(11,340	)							(6,717	)

Total assets	$	1,098,260							$	974,579


Liabilities and Stockholders’ Equity
Interest-bearing demand accounts	$	104,083			107		0.42	%	$	107,782			309		1.15	%
Savings accounts		79,460			117		0.60	%		81,265			313		1.55	%
Money market accounts		117,055			428		1.48	%		109,975			904		3.31	%
Certificates of deposit		381,019			2,959		3.15	%		325,059			3,262		4.04	%
Borrowings		205,162			1,596		3.16	%		141,948			1,429		4.05	%

Total interest-bearing liabilities		886,779			5,207		2.38	%		766,029			6,217		3.26	%
Noninterest-bearing deposits		63,840								56,682
Other liabilities		6,230								3,502

Total liabilities		956,849								826,213
Stockholders’ equity		141,411								148,366

Total liabilities & stockholders’ equity	$	1,098,260							$	974,579

Net interest income				$	8,736							$	7,237

Net interest spread							3.26	%							3.06	%
Net interest margin							3.53	%							3.40	%
Net interest income and margin (tax equivalent basis) (1)				$	8,892		3.59	%				$	7,352		3.45	%

Ratio of average interest-earning assets to average interest-bearing liabilities		113.12	%							111.81	%


(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 equilvalent adjustment has been computed using a Federal income tax rate of 34%, and has the effect of increasing interest income by $156,000, and $115,000 for the three month period ended March 31, 2009 and 2008, respectively. The average yield on investments increased to 5.19% from 4.79% for the three month period ended March 31, 2009 and increased to 5.78% from 5.45% for the three month period ended March 31, 2008.

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 net change 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 March 31, 2009
	Compared to March 31, 2008
	Increase (decrease) due to changes in:
	Average			Average			Net
	Volume			Rate			Change
	(in thousands)
Interest-Earning Assets
Interest-earning deposits	$	50		$	(58	)	$	(8	)
Investments		205			(287	)		(82	)
Loans		1,777			(1,198	)		579

Total interest income		2,032			(1,543	)		489


Interest-Bearing Liabilities
Interest-bearing demand accounts		(10	)		(192	)		(202	)
Savings accounts		(7	)		(189	)		(196	)
Money market accounts		53			(529	)		(476	)
Certificates of deposit		487			(791	)		(304	)
Borrowings		527			(359	)		168

Total interest expense		1,050			(2,060	)		(1,010	)


Total net interest income	$	982		$	517		$	1,499

Comparison of Operating Results for the Three Months Ended March 31, 2009 and 2008

General.The net loss for the three months ended March 31, 2009 was $99,000 compared to a net loss of $2.2 million for the same period in 2008. The March 31, 2008 quarter net loss resulted, in part, from the Company’s contribution of $3.8 million, net of taxes, to The CapeBank Charitable Foundation, and approximately $235,000 of expenses, net of taxes, associated with the Bank’s name change and costs associated with the acquisition of Boardwalk Bank during the period. The results for the 2009 quarter were impacted by a $1.3 million charge related to the employment agreement of the Company’s former President/CEO, and a $1.5 million other-than-temporary impairment charge on Collateralized Debt Obligations (CDO).

Interest Income.Interest income increased $489,000, or 3.6%, to $13.9 million for the three months ended March 31, 2009, from $13.5 million for the three months ended March 31, 2008 primarily from an increase of $579,000 in interest income on loans resulting from higher volumes associated with the acquisition of Boardwalk Bank effective January 31, 2008. Average loans for the three month period ended March 31, 2009 were $800.2 million compared to $677.4 million for the three month period ended March 31, 2009.

The average balance of investments increased $15.9 million, or 9.3% to $187.9 million for the three months ended March 31, 2009, compared to $172.0 million for the three months ended March 31, 2008. The average yield on investments decreased 66 basis points to 4.79% for the three months ended March 31, 2009, from 5.45% for the three months ended March 31, 2008. The increase in the average balance was a result of several factors including the three months ending March 31, 2008 balance reflecting only two months of post-merger Boardwalk Bank investment balances, and an increase in mortgage-backed securities (MBS) due to purchases partially offset by the OTTI write-down of several CDO securities. The decline in the average yield was primarily a result of falling market interest rates which negatively impacted both the repricing of our adjustable rate MBS portfolio and U.S. Government and agency obligations where called securities were replaced at lower coupon rates. Those declines were slightly offset by an increase in the yield of the CDO portfolio due to the previously discussed OTTI write-down.

Interest Expense.Interest expense decreased $1.0 million, or 16.2%, to $5.2 million for the three months ended March 31, 2009, from $6.2 million for the three months ended March 31, 2008.

Interest expense on NOW (interest bearing demand accounts) and money market accounts decreased $678,000, or 55.9%, to $535,000 for the three months ended March 31, 2009, from $1.2 million for the three months ended March 31, 2008, and interest expense on certificates of deposit decreased $303,000, or 9.3%, to $3.0 million for the three months ended March 31, 2009, from $3.3 million for the three months ended March 31, 2008.

Interest expense on borrowings (Federal Home Loan Bank of New York advances) increased $167,000, or 11.8%, to $1.6 million for the three months ended March 31, 2009 from $1.4 million for the three months ended March 31, 2008. The increase in average borrowings of $63.2 million primarily resulted from the acquisition of Boardwalk Bank.

Net Interest Income.Net interest income increased $1.5 million, or 20.7%, to $8.7 million for the three months ended March 31, 2009, from $7.2 million for the three months ended March 31, 2008.

We experienced an increase in our net interest rate spread of 20 basis points, to 3.26% for the three months ended March 31, 2009, from 3.06% for the three months ended March 31, 2008, and an increase in our net interest margin of 13 basis points, to 3.53% for the three months ended March 31, 2009, from 3.40% for the three months ended March 31, 2008. 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.

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 March 31, 2009, the Company’s allowance for loans losses increased to $11.9 million from $11.2 million at December 31, 2008, an increase of $684,000 or 6.1%. The allowance for loan loss ratio increased to 1.48% of gross loans at March 31, 2009, from 1.41% of gross loans at December 31, 2008. The allowance for loan losses to non-performing loans coverage ratio declined to 39.7% at March 31, 2009, from 53.4% at December 31, 2008.

We recorded a provision for loan losses of $745,000 for the three months ended March 31, 2009 compared to $283,000 for the three months ended March 31, 2008. The increase in the provision for losses over the prior year correlates to management’s analysis of non-performing loans. For the quarter ended March 31, 2009, net charge-offs were $61,000 compared to $19,000 for the quarter ended March 31, 2008.

Non-Interest Income.Non-interest income decreased $1.5 million or 139.4%, to a loss of $433,000 for the three months ended March 31, 2009, from $1.1 million for the three months ended March 31, 2008. The decrease resulted from the Company recognizing an other-than-temporary impairment charge to non-interest income on CDO’s totaling $1.5 million for the three month period ended March 31, 2009. In addition, during the current quarter, the Company recognized $29,000 in losses related to the sale of foreclosed real estate.

Non-Interest Expense.Non-interest expense decreased $4.2 million to $8.1 million for the three months ended March 31, 2009. The 2008 quarter included 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. The 2009 quarter did not include these charges but did include increased compensation expenses resulting from a $1.3 million expense related to the employment agreement of the Company’s former President/CEO, increased expense of $702,000 primarily resulting from the Federal deposit insurance premium increases, and a provision for losses on foreclosed real estate of $68,000. Advertising costs declined during the current period as a result of a higher level of advertising in the prior period related to the name change after the acquisition of Boardwalk Bank.

Income Tax Benefit.For the three months ended March 31, 2009 the income tax benefit was $427 thousand, compared to an income tax benefit of $2.0 million for the three months ended March 31, 2008, a change of $1.6 million. The effective tax rate was a benefit of 81.2% for the three months ended March 31, 2009 compared to a benefit of 46.8% for the three months ended March 31, 2008. The change in the effective tax rate from the prior year is a result of an increase in non-taxable items relative to pretax income including interest on tax-exempt securities, BOLI income and other permanent differences between income for financial reporting purposes versus taxable income.

Critical Accounting Policies

In the preparation of our consolidated financial statements, we have adopted various accounting policies that govern the application of accounting principles generally accepted in the United States. Our significant accounting policies are described in the Note 1 to our Consolidated Financial Statements.

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 collectability 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 Statement of Financial Accounting Standards (SFAS) No. 5, “Accounting for Contingencies,using historical loss factors adjusted for economic conditions and other factors. Other 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.

Goodwill Impairment. The Company follows the provisions of SFAS No. 142, “Goodwill and Other Intangibles,” and performs an impairment test at least annually or when circumstances indicate that an event has occurred during an interim period. The Company determined that such an event did not occur during the quarter ended March 31, 2009.

Deferred Income Taxes. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

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 Operating Officer, EVP/Chief Lending Officer, SVP/Chief Financial Officer, SVP of Residential Lending, 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.

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, government agency debt and mortgage-backed securities;

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

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

	•		obtaining general financing through lower cost deposits;

	•		utilizing both fixed term advances and an overnight line of credit with the Federal Home Loan Bank of New York; and

	•		utilizing low cost short term brokered deposits as an alternative funding source.

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 March 31, 2009, 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.


	Net Interest Income
	Estimated		Increase (decrease) in
Change in Interest Rates	Net Interest		Estimated Net Interest Income
(basis points)(1)	Income		Amount			Percent
	(dollars in thousands)

+200	$	38,537	$	(799	)		-2.03	%
+100		39,033		(303	)		-0.77	%
0		39,336
-100		40,012		676			1.72	%
-200		39,634		298			0.76	%


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

The table above indicates that at March 31, 2009, in the event of a 100 basis point increase in interest rates, we would experience a $303 thousand decrease in net interest income. In the event of a 100 basis point decrease in interest rates, we would experience a $676 thousand increase 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 March 31, 2009, 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.

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

The Company does not believe its risks have materially changed from those risks included in the Company’s Annual Report on Form 10-K, filed with the SEC on March 16, 2009.

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 has 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

None

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			Amended and Restated 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			Form of Change in Control Agreement *

	10.3			Amended and Restated Phantom Incentive Stock Option Plan *

	10.4			Amended and Restated Phantom Restricted Stock Plan *

	10.5			Form of Director Retirement Plan *

	10.6			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).

**		Filed as an exhibit to the Company’s Current Report Form 8-K with the Securities and Exchange Commission on July 18, 2008.

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: May 11, 2009	/s/ Michael D. Devlin
	Michael D. Devlin
	President and Chief Executive Officer

Date: May 11, 2009	/s/ Guy Hackney
	Guy Hackney
	Senior Vice President and Chief Financial Officer

EXHIBIT INDEX


Exhibit
No.		Description

	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

Positive
Negative
Uncertain
Constraining
Legalese
Litigous
Readability	H.S. freshman Avg

Cape Bancorp Inactive 10-Q2009 Q1 Quarterly report

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