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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934.
For the fiscal year ended December 31, 2006.
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934.
For the transition period from ____ to ____.
Commission file number 0-49925
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A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
Central Jersey Bank, N.A.
Employees' Savings & Profit Sharing Plan and Trust
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B. Name of issuer of the securities held pursuant to
the plan and the address of its principal executive office:
Central Jersey Bancorp
627 Second Avenue
Long Branch, New Jersey 07740
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<page>
INDEX TO FINANCIAL STATEMENTS
CENTRAL JERSEY BANK, N.A. EMPLOYEES' SAVINGS
& PROFIT SHARING PLAN AND TRUST
Financial Statements
December 31, 2006 and 2005
<table>
<caption>
- ----------------------------------------------------------------------------------------
Page
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<s> <c>
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM...............................1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits
December 31, 2006 and 2005..........................................2
Statements of Changes in Net Assets Available for Plan Benefits
Years Ended December 31, 2006 and 2005..............................3
Notes to Financial Statements................................................4
SUPPLEMENTAL SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)......Schedule 1
</table>
<page>
Report of Independent Registered Public Accounting Firm
The Board of Directors
Central Jersey Bancorp:
We have audited the accompanying statements of net assets available for plan
benefits of Central Jersey Bank, N.A. Employees' Savings & Profit Sharing Plan
and Trust (the "Plan") (formerly known as The Monmouth Community Bank, NA
Employees' Savings & Profit Sharing Plan) as of December 31, 2006 and 2005, and
the related statements of changes in net assets available for plan benefits for
the years then ended. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Central
Jersey Bank, N.A. Employees' Savings & Profit Sharing Plan and Trust as of
December 31, 2006 and 2005, and the changes in net assets available for plan
benefits for the years then ended, in conformity with U.S. generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental Schedule H, Line 4i-
Schedule of Assets (Held at End of Year) as of December 31, 2006, is presented
for additional analysis and is not a required part of the 2006 basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audit of the 2006 basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the 2006 basic financial statements taken as a whole.
/s/ KPMG LLP
Short Hills, New Jersey
June 29, 2007
1
<page>
CENTRAL JERSEY BANK, N.A.
EMPLOYEE SAVINGS & PROFIT SHARING PLAN AND TRUST
Statements of Net Assets Available for Plan Benefits
December 31, 2006 and 2005
<table>
<caption>
2006 2005
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<s> <c> <c>
Investments:
Investments, at fair value $1,491,010 $1,202,542
Investments in Central Jersey Bank, N.A. common stock, at fair value 731,346 908,291
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Total investments 2,222,356 2,110,833
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Receivables:
Employer receivables 13,930 14,546
Participant loans receivable 43,014 28,450
Accrued income 231 185
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57,175 43,181
Payables:
Accrued expenses (14,229) (14,927)
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Net assets available for benefits $2,265,302 $2,139,087
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</table>
See accompanying notes to financial statements.
2
<page>
CENTRAL JERSEY BANK, N.A.
EMPLOYEE SAVINGS & PROFIT SHARING PLAN AND TRUST
Statements of Changes in Net Assets Available for Plan Benefits
Years ended December 31, 2006 and 2005
<table>
<caption>
2006 2005
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<s> <c> <c>
Contributions:
Employer contributions $ 207,213 $ 112,929
Employee contributions 265,455 189,525
Rollovers 19,949 103,159
Transfers from predecessor plan -- 1,064,100
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Total contributions 492,617 1,469,713
Investment (loss) income:
Interest income 10,827 4,951
Net realized (losses) gains on sales of investments (10,532) 76,808
Net depreciation of investments (184,194) (63,541)
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Total investment (loss) income (183,899) 18,218
Contributions and investment (loss) income 308,718 1,487,931
Deductions:
Administrative expenses 13,979 7,213
Payment to participants 168,524 10,337
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Net change in assets available for benefits 126,215 1,470,381
Net assets available for benefits, beginning of year 2,139,087 668,706
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Net assets available for benefits, end of year $ 2,265,302 $ 2,139,087
=========== ===========
</table>
See accompanying notes to financial statements.
3
<page>
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2006 and 2005
(1) Plan Description
The following description of the Central Jersey Bank, N.A. Employees'
Savings & Profit Sharing Plan and Trust (the Plan), formerly known as The
Monmouth Community Bank, N.A. Employees' Savings & Profit Sharing Plan,
provides only general information. Participants should refer to the Plan
documents for a more complete description of the Plans' provisions. The
Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
(a) Plan Changes
Effective August 22, 2005, Monmouth Community Bank, N.A. merged with
Allaire Community Bank and the organization became known as Central
Jersey Bank, N.A. Effective September 1, 2005, the Allaire Community
Bank 401(k) Profit Sharing Plan merged into the Monmouth Community
Bank, NA Employees' Savings & Profit Sharing Plan and Trust. The
merged plan was re-named the Central Jersey Bank, N.A. Employees'
Savings & Profit Sharing Plan and Trust.
(b) General
The Plan was established January 1, 2000 as a defined contribution
plan. Generally, employees become eligible to participate in the
Plan on the first of the month following three months of continuous
service at Central Jersey Bank, N.A. (the Bank).
(c) Employee Contributions
An eligible employee may elect to have a percentage of compensation
contributed to this Plan on a pre-tax salary reduction basis. A
participant may elect to defer between 1% and 75% of their
compensation under a Salary Reduction Agreement to the Plan.
Additionally, participants may allocate their contributions to
fifteen different investment funds and to the common stock fund of
Central Jersey Bancorp. This contribution amount is limited by the
Internal Revenue Code (the Code) on a pretax basis to $15,000 in
2006. In addition, certain eligible participants can make "catch-up"
contributions if the maximum amount of regular contributions are
made and the participant is age 50 or older, thereby increasing the
total elective deferrals to $20,000 for 2006.
(d) Employer Contributions
In 2006 and 2005, contributions were made by the Bank in an amount
equal to 80% of the first 5% of a participant's eligible
contributions. Prior to September 2005, the contributions made by
the Bank were determined at a rate of up to 3% of a participant's
eligible contributions for the Plan year. The Board of Directors
sets the Bank's matching contribution rate in its sole discretion.
(e) Vesting
Participants are always vested with respect to their contributions
plus actual earnings thereon. Vesting with respect to the Bank's
matching contributions is 20% per year of service, with 100% vesting
after 5 years.
4
<page>
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2006 and 2005
(f) Participant Loans
Participants may borrow from the vested portion of their account.
The loan must be no less than $1,000 and no more than $50,000.
Participants may not borrow more than 50% of the vested balance in
their accounts. Any loan made must generally be repaid within a
period not to exceed the earlier of termination of employment or
five years. The term of the loan may exceed five years for the
purchase of a primary residence, however, it may not exceed 15
years. Loan interest rates are determined at the time of the loan
and remain in effect for the term of the loan. Principal and
interest are paid according to the participant amortization schedule
through bi-weekly payroll deductions.
(g) Participants' Accounts
Individual accounts are maintained for each Plan participant. Each
participant's account is credited with the participant's
contribution and the Bank's matching contribution on behalf of that
participant. Allocations of plan earnings or losses are based on the
participant's earnings or account balances, as defined. The benefit
to which each participant is entitled is the benefit that can be
provided from participant's vested account.
Participants have the option to invest in a self directed brokerage
account. Assets may be transferred from their core account only. A
minimum of $1,000 is required with a maximum investment of 25% of
total account balance.
(h) Benefit Payments/Withdrawals
Upon retirement or termination of employment, participants or their
designated beneficiary, may, under certain conditions elect to
receive vested benefit distributions in a lump-sum payment equal to
the total value of their separate accounts or installment payments
upon termination of employment, disability or death.
During employment, participants may request an in-service withdrawal
under certain circumstances. Rollover contributions and earnings
thereof may be requested for distribution according to plan
provisions. Additionally, participants may request an in-service
withdrawal of pre-tax elective deferrals and employer supplemental
contributions and the earning thereof upon attainment of age 59 1/2
or hardship. In the event of hardship, the distribution cannot
exceed the amount required to relieve the hardship. Such withdrawals
are subject to approval by the Plan administrator and applicable
penalties and is recorded when paid.
(i) Forfeitures
Forfeitures of non-vested 401(k) contributions used to reduce
employer contributions for the years ended December 31, 2006 and
2005 amounted to $1,638 and $1,670, respectively.
(j) Investment Valuation
Investments were valued at fair market value. Investment
transactions were recorded on a settlement date basis. There were no
material unsettled trades at December 31, 2006 and 2005.
5
<page>
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2006 and 2005
(k) New Accounting Pronouncement
As of December 31, 2006, the Plan adopted Financial Accounting
Standards Board (FASB) Staff Position FSP AAG INV-1 and Statement of
Position No. 94-4-1, Reporting of Fully Benefit-Responsive
Investment Contracts Held by Certain Investment Companies Subject to
the AICPA Investment Company Guide and Defined-Contribution Health
and Welfare and Pension Plans (the FSP). The FSP requires the
Statement of Net Assets Available for Plan Benefits to present the
fair value of the Plan's investments as well as the adjustment from
fair value to contract value for the fully benefit-responsive
investment contracts. The Statement of Changes in Net Assets
Available for Plan Benefits is prepared on a contract value basis
for the fully benefit-responsive investment contracts. The FSP was
applied retroactively to the prior period presented on the Statement
of Net Assets Available for Benefits as of December 31, 2005.
(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
The financial statements of the Plan have been prepared on an
accrual basis and present the net assets available for benefits and
the changes in those net assets.
(b) Funds and Accounts Managed by State Street Global Advisors
Under the terms of a trust agreement between State Street Global
Advisors (the "Custodian") and the Bank, the Custodian managed funds
on behalf of the Plan. The Custodian held the Plan's investment
assets and executed transactions therein. The investments in the
funds were reported to the Bank by the Custodian as having been
determined through the use of current values for all assets.
(c) Use of Estimates
In preparing plan financial statements, estimates and assumptions
have been made relating to the reporting of assets and liabilities
and changes therein, and the disclosure of contingent assets and
liabilities to prepare these financials statements in conformity
with U.S. generally accepted accounting principles. Actual results
could differ from those estimates.
(d) Concentration of Risk
The assets of the Plan are primarily financial instruments, which
are monetary in nature. As a result, interest rates have a more
significant impact on the Plan's performance than do the effects of
general levels of inflation. Interest rates do not necessarily move
in the same direction or in the same magnitude as the prices of
goods and services as measured by the consumer price index.
Investment securities, in general, are exposed to various risks such
as interest rate, credit, and overall market volatility. Due to the
level of risk associated with certain investment securities, it is
reasonably possible that changes in values of the investment
securities will occur in the near term and that such changes could
materially affect the amounts reported in the financial statements.
6
<page>
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2006 and 2005
(e) Investment Valuation
Investments in mutual funds are managed by State Street Global
Advisors and held by the Bank of New York. Additionally, investments
are made to the Central Jersey Bancorp common stock fund which are
valued and recorded at market value as determined by quoted market
prices, which represent the net asset value of the shares held by
the Plan at the end of the year. The Plan is valued at least
quarterly and participants' accounts are credited with a
proportional share of investment income. Additionally, investments
are priced daily. Loans receivable from participants are valued at
their outstanding balance, which approximates fair value.
Investment contracts are presented at fair value on the statement of
net assets available for plan benefits. Investments in fully
benefit-responsive investment contracts are stated at contract value
which is equal to principal balance plus accrued interest. Contract
value approximates fair value. As provided in the FSP, an investment
contract is generally valued at contract value, rather than fair
value, to the extent it is fully benefit-responsive. The fair value
of fully benefit-responsive investment contracts is calculated using
a discounted cash flow model which considers recent fee bids as
determined by recognized dealers, discount rate and the duration of
the underlying portfolio securities.
(f) Income Recognition
Interest income is recorded as earned on the accrual basis. Dividend
income is recorded on the ex-dividend date. Participant loans
receivable are valued at cost which approximates fair value.
(3) Plan Expenses
Certain costs of administrative services rendered on behalf of the Plan
were paid by the Bank.
(4) Plan Termination
Although it has not expressed any intention to do so, the Bank has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of the
termination of the Plan, no further allocations shall be made, and no
eligible employee shall become a participant after the date of
termination.
(5) Federal Tax Status
The Internal Revenue Service issued its latest determination letter on
March 7, 2002 to the Plan, which states that the Plan and its underlying
trust qualify under the applicable provisions of the Internal Revenue Code
(IRC) and, therefore, are exempt from federal income taxes. The Plan has
been amended since receiving the determination letter. However, in the
opinion of the Plan Administrator and the Plan's tax counsel, the Plan and
its underlying trust have operated within the terms of the Plan and remain
qualified under applicable provisions of the IRC.
(6) Investments
The values of individual investments that represent 5% or more of the
total Plan's assets at December 31, 2006 and 2005 are as follows:
7
<page>
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2006 and 2005
<table>
<caption>
2006 2005
--------- ---------
<s> <c> <c>
Central Jersey Bancorp, investment in common stock $ 731,346 $ 908,291
State Street Bank and Trust Company S&P 500 Flagship
Securities Lending Fund 208,840 88,142
State Street Bank and Trust Company Moderate Strategic
Balanced 190,896 146,486
State Street Bank and Trust Company Conservative Strategic
Balanced Securities Lending Fund 190,820 153,410
Pentegra Stable Value Fund 173,939 123,537
State Street Bank and Trust Company Government Money
Market Account 140,557 125,567
State Street Bank and Trust Company Passive Long Treasury
Fund 127,794 115,279
<caption>
For the years ended December 31, 2006 and 2005, the Plan's net
appreciation/(depreciation) of investments is as follows:
2006 2005
--------- ---------
<s> <c> <c>
Commingled Funds $ 102,624 $ (27,359)
Investment in Central Jersey Bancorp, common stock (286,818) (36,182)
--------- ---------
Net depreciation of investments $(184,194) $ (63,541)
========= =========
</table>
(7) Related Parties
The Bank of New York is the trustee, as defined by the Plan. As a result,
these transactions qualify as party-in-interest transactions. Fees for the
investment management services are paid by the Plan Sponsor.
(8) Reconciliation of Financial Statements to Form 5500
The following is a reconciliation of the employee contributions per the
financial statements for the years ended December 31, 2006 and 2005 to the
Form 5500:
2006 2005
-------- --------
Employee Contributions per the Financial Statements $265,455 $189,525
Corrective Distributions 8,152 13,711
-------- --------
Total Employee Contributions per the Form 5500 $273,607 $203,236
======== ========
8
<page>
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT SHARING PLAN AND TRUST
Notes to Financial Statements
December 31, 2006 and 2005
(9) Subsequent Event
Effective January 1, 2007, the Plan adopted a Safe Harbor Amendment in
which the Bank shall make a safe harbor basic matching contribution to the
Plan on behalf of each participant in the amount of 100% of the
participant's 401(k) deferrals that do not exceed 3% percent of the
participant's salary plus 50% of the participants deferrals that exceed 3%
of the participants salary but that do not exceed 5% of the participants
salary.
With the adoption of the Safe Harbor Amendment, the Plan amended the
vesting schedule to reflect 100% vesting for all plan participants
effective January 1, 2007.
9
<page>
<table>
<caption>
SCHEDULE 1
CENTRAL JERSEY BANK, N.A.
EMPLOYEE SAVINGS & PROFIT SHARING PLAN AND TRUST
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2006
Current
Identity of Issuer Description of Investment Cost value
- ------------------------------------ ---------------------------------------- ----------- -----------
<s> <c> <c> <c>
Pentegra Services, Inc.* Penetgra Stable Value Fund $166,526 $ 173,939
State Street Bank and Trust Company* Moderate Strategic Balanced 169,419 190,896
State Street Bank and Trust Company* Conservative Strategic Balanced
Securities Lending Fund 175,606 190,820
State Street Bank and Trust Company* Aggressive Strategic Balanced Securities
Lending Fund 11,011 12,598
State Street Bank and Trust Company* Russell 2000 Index Securities Lending
Series Fund 44,040 51,904
State Street Bank and Trust Company* S&P 500 Flagship Securities Lending
Series Fund 181,848 208,840
State Street Bank and Trust Company* S&P Growth Index Securities Lending
Fund 35,337 38,861
State Street Bank and Trust Company* S&P Midcap Index Securities Lending
Series Fund 76,032 84,934
State Street Bank and Trust Company* NASDAQ 100 Index Non-Lending Series
Fund 32,716 35,281
State Street Bank and Trust Company* REIT Index Non-Lending Securities
Fund 21,962 24,764
State Street Bank and Trust Company* S&P Value Index Securities Lending
Fund 84,579 100,663
State Street Bank and Trust Company* Daily EAFE Index Securities Lending
Series Fund 32,259 37,532
State Street Bank and Trust Company* Schwab Window 17,341 17,341
State Street Bank and Trust Company* Collective Short Term Investment Fund 54,286 54,286
State Street Bank and Trust Company* Government Money Market Account 140,557 140,557
State Street Bank and Trust Company* Passive Long Treasury Fund 127,794 127,794
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Total mutual funds 1,491,010
*Central Jersey Bancorp, investment in
common stock 731,346
*Participant loans receivable (a) 43,014
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Total other investments 774,360
Total investments $ 3,756,380
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</table>
* A party-in-interest as defined by ERISA
(a) As of December 31, 2006, the interest rates on these loans ranged from 5.00%
to 9.25%
See accompanying report of independent registered public accounting firm.
10
<page>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities and Exchange Act of
1934, the trustees (or other person who administers the employee benefit plan)
has duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
CENTRAL JERSEY BANK, N.A.
EMPLOYEES' SAVINGS & PROFIT
SHARING PLAN AND TRUST
Date: June 29, 2007 By: /s/ Gail M. Corrigan
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Gail M. Corrigan
Plan Administrator
11
<page>
EXHIBIT INDEX
Exhibit Number Description
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23.1 Consent of KPMG LLP.