William P. Morrissey Immediately
Senior Vice President
(617) 628-4000
CENTRAL BANCORP REPORTS 94% EARNINGS IMPROVEMENT
FOR ITS JUNE 2002 QUARTER, AND DECLARES
ITS REGULAR QUARTERLY CASH DIVIDEND
SOMERVILLE, MASSACHUSETTS, July 15, 2002-- Central Bancorp, Inc. (NASDAQ:
CEBK) today reported that its net income nearly doubled to $1,027,000, or $0.63
per diluted share, for the three months ended June 30, 2002, from $530,000, or
$0.32 per diluted share, for the corresponding quarter in the prior fiscal year.
The 93.8% earnings increase primarily resulted from an increase of
$1,045,000 in net interest and dividend income principally due to a decrease in
the Company's cost of funds. During the quarter ended June 30, 2002, the
weighted average cost of all interest-bearing liabilities was 3.31% compared to
4.57% for the quarter ended June 30, 2001, reflecting the general decrease in
interest rates occurring over the past eighteen months. The Company also
benefited during the quarter from elimination of the amortization of goodwill,
as required by revised accounting rules, which amounted to $72,000 in the first
quarter of the prior fiscal year.
The increase in earnings in this year's quarter occurred despite a decrease
of $192,000 in net gains on sales and write-downs of investment securities.
During the quarter ended June 30, 2002, the Company recorded write-downs of
$215,000 in certain equity securities to recognize an impairment in value deemed
to be other than temporary.
Loan quality continued to be outstanding, with no non-performing loans and
no foreclosed property held by the Company at June 30, 2002. Loan delinquencies
continued to be virtually non-existent.
John D. Doherty, President & Chief Executive Officer, stated, " We are very
pleased with the continuing improvement in net interest and dividend income,
which increased 4.1% compared to the quarter ended March 31, 2002. We are
particularly pleased with the impact that the $10.2 million growth in core
deposits during the quarter had on this improvement."
(continued)
Central Bancorp, Inc.
Page 2 of 3
The Company also announced today that its Board of Directors has declared a
regular quarterly cash dividend of $0.10 per share. The dividend is payable on
August 16, 2002 to stockholders of record on August 2, 2002. This represents the
Company's 24th consecutive distribution since implementing a cash dividend
policy in October 1996.
Central Bancorp, Inc., is the holding company for Central Bank, whose legal
name is Central Co-operative Bank, a Massachusetts-chartered co-operative bank
operating eight full-service banking offices in suburban Boston.
(See accompanying tables.)
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This earnings report may contain certain forward-looking statements, which are
based on management's current expectations regarding economic, legislative and
regulatory issues that may impact the Company's earnings in future periods.
Factors that could cause future results to vary materially from current
management expectations include, but are not limited to, general economic
conditions, changes in interest rates, deposit flows, real estate values and
competition; changes in accounting principles, policies or guidelines; changes
in legislation or regulation; and other economic, competitive, governmental,
regulatory and technological factors affecting the Company's operations,
pricing, products and services.
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Central Bancorp, Inc.
Page 3 of 3
CENTRAL BANCORP, INC.
CONSOLIDATED OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Quarter Ended
June 30,
---------------------------
2002 2001
---------------------------
(Unaudited)
Net interest and dividend income $ 4,280 $ 3,235
Net gain on sales and write-downs
of investment securities 11 203
Other non-interest income 212 206
Non-interest expenses 2,891 2,811
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Income before taxes 1,612 833
Provision for income taxes 585 303
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Net income $ 1,027 $ 530
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Earnings per share:
Basic $ 0.64 $ 0.32
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Diluted $ 0.63 $ 0.32
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Weighted average number of
shares outstanding:
Basic 1,606 1,661
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Diluted 1,625 1,670
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CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS)
JUNE 30, March 31,
2002 2002
--------------------------------
(UNAUDITED)
Total assets $ 473,273 $ 468,219
Total loans 363,136 371,707
Allowance for loan losses 3,293 3,292
Deposits 271,073 261,907
Borrowings 159,255 164,000
Stockholders' equity 39,072 38,954