[CENTRAL BANCORP LETTERHEAD]
Contact: William P. Morrissey
Senior Vice President For Release: Immediately
(617) 628-4000
CENTRAL BANCORP REPORTS SECOND QUARTER EARNINGS AND
FINAL ANNUAL MEETING ELECTION RESULTS
SOMERVILLE, MASSACHUSETTS, October 25, 2002-- Central Bancorp, Inc.
(NASDAQ: CEBK) today reported that its net income increased over 18% to
$668,000, or $0.42 per diluted share, for the three months ended September 30,
2002, from $564,000, or $0.34 per diluted share, for the corresponding quarter
in the prior fiscal year. Exclusive of the after-tax impact of gains and losses
on the sales and write-downs of investment securities, core earnings increased
67% in the current fiscal quarter compared to the same quarter in the prior
year. This significant improvement occurred despite additional costs incurred
during the current quarter in connection with the contested election of
directors at this year's annual meeting which, after taxes, reduced net income
by approximately $190,000. The elimination of goodwill amortization in the
current year, as required by a change in generally accepted accounting
principles, contributed $72,000 to the improved quarterly results.
The increase in net income in the second quarter, as compared to the same
quarter in the prior year, occurred despite a decrease of $342,000, before
taxes, in net gains and losses on sales and write-downs of investment
securities. During the quarter ended September 30, 2002, the Company recognized
write-downs of $220,000 in certain equity securities due to an impairment in
value deemed to be other than temporary.
For the six months ended September 30, 2002, net income increased 55% to
$1,695,000, or $1.05 per diluted share, from $1,094,000, or $0.65 per diluted
share in the year earlier period. Exclusive of the after-tax impact of gains and
losses on the sales and write-downs of investment securities, core earnings
doubled during the first six months of the current fiscal year compared to the
same period in the prior year.
(continued)
Central Bancorp, Inc.
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John D. Doherty, President & Chief Executive Officer, stated, "I am pleased
that we were able to continue to improve significantly our core earnings in the
second quarter as compared to last year. Core deposits increased at an
annualized rate of over 15% during the current quarter and helped to partially
offset the pressures on the net interest margin caused by the unprecedented
level of mortgage loan prepayments and the related decrease in loan yields."
The significant increase in core earnings in the quarter ended September
30, 2002, as compared to the same period in the prior year, primarily resulted
from an increase of $756,000 in net interest and dividend income due to the
Bank's lower cost of funds. The Company experienced a narrowing in its net
interest margin to 3.56% in the most recently completed quarter from 3.76% in
the first quarter of the current fiscal year. The narrowing of the Company's net
interest margin is attributable to the decline in yield on interest-earning
assets resulting from a record level of mortgage refinancings in the current low
interest rate environment.
Loan quality continued to be outstanding with only one loan having a
balance of $599,000 delinquent in excess of 90 days at September 30, 2002. In
addition, loan delinquencies continued to be minimal and the Company held no
foreclosed assets at end of the current quarter.
The Company also announced today that final results of the election of
three directors at the 2002 Annual Meeting of stockholders confirmed that Paul
E. Bulman, Garrett Goodbody and Richard Fates received a plurality of the votes
cast.
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 Six Months Ended
September 30, September 30,
--------------- ---------------
2002 2001 2002 2001
--------------- ---------------
(Unaudited) (Unaudited)
Net interest and dividend income $4,116 $3,360 $8,396 $6,596
Net gain (loss) on sales and write-downs
of investment securities (221) 121 (210) 324
Other non-interest income 279 216 491 422
Non-interest expenses 3,132 2,806 6,023 5,618
------ ------ ------ ------
Income before taxes 1,042 891 2,654 1,724
Provision for income taxes 374 327 959 630
------ ------ ------ ------
Net income $ 668 $ 564 $1,695 $1,094
====== ====== ====== ======
Earnings per share:
Basic $ 0.42 $ 0.34 $ 1.06 $ 0.66
====== ====== ====== ======
Diluted $ 0.42 $ 0.34 $ 1.05 $ 0.65
====== ====== ====== ======
Weighted average number of shares outstanding:
Basic 1,585 1,666 1,592 1,664
====== ====== ====== ======
Diluted 1,600 1,683 1,609 1,678
====== ====== ====== ======
RECONCILIATION OF GAAP
EARNINGS TO CORE EARNINGS:
Net Income per GAAP $ 668 $ 564 $1,695 $1,094
Net (gain) loss on sales and write-downs of
investment securities, net of taxes 146 (77) 139 (207)
====== ====== ====== ======
Core Earnings $ 814 $ 487 $1,834 $ 887
====== ====== ====== ======
CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS)
SEPTEMBER 30, March 31,
2002 2002
----------------------------
(UNAUDITED)
Total assets $470,543 $468,219
Total loans 369,843 371,707
Allowance for loan losses 3,294 3,292
Deposits 276,447 261,907
Borrowings 151,700 164,000
Stockholders' equity 39,419 38,954