CENTRAL BANCORP, INC.                               NEWS RELEASE
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399 Highland Avenue, Somerville, Massachusetts
TEL:  617-628-4000    FAX: 617-629-4357



FOR IMMEDIATE RELEASE
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DATE:  January 12, 1999            CONTACT:  JOHN D. DOHERTY
                                             PRESIDENT AND CEO
                                             (617) 628-4000


                     CENTRAL BANCORP, INC.
                 ADOPTS SHAREHOLDER RIGHTS PLAN
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     SOMERVILLE, MASSACHUSETTS (NASDAQ:CEBK)..... Central
Bancorp, Inc., parent company of Central Co-operative Bank,
adopted a Shareholder Rights Plan in connection with the comple
tion of the reorganization of Central Co-operative Bank into the
holding company form of ownership and formation of Central
Bancorp, Inc.  The holding company reorganization was completed
on January 8, 1999.  The Rights Plan is substantially identical
to the Rights Plan previously in effect for Central Co-operative
Bank.  The Rights Plan is designed to protect shareholders'
interests in the event of an unfair and coercive takeover at
tempt.

     The Rights Plan entitles each holder of Central Bancorp,
Inc. common stock to purchase the Company's stock at a discount
price in the event any person or group of persons exceeds prede
termined ownership limitations of the Company's outstanding
common stock.

     According to John D. Doherty, President and Chief Executive
Officer, "The Rights Plan is intended to assure that all of
Central Bancorp, Inc.'s shareholders receive fair and equal
treatment in the event of any proposed takeover of the Company. 
The Rights Plan will not prevent a takeover, but should encourage
anyone seeking to acquire the Company to negotiate with the Board
prior to attempting a takeover."

     "Our principal objective," Mr. Doherty said, "is to continue
to build long-term value for our shareholders."

     The Rights Plan applies to shares held on the record date of
January 8, 1999.  However, rights issued under the Plan will not
be exercisable initially.  They will trade with the Company's
common stock and no certificates will be issued until certain
triggering events occur, as set forth under the Rights Plan and
related Rights Agreement.