1
Paul S. Feeley Immediately
SENIOR VICE PRESIDENT, TREASURER &
CHIEF FINANCIAL OFFICER
(617) 628-4000
CENTRAL BANCORP REPORTS THIRD QUARTER EARNINGS
SOMERVILLE, MASSACHUSETTS, February 9, 2005-- Central Bancorp, Inc.
(NASDAQ: CEBK) today reported that its net income increased more than 19% to
$686,000, or $0.48 per diluted share, for the three months ended December 31,
2004, from $575,000, or $0.37 per diluted share, for the corresponding quarter
in the prior fiscal year.
Net interest and dividend income, which increased $281,000 to
$3,974,000 in 2004's quarter from the year earlier quarter, was a major
contributor to the earnings improvement. The Company's net interest margin also
rose, climbing to 3.22% for the December 31, 2004 quarter from 3.15% in the
comparable 2003 quarter and 3.20% in the September 30, 2004 quarter.
Earnings for the nine months ended December 31, 2004 were $1,646,000,
or $1.09 per diluted share, compared to $2,693,000, or $1.72 per diluted share,
for the same period last year. The 2004 nine-month results included costs of
$178,700, net of taxes, consisting primarily of legal and other professional
fees incurred in connection with the Company's and the ESOP trust's previously
announced purchase of 154,268 shares of Company stock from PL Capital LLC and
affiliates. During the nine months ended December 31, 2003, the Company
recognized a favorable after-tax impact of $374,000 from the settlement of a
REIT-related tax liability with the Massachusetts Department of Revenue, and an
insurance recovery of $329,000, net of related legal fees and taxes,
attributable to shareholder litigation. Excluding these unusual items, pro forma
earnings were $1,825,000 for 2004, a decline of $165,000 vs. the same quarter
last year.
John D. Doherty, Chairman, President & Chief Executive Officer, noted,
"The increases in net interest and dividend income and in net interest margin
during the current quarter are encouraging developments for our Company,
especially given the challenging economic and interest rate climate. We're
pleased our assets and deposits were both at RECORD levels at December 31, 2004,
reflecting in part higher commercial lending activity.
Our asset quality has remained outstanding."
(continued)
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CENTRAL BANCORP, INC.
PAGE 2 OF 3
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 and one limited-service high
school branch in suburban Boston.
(SEE ACCOMPANYING TABLES.)
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THIS PRESS RELEASE CONTAINS FINANCIAL INFORMATION DETERMINED BY METHODS OTHER
THAN IN ACCORDANCE WITH ACCOUNTING METHODS GENERALLY ACCEPTED IN THE UNITED
STATES OF AMERICA ("GAAP"). THE COMPANY'S MANAGEMENT USES THESE NON-GAAP
MEASURES IN ITS ANALYSIS OF THE COMPANY'S PERFORMANCE. THESE MEASURES TYPICALLY
ADJUST GAAP PERFORMANCE MEASURES TO EXCLUDE THE EFFECTS OF SIGNIFICANT GAINS OR
LOSSES THAT ARE UNUSUAL IN NATURE. BECAUSE THESE ITEMS AND THEIR IMPACT ON THE
COMPANY'S PERFORMANCE ARE DIFFICULT TO PREDICT, MANAGEMENT BELIEVES THAT
PRESENTATIONS OF FINANCIAL MEASURES EXCLUDING THE IMPACT OF THESE ITEMS PROVIDE
USEFUL SUPPLEMENTAL INFORMATION THAT IS ESSENTIAL TO A PROPER UNDERSTANDING OF
THE OPERATING RESULTS OF THE COMPANY'S BUSINESS. THESE DISCLOSURES SHOULD NOT BE
VIEWED AS A SUBSTITUTE FOR OPERATING RESULTS DETERMINED IN ACCORDANCE WITH GAAP,
NOR ARE THEY NECESSARILY COMPARABLE TO NON-GAAP PERFORMANCE WHICH MAY BE
PRESENTED BY OTHER COMPANIES.
THIS PRESS RELEASE 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 Nine Months Ended
December 31, December 31,
-------------------------------------------------------------
2004 2003 2004 2003
-------------------------------------------------------------
(Unaudited) (Unaudited)
Net interest and dividend income $3,974 $3,693 $11,627 $11,743
Provision for loan losses -- 50 50 150
Net gain (loss) on sales and write-downs
of investment securities 84 -- 432 (135)
Gain on sale of loans 85 54 204 263
Other non-interest income 208 253 688 756
Non-interest expenses 3,249 3,017 10,254 8,776
------ ------ ------- -------
Income before taxes 1,102 933 2,647 3,701
Provision for income taxes 416 358 1,001 1,008
------ ------ ------- -------
Net income $ 686 $ 575 $ 1,646 $ 2,693
====== ====== ======= =======
Earnings per share:
Basic $ .49 $ .37 $ 1.10 $ 1.74
====== ====== ======= =======
Diluted $ .48 $ .37 $ 1.09 $ 1.72
====== ====== ======= =======
Weighted average number of shares outstanding:
Basic 1,413 1,553 1,503 1,549
====== ====== ======= =======
Diluted 1,424 1,567 1,515 1,563
====== ====== ======= =======
RECONCILIATION OF GAAP EARNINGS
TO PRO FORMA EARNINGS:
Net income per GAAP $ 686 $ 575 $ 1,646 $ 2,693
Impact of REIT legislation, net of taxes -- -- -- (374)
Impact of litigation and legal fees,
net of insurance and taxes -- (53) -- (329)
Costs associated with stock buyback,
net of taxes -- -- 179 --
------ ------ ------- -------
Pro forma earnings $ 686 $ 522 $ 1,825 $ 1,990
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CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
DECEMBER 31, March 31,
2004 2004
----------------------------------
(UNAUDITED)
Total assets $509,391 $490,897
Investment securities available for sale 113,356 83,771
Total loans (1) 374,559 357,424
Allowance for loan losses 3,621 3,537
Deposits 314,322 295,920
Borrowings 153,223 145,256
Stockholders' equity 38,748 43,454
Book value per share 24.39 26.10
(1) Includes loans held for sale of $2,277 and $799 at December 31, 2004
and March 31, 2004, respectively.