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[CENTRAL BANCORP LETTERHEAD]
Contact: Paul S. Feeley For Release: Immediately
SENIOR VICE PRESIDENT, TREASURER &
CHIEF FINANCIAL OFFICER
(617) 628-4000
CENTRAL BANCORP REPORTS
FOURTH QUARTER AND FISCAL YEAR EARNINGS
SOMERVILLE, MASSACHUSETTS, May 12, 2005-- Central Bancorp, Inc.
(NASDAQ: CEBK) today reported that its net income more than tripled to $817,000,
or $0.57 per diluted share, for the three months ended March 31, 2005, from
$243,000, or $0.15 per diluted share, for the corresponding quarter in the prior
fiscal year.
An increase of $276,000 in net interest and dividend income, as well as
a decrease of $362,000 in operating expenses primarily due to lower marketing
costs, contributed to the improvement in earnings. The increase in net interest
and dividend income was driven almost entirely by an increase in average earning
assets, as the Company's net interest margin of 3.28% was virtually unchanged
from the year earlier quarter. The net interest margin, however, represented an
improvement over the December 31, 2004 quarter of six basis points, from 3.22%.
Earnings for the fiscal year ended March 31, 2005 were $2,463,000, or
$1.65 per diluted share, compared to $2,936,000, or $1.88 per diluted share, for
the 2004 fiscal year. However, excluding previously announced significant items
noted in the attached table, pro-forma earnings were $2,642,000 in fiscal 2005,
an improvement of $409,000, or 18%, over fiscal 2004. These unusual items
included the costs associated with purchasing Company stock during fiscal 2005
($179,000), and a favorable REIT tax settlement ($374,000) and an insurance
recovery ($329,000), both of which were posted in fiscal 2004.
Central Bancorp's Chairman, President & Chief Executive Officer, John
D. Doherty, commented, "Our Company ended its most recent fiscal year on an
improving note with increased quarterly earnings and record levels of assets,
loans and deposits. Asset quality remains outstanding."
(CONTINUED)
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CENTRAL BANCORP, INC.
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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.
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CENTRAL BANCORP, INC.
CONSOLIDATED OPERATING DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
Quarter Ended Year Ended
March 31, March 31,
----------------------------------------------------------------
2005 2004 2005 2004
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(Unaudited)
Net interest and dividend income $ 4,103 $ 3,827 $ 15,731 $ 15,570
Provision for loan losses 50 50 100 200
Net gain (loss) on sales and write-downs
of investment securities 20 -- 453 (135)
Gain on sale of loans 49 32 252 295
Other non-interest income 262 210 950 966
Non-interest expenses 3,263 (3,625) (13,518) (12,401)
------- ------- -------- --------
Income before taxes 1,121 394 3,768 4,095
Provision for income taxes 304 151 1,305 1,159
------- ------- -------- --------
Net income $ 817 $ 243 $ 2,463 $ 2,936
======= ======= ======== ========
Earnings per share:
Basic $ .58 $ .16 $ 1.66 $ 1.89
======= ======= ======== ========
Diluted $ .57 $ .15 $ 1.65 $ 1.88
======= ======= ======== ========
Weighted average number of shares outstanding:
Basic 1,417 1,556 1,482 1,551
======= ======= ======== ========
Diluted 1,427 1,570 1,493 1,565
======= ======= ======== ========
RECONCILIATION OF GAAP EARNINGS
TO PRO FORMA EARNINGS:
Net income per GAAP $ 817 $ 243 $ 2,463 $ 2,936
Impact of REIT legislation, net of taxes -- -- -- (374)
Impact of litigation and legal fees,
net of insurance and taxes -- -- -- (329)
Costs associated with stock buyback,
net of taxes -- -- 179 --
------- ------- -------- --------
Pro forma earnings $ 817 $ 243 $ 2,642 $ 2,233
======= ======= ======== ========
CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
MARCH 31, March 31,
2005 2004
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Total assets $ 521,204 $ 490,897
Investment securities available for sale 108,616 83,771
Total loans (1) 388,603 357,424
Allowance for loan losses 3,681 3,537
Deposits 333,215 295,920
Borrowings 146,455 145,256
Stockholders' equity 38,239 43,454
Book value per share 24.07 26.10
(1) INCLUDES LOANS HELD FOR SALE OF $2,221 AND $799 AT MARCH 31,
(2005) AND MARCH 31, 2004, RESPECTIVELY.