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NEWS RELEASE
Contact: Paul S. Feeley For Release: Immediately
Senior Vice President, Treasurer &
Chief Financial Officer
(617) 628-4000
CENTRAL BANCORP REPORTS
IMPROVED QUARTERLY EARNINGS
SOMERVILLE, MASSACHUSETTS, January 31, 2006 - Central Bancorp, Inc.
(NASDAQ:CEBK) today reported that its net income improved more than 16% to
$796,000, or $.55 per diluted share, for the quarter ended December 31, 2005,
from $686,000, or $.48 per diluted share, for the corresponding quarter in the
prior fiscal year. The Company's earnings for the nine months ended December 31,
2005 of $2,125,000, or $1.48 per diluted share, rose over 29% from the earnings
of $1,646,000, or $1.09 per diluted share, for the nine months ended December
31, 2004.
The earnings improvement for the quarterly periods included a $105,000
increase in net interest and dividend income and a $70,000 increase in total
non-interest income primarily attributable to a continuing higher level of
deposit-related fees earned during the period, offset partially by a decline in
gains on sales of loans as the volume of this business has slowed in recent
months.
Central Bancorp's Chairman, President & Chief Executive Officer, John
D. Doherty, commented, "The December 2005 quarterly results represented the
fifth consecutive time in which our quarterly earnings have surpassed the
corresponding quarter of the previous year. At December 31, 2005, our deposits
of nearly $360 million were at the highest level in the Company's history --
growing by more than $9 million during the quarter as we continued to offer
special Certificate of Deposit programs at attractive rates. We had only one
non-performing loan totaling $120,000 at December 31, 2005."
The earnings improvement for the nine months ended December 31, 2005
was primarily attributable to increases of $824,000 in net interest and dividend
income and $223,000 in total non-interest income. While the net interest spread
and margins remained virtually unchanged, interest earning assets increased
significantly, resulting in the increased earnings. The increases in total
non-interest income continued to be driven by increases in deposit-related fees
and
(CONTINUED)
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CENTRAL BANCORP, INC.
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commissions from non-deposit investment products, offset partially by lower
levels of gains on sales of loans and investments as a result of a decline in
activity as well as the previously reported charge of $283,000 in the September
2005 quarter associated with a restructuring that involved voluntary employment
termination packages offered to selected employees.
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, a limited service high school
branch in suburban Boston and a stand alone 24-hour automated teller machine in
Somerville.
(SEE ACCOMPANYING TABLES.)
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THIS PRESS RELEASE MAY CONTAIN CERTAIN FORWARD-LOOKING STATEMENTS, WHICH ARE
BASED ON MANAGEMENT'S CURRENT BELIEFS AND EXPECTATIONS, AS WELL AS THE
ASSUMPTIONS MADE USING INFORMATION CURRENTLY AVAILABLE TO MANAGEMENT. SINCE
THESE STATEMENTS REFLECT THE VIEWS OF MANAGEMENT CONCERNING FUTURE EVENTS, THESE
STATEMENTS INVOLVE RISKS, UNCERTAINTIES AND ASSUMPTIONS. THESE RISKS AND
UNCERTAINTIES INCLUDE AMONG OTHERS: 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. ADDITIONALLY, OTHER RISKS AND UNCERTAINTIES MAY BE DESCRIBED IN THE
COMPANY'S QUARTERLY REPORTS ON FORM 10-Q AND ITS ANNUAL REPORTS ON FORM 10-K,
EACH FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, WHICH ARE AVAILABLE AT
THE SECURITIES AND EXCHANGE COMMISSION'S INTERNET WEBSITE (WWW.SEC.GOV) AND TO
WHICH REFERENCE IS HEREBY MADE. THEREFORE, ACTUAL FUTURE RESULTS MAY DIFFER
SIGNIFICANTLY FROM RESULTS DISCUSSED IN THESE FORWARD-LOOKING STATEMENTS AND
UNDUE RELIANCE SHOULD NOT BE PLACED ON SUCH STATEMENTS. THE COMPANY ASSUMES NO
OBLIGATION TO UPDATE ANY FORWARD-LOOKING STATEMENTS.
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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 Nine Months Ended
December 31, December 31,
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2005 2004 2005 2004
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(Unaudited) (Unaudited)
Net interest and dividend income $4,079 $ 3,974 $12,451 $11,627
Provision for loan losses -- -- 100 50
Net gain on sales and write-downs
of investment securities 93 84 306 432
Gain on sale of loans 44 85 183 204
Other non-interest income 310 208 1,058 688
Non-interest expenses 3,302 (3,249) (10,621) (10,254)
------- -------- -------- --------
Income before taxes 1,224 1,102 3,277 2,647
Provision for income taxes 428 416 1,152 1,001
------- -------- -------- --------
Net income $ 796 $ 686 $ 2,125 $ 1,646
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Earnings per share:
Basic $ .56 $ .49 $ 1.49 $ 1.10
======= ======== ======== ========
Diluted $ .55 $ .48 $ 1.48 $ 1.09
======= ======== ======== ========
Weighted average number of
shares outstanding:
Basic 1,431 1,413 1,427 1,503
======= ======== ======== ========
Diluted 1,440 1,424 1,435 1,515
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Outstanding shares, end of period 1,590 1,589 1,590 1,589
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SELECTED CONSOLIDATED BALANCE SHEET DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)
DECEMBER 31, March 31,
2005 2005
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Total assets $ 536,867 $ 521,071
Investment securities available for sale 97,037 108,616
Total loans (1) 413,787 388,603
Allowance for loan losses 3,783 3,681
Deposits 359,540 333,215
Borrowings 129,129 141,197
Subordinated debenture 5,258 5,258
Stockholders' equity 39,155 38,239
Book value per share 24.63 24.07
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(1) Includes loans held for sale of $1,056 and $2,221 at December 31, 2005
and March 31, 2005, respectively.