Central Bancorp, Inc. Declares ESOP Purchases Shares.

Business Editors

SOMERVILLE, Mass.--(BUSINESS WIRE)--May 15, 2002

Central Bancorp, Inc. (NASDAQ National Market: CEBK) today announced that the Central Co-operative Bank Employee Stock Ownership Plan Trust (the "ESOP") had begun purchasing shares on the open market and in privately negotiated transactions. As previously announced, the ESOP had received approval from the Federal Reserve to increase its ownership to above 10% of shares outstanding. The Company's Board of Directors had previously authorized a loan to the ESOP in an amount sufficient to purchase up to 5% of outstanding shares. Pursuant to this authority, the ESOP had previously purchased shares in a privately negotiated transaction and purchased 5,000 shares in the open market yesterday.

"The ESOP is a key element of our compensation program," John D. Doherty, President of Central Bancorp, Inc. explained. "By making our employees into stockholders, their interests become more closely aligned with those of other investors. The ESOP, however, has allocated nearly all of the shares it had acquired in prior years. The new purchases will allow us to maintain ESOP benefits at their current level."

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.