Central Bancorp Reports Earnings for Its June 30, 2001 Quarter and the Status of Its Common Stock Buyback Program.Business Editors SOMERVILLE, Mass.--(BUSINESS WIRE)--July 26, 2001 Central Bancorp, Inc., (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on National Market:CEBK) today reported net income of $530,000, or 32 cents per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the three months ended June 30, 2001, compared to net income of $765,000, or 43 cents per diluted share, for the corresponding 2000 quarter. The earnings decline for the June 30, 2001 quarter was in part due to a $202,000 decrease in net interest and dividend income compared to the year earlier quarter. This decrease was attributable to an acceleration in residential loan pay-offs as borrowers sought to refinance Refinance 1. When a business or person revises their payment schedule for repaying debt. 2. Replacing an older loan with a new loan offering better terms. Notes: When a business refinances they typically extend the maturity date. their loans at lower rates, a slowing of long-term, fixed-rate loan Fixed-rate loan A loan whose rate is fixed for the life of the loan. originations due to the current interest rate environment, and a determination by the Company to slow its lending activities during the first half of the current calendar year in anticipation of the slowdown For articles with similar titles, see Slow Down (disambiguation). A slowdown is an industrial action in which employees perform their duties but seek to reduce productivity or efficiency in their performance of these duties. in the national economy and especially in the local real estate markets. The increased liquidity maintained following the decision to slow lending activities and the drop in short-term rates as a result of Federal Reserve actions led to a compression in the Company's interest rate spread and margin. The Company anticipates that the interest rate spread and margin will improve once the impact of interest rate declines reduce the cost of deposits. John D. Doherty, President & Chief Executive Officer of Central Bancorp stated that "The Company has been able to maintain its loan quality. During the quarter and the last fiscal year there were no foreclosures and the Company continues to have no non-performing mortgage or commercial loans at June 30, 2001. We continue to believe that it is in the best interest of the Company to maintain the highest possible loan quality during a time of such economic uncertainty." Higher operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. for new personnel and data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a also contributed to the decline in net income in the year-to-year comparisons. The increase in personnel costs included the addition of staff to sell non-deposit investment products, including mutual funds, annuities and insurance products, to generate fee income in future periods. Additionally, the Company increased its loan administration staff to better monitor and develop the commercial loan area. During fiscal 2001, the Company converted to a new computer processing system that will allow it to continue to improve its products offerings and services to both individual and business customers. Although more costly, the new system will allow the Company to be more competitive with other financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. providers by allowing it to offer the same types of products offered by larger competitors. As an example, the Company expects to launch a full-service internet banking product during the second fiscal quarter. During the first fiscal quarter, total stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. rose to $38,518,000 which represents 8.76% of total assets. The Company is continuing its fourth common stock buyback Stock buyback A corporation's purchase of its own outstanding stock, usually in order to raise the company's earnings per share. stock buyback See buyback. program, announced in December 2000. An additional 19,000 shares were purchased during the quarter at an average price of $20.33. At June 30, 2001, 60,458 shares remain authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by that program. The shares repurchased since the first buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program was adopted in April 1999 total 304,836 at an average cost of $18.42 per share, representing 15.47% of the common stock issued and outstanding prior to the adoption of the first buyback program.. Central Bancorp, Inc., is the holding company for Central Bank, whose legal name is Central Co-operative Bank The Co-operative Bank is a co-operative bank trading in the United Kingdom with headquarters in Manchester, UK. It is an ethical bank, and refuses to invest in companies involved in the arms trade, genetic engineering, animal testing and use of sweated labour as stated in its , a Massachusetts-chartered co-operative bank operating eight full-service banking offices in suburban Boston. This earnings report may contain certain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. , 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 guidelines, n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. ; changes in legislation or regulation; and other economic, competitive, governmental, regulatory and technological factors affecting the Company's operations, pricing, products and services.
Central Bancorp, Inc.
Consolidated Operating Data
(In Thousands, Except Per-Share Data)
Quarter Ended
June 30,
2001 2000
(Unaudited)
Net interest and dividend income $ 3,235 $ 3,437
Non-interest income 409 338
Operating expenses 2,811 2,576
Income before income taxes 833 1,199
Income tax expense 303 434
Net income $ 530 $ 765
Earnings per common share:
Basic $ 0.32 $ 0.43
Assuming dilution $ 0.32 $ 0.43
Central Bancorp, Inc.
Consolidated Balance Sheet Data
(In Thousands)
June 30, March 31,
2001 2001
(Unaudited)
Total assets $ 439,847 $ 449,337
Total loans 331,615 345,793
Allowance for loan losses 3,211 3,106
Deposits 284,131 287,167
Borrowings 114,000 121,000
Stockholders' equity 38,518 38,212
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