U.S. SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTER ENDED JUNE 30, 2002
                              -------------

                         COMMISSION FILE NUMBER: 0-25251
                                                 -------

                              CENTRAL BANCORP, INC.
               --------------------------------------------------
               (EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

                                  MASSACHUSETTS
         --------------------------------------------------------------
         (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)

                  I.R.S. EMPLOYER IDENTIFICATION NO. 04-3447594

                   399 HIGHLAND AVENUE, SOMERVILLE, MA. 02144
                   ------------------------------------------
                    (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

                                 (617) 628-4000
                          -----------------------------
                          REGISTRANT'S TELEPHONE NUMBER




Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed  by  Section  13 or 15 (d) of the  Securities  Exchange  Act of 1934
during the  preceding  12 months (or such  shorter  period  that the Company was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X    No
                                      ---      ---

       Common Stock, $1.00 par value                   1,659,933
       -----------------------------          -----------------------------
                 Class                        Outstanding at August 9, 2002
<PAGE>

                             CENTRAL BANCORP, INC.

                                TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION                                          PAGE NO.

         Item 1.  Financial Statements (Unaudited)

                  Consolidated Statements of Financial Condition at
                  March 31, 2002 and June 30, 2002                          1

                  Consolidated Statements of Income for the three
                  months ended June 30, 2002 and 2001                       2


                  Consolidated Statements of Changes in Stockholders'
                  Equity for the three months ended June 30, 2002 and 2001  3


                  Consolidated Statements of Cash Flows for the three
                  months ended June 30, 2002 and 2001                       4


                  Notes to Unaudited Consolidated Financial Statements      5

         Item 2.  Management's Discussion and Analysis of Financial
                  Condition and Results of  Operations                      9


                  Liquidity and Capital Resources                           11

         Item 3.  Quantitative and Qualitative Disclosures about
                  Market Risk                                               11

PART II.  OTHER INFORMATION

         Item 1.  Legal Proceedings                                         13

         Item 2.  Changes in Securities and Use of Proceeds                 13

         Item 3.  Defaults upon Senior Securities                           13

         Item 4.  Submission of Matters to a Vote of Security Holders       13

         Item 5.  Other Information                                         13

         Item 6.  Exhibits and Reports on Form 8-K                          13

SIGNATURES

<PAGE>
Item 1. Financial Statements

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
                 Consolidated Statements of Financial Condition
<TABLE>
<CAPTION>
                                                                                     June 30,             March 31,
 (Dollars in Thousands)                                                                  2002                  2002
-------------------------------------------------------------------------------------------------------------------
ASSETS                                                                             (Unaudited)
<S>                                                                               <C>                   <C>
Cash and due from banks                                                           $     6,826           $     5,109
Short-term investments                                                                 14,677                 2,455
                                                                                  -----------           -----------
     Cash and cash equivalents                                                         21,503                 7,564
                                                                                  -----------           -----------
Due from brokers                                                                        3,970                    --
Investment securities available for sale (amortized cost of $69,542
     at June 30, 2002 and $74,935 at March 31, 2002)                                   68,977                73,884
Stock in Federal Home Loan Bank of Boston, at cost                                      8,300                 8,300
The Co-operative Central Bank Reserve Fund                                              1,576                 1,576
                                                                                  -----------           -----------
    Total investments                                                                  78,853                83,760
                                                                                  -----------           -----------
Loans (Note 2)                                                                        363,135               371,707
Less allowance for loan losses                                                          3,293                 3,292
                                                                                  -----------           -----------
     Net loans                                                                        359,842               368,415
                                                                                  -----------           -----------
Accrued interest receivable                                                             2,710                 2,530
Banking premises and equipment, net                                                     1,879                 1,836
Deferred tax asset, net                                                                 1,519                 1,289
Goodwill, net (Note 1)                                                                  2,232                 2,232
Other assets                                                                              764                   593
                                                                                  -----------           -----------
    Total assets                                                                  $   473,272           $   468,219
                                                                                  ===========           ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits (Note 3)                                                               $   271,073           $   261,907
  Advances from Federal Home Loan Bank of Boston                                      159,255               164,000
  Advance payments by borrowers for taxes and insurance                                   815                 1,111
  Accrued expenses and other liabilities                                                3,058                 2,247
                                                                                  -----------           -----------
    Total liabilities                                                                 434,201               429,265
                                                                                  -----------           -----------
Commitments and Contingencies (Note 5)
Stockholders' equity (Note 6):
  Preferred stock $1.00 par value; authorized 5,000,000 shares;
    none issued or outstanding                                                             --                    --
  Common stock $1.00 par value; authorized 15,000,000 shares;
    1,999,588 issued at June 30, 2002 and March 31, 2002                                2,000                 2,000
  Additional paid-in capital                                                           12,002                11,934
  Retained income                                                                      34,004                33,141
  Treasury stock (367,036 shares at June 30, 2002 and 366,799
     shares at March 31, 2002), at cost                                                (7,196)               (7,189)
  Accumulated other comprehensive income (loss) (Note 4)                                 (293)                 (626)
  Unearned compensation - ESOP                                                         (1,446)                 (306)
                                                                                  -----------           -----------
    Total stockholders' equity                                                         39,071                38,954
                                                                                  -----------           -----------
    Total liabilities and stockholders' equity                                    $   473,272           $   468,219
                                                                                  ===========           ===========
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       1
<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
                        Consolidated Statements of Income
                      (In Thousands, Except Per Share Data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                  Three Months Ended
                                                                       June 30,
                                                                  ------------------
                                                                    2002      2001
                                                                  ------     ------
<S>                                                               <C>        <C>
Interest and dividend income:
  Mortgage loans                                                  $6,204     $6,149
  Other loans                                                        146        181
  Short-term investments                                              27        472
  Investments                                                      1,186        797
                                                                  ------     ------
    Total interest and dividend income                             7,563      7,599
                                                                  ------     ------
Interest expense:
  Deposits                                                         1,494      2,638
  Advances from Federal Home Loan Bank of Boston                   1,789      1,726
                                                                  ------     ------
    Total interest expense                                         3,283      4,364
                                                                  ------     ------

    Net interest and dividend income                               4,280      3,235
Provision for loan losses                                             --         --
                                                                  ------     ------
    Net interest and dividend income after
      provision for loan losses                                    4,280      3,235
                                                                  ------     ------
Non-interest income:
  Deposit service charges                                            129        123
  Net gains from sales and write-downs of investment securities       11        203
  Other income                                                        83         83
                                                                  ------     ------
    Total non-interest income                                        223        409
                                                                  ------     ------
Non-interest expenses:
  Salaries and employee benefits                                   1,638      1,533
  Occupancy and equipment                                            281        318
  Data processing service fees                                       291        270
  Professional fees                                                  249        192
  Goodwill amortization (Note 1)                                      --         72
  Other expenses                                                     432        426
                                                                  ------     ------
    Total non-interest expenses                                    2,891      2,811
                                                                  ------     ------

    Income before income taxes                                     1,612        833
Provision for income taxes                                           585        303
                                                                  ------     ------
      Net income                                                  $1,027     $  530
                                                                  ======     ======

Earnings per common share - basic                                 $ 0.64     $ 0.32
                                                                  ======     ======

Earnings per common share - diluted                               $ 0.63     $ 0.32
                                                                  ======     ======

Weighted average common shares outstanding - basic                 1,606      1,661

Weighted average common and equivalent shares
   outstanding - diluted                                           1,625      1,670
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

                                       2
<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
           Consolidated Statements of Changes in Stockholders' Equity
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                Additional
                                                  Common          Paid-In       Retained       Treasury
                    (In Thousands)                 Stock          Capital        Income          Stock
-----------------------------------------------------------------------------------------------------------
<S>                                              <C>           <C>           <C>              <C>
Three Months Ended June 30, 2002
--------------------------------
     Balance at March 31, 2002                   $   2,000     $    11,934   $    33,141      $   (7,189)

     Net Income                                         --              --         1,027              --
     Other comprehensive income net of tax:
         Unrealized gain on securities, net
           of reclassification adjustment               --              --            --              --
            Comprehensive income

     Purchase of shares by ESOP                         --              --            --              --
     Director deferred compensation
         transactions                                   --               7            --              (7)
     Dividends paid ($0.10 per share)                   --              --          (164)             --
     Amortization of unearned compensation -
         ESOP                                           --              61            --              --
                                                 ---------     -----------   -----------      ----------
     Balance at June 30, 2002                    $   2,000     $    12,002   $    34,004      $   (7,196)
                                                 =========     ===========   ===========      ==========
Three Months Ended June 30, 2001
--------------------------------
     Balance at March 31, 2001                   $   1,970     $    11,190   $    30,950      $   (5,230)

     Net Income                                         --              --           530              --
     Other comprehensive income net of tax:
         Unrealized (loss) on securities, net
           of reclassification adjustment               --              --            --              --
            Comprehensive income

     Proceeds from exercise of stock options            18             274            --              --
     Director deferred compensation
         transactions                                   --              22            --             (20)
     Purchase of treasury stock                         --              --            --            (386)
     Dividends paid ($0.10 per share)                   --              --          (168)             --
     Amortization of unearned compensation -
         ESOP                                           --              50            --              --
                                                 ---------     -----------   -----------      ----------
     Balance at June 30, 2001                    $   1,988     $    11,536   $    31,312      $   (5,636)
                                                 =========     ===========   ===========      ==========
<CAPTION>
                                                 Accumulated
                                                     Other               Unearned              Total
                                                 Comprehensive         Compensation        Stockholders'
                    (In Thousands)               Income (Loss)             ESOP               Equity
--------------------------------------------------------------------------------------------------------
<S>                                              <C>                  <C>                   <C>
Three Months Ended June 30, 2002
--------------------------------
     Balance at March 31, 2002                   $      (626)         $     (306)           $   38,954

     Net Income                                           --                  --                1,027
     Other comprehensive income net of tax:
         Unrealized gain on securities, net
           of reclassification adjustment                333                  --                  333
                                                                                          -----------
            Comprehensive income                                                                1,360
                                                                                          -----------
     Purchase of shares by ESOP                           --              (1,183)              (1,183)
     Director deferred compensation
         transactions                                     --                  --                   --
     Dividends paid ($0.10 per share)                     --                  --                 (164)
     Amortization of unearned compensation -
         ESOP                                             --                  43                  104
                                                 -----------          ----------          -----------
     Balance at June 30, 2002                    $      (293)         $   (1,446)         $    39,071
                                                 ===========          ==========          ===========
Three Months Ended June 30, 2001
--------------------------------

     Balance at March 31, 2001                   $      (431)         $     (237)         $    38,212

     Net Income                                           --                  --                  530
     Other comprehensive income net of tax:
         Unrealized (loss) on securities, net
           of reclassification adjustment                (46)                 --                  (46)
                                                                                          -----------
            Comprehensive income                                                                  484
                                                                                          -----------
     Proceeds from exercise of stock options              --                  --                  292
     Director deferred compensation
         transactions                                     --                  --                    2
     Purchase of treasury stock                           --                  --                 (386)
     Dividends paid ($0.10 per share)                     --                  --                 (168)
     Amortization of unearned compensation -
         ESOP                                             --                  32                   82
                                                 -----------          ----------          -----------
     Balance at June 30, 2001                    $      (477)         $     (205)         $    38,518
                                                 ===========          ==========          ===========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       3
<PAGE>
                      CENTRAL BANCORP, INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                        Three Months Ended
                                                                                             June 30,
                                     (In Thousands)                                     2002         2001
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                   <C>         <C>
Cash flows from operating activities:

Net income                                                                            $  1,027    $    530
   Adjustments to reconcile net income to net cash provided by operating activities
      Depreciation and amortization                                                         80         107
      Amortization of premiums, fees and discounts                                          61          33
      Amortization of goodwill                                                              --          72
      Stock-based compensation                                                             104          82
      Net gains from sales and write-downs of investment
         securities                                                                        (11)       (203)
(Increase) decrease in accrued interest receivable                                        (180)        200
(Increase) decrease in other assets                                                       (271)         42
Decrease in advance payments by borrowers for taxes and insurance                         (296)       (199)
Increase in accrued expenses and other liabilities                                         811         439
                                                                                      --------    --------
      Net cash provided by operating activities                                          1,325       1,103
                                                                                      --------    --------

Cash flows from investing activities:

    Net decrease in loans                                                                8,191      14,283
    Principal payments on mortgage-backed securities                                     1,472       1,667
    Purchase of investment securities                                                       --      (7,291)
    Maturities of investment securities                                                     --       7,990
    Proceeds from sales of investment securities                                          --           784
    Net increase in short-term investments                                             (12,222)     (8,569)
    Purchase of banking premises and equipment                                            (123)        (67)
                                                                                      --------    --------
      Net cash provided by (used in) investing activities                               (2,682)      8,797
                                                                                      --------    --------

Cash flows from financing activities:

    Increase (decrease) in deposits                                                      9,166      (3,036)
    Proceeds from advances from FHLB of Boston                                          28,500          --
    Repayments of advances from FHLB of Boston                                         (33,245)     (7,000)
    Net directors deferred compensation                                                     --           2
    Purchase of treasury stock                                                              --        (386)
    Purchase of shares by ESOP                                                          (1,183)         --
    Proceeds from exercise of stock options                                                 --         292
    Dividends paid                                                                        (164)       (168)
                                                                                      --------    --------
      Net cash provided by (used in) financing activities                                3,074     (10,296)
                                                                                      --------    --------

    Net increase (decrease) in cash and due from banks                                   1,717        (396)
    Cash and due from banks at beginning of period                                       5,109       5,351
                                                                                      --------    --------
    Cash and due from banks at end of period                                          $  6,826    $  4,955
                                                                                      ========    ========

    Supplemental disclosure of cash flow information:
      Cash paid during the period for:
        Interest                                                                      $  3,299    $  4,377
        Income taxes                                                                       360          81
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


                                       4
<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2002




(1)  BASIS OF PRESENTATION

     The unaudited  consolidated  financial statements of Central Bancorp,  Inc.
and its wholly-owned subsidiary Central Co-operative Bank (collectively referred
to as "the Company")  presented  herein should be read in  conjunction  with the
consolidated  financial  statements  of the Company as of and for the year ended
March 31, 2002,  included in the Company's Annual Report on Form 10-K filed with
the  Securities  and  Exchange  Commission.  In the opinion of  management,  the
accompanying   unaudited   consolidated   financial   statements   reflect   all
adjustments,  consisting of normal recurring  adjustments,  necessary for a fair
presentation.  Interim results are not  necessarily  indicative of results to be
expected for the entire year.

     The Company's  significant  accounting  policies are described in Note 1 of
the Notes to Consolidated Financial Statements included in its Form 10-K for the
year ended March 31, 2002. For interim reporting  purposes,  the Company follows
the same  significant  accounting  policies.  As set forth in Note 1 of the Form
10-K, the Company  initially  applied the requirements of Statement of Financial
Accounting  Standards  No.  142  (SFAS  No.  142)  beginning  April 1, 2002 and,
accordingly,  no amortization of goodwill was recorded in the quarter ended June
30,  2002.  Net income and  earnings  per share (both basic and diluted) for the
quarter  ended June 30, 2001 would have been  $602,000 and $0.36,  respectively,
had the requirements of SFAS No. 142 been applied retroactively.

     Certain  reclassifications  have  been  made to the  prior  year  financial
statements to conform to the current year presentation.  Such  reclassifications
have no effect on previously reported net income.

(2)  LOANS

     Loans as of June 30,  2002 and  March  31,  2002 are  summarized  below (in
thousands):
<TABLE>
<CAPTION>
                                                                June 30,                 March 31,
                                                                 2002                      2002
                                                              -----------               -----------
       <S>                                                    <C>                       <C>
       Real estate loans:
          Residential real estate                             $   239,026               $   246,045
          Commercial real estate                                   88,044                    87,013
          Construction                                             18,824                    20,998
          Second mortgage and home equity lines of credit           9,298                     9,154
                                                              -----------               -----------
               Total real estate loans                            355,192                   363,210
                                                              -----------               -----------
       Commercial loans                                             6,392                     6,901
       Consumer loans                                               1,551                     1,596
                                                              -----------               -----------
                Total loans                                       363,135                   371,707
        Less:  allowance for loan losses                           (3,293)                   (3,292)
                                                              -----------               -----------
                Total loans, net                              $   359,842               $   368,415
                                                              ===========               ===========
</TABLE>

     There were no non-accrual loans at June 30, 2002 and March 31, 2002.
                                       5
<PAGE>
                      CENTRAL BANCORP, INC. AND SUBSIDIARY
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                            JUNE 30, 2002 (CONTINUED)


(3)  DEPOSITS

     Deposits at June 30, 2002 and March 31, 2002 are  summarized as follows (in
thousands):
<TABLE>
<CAPTION>
                                                                 June 30                 March 31,
                                                                  2002                      2002
                                                              -----------               -----------
<S>                                                           <C>                       <C>
Demand deposit accounts                                       $    29,731               $    25,370
NOW accounts                                                       32,802                    36,277
Regular, Club and 90 day notice accounts                           73,661                    72,944
Money market deposit accounts                                      26,825                    17,997
                                                              -----------               -----------
         Total non certificate accounts                           163,019                   152,588
                                                              -----------               -----------
Term deposit certificates
      Certificates of $100 and above                               27,496                    27,233
      Certificates less than $100                                  80,558                    82,086
                                                              -----------               -----------
         Total term deposit certificates                          108,054                   109,319
                                                              -----------               -----------
                                                              $   271,073               $   261,907
                                                              ===========               ===========
</TABLE>

(4)  REPORTING COMPREHENSIVE INCOME

     The  Company  has  established   standards  for  reporting  and  displaying
comprehensive  income,  which  is  defined  as  all  changes  to  equity  except
investments by, and distributions to, shareholders. Net income is a component of
comprehensive  income,  with all other components referred to, in the aggregate,
as other comprehensive income.

     The Company's other  comprehensive  income (loss) and related tax effect is
as follows (in thousands):
<TABLE>
<CAPTION>
                                                                  For the Three Months Ended
                                                                         June 30, 2002
                                                              -----------------------------------
                                                              Before-
                                                               Tax       Tax(Benefit)  After-Tax
                                                              Amount        Expense      Amount
                                                              ------     ------------  ---------
<S>                                                           <C>             <C>          <C>
Unrealized gains (losses) on securities:
  Unrealized net holding gains arising during period          $  497          $ 156        $ 341

   Less: reclassification adjustment for net
            gains included in net income                         (11)            (3)          (8)
                                                              ----------------------------------
   Other comprehensive income                                 $  486          $ 153        $ 333
                                                              ==================================
</TABLE>

                                       6
<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2002

(4)  REPORTING COMPREHENSIVE INCOME (CONTINUED)
<TABLE>
<CAPTION>
                                                                  For the Three Months Ended
                                                                         June 30, 2001
                                                              -----------------------------------
                                                              Before-
                                                               Tax       Tax(Benefit)  After-Tax
                                                              Amount        Expense      Amount
                                                              ------     ------------  ---------
<S>                                                           <C>             <C>          <C>
Unrealized gains (losses) on securities
   Unrealized holding gains arising during period             $  137          $  53        $  84

   Less: reclassification adjustment for net
             gains included in net income                       (203)           (73)        (130)
                                                              ----------------------------------
   Other comprehensive loss                                   $  (66)         $ (20)       $ (46)
                                                              ==================================
</TABLE>

(5)  CONTINGENCIES

Legal Proceedings

     The Company  from time to time is involved as  plaintiff  or  defendant  in
various legal actions incident to its business. Except as described herein, none
of  these  actions  are  believed  to  be  material,   either   individually  or
collectively,  to the  results of  operations  and  financial  condition  of the
Company.

     Central Co-operative Bank (the Bank) has been named as defendant in a civil
suit filed March 28, 2002 in  Middlesex  Superior  Court under the caption Yi v.
                                                                           -----
Central  Bank in which it is alleged,  inter alia,  that the Bank  committed  an
-------------                          ----- ----
unfair or  deceptive  trade  practice  by  failing  to pay  surplus  foreclosure
proceeds to a junior lien holder in 1994.  Plaintiff  seeks  damages of $160,000
plus interest of  approximately  $150,000 and has applied for a multiple  damage
award under Chapter 93A of the Massachusetts  General Laws which provides for up
to treble  damages if a violation  is found to be willful or  knowing.  The Bank
believes  that it has  meritorious  defenses  to all such  claims and intends to
vigorously defend against them.

State Income Taxes

     In June 2002,  the Bank received  from the  Commonwealth  of  Massachusetts
Department  of  Revenue  ("DOR") a Notice of Intent to Assess  additional  state
excise taxes of $535,000 plus interest with respect to its tax years ended March
31, 2000 and 2001.  For the period  April 1, 2001 to June 30,  2002,  additional
state excise taxes would be $300,000  applying the  methodology set forth in the
DOR's aforementioned  Notice of Intent to Assess. The Bank is aware that the DOR
has  sent  similar   notices  to  numerous  other   financial   institutions  in
Massachusetts  that  reported a deduction  for  dividends  received  from a REIT
during  this  period.  Assessed  amounts  ultimately  paid,  if  any,  would  be
deductible expenses for federal income tax purposes.

     The DOR contends that dividend distributions by the Bank's REIT to the Bank
are fully taxable in  Massachusetts.  The Bank  believes that the  Massachusetts
statute that provides for a dividends received deduction equal to 95% of certain
dividend  distributions  applies to the  distributions  made by the Bank's REIT.
Accordingly,  no provision has been made in the Company's consolidated financial
statements for the amounts assessed or additional amounts that might be assessed
in the future.  The Company  intends to vigorously  appeal the assessment and to
pursue all available means to defend its position.

                                       7
<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2002

(6)  SUBSEQUENT EVENTS

Exercise of Stock Options

     In July 2002, stock options for 25,639 shares were exercised.  The proceeds
to the Company,  including the related tax benefit,  amounted to $529,000  which
was credited to stockholders' equity in July 2002.

ESOP Stock Purchases

     During fiscal 2002, the Company's Board of Directors authorized the Central
Co-operative  Bank Employee Stock  Ownership Plan Trust (the ESOP) to acquire up
to an additional 5% of outstanding  shares of Company stock.  During the quarter
ended June 30, 2002,  the ESOP acquired  38,874 shares at a cost of  $1,183,003.
During July 2002,  an  additional  6,100  shares,  at a cost of  $184,495,  were
acquired.

Dividend

     On July 11, 2002,  the Board of Directors  voted the payment of a quarterly
cash  dividend of $.10 per share.  The dividend is payable on August 16, 2002 to
stockholders of record on August 2, 2002.


                                       8
<PAGE>

ITEM 2. MANAGEMENT'S  DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS

 FORWARD-LOOKING STATEMENTS

     When used in this discussion and elsewhere in this Quarterly Report on Form
10-Q,  the words or phrases  "will  likely  result,"  "are  expected  to." "will
continue," "is anticipated,"  "estimate,"  "project," or similar expressions are
intended  to  identify  "forward-looking  statements"  within the meaning of the
Private  Securities  Litigation Reform Act of 1995. The Company cautions readers
not to place undue reliance on any such forward-looking statements,  which speak
only as of the date made, and to advise readers that various factors,  including
changes in regional  and  national  economic  conditions,  unfavorable  judicial
decisions,  substantial  changes in levels of market interest rates,  credit and
other risks of lending and investment  activities and competitive and regulatory
factors,  could affect the Company's  financial  performance and could cause the
Company's  actual  results for future  periods to differ  materially  from those
anticipated or projected.

     The Company does not undertake and specifically disclaims any obligation to
update any  forward-looking  statements to reflect  occurrence of anticipated or
unanticipated events or circumstances after the date of such statements.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2002 AND MARCH 31, 2002

     Total assets  increased  by $5.1  million from $468.2  million at March 31,
2002 to $473.3 million at June 30, 2002.  This increase  occurred as a result of
net deposit  growth of $9.2  million  which was  partially  used to paydown FHLB
advances.

     During the quarter ended June 30, 2002, cash and cash equivalents increased
by $13.9 million while investment securities and loans decreased by $4.9 million
and $8.6 million, respectively.  These changes reflect the impact of higher than
normal loan  prepayments due to the current lower rate interest  environment and
the willingness of the Bank to hold a greater portion of its funds in short-term
instruments  while  interest  rates are low.  During the  current  quarter,  the
Company originated $28.5 million in loans, including $16.7 million in commercial
real estate loans.

     During the  quarter  ended June 30,  2002,  the  Company  experienced  core
deposit  growth  of  $10.4  million,  or  6.8%.  While  deposit  flows  can vary
significantly  on a daily basis,  the Company has  experienced  steady growth in
core deposits  during the past five quarters.  This growth has been aided by the
introduction and promotion of the Bank's  Community  Package Account product and
the continuing uncertainty in the stock market.

     FHLB  advances  were reduced by $4.7 million  during the quarter ended June
30, 2002.  This decrease is consistent  with the Company's  overall  strategy of
reducing its utilization of FHLB advances.

     The increase in  stockholders'  equity of $117,000 to $39.1 million at June
30, 2002 resulted  primarily  from net income of  $1,027,000  and an increase of
$333,000 in the market value of investment securities available for sale, net of
taxes,  which were partially offset by cash dividends and stock purchases by the
Employee Stock  Ownership Plan (ESOP)  totaling  $1,347,000.  During the current
quarter,  an  additional  38,874  shares were  purchased by the ESOP for a total
purchase  price of  $1,183,000  ($30.43/share)  which was funded by an  internal
loan.  Approximately 38,000 additional shares may be purchased under the program
approved by the Board of Directors in fiscal 2002.

COMPARISON OF OPERATING RESULTS FOR THE QUARTER ENDED JUNE 30, 2002 AND 2001

     Net income  increased by $497,000,  or 93.8%, to $1,027,000 for the quarter
ended  June 30,  2002,  compared  to the same  quarter  in the prior  year.  The
significant increase was primarily due an increase of $1,045,000 in net interest
and dividend income,  partially offset by a decrease of $186,000 in non-interest
income and an  increase  of  $80,000 in  non-interest  expenses.  The  Company's
effective tax rate was unchanged at approximately 36.3% in both periods.

Interest  Income.  Interest  income for the quarter ended June 30, 2002 was $7.6
million, essentially unchanged from the prior year quarter despite a decrease in
the yield on  interest-earning  assets  from  7.12% in the first  quarter of the


                                       9
<PAGE>

prior year to 6.62% in the  current  quarter.  Average  interest-earning  assets
increased by $21.7 million,  or 5.0%, to $456.6 million during the quarter ended
June 30, 2002 from $434.9 million for the quarter ended June 30, 2001.

     The  principal  areas of growth in average  balances for the quarter  ended
June 30, 2002 were real estate loans (up $25.6 million,  or 7.7%) and investment
securities  (up $28.7  million,  or 52.1%),  partially  offset by a decrease  in
short-term investments of $33.0 million, all as compared to average balances for
the quarter ended June 30, 2001.

Interest Expense.  Interest expense for the quarter ended June 30, 2002 was $3.3
million compared to $4.4 million for the quarter ended June 30, 2001, a decrease
of $1.1 million,  or 24.8%. This significant  decrease resulted from a 126 basis
points  decrease in the cost of funds from 4.57% in the  quarter  ended June 30,
2001 to 3.31% in the quarter  ended June 30, 2002.  This  decrease was partially
offset by an increase in average  interest-bearing  liabilities of $14.4 million
in the current year period.

     The  significant  decrease  in the cost of funds in the  first  quarter  of
fiscal 2003  reflected the impact of the series of rate  decreases  initiated by
the Federal Reserve Board beginning in January 2001, the repricing of a majority
of  certificates  of deposits  during the past year and a shift in deposits from
higher cost  certificates of deposits which represented 52.9% of deposits at the
beginning  of the first  quarter  of the  prior  year  compared  to 41.7% at the
beginning of the first quarter of the current year.

Provisions  for Loan  Losses.  The Company  provides for loan losses in order to
maintain the allowance for loan losses at a level that  management  estimates is
adequate  to  absorb  future  charge-offs  of  loans  deemed  uncollectible.  In
determining the appropriate  level of the allowance for loan losses,  management
considers  past and  anticipated  loss  experience,  evaluations  of  underlying
collateral,  prevailing economic  conditions,  the nature and volume of the loan
portfolio  and the levels of  non-performing  and other  classified  loans.  The
amount of the allowance is based on estimates and ultimate  losses may vary from
such estimates. Management assesses the allowance for loan losses on a quarterly
basis and provides for loan losses  monthly in order to maintain the adequacy of
the allowance.

     Due to the high level of asset  quality,  as  measured  by low  delinquency
rates and the absence of  non-performing  loans  during the past two years,  the
Company made no  provision  for loan losses  during the quarters  ended June 30,
2002 and 2001.

Non-interest  Income.  Total  non-interest  income was  $223,000 for the quarter
ended June 30, 2002 compared to $409,000 in the same period of 2001. The primary
reason  for the  $186,000  decline in the  current  year was the  write-down  of
$215,000 in certain equity  securities  which had  experienced a decline in fair
value judged to be other than temporary.

Non-interest  Expenses.  Non-interest  expenses  increased  $80,000  during  the
quarter  ended June 30, 2002 as compared to the same quarter in 2001.  Exclusive
of the  elimination  of the  amortization  of goodwill  in the  current  year as
required  by  generally   accepted   accounting   principles   (SFAS  No.  142),
non-interest  expenses increased $152,000, or 5.4%, due principally to increases
in salaries and employee benefits ($105,000) and professional fees ($57,000).

     The increase in salaries and employee benefits of $105,000, or 6.8%, during
the quarter ended June 30, 2002, was due to overall salary  increases  averaging
4.7%,  increases in staffing and  additional  ESOP expense due to an increase in
market value of the Company's stock.

     The increase in professional fees of $57,000,  or 29.7%, during the quarter
ended June 30, 2002 was primarily due to increases in legal and consulting fees.

Income Taxes.  The effective tax rates for the quarters  ended June 30, 2002 and
2001 were 36.3% and 36.4%,  respectively.  These  rates vary from the  statutory
income tax rate for banks of  approximately  40.9% due to the  Company's  use of
both a securities corporation and a REIT subsidiary for state tax purposes.

     In June 2002,  the Bank received  from the  Commonwealth  of  Massachusetts
Department  of  Revenue  ("DOR") a Notice of Intent to Assess  additional  state
excise taxes of $535,000 plus interest with respect to its tax years ended March
31, 2000 and 2001.  For the period  April 1, 2001 to June 30,  2002,  additional
state excise taxes

                                       10
<PAGE>

would be $300,000 applying the methodology set forth in the DOR's aforementioned
Notice of  Intent to  Assess.  The Bank is aware  that the DOR has sent  similar
notices to numerous other financial  institutions in Massachusetts that reported
a deduction  for  dividends  received  from a REIT during this period.  Assessed
amounts ultimately paid, if any, would be deductible expenses for federal income
tax purposes.

     The DOR contends that dividend distributions by the Bank's REIT to the Bank
are fully taxable in  Massachusetts.  The Bank  believes that the  Massachusetts
statute that provides for a dividends received deduction equal to 95% of certain
dividend  distributions  applies to the  distributions  made by the Bank's REIT.
Accordingly,  no provision has been made in the Company's consolidated financial
statements for the amounts assessed or additional amounts that might be assessed
in the future.  The Company  intends to vigorously  appeal the assessment and to
pursue all available means to defend its position.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's  principal sources of liquidity are loan  amortization,  loan
prepayments,  increases  in deposits,  advances  from the Federal Home Loan Bank
(FHLB) of Boston and funds from  operations.  The Bank is a voluntary  member of
the FHLB of  Boston  and as such is  entitled  to  borrow up to the value of its
qualified  collateral that has not been pledged to others.  Qualified collateral
generally  consists of residential  first mortgage  loans,  U. S. Government and
agencies  securities  and funds on deposit  at the FHLB of  Boston.  At June 30,
2002, the Bank had approximately  $22.4 million in unused borrowing  capacity at
the FHLB of Boston.

     At June 30, 2002, the Company had  commitments to originate  loans,  unused
outstanding  lines of credit and  undisbursed  proceeds of loans  totaling $54.5
million.  Since many of the commitments may expire without being drawn upon, the
total commitment amounts do not necessarily  represent future cash requirements.
The Company anticipates that it will have sufficient funds available to meet its
current loan commitments.

     The  Company's  and the  Bank's  capital  ratios  at June 30,  2002 were as
follows:

                                                  Company       Bank
                                                  -------       ----

Total Capital (to risk-weighted assets)           12.68%       11.69%

Tier 1 Capital (to risk-weighted assets)          11.63        10.64

Tier 1 Capital (to average assets)                 7.93         7.22

     These ratios placed the Company in excess of  regulatory  standards and the
Bank in the "well capitalized" category as set forth by the FDIC.


ITEM 3.     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     The Company's  earnings are largely  dependent on its net interest  income,
which is the  difference  between the yield on  interest-earning  assets and the
cost of interest-bearing  liabilities.  The Company seeks to reduce its exposure
to changes in interest  rate,  or market risk,  through  active  monitoring  and
management of its interest-rate  risk exposure.  The policies and procedures for
managing both on- and off-balance sheet activities are established by the Bank's
asset/liability  management  committee ("ALCO").  The Board of Directors reviews
and approves the ALCO policy  annually and  monitors  related  activities  on an
ongoing basis.

     Market risk is the risk of loss from adverse  changes in market  prices and
rates.  The  Company's  market risk arises  primarily  from  interest  rate risk
inherent in its lending, borrowing and deposit taking activities.

     The main  objective  in  managing  interest  rate risk is to  minimize  the
adverse impact of changes in interest rates on net interest  income and preserve
capital, while adjusting the asset/liability  structure to control interest-rate
risk.  However, a sudden and substantial  increase or decrease in interest rates
may  adversely  impact  earnings to the

                                       11
<PAGE>

extent that the interest rates borne by assets and  liabilities do not change at
the same speed, to the same extent, or on the same basis.

     The  Company   quantifies   its   interest-rate   risk  exposure   using  a
sophisticated  simulation  model.  Simulation  analysis  is used to measure  the
exposure of net  interest  income to changes in  interest  rates over a specific
time horizon. Simulation analysis involves projecting future interest income and
expense under various rate scenarios. The simulation is based on forecasted cash
flows and  assumptions of management  about the future changes in interest rates
and levels of activity  (loan  originations,  loan  prepayments,  deposit flows,
etc). The assumptions are inherently  uncertain and,  therefore,  actual results
will differ from  simulated  results due to timing,  magnitude  and frequency of
interest rate changes as well as changes in market  conditions  and  strategies.
The net interest income  projection  resulting from use of forecasted cash flows
and  management's  assumptions  is compared to net interest  income  projections
based on an  immediate  shift of 300 basis  points  upward and 150 basis  points
downward.  Internal  guidelines  on interest  rate risk state that for every 100
basis points  immediate shift in interest  rates,  estimated net interest income
over the next twelve months should decline by no more than 5%.

     The following  table indicates the estimated  exposure,  as a percentage of
estimated net interest  income,  for the twelve month period  following the date
indicated assuming an immediate shift in interest rates as set forth below:
<TABLE>
<CAPTION>
                                                 June 30,      March 31,
                                                   2002          2002
                                                 --------      ---------

<C>                                              <C>           <C>
300 basis point increase in rates...........     (5.58)%       (12.9)%

150 basis point decrease in rates...........     (1.27)%         0.5%
</TABLE>

     For each one  percentage  point change in net  interest  income in the June
2002 projections,  the effect on net income would be $108,000 assuming a 36% tax
rate.


                                       12
<PAGE>

PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

                See Note 5 of the  Notes  to  Unaudited  Consolidated  Financial
          Statements presented elsewhere herein.

Item 2.   Changes in Securities and Use of Proceeds
                Not Applicable

Item 3.   Defaults upon Senior Securities
                Not Applicable

Item 4.   Other Information
                None

Item 5.   Exhibits and Reports on Form 8-K

          (a)  Exhibits

               10.16  Termination of Consulting Agreement,  dated July 30, 2002,
                      between Joseph R. Doherty and Central Co-operative Bank

               99.1   Certification under Section 906 of  Sarbanes-Oxley  Act of
                      2002

          (b)  Reports on Form 8-K
               During the quarter ended June 30, 2002,  the  Registrant  did not
               file a  Current  Report  on Form  8-K.  On  July  15,  2002,  the
               Registrant  filed a Form 8-K which  included  the  press  release
               announcing its earnings for the quarter ended June 30, 2002.


                                       13
<PAGE>

                                   SIGNATURES



Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized


                                      CENTRAL BANCORP, INC.
                                      ---------------------
                                      Registrant




August 14, 2002                       /s/John D. Doherty
---------------                       -------------------------------------
    Date                              John D. Doherty
                                      President and Chief Executive Officer




August 14, 2002                       /s/Michael K. Devlin
---------------                       -------------------------------------
   Date                               Michael K. Devlin
                                      Senior Vice President, Treasurer
                                      and Chief Financial Officer