UNITED STATES
                     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, 2003

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

                             CENTRAL BANCORP, INC.
                             ---------------------
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS 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
                                       --    --
Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act). Yes    No X
                                                --    --


Common Stock, $1.00 par value                         1,663,133
-----------------------------              ---------------------------------
           Class                            Outstanding at August 13, 2003
<PAGE>

                              CENTRAL BANCORP, INC.

                                TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION                                           PAGE NO.

        Item 1. Financial Statements (Unaudited)

                Consolidated  Statements of Financial  Condition at
                June 30, 2003 and March 31, 2003                               1

                Consolidated Statements of Income for the three months ended
                June 30, 2003 and 2002                                         2

                Consolidated Statements of Changes in Stockholders' Equity
                for the three months ended June 30, 2003 and 2002              3

                Consolidated Statements of Cash Flows for the three
                months ended June 30, 2003 and 2002                            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    12

        Item 4. Controls and Procedures                                       12

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
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                       June 30,           March 31,
 (Dollars in Thousands)                                                                  2003                  2003
-----------------------------------------------------------------------------------------------------------------------------
<S>                                                                                     <C>                     <C>
ASSETS
Cash and due from banks                                                           $     7,806           $     5,996
Short-term investments                                                                 15,932                 5,226
                                                                                  -----------           -----------
     Cash and cash equivalents                                                         23,738                11,222
                                                                                  -----------           -----------
Investment securities available for sale (amortized cost of $57,584
     at June 30, 2003 and $59,500 at March 31, 2003)                                   60,823                61,111
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                                                                  70,699                70,987
                                                                                  -----------           -----------

Loans held for sale                                                                     5,051                   647

Loans (Note 2)                                                                        372,878               389,817
Less allowance for loan losses                                                          3,354                 3,284
                                                                                  -----------           -----------
     Net loans                                                                        369,524               386,533
                                                                                  -----------           -----------
Accrued interest receivable                                                             2,365                 2,380
Banking premises and equipment, net                                                     1,851                 1,869
Deferred tax asset, net                                                                    --                   719
Goodwill, net                                                                           2,232                 2,232
Other assets                                                                            2,597                   619
                                                                                  -----------           -----------
    Total assets                                                                  $   478,057           $   477,208
                                                                                  ===========           ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits (Note 3)                                                               $   286,855           $   287,959
  Federal Home Loan Bank advances                                                     144,400               144,400
  Short-term borrowings                                                                    --                   176
  Advance payments by borrowers for taxes and insurance                                   938                   999
  Accrued expenses and other liabilities                                                4,103                 4,231
                                                                                  -----------           -----------
    Total liabilities                                                                 436,296               437,765
                                                                                  -----------           -----------
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;
     2,028,427 shares issued at June 30, 2003 and
     2,027,727 shares issued at March 31, 2003                                          2,028                 2,028
  Additional paid-in capital                                                           12,805                12,751
  Retained income                                                                      35,763                34,601
  Treasury stock (365,294 shares at June 30, 2003 and
     March 31, 2003), at cost                                                          (7,249)               (7,249)
  Accumulated other comprehensive income (Note 4)                                       2,007                 1,002
  Unearned compensation - ESOP                                                         (3,593)               (3,690)
                                                                                  -----------           -----------
    Total stockholders' equity                                                         41,761                39,443
                                                                                  -----------           -----------
    Total liabilities and stockholders' equity                                    $   478,057           $   477,208
                                                                                  ===========           ===========

</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,
                                                                              --------------------------------
                                                                                   2003              2002
                                                                              -------------      -------------
<S>                                                                                 <C>              <C>
Interest and dividend income:
  Mortgage loans                                                              $    6,021         $   6,204
  Other loans                                                                        144               146
  Short-term investments                                                              18                27
  Investments                                                                        840             1,186
                                                                              ----------         ---------
    Total interest and dividend income                                             7,023             7,563
                                                                              ----------         ---------
Interest expense:
  Deposits                                                                         1,157             1,494
  Advances from Federal Home Loan Bank of Boston                                   1,756             1,789
  Short-term borrowings                                                                1                --
                                                                              ----------         ---------
    Total interest expense                                                         2,914             3,283
                                                                              ----------         ---------

    Net interest and dividend income                                               4,109             4,280
Provision for loan losses                                                             50                --
                                                                              ----------         ---------
    Net interest and dividend income after
      provision for loan losses                                                    4,059             4,280
                                                                              ----------         ---------
Non-interest income:
  Deposit service charges                                                            161               129
  Net gains (losses) from sales and write-downs of investment securities              (5)               11
  Gain on sales of loans                                                             141                --
  Other income                                                                       117                83
                                                                              ----------         ---------
    Total non-interest income                                                        414               223
                                                                              ----------         ---------
Non-interest expenses:
  Salaries and employee benefits                                                   1,800             1,638
  Occupancy and equipment                                                            270               281
  Data processing service fees                                                       281               291
  Professional fees (Note 5)                                                         130               249
  Advertising                                                                        121                67
  Other expenses                                                                     401               365
                                                                              ----------         ---------
    Total non-interest expenses                                                    3,003             2,891
                                                                              ----------         ---------

    Income before income taxes                                                     1,470             1,612
Provision for income taxes (Note 5)                                                  182               585
                                                                              ----------         ---------
      Net income                                                              $    1,288         $   1,027
                                                                              ==========         =========

Earnings per common share - basic                                             $     0.83         $    0.64
                                                                              ==========         =========

Earnings per common share - diluted                                           $     0.83         $    0.63
                                                                              ==========         =========

Weighted average common shares outstanding - basic                                 1,546             1,606

Weighted average common and equivalent shares
   outstanding - diluted                                                           1,559             1,625
</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>

                                                                                            Accumulated
                                                         Additional                            Other        Unearned      Total
                                                Common     Paid-In   Retained   Treasury   Comprehensive  Compensation Stockholders'
                    (In Thousands)               Stock     Capital    Income      Stock    Income (Loss)      ESOP       Equity
------------------------------------------------------------------------------------------------------------------------------------
<S>                                               <C>         <C>       <C>        <C>          <C>             <C>         <C>
Three Months Ended June 30, 2002
--------------------------------

     Balance at March 31, 2002                   $2,000  $  11,934   $33,141    $(7,189)   $  (626)      $  (306)      $ 38,954
     Net Income                                      --         --     1,027         --         --            --          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                                --          7        --         (7)        --            --             --
     Dividends paid ($.10 per share)                 --         --      (164)        --         --            --           (164)
     Amortization of unearned compensation -
         ESOP                                        --         61        --         --         --            43            104
                                                 ------  ---------   -------    -------    -------       -------       --------
     Balance at June 30, 2002                    $2,000  $  12,002   $34,004    $(7,196)   $  (293)      $(1,446)      $ 39,071
                                                 ======  =========   =======    =======    =======       =======       ========

Three Months Ended June 30, 2003
--------------------------------

     Balance at March 31, 2003                   $2,028  $  12,751   $34,601    $(7,249)   $ 1,002       $(3,690)      $ 39,443

     Net income                                      --         --     1,288         --         --            --          1,288
     Other comprehensive income net of tax:
         Unrealized gain on securities, net
           of reclassification adjustment            --         --        --         --      1,005            --          1,005
                                                                                                                       --------
            Comprehensive income                                                                                          2,293
                                                                                                                       --------
     Proceeds from exercise of stock options         --         13        --         --         --            --             13
     Tax benefit of stock options                    --          4        --         --         --            --              4
     Director deferred compensation
         transactions                                --         23        --         --         --            --             23
     Dividends paid ($.12 per share)                 --         --      (126)        --         --            --           (126)
     Amortization of unearned compensation -
         ESOP                                        --         14        --         --         --            97            111
                                                 ------  ---------   -------    -------    -------       -------       --------
     Balance at June 30, 2003                    $2,028  $  12,805   $35,763    $(7,249)   $ 2,007       $(3,593)      $ 41,761
                                                 ======  =========   =======    =======    =======       =======       ========

</TABLE>


     See accompanying notes to unaudited consolidated financial statements.

                                       3
<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
                               Three Months Ended
<TABLE>
<CAPTION>
                                                                                    June 30,
                           (In thousands)                                     2003         2002
---------------------------------------------------------------------------------------------------
<S>                                                                         <C>             <C>
Cash flows from operating activities:

Net income                                                             $     1,288     $     1,027
   Adjustments to reconcile net income to net cash provided
      by (used in) operating activities
         Depreciation and amortization                                          79              80
         Amortization of premiums                                               65              61
         Stock-based compensation                                              111             104
         Net (gains) losses from sales and write-downs of
             investment securities                                               5             (11)
         Gain on sale of loans held for sale                                  (141)             --
         Originations of loans held for sale                               (10,984)             --
         Proceeds from sale of loans originated for sale                     6,721              --
(Increase) decrease in accrued interest receivable                              16            (180)
Increase in other assets, net                                               (1,978)           (271)
Decrease in advance payments by borrowers for taxes and insurance              (61)           (296)
Increase in accrued expenses and other liabilities, net                         40             811
                                                                       -----------     -----------
         Net cash provided by (used in) operating activities                (4,839)          1,325
                                                                       -----------     -----------

Cash flows from investing activities:

Net  decrease in loans                                                      16,939           8,191
Principal payments on mortgage-backed securities                             1,365           1,472
Proceeds from sales of investment securities                                   482              --
Purchase of banking premises and equipment                                     (61)           (123)
                                                                       -----------     -----------
         Net cash provided by investing activities                          18,725           9,540
                                                                       -----------     -----------

Cash flows from financing activities:

Increase (decrease) in deposits                                             (1,104)          9,166
Proceeds from advances from FHLB of Boston                                      --          28,500
Repayments on advances from FHLB of Boston                                      --         (33,245)
Decrease in short-term borrowings                                             (176)             --
Proceeds from exercise of stock options                                         13              --
Purchase of shares by ESOP                                                      --          (1,183)
Dividends paid, net                                                           (126)           (164)
Net directors deferred compensation                                             23              --
                                                                       -----------     -----------
         Net cash provided by (used in) financing activities                (1,370)          3,074
                                                                       -----------     -----------

Net increase in cash and cash equivalents                                   12,516          13,939
Cash and cash equivalents at beginning of year                              11,222           7,564
                                                                       -----------     -----------
Cash and cash equivalents at end of period                             $    23,738     $    21,503
                                                                       ===========     ===========
Supplemental disclosure of cash flow information:
     Cash paid during the period for:
       Interest                                                        $     2,919     $     3,299
       Income taxes                                                    $       546     $       360


</TABLE>

     See accompanying notes to unaudited consolidated financial statements.

                                       4

<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003

(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, 2003,  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, 2003. For interim reporting  purposes,  the Company follows
the same significant accounting policies.

     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,  excluding  loans held for sale,  as of June 30,  2003 and March 31,
2003 are summarized below (in thousands):

<TABLE>
<CAPTION>
                                                           June 30,        March 31,
                                                             2003            2003
                                                        -----------     ------------
<S>                                                          <C>                <C>
 Real estate loans:
    Residential real estate                             $   211,248     $   236,649
    Commercial real estate                                  115,849         107,140
    Construction                                             30,315          30,294
    Second mortgage and home equity lines of credit           9,420           9,128
                                                        -----------     -----------
         Total real estate loans                            366,832         383,211
                                                        -----------     -----------
 Commercial loans                                             4,840           5,319
 Consumer loans                                               1,206           1,287
                                                        -----------     -----------
          Total loans                                       372,878         389,817
  Less:  allowance for loan losses                           (3,354)         (3,284)
                                                        -----------     -----------
          Total loans, net                              $   369,524     $   386,533
                                                        ===========     ===========

</TABLE>

 There were no non-accrual loans at June 30, 2003 and March 31, 2003.


                                       5
<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
                                  JUNE 30, 2003

(3)  DEPOSITS

     Deposits at June 30, 2003 and March 31, 2003 are  summarized as follows (in
      thousands):
<TABLE>
<CAPTION>
                                                   June 30,         March 31,
                                                     2003             2003
                                                 ------------     -------------
<S>                                                     <C>             <C>
Demand deposit accounts                          $    32,432      $    31,523
NOW accounts                                          38,406           38,047
Passbook and other savings accounts                   72,126           71,629
Money market deposit accounts                         41,628           42,687
                                                 -----------      -----------
         Total non certificate accounts              184,592          183,886
                                                 -----------      -----------
Term deposit certificates
      Certificates of $100 and above                  25,965           26,259
      Certificates less than $100                     76,298           77,814
                                                 -----------      -----------
         Total term deposit certificates             102,263          104,073
                                                 -----------      -----------
         Total deposits                          $   286,855      $   287,959
                                                 ===========      ===========
</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 and related tax effect for the
three months ended June 30, 2003 and 2002 are as follows (in thousands):
<TABLE>
<CAPTION>

                                                                     For the Three Months Ended
                                                                            June 30, 2003
                                                              ------------------------------------
                                                              Before-
                                                               Tax         Tax(Benefit)  After-Tax
                                                              Amount         Expense      Amount
                                                              -------      -----------   ---------
<S>                                                             <C>            <C>         <C>
Unrealized gains on securities:
  Unrealized net holding gains arising during period          $ 1,623      $   621        $ 1,002
   Less: reclassification adjustment for net
            losses included in net income                           5            2              3
                                                              -------      -------        -------
   Other comprehensive income                                 $ 1,628      $   623        $ 1,005
                                                              =======      =======        =======
</TABLE>


                                       6


<PAGE>
                      CENTRAL BANCORP, INC. AND SUBSIDIARY
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2003

(4)  REPORTING COMPREHENSIVE INCOME (CONTINUED)
<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 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>

(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 $165,000
plus statutory interest of approximately $175,000 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. While
the Bank  believes  that it has  meritorious  defenses  to all such  claims  and
intends to vigorously  defend against them, a settlement  offer has been made to
the plaintiff's counsel, however, no response has been received.

     The  Company and certain  present  and former  directors  had been named in
related  federal  and  state  court  lawsuits  brought  by PL  Capital,  LLC and
affiliates  ("PL  Capital")  and also by  Lawrence  B.  Seidman  and  affiliates
("Seidman"),  respectively, current and former stockholders, in which PL Capital
and Seidman had  challenged  the  directors'  determination  that PL Capital and
Seidman  secretly  acted in concert in  violation of the  Company's  Shareholder
Rights  Agreement  ("Rights  Plan").  On August 4,  2003,  the  Company  and the
directors,  former  directors and  affiliated  entities that were parties to the
litigation entered into an Agreement (the "Agreement") with PL Capital,  LLC and
its affiliated  persons and entities,  pursuant to which all the parties settled
all of the pending litigation between them and filed with the appropriate courts
the filings necessary for the litigation to be dismissed.

STATE INCOME TAXES

     During 2002, the Massachusetts Department of Revenue ("DOR") issued notices
of  intent  to  assess  additional  state  excise  taxes to  numerous  financial
institutions in  Massachusetts  that have formed a real estate  investment trust
(REIT)  subsidiary.  The DOR contended that dividends received by the banks from
such subsidiaries were fully taxable in Massachusetts.

     The Governor of  Massachusetts  signed  legislation on March 5, 2003, which
expressly disallows  deductions for dividends received from a REIT, resulting in
such dividends  being subject to state taxation.  In addition,  this law applies
retroactively  to tax years ending on or after  December 31, 1999. In the fourth
quarter of fiscal 2003, the Company provided  additional state taxes,  including
interest, net of the related federal tax benefit, of $835,000.


                                       7

<PAGE>
                      CENTRAL BANCORP, INC. AND SUBSIDIARY
        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
                                  JUNE 30, 2003

(5)  CONTINGENCIES (CONTINUED)

     In June 2003, a settlement  of this matter was reached  between the DOR and
the majority of affected financial  institutions.  The settlement  provides that
50% of all dividends  received from REIT subsidiaries from 1999 through 2002 are
subject  to state  taxation.  Interest  on such  additional  taxes is also to be
assessed.  Payment of such taxes and interest totaling $431,000 was made in June
2003. As a result of this settlement, the Bank recognized a recovery of $374,000
in income  taxes,  which  increased  net income by the same  amount in the first
quarter of fiscal 2004.

(6)  SUBSEQUENT EVENTS

     On July 9, 2003,  the Board of  Directors  voted the payment of a quarterly
cash  dividend of $.12 per share.  The dividend is payable on August 15, 2003 to
stockholders of record on August 1, 2003.

     As more fully  disclosed in Note 5, the Company  entered into the Agreement
on August 4, 2003 with PL  Capital.  The  litigation  between  the  parties  was
dismissed  as part  of the  Agreement  and a  payment  of  $400,000,  which  was
reimbursed by insurance, was made to PL Capital.

(7)  RECENT ACCOUNTING PRONOUNCEMENT

     In December 2002, the FASB issued SFAS No. 148, "Accounting for Stock-Based
Compensation  - Transition and  Disclosure."  SFAS No. 148 amends SFAS Statement
No. 123, to provide  alternative methods of transition for a voluntary change to
the fair value based method of accounting for stock-based employee compensation.
Companies  are able to  eliminate  a  "ramp-up"  effect  that  the SFAS No.  123
transition rule creates in the year of adoption. Companies can choose to elect a
method that will provide for comparability  amongst years reported. In addition,
this  Statement  amends the  disclosure  requirement of Statement 123 to require
prominent  disclosures in both annual  compensation and the effect of the method
used on reported  results.  The  amendments  to SFAS No. 123 are  effective  for
financial  statements  for fiscal  years ending  after  December  15, 2002.  The
Company  is  not  currently   considering  the  adoption  of  fair  value  based
compensation of stock options.



                                       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.

CRITICAL ACCOUNTING POLICIES

     Accounting  policies  involving  significant  judgments and  assumptions by
management,  which have, or could have, a material  impact on the carrying value
of  certain  assets  and  impact  income,  are  considered  critical  accounting
policies. The Company considers the allowance for loan losses to be its critical
accounting  policy.  There have been no  significant  changes in the  methods or
assumptions used in the accounting  policies that require material estimates and
assumptions.

     Arriving at an appropriate  level of allowance for loan losses  necessarily
involves a high degree of judgment.  The ongoing  evaluation  process includes a
formal  analysis of the allowance  each quarter,  which  considers,  among other
factors,  the  character and size of the loan  portfolio,  business and economic
conditions,  loan  growth,  delinquency  trends,   nonperforming  loans  trends,
charge-off  experience and other asset quality  factors.  The Company  evaluates
specific loan status reports on certain  commercial  and commercial  real estate
loans  rated  "substandard"  or worse in excess of a  specified  dollar  amount.
Estimated  reserves for each of these credits is determined by reviewing current
collateral value, financial  information,  cash flow, payment history and trends
and other  relevant facts  surrounding  the  particular  credit.  Provisions for
losses on the remaining commercial and commercial real estate loans are based on
pools of similar loans using a combination  of historical  loss  experience  and
qualitative  adjustments.  For the  residential  real estate and  consumer  loan
portfolios,   the  range  of  reserves  is  calculated  by  applying  historical
charge-off and recovery  experience to the current  outstanding  balance in each
loan category.  Although management uses available  information to establish the
appropriate  level of the  allowance  for loan losses,  future  additions to the
allowance may be necessary  based on estimates that are susceptible to change as
a result of changes in  economic  conditions  and other  factors.  In  addition,
various regulatory  agencies,  as an integral part of their examination process,
periodically  review the Company's  allowance for loan losses. Such agencies may
require the Company to recognize  adjustments  to the  allowance  based on their
judgments about information available to them at the time of their examination.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2003 AND MARCH 31, 2003

     Total assets increased by $849,000 from $477.2 million at March 31, 2003 to
$478.1 million at June 30, 2003.  During the quarter ended June 30, 2003,  loans
(excluding loans held for sale) decreased by $16.9 million consisting  primarily
of a $25.4 million decrease in residential  mortgage loans,  partially offset by
an $8.7 million  increase in commercial  real estate  loans.  During the current
quarter,  interest  rates  for  residential  mortgages  reached  a  45-year  low
resulting in significant refinancing activity. Management regularly assesses the
desirability  of holding  newly  originated  long-term,  fixed-rate  residential
mortgage  loans in portfolio or selling such loans in the  secondary  market.  A
number of factors are  evaluated to determine  whether or not to hold such loans
in portfolio including,  current and projected liquidity,  current and projected
interest  rates,  projected  growth  in other  interest-earning  assets  and the
current and projected interest rate risk profile.  Based on its consideration of
these factors,  management determined that fixed-rate residential mortgage loans
originated  during the current  quarter should be sold in the secondary  market.
This decision resulted in the  aforementioned  decrease in residential  mortgage
loans and a $12.5  million  increase  in cash and cash  equivalents  during  the
quarter ended June 30, 2003.


                                       9

<PAGE>

     The Company  experienced  modest growth of $706,000 in core deposits in the
current  quarter,  which was more than offset by a $1.8 million decrease in term
deposits  resulting  in a decrease  in total  deposits  of $1.1  million.  While
deposits  flows  can  vary  significantly  on a daily  basis,  the  Company  has
experienced  a  generally  flat  level of  total  deposits  during  the past two
quarters  with a  declining  level of term  deposits.  Management  sets its term
deposit rates to be competitive in its market area, however, the desirability of
term  deposits has been  adversely  affected  during this period of low interest
rates.

     The increase in  stockholders'  equity of $2.3 million to $41.8  million at
June 30,  2003  resulted  primarily  from net income of $1.3  million  and other
comprehensive income of $1.0 million.

COMPARISON OF OPERATING RESULTS FOR THE QUARTERS ENDED JUNE 30, 2003 AND 2002

     Net income increased by $261,000 to $1.3 million for the quarter ended June
30, 2003, compared to the same quarter in the prior year. Included in net income
in the current quarter was a recovery of income taxes of $374,000 resulting from
the  settlement  of the REIT  tax  dispute  among  Massachusetts  banks  and the
Massachusetts  Department of Revenue  (DOR).  Exclusive of this item, net income
for the quarter ended June 30, 2003 decreased  $113,000,  or 11.0%,  compared to
the  corresponding  quarter  in the  prior  year.  This  decline  was  primarily
attributable  to the reduction in net interest  income and margin in the current
quarter  due to  management's  decision  to sell  its  current  originations  of
fixed-rate  residential  mortgage loans as previously  discussed.  The Company's
effective tax rate, exclusive of the tax recovery of $374,000,  was 37.8% in the
current  quarter  compared  to  36.3%  in  the  prior  year  quarter  due to the
elimination  of the  use of the  dividends  received  deduction  for  state  tax
purposes on dividends received by the Bank from its REIT subsidiary.

Interest  Income.  Interest  income for the quarter ended June 30, 2003 was $7.0
million  compared  to $7.6  million in the prior  year  quarter.  This  decrease
occurred due to the steady decline in interest rates  experienced  over the past
year,  which has  caused an  unprecedented  level of loan  refinancing  and loan
modification  activity.  As a  result,  the  yield  on  interest-earning  assets
decreased  from 6.62% in the quarter ended June 30, 2002 to 6.07% in the current
quarter.   This  decrease  was  partially  offset  by  an  increase  in  average
interest-earning assets of $6.1 million in the current year period.

Interest Expense.  Interest expense for the quarter ended June 30, 2003 was $2.9
million compared to $3.3 million for the quarter ended June 30, 2002, a decrease
of $369,000, or 11.2%. This decrease resulted from a 39 basis points decrease in
the cost of funds from 3.31% in the quarter  ended June 30, 2002 to 2.92% in the
quarter ended June 30, 2003.  This decrease was partially  offset by an increase
in average  interest-bearing  liabilities  of $2.1  million in the current  year
period.

     The  decrease  in the cost of funds in the first  quarter  of  fiscal  2004
reflected  the impact of the series of rate  decreases  initiated by the Federal
Reserve  Board  beginning in January  2001,  the  repricing of  certificates  of
deposits  during  the  past  year  and a shift  in  deposits  from  higher  cost
certificates of deposits which represented 41.7% of deposits at the beginning of
the first  quarter of the prior year  compared to 36.1% 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  probable losses based on an evaluation of known and inherent
risks in the portfolio.  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.

     During the current  quarter,  the Company provided $50,000 for loan losses.
While the Company's asset quality, as measured principally by delinquency rates,
charge-offs and loan classifications,  continues to be outstanding, the shifting
of the mix of the loan portfolio to a greater  portion of commercial real estate
loans  indicated  the need for an increase in the reserve for loan losses in the
current quarter.  No provision was recorded in the corresponding  quarter of the
prior year.


                                       10

<PAGE>

Non-interest  Income.  Total  non-interest  income was  $414,000 for the quarter
ended June 30, 2003 compared to $223,000 in the same period of 2002. The primary
reason for the  $191,000  increase in the current  year was the gain on sales of
loans which  amounted to $141,000.  During the second half of fiscal  2003,  the
Company commenced its mortgage banking  initiative.  During the current quarter,
$6.6 million in fixed-rate  residential  mortgage loans were sold on a servicing
released basis. At June 30, 2003,  loans held for sale amounted to $5.1 million.
Based on the  balance  of loans held for sale and loan  commitments  at June 30,
2003, management  anticipates that the volume of loan sales will increase in the
upcoming  quarter.  With the recent increase in mortgage rates, loan refinancing
activity  has  declined,  which could result in a decrease in the volume of loan
sales during the second half of the Company's fiscal year.

     The Company also experienced increases in deposit service charges ($32,000)
and  brokerage  income  on the sale of  non-deposit  products  ($27,000)  due to
increases in the volume of activity.

Non-interest Expenses. Non-interest expenses increased $112,000, or 3.9%, during
the quarter  ended June 30,  2003 as  compared  to the same  quarter in 2002 due
principally  to  increases  in salaries and  employee  benefits  ($162,000)  and
advertising   ($54,000),   partially   offset  by  a  decrease  of  $119,000  in
professional fees.

     The increase in salaries and employee benefits of $162,000, or 9.9%, during
the quarter ended June 30, 2003, was due to overall salary  increases  averaging
4%,  increases in staffing in the lending  area, as well as increases in pension
and health care costs.

     Professional fees decreased  $119,000 during the current quarter due to the
recognition of a partial reimbursement of legal defense costs from the Company's
insurance  carrier of $1.9  million.  The legal  defense  costs were incurred in
connection  with  shareholder  litigation,  which was  settled  in August  2003.
Management is  continuing to work with its insurance  carrier to ensure that the
Company  receives full  reimbursement of all legal fees to which it is entitled.
No estimate of any additional insurance reimbursement is available.

Income Taxes.  The effective tax rates for the quarters  ended June 30, 2003 and
2002 were  12.4% and 36.3%,  respectively.  As  previously  noted,  the  Company
recovered  $374,000  in taxes  during  the  current  quarter  as a result of the
settlement  of the REIT tax dispute with the DOR.  Exclusive  of this item,  the
effective tax rate for the quarter ended June 30, 2003 was 37.8%.  This increase
from the prior year is entirely  due to the change in state tax law  eliminating
the use of the dividends received deduction on dividends received by a bank from
its REIT subsidiary.  The Company's  effective tax rate is expected to be higher
throughout  the  current  year as  compared  to fiscal  2003 as a result of this
change in state tax law.

LIQUIDITY AND CAPITAL RESOURCES

     The Company's  principal  sources of liquidity are short-term  investments,
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, 2003,  the Bank had  approximately  $11.5 million in unused
borrowing  capacity at the FHLB of Boston.  The Bank is currently in the process
of pledging  additional  real  estate  secured  loans in order to  increase  its
qualified collateral at the FHLB of Boston.

     At June 30, 2003, the Company had  commitments to originate  loans,  unused
outstanding  lines of credit and  undisbursed  proceeds of loans  totaling $58.0
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,  2003 were as
follows:

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

 Tier 1 Capital (to average assets)                7.92%             7.08%
 Tier 1 Capital (to risk-weighted assets)         11.47             10.30
 Total Capital (to risk-weighted assets)          12.50             11.33


                                       11
<PAGE>

     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 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 both actual and
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 actual and
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
50/100 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:

                                                   June 30,         March 31,
                                                     2003             2003
                                                   --------         ---------

   300 basis point increase in rates.........         (4.9)%         (7.6)%

   50 basis point decrease in rates
   (June 30 only)..............................       (5.2)

   100 basis point decrease in rates
   (March 31 only)..........................                         (2.0)%

     For each one  percentage  point change in net  interest  income in the June
2003 projections,  the effect on net income would be $100,400 assuming a 38% tax
rate.

ITEM 4. CONTROLS AND PROCEDURES

     As of the end of the  period  covered  by this  report,  management  of the
Company  carried  out  an  evaluation,   under  the  supervision  and  with  the
participation  of  the  Company's  principal  executive  officer  and  principal
financial officer, of the effectiveness of the Company's disclosure controls and
procedures.  Based on this evaluation, the Company's principal executive officer
and principal financial officer concluded that the Company's disclosure controls
and  procedures  are  effective  in  ensuring  that  information  required to be
disclosed  by the  Company  in  reports  that it  files  or  submits  under  the
Securities Exchange Act of 1934, as amended, is


                                       12
<PAGE>

recorded, processed,  summarized and reported, within the time periods specified
in the Securities and Exchange Commission's rules and forms.

     In addition,  there have been no changes in the Company's  internal control
over financial  reporting (to the extent that elements of internal  control over
financial  reporting are subsumed  within  disclosure  controls and  procedures)
identified in connection  with the evaluation  described in the above  paragraph
that occurred  during the Company's  last fiscal  quarter,  that has  materially
affected,  or is reasonably likely to materially  affect, the Company's internal
control over financial reporting.

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

     The  Company and certain  present  and former  directors  had been named in
related  federal  and  state  court  lawsuits  brought  by PL  Capital,  LLC and
affiliates  ("PL  Capital")  and also by  Lawrence  B.  Seidman  and  affiliates
("Seidman"),  respectively, current and former stockholders, in which PL Capital
and Seidman had  challenged  the  directors'  determination  that PL Capital and
Seidman  secretly  acted in concert in  violation of the  Company's  Shareholder
Rights  Agreement.  On August 4, 2003,  the  Company and the  directors,  former
directors and affiliated  entities that were parties to the  litigation  entered
into an Agreement with PL Capital,  LLC and its affiliated persons and entities,
pursuant to which all the parties settled all of the pending  litigation between
them and  filed  with the  appropriate  courts  the  filings  necessary  for the
litigation to be dismissed.

Item 2.  Changes in Securities and Use of Proceeds

                  Not Applicable

Item 3.  Defaults upon Senior Securities

                  Not Applicable

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

                  Not Applicable

Item 5.  Other Information

                  None

Item 6.  Exhibits and Reports on Form 8-K

                 (a)  Exhibits

                      3.2    Bylaws of Central Bancorp, Inc.

                      31.1   Rule 13a-14(a) Certification of Chief Executive
                              Officer

                      31.2   Rule 13a-14(a) Certification of Chief Financial
                              Officer

                      32     Section 1350 Certification

                  (b) Reports on Form 8-K

                  Date of Report  Item(s) Reported  Financial Statements Filed
                  --------------  ----------------  --------------------------

                  May 2, 2003           7, 12                N/A
                  May 12, 2003          5, 7                 N/A
                  May 23, 2003          5, 7                 N/A
                  June 24, 2003         5, 7                 N/A


                                       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, 2003                        /s/John D. Doherty
---------------                        ------------------------------------
 Date                                  John D. Doherty
                                       Chairman, President and Chief Executive
                                        Officer




August 14, 2003                        /s/Michael K. Devlin
---------------                        -------------------------------------
 Date                                  Michael K. Devlin
                                       Senior Vice President, Treasurer
                                        and Chief Financial Officer