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 SEPTEMBER 30, 2001
                              ------------------

                         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)


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


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
                                       ----    -----

        Class                                   Outstanding at November 8, 2001
-----------------------------                   --------------------------------
Common Stock, $1.00 par value                            1,671,626


<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY

                                TABLE OF CONTENTS

PART I.  FINANCIAL INFORMATION
         ---------------------

         Item 1.  Financial Statements

                  Consolidated Statements of Financial Condition at March 31,
                  2001 and September 30, 2001 (unaudited)

                  Consolidated Statements of Income for the three and six month
                  periods ended September 30, 2001 and 2000 (unaudited)

                  Consolidated Statements of Cash Flows for the six month
                  periods ended September 30, 2001 and 2000 (unaudited)

                  Consolidated Statements of Changes in Stockholders' Equity for
                  the six month periods ended September 30, 2001 and 2000
                  (unaudited)

                  Notes to Consolidated Financial Statements (unaudited)

         Item 2.  Management's Discussion and Analysis of Financial Condition
                  and Results of Operations for the three and six month periods
                  ended September 30, 2001 and 2000

         Item 3.  Quantitative and Qualitative Disclosures about Market Risk

                  (Incorporated by reference to the Company's Annual Report on
                  Form 10-K for the fiscal year ended March 31, 2001)

PART II. OTHER INFORMATION
         -----------------

         Item 1.  Legal Proceedings

         Item 2.  Changes in Securities and Use of Proceeds

         Item 3.  Defaults upon Senior Securities

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

         Item 5.  Other Information

         Item 6.  Exhibits and Reports on Form 8-K

SIGNATURES


<PAGE>
Item 1-Financial Statements:

                      CENTRAL BANCORP, INC. AND SUBSIDIARY
                 Consolidated Statements of Financial Condition
                             (Dollars in Thousands)
<TABLE>
<CAPTION>
                                                                                   September 30,            March 31,
                                                                                       2001                   2001
-------------------------------------------------------------------------------------------------------------------------
                                                                                  (Unaudited)
<S>                                                                               <C>                   <C>
ASSETS
Cash and due from banks                                                           $         7,921       $         5,351
                                                                                  ---------------------------------------
Short-term investments                                                                     16,423                34,529
Investments available for sale:
  Investment securities                                                                    51,134                31,263
  Mortgage-backed securities                                                               21,038                19,314
Stock in Federal Home Loan Bank of Boston, at cost                                          6,150                 6,150
The Co-operative Central Bank Reserve Fund                                                  1,576                 1,576
                                                                                  ---------------------------------------
    Total investments                                                                      96,321                92,832
                                                                                  ---------------------------------------

Loans:
  Mortgage loans                                                                          310,945               338,898
  Other loans                                                                               7,315                 6,895
                                                                                  ---------------------------------------
                                                                                          318,260               345,793
  Less allowance for loan losses                                                           (3,210)               (3,106)
                                                                                  ---------------------------------------
    Net loans                                                                             315,050               342,687
                                                                                  ---------------------------------------

Accrued interest receivable                                                                 2,473                 2,426
Office properties and equipment, net                                                        1,950                 2,018
Deferred tax asset, net                                                                       852                   801
Goodwill, net                                                                               2,376                 2,520
Other assets                                                                                  533                   702
                                                                                  ---------------------------------------
    Total assets                                                                  $       427,476       $       449,337
                                                                                  =======================================

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Deposits                                                                        $       270,868       $       287,167
  Advances from Federal Home Loan Bank of Boston                                          108,000               121,000
  Advance payments by borrowers for taxes and insurance                                     1,253                 1,220
  Accrued interest payable                                                                    520                   608
  Accrued expenses and other liabilities                                                    8,084                 1,130
                                                                                  ---------------------------------------
    Total liabilities                                                                     388,725               411,125
                                                                                  ---------------------------------------

Commitments and Contingencies (Note 2)

Stockholders' equity:
  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;
    Issued 1,990,424 and 1,970,000 shares(outstanding 1,669,151 and
    1,684,164) at September 30, 2001 and March 31, 2001 respectively                        1,990                 1,970
  Additional paid-in capital                                                               11,602                11,190
  Retained income                                                                          31,708                30,950
  Treasury stock (321,273 shares and 285,836 shares at September 30,
    2001, and March 31, 2001, respectively), at cost                                       (5,959)               (5,230)
  Accumulated other comprehensive income (loss) (note 4)                                     (418)                 (431)
  Unearned compensation - ESOP                                                               (172)                 (237)
                                                                                  ---------------------------------------
    Total stockholders' equity                                                             38,751                38,212
                                                                                  ---------------------------------------
    Total liabilities and stockholders' equity                                    $       427,476       $       449,337
                                                                                  =======================================
</TABLE>

See accompanying notes to unaudited consolidated financial statements.

<PAGE>
                      CENTRAL BANCORP, INC. AND SUBSIDIARY
                        Consolidated Statements of Income
                      (In Thousands, Except Per Share Data)
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                            Three Months Ended               Six Months Ended
                                                                September 30,                   September 30,
                                                            2001          2000               2001            2000
                                                          ------------------------      ----------------------------
<S>                                                      <C>           <C>              <C>             <C>
Interest and dividend income:
  Mortgage loans                                          $   5,797   $   6,533         $    11,946   $  12,546
  Other loans                                                   182         162                 364         288
  Short-term investments                                        329          64                 801         149
  Investment securities                                         597         616               1,086       1,226
  Mortgage-backed securities                                    251         359                 539         735
  The Co-operative Central Bank Reserve Fund                     24          25                  43          45
                                                          ----------------------        ------------------------
    Total interest and dividend income                        7,180       7,759              14,779      14,989
                                                          ----------------------        ------------------------
Interest expense:
  Deposits                                                    2,177       2,476               4,814       4,819
  Advances from Federal Home Loan Bank of Boston              1,643       1,821               3,369       3,271
                                                          ----------------------        ------------------------
    Total interest expense                                    3,820       4,297               8,183       8,090
                                                          ----------------------        ------------------------

    Net interest and dividend income                          3,360       3,462               6,596       6,899
Provision for loan losses                                        --          --                  --          --
                                                          ----------------------        ------------------------
    Net interest and dividend income after
      provision for loan losses                               3,360       3,462               6,596       6,899
                                                          ----------------------        ------------------------
Non-interest income:
  Deposit service charges                                       105         112                 229         216
  Net gains from sales of investment securities                 121         193                 324         376
  Other income                                                  111          49                 193         100
                                                          ----------------------        ------------------------
    Total non-interest income                                   337         354                 746         692
                                                          ----------------------        ------------------------
Operating expenses:
  Salaries and employee benefits                              1,515       1,311               3,048       2,628
  Occupancy and equipment                                       277         286                 595         565
  Advertising                                                    79         103                 198         329
  Data processing service fees                                  220         163                 490         291
  Professional fees                                             362         245                 554         513
  Goodwill amortization                                          72          72                 144         144
  Other expense                                                 281         260                 589         546
                                                          ----------------------        ------------------------
    Total operating expenses                                  2,806       2,440               5,618       5,016
                                                          ----------------------        ------------------------

    Income before income taxes                                  891       1,376               1,724       2,575
Income tax expense                                              327         499                 630         933
                                                          ----------------------        ------------------------
      Net income                                          $     564         877         $     1,094   $   1,642
                                                          ======================        ========================

Earnings per common share                                 $    0.34   $    0.51         $      0.66   $    0.93
                                                          ======================        ========================
Earnings per common share, diluted                        $    0.34   $    0.51         $      0.65   $    0.93
                                                          ======================        ========================
Weighted average common shares outstanding                    1,666       1,731               1,664       1,759

Weighted average common shares outstanding, diluted           1,683       1,733               1,678       1,760
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


<PAGE>
                      CENTRAL BANCORP, INC. AND SUBSIDIARY
                      Consolidated Statements of Cash Flows
                                   (Unaudited)
<TABLE>
<CAPTION>
                                                                                            Six Months Ended
                                                                                              September 30,
                                     (In Thousands)                                       2001            2000
----------------------------------------------------------------------------------------------------------------------
<S>                                                                              <C>                <C>
Cash flows from operating activities:

Net income                                                                       $      1,094       $         1,642
   Adjustments to reconcile net income to net cash provided by
    operating activities
      Depreciation and amortization                                                       205                   221
      Amortization of premiums, fees and discounts                                         68                    45
      Amortization of goodwill                                                            144                   144
      Net gains from sales of investment securities                                      (324)                 (376)
Decrease in deferred tax asset                                                             --                   185
Increase in accrued interest receivable                                                   (33)                 (278)
Decrease (increase) in other assets                                                       169                  (118)
Increase in advance payments by borrowers for taxes and insurance                          33                   426
(Decrease) increase in accrued interest payable                                           (88)                   57
(Decrease) increase in accrued income taxes                                              (541)                  655
Increase (decrease) in accrued expenses and other liabilities                             342                   (94)
                                                                                   -----------------------------------
      Net cash provided by operating activities                                         1,069                 2,509
                                                                                   -----------------------------------

Cash flows from investing activities:

    Principal collected on loans                                                       62,550                31,224
    Loan originations                                                                 (34,913)              (62,663)
    Principal payments on mortgage-backed securities available for sale                 3,573                 2,021
    Purchase of investment securities available for sale                              (39,106)               (3,169)
    Maturities and calls of investment securities available for sale                   20,000                    --
    Proceeds from sales of investment securities available for sale                     1,295                 1,876
    Net decrease in short-term investments                                             18,106                10,690
    Purchase of Stock in Federal Home Loan Bank of Boston                                  --                  (350)
    Purchase of office properties and equipment                                          (137)                  (92)
                                                                                   -----------------------------------
      Net cash provided by (used in) investing activities                              31,368               (20,463)
                                                                                   -----------------------------------

Cash flows from financing activities:

    Net increase (decrease) in deposits                                               (16,299)                9,861
    Proceeds from advances from FHLB of Boston                                             --               119,000
    Payments on advances from FHLB of Boston                                          (13,000)             (111,000)
    Earned ESOP shares charged to expense                                                  95                    --
    Proceeds from exercise of stock options                                               337                    --
    Purchase of Treasury stock                                                           (729)               (1,048)
    Payments of dividends on common stock                                                (336)                 (356)
    Amortization of unearned compensation - ESOP                                           65                    65
                                                                                   -----------------------------------
      Net cash (used in) provided by financing activities                             (29,867)               16,522
                                                                                   -----------------------------------

    Net increase (decrease) in cash and due from banks                                  2,570                (1,432)
    Cash and due from banks at beginning of period                                      5,351                 6,588
                                                                                   -----------------------------------
    Cash and due from banks at end of period                                     $      7,921       $         5,156
                                                                                   ===================================

    Supplemental disclosure of cash flow information:
      Cash paid during the period for:
        Interest                                                                 $      8,271       $         8,033
        Income taxes                                                                      868                   278
</TABLE>

See accompanying notes to unaudited consolidated financial statements.


<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>
Six Months Ended September 30, 2000
------------------------------------
      Balance at March 31, 2000                              $  1,970    $ 11,190    $ 28,538    $ (3,043)
                                                             --------    --------    --------    --------
      Net Income                                                   --          --       1,642          --
      Other Comprehensive Income, net of tax
          Unrealized gain on securities, net of
                 reclassification adjustment (note 4)              --          --          --          --
                                                             --------    --------    --------    --------
             Comprehensive income (loss)                           --          --       1,642          --
                                                             --------    --------    --------    --------
      Purchase of treasury stock                                   --          --          --      (1,048)
      Dividends paid                                               --          --        (356)         --
      Amortization of unearned compensation - ESOP                 --          --          --          --
                                                             --------    --------    --------    --------
      Balance at September 30, 2000                          $  1,970    $ 11,190    $ 29,824    $ (4,091)
                                                             ========    ========    ========    ========
Six Months Ended September 30, 2001
-----------------------------------
      Balance at March 31, 2001                              $  1,970    $ 11,190    $ 30,950    $ (5,230)
                                                             --------    --------    --------    --------
      Net Income                                                   --          --       1,094          --
      Other Comprehensive Income, net of tax
          Unrealized (losses) on securities, net of
                 reclassification adjustment (note 4)              --          --          --          --
                                                             --------    --------    --------    --------
             Comprehensive income                                  --          --       1,094          --
                                                             --------    --------    --------    --------

      Earned ESOP shares charged to expense                        --          95          --          --
      Proceeds from exercise of stock options                      20         317          --          --
      Purchase of treasury stock                                   --          --          --        (729)
      Dividends paid                                               --          --        (336)         --
      Amortization of unearned compensation - ESOP                 --          --          --          --
                                                             --------    --------    --------    --------
      Balance at September 30, 2001                          $  1,990    $ 11,602    $ 31,708    $ (5,959)
                                                             ========    ========    ========    ========
<CAPTION>
                                                              Accumulated
                                                                  Other           Unearned       Total
                                                              Comprehensive    Compensation    Stockholders'
                             (In Thousands)                    Income (Loss)       ESOP          Equity
------------------------------------------------------------------------------------------------------------
<S>                                                              <C>             <C>            <C>
Six Months Ended September 30, 2000
-----------------------------------
      Balance at March 31, 2000                                  $ (825)         $  (433)       $ 37,397
                                                                 ------          -------        --------
      Net Income                                                     --               --           1,642
      Other Comprehensive Income, net of tax
          Unrealized gain on securities, net of
                 reclassification adjustment (note 4)               348               --             348
                                                                 ------          -------        --------
             Comprehensive income (loss)                            348               --           1,990
                                                                 ------          -------        --------
      Purchase of treasury stock                                     --               --          (1,048)
      Dividends paid                                                 --               --            (356)
      Amortization of unearned compensation - ESOP                   --               65              65
                                                                 ------          -------        --------
      Balance at September 30, 2000                              $ (477)        $   (368)       $ 38,048
                                                                 ======          =======        ========
Six Months Ended September 30, 2001
-----------------------------------
      Balance at March 31, 2001                                  $ (431)        $   (237)       $ 38,212
                                                                 ------          -------        --------
      Net Income                                                     --               --           1,094
      Other Comprehensive Income, net of tax
          Unrealized (losses) on securities, net of
                 reclassification adjustment (note 4)                13               --              13
                                                                 ------          -------        --------
             Comprehensive income                                    13               --           1,017
                                                                 ------          -------        --------

      Earned ESOP shares charged to expense                          --               --              95
      Proceeds from exercise of stock options                        --               --             337
      Purchase of treasury stock                                     --               --            (729)
      Dividends paid                                                 --               --            (336)
      Amortization of unearned compensation - ESOP                   --               65              65
                                                                 ------          -------        --------
      Balance at September 30, 2001                              $ (418)        $   (172)       $ 38,751
                                                                 ======          =======        ========
</TABLE>

     See accompanying notes to unaudited consolidated financial statements.
<PAGE>


                      CENTRAL BANCORP, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2001
                                   (UNAUDITED)

(1) BASIS OF PRESENTATION
    ---------------------

     The consolidated  financial  statements of the Registrant for September 30,
     2001 and 2000  presented  herein  should  be read in  conjunction  with the
     financial  statements of the Company as of and for the year ended March 31,
     2001,  included in the Company's Annual Report on Form 10-K. In the opinion
     of management, the accompanying unaudited consolidated financial statements
     reflect  all  adjustments,  consisting  of  normal  recurring  adjustments,
     necessary to fairly present the results for the interim periods  presented.
     Interim  results are not  necessarily  indicative of results to be expected
     for the entire year.

(2) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
    -------------------------------------------------

     Commitments  to  originate  loans,  unused  lines of credit and  unadvanced
     portions  of  construction  loans  are  agreements  to lend to a  customer,
     provided  there  is no  violation  of  any  condition  established  in  the
     contract.  Commitments  generally  have  fixed  expiration  dates  or other
     termination  clauses  and may require  payment of a fee.  Since many of the
     commitments  may expire  without  being  drawn upon,  the total  commitment
     amounts do not necessarily represent future cash requirements.  The Company
     evaluates each customer's  credit  worthiness on a case-by-case  basis. The
     amount of  collateral  obtained,  if deemed  necessary  by the Company upon
     extension of credit,  is based on  management's  credit  evaluation  of the
     borrower.

     Commitments at September 30, 2001 follow:                    (In Thousands)

       Unused lines of credit....................................   $  10,566
       Unadvanced portions of construction loans.................       7,376
       Unadvanced portions of commercial loans...................       6,411
       Commitments to originate commercial loans.................         535
       Commitments to originate commercial mortgage loans........      14,846
       Commitments to originate residential mortgage loans:
            Fixed rate...........................................       1,080
            Adjustable rate......................................         710

<PAGE>
                      CENTRAL BANCORP, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                               SEPTEMBER 30, 2001
                                   (UNAUDITED)

(3) INCOME TAXES
    ------------

     The Company accounts for income taxes using the asset and liability method.
     Deferred  tax assets and  liabilities  are  established  for the  temporary
     differences  between the financial reporting basis and the tax basis of the
     Company's  assets and  liabilities  at enacted tax rates  expected to be in
     effect when such amounts are realized or settled.

(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:
<TABLE>
<CAPTION>
                                                                              For the Six Months Ended
                                    (In Thousands)                              September 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                  $  286         $    67         $  219

      Less: reclassification adjustment for
        gains realized in net income                                     324             118            206
                                                                      --------------------------------------

      Other comprehensive income (loss)                               $  (38)        $   (51)        $   13
                                                                     ======================================
</TABLE>
<TABLE>
<CAPTION>
                                                                            For the Six Months Ended
                                                                               September 30, 2000
                                                                    ----------------------------------------
                                                                      Before-
                                                                       Tax            Tax          After-Tax
                                                                      Amount         Expense        Amount
                                                                      ------       ------------    ---------
<S>                                                                   <C>            <C>             <C>
    Unrealized gains on securities:
      Unrealized holding gains arising during period                  $  909         $   321         $  588

      Less:  reclassification adjustment for
        gains realized in net income                                     376             136            240
                                                                      --------------------------------------

      Other comprehensive income                                      $  533         $   185         $  348
                                                                      ======================================
</TABLE>
<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED

                               SEPTEMBER 30, 2001
                                   (UNAUDITED)


(5) DIRECTORS DEFERRED COMPENSATION PLAN
    ------------------------------------

     In fiscal 2001, the Company  established a deferred  compensation  plan for
     its directors.  The Plan allows the Company's directors to defer receipt of
     all or a  portion  of  their  compensation.  The  plan  requires  that  the
     compensation  deferred be invested in Company stock held in an  irrevocable
     trust. At September 30, 2001 the trust held 1,311 shares of Central Bancorp
     stock that the  Company has  classified  as treasury  stock.  The  treasury
     shares are considered  outstanding in the computation of earnings per share
     and book value per share.

<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY

                     Management's Discussion and Analysis of
                  Financial Condition and Results of Operations

GENERAL:
-------

     On  January 8, 1999,  the  Registrant,  Central  Bancorp,  Inc.  became the
     holding  company of Central  Co-operative  Bank when the Bank completed its
     holding company  reorganization.  Because substantially all of the business
     of the Registrant is the business of the Bank, the discussion below focuses
     on the  business  of the  Bank.  For more  information,  see  "Management's
     Discussion   and   Analysis   of   Financial   Condition   and  Results  of
     Operations--Holding  Company"  included in the  Company's  Annual Report on
     Form 10-K as of and for the year ended March 31, 2001.

     Net income  amounted to $564,000,  or $0.34 per diluted share for the three
     months ended  September 30, 2001 as compared to net income of $877,000,  or
     $0.51 per diluted share in the  corresponding  quarter ended  September 30,
     2000.

     The earnings  decline for the September 30, 2001 quarter was in part due to
     a $102,000  decrease in net interest and  dividend  income  compared to the
     year earlier quarter.  This decrease was attributable to an acceleration in
     residential  loan pay-offs as borrowers  sought to refinance their loans at
     lower rates, a slowing of long-term,  fixed-rate loan  originations  due to
     the uncertain interest rate environment, and a determination by the Company
     to slow its  lending  activities  in  anticipation  of the  slowdown in the
     national  economy  and  especially  in the local real estate  markets.  The
     increased  liquidity  maintained  through most of the quarter following the
     decision to slow lending  activities and the drop in short-term  rates as a
     result of Federal  Reserve  actions led to a  compression  in the Company's
     interest rate spread and margin.

     In addition,  the Company's operating expenses increased by $366,000 during
     the September  30, 2001 quarter over the  September  30, 2000 quarter.  The
     higher  operating  expenses  for new  personnel  and data  processing  also
     contributed to the decline in net income in the  year-to-year  comparisons.
     The  increase in  personnel  costs  included  the addition of staff to sell
     non-deposit  investment  products,  including  mutual funds,  annuities and
     insurance products, to generate fee income in future periods. Additionally,
     the Company increased its loan  administration  and commercial  origination
     staff to better monitor and develop the commercial loan area. During fiscal
     2001, the Company  converted to a new computer  processing system that will
     allow it to continue to improve its products offerings and services to both
     individual  and business  customers.  Although more costly,  the new system
     will allow the Company to be more competitive with other financial services
     providers  by allowing  it to offer the same types of  products  offered by
     larger competitors. The Bank introduced a complete internet banking product
     in August 2001.

FINANCIAL CONDITION:
-------------------

     The  following is a discussion of the major changes and trends in financial
     condition  from the end of the  preceding  fiscal year,  March 31, 2001, to
     September 30, 2001.

     Total  assets  decreased  from  $449.3  million at March 31, 2001 to $427.5
     million at September 30, 2001 primarily as a result of net loan payoffs and
     amortization. Funds generated from the reduction in loans were used to fund
     deposit outflows and maturities of advances from FHLB of Boston.

     The Company's loan balance declined by $27.5 million or 8.0% as a result of
     a higher  level of  amortization  and  payoffs  than  originations,  as the
     Company made a decision to slow down long-term
<PAGE>

     fixed-rate   residential  loan   originations   because  of  the  low  rate
     environment for such loans.  Loan  originations  amounted to $34.9 million.
     Loan  amortization  and pay-offs  amounted to $62.6 million.  The Company's
     investment portfolio increased by $3.5 million, primarily as a result of an
     increase  in  investment  securities  offset by a  decrease  in short  term
     investments.

     Deposits  decreased  during the period by $16.3 million  primarily due to a
     decrease in term deposit  certificates,  offset by increases in savings and
     transaction accounts.

     During the period,  the Company  continued  its fourth common stock buyback
     program. An additional 34,126 shares were purchased during the period at an
     average  price of $21.36.  At September 30, 2001,  45,332  shares  remained
     authorized by that program.  The shares repurchased since the first buyback
     program  was  adopted  in April 1999  total  319,962 at an average  cost of
     $18.59  per  share,  representing  16.24% of the  common  stock  issued and
     outstanding prior to the adoption of the first buyback program.

NON-PERFORMING ASSETS:
---------------------

     The Company had no non-accruing  loans at September 30, 2001.  There was no
     interest  income not  recognized  on  non-accruing  loans for the first six
     months of fiscal 2001.

     The following  table sets forth  information  with respect to the Company's
     non-performing assets for the dates indicated:

<TABLE>
<CAPTION>
                                                        Sept. 30,   March 31,     Sept. 30,
                                                          2001        2001          2000
                                                        --------    ---------     --------
                                                               (Dollars in thousands)
<S>                                                      <C>          <C>           <C>
Loans accounted for on a
    non-accrual basis, (non-accruing loans)              $   --       $  --         $  --
Impaired loans, accruing                                     --          --            --
Non-accruing loans as a percentage of
  total loans                                              0.00%       0.00%         0.00%
Non-accruing loans as a percentage of
  total assets                                             0.00%       0.00%         0.00%
</TABLE>

RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 2001, AND 2000:
--------------------

     Net  income  for the three  months  ended  September  30,  2001,  and 2000,
     amounted to $564,000 or $0.34 per diluted  share and  $877,000 or $0.51 per
     diluted share, respectively.

     Interest income from the Company's loan portfolio decreased $716,000 in the
     second quarter of fiscal 2002.  This decrease was primarily the result of a
     $24.2 million decrease in the average loan balance combined with a 31 basis
     point decrease in average rates earned on these loans.
<PAGE>

     Income from the Company's  investment  portfolio  (which includes income on
     short term investments, investment securities,  mortgage-backed securities,
     FHLB stock and The  Co-operative  Central Bank Reserve  Fund)  increased by
     $137,000 during the second quarter of fiscal 2002 when compared to the same
     fiscal 2001 period. The yield on these assets decreased by 151 basis points
     while the average balance increased by $32.1 million during the fiscal 2002
     quarter.

     Average  earning assets  increased by $7.9 million while the rate earned on
     these assets  decreased 69 basis points to 6.81% during the second  quarter
     of fiscal 2002 when compared to the second quarter of fiscal 2001.

     The  Company's  cost of deposits  decreased  by $299,000  during the second
     quarter of fiscal 2002 when compared to the same fiscal 2001  quarter.  The
     rate paid on  deposits  decreased  54 basis  points  from 3.69%  during the
     quarter  ended  September  30,  2000 to  3.15%  during  the  quarter  ended
     September 30, 2001. The average  balance of these  deposits  increased $8.6
     million to $276.8  million  during the second  quarter of fiscal  2002 from
     $268.2 million during the fiscal 2001 second quarter.

     The average  balance of borrowed funds  decreased by $3.2 million to $112.3
     million in the fiscal 2002 second quarter compared to $115.5 million in the
     same fiscal 2001 quarter. The rate paid on borrowings decreased by 45 basis
     points in the fiscal  2002  quarter to 5.85% from 6.31% in the fiscal  2001
     quarter.  The combined  effect of these changes  resulted in an decrease of
     $178,000 in interest  expense on  borrowings  to $1.6 million in the second
     quarter of fiscal 2002  compared to $1.8  million in fiscal  2001's  second
     quarter.

     The average balance of interest-bearing  liabilities increased $5.4 million
     while the rates  paid on these  liabilities  decreased  by 55 basis  points
     during the  quarter  ended  September  30,  2002 when  compared to the same
     period one year ago.

     These developments resulted in a $579,000 decrease in interest and dividend
     income and a decrease  of $477,000 in  interest  expense.  The  combination
     resulted in a $102,000  decrease in net interest  and dividend  income from
     the fiscal 2001 quarter to the fiscal 2002 quarter.

     The  provision  for loan losses is made to maintain the  allowance for loan
     losses at a level  which  management  considers  adequate  to  provide  for
     probable  losses based on an evaluation of known and inherent  risks in the
     loan portfolio. Due to the Bank's stable and relatively high level of asset
     quality, and, consistent with the current evaluation of the loan portfolio,
     the Company  did not make any  provision  for the second  quarter of fiscal
     2002 or fiscal 2001.

     Non-interest  income decreased by $17,000 to $337,000 in the second quarter
     of fiscal 2002 from $354,000 in the second fiscal 2001 quarter. The Company
     recorded  $121,000  and  $193,000  in net gains  from  sales of  investment
     securities  during the  second  quarter  of fiscal  2002 and  fiscal  2001,
     respectively.  Service charges on deposit  accounts  decreased by $7,000 to
     $105,000  during  fiscal  2002 and other  income,  including  fees from non
     deposit  investment  products,  increased  by $62,000 to $111,000 in fiscal
     2002.

     Operating  expenses increased $366,000 in the second quarter of fiscal 2002
     compared to the same  quarter of fiscal  2001.  This  increase is primarily
     attributable to an increase of $204,000 in salaries and employee  benefits,
     an increase of $57,000 in data  processing  service fees and an increase in
     professional  fees of  $117,000  as a  result  of  added  personnel,  a new
     computer  processing system and increased legal and consulting fees, offset
     by a reduction in advertising expense of $24,000 for the recent quarter due
     to a  decision  by  management  to slow the  growth  of both  deposits  and
     residential loans.
<PAGE>

     The provision  for Federal and state income taxes  amounted to $327,000 and
     $499,000  during  the  second  quarter  of  fiscal  2002 and  fiscal  2001,
     respectively.  The  decreased  expense  relates  primarily to the decreased
     level of pre-tax income.

RESULTS OF OPERATIONS - SIX MONTHS ENDED SEPTEMBER 30, 2001, AND 2000:
---------------------

     Net income for the six months ended September 30, 2001, and 2000,  amounted
     to $1.1  million or $0.65 per diluted  share and $1.6  million or $0.93 per
     diluted share, respectively.

     Interest  income from the Company's loan portfolio  decreased  $524,000 for
     the six months ended  September 30, 2001. This decrease was the result of a
     $4.5 million decrease in the average loan balance in addition to a 21 basis
     point decrease in average rates earned on these loans.

     Incomefrom the Company's  investment  portfolio  (which  includes income on
     short term investments, investment securities,  mortgage-backed securities,
     FHLB stock and The  Co-operative  Central Bank Reserve  Fund)  increased by
     $314,000  during the six months ended  September  30, 2001 when compared to
     the same fiscal 2001  period.  The yield on these  assets  decreased by 127
     basis points while the average  balance  increased by $29.3 million  during
     the six months ended September 30, 2001.

     Average earning assets  increased by $24.8 million while the rate earned on
     these assets decreased 53 basis points to 6.89% during the six months ended
     September 30, 2001 when compared to the same period of fiscal 2001.

     The  Company's  cost of deposits  decreased by $5,000 during the six months
     ended September 30, 2001 when compared to the same fiscal 2001 period.  The
     rate paid on deposits  decreased  19 basis points from 3.61% during the six
     months  ended  September  30,  2000 to 3.42%  during the six  months  ended
     September 30, 2001. The average  balance of these deposits  increased $14.6
     million to $281.4  million  during the six months ended  September 30, 2001
     from $266.8 million during the fiscal 2001 six month period.

     The average  balance of borrowed funds  increased by $8.8 million to $115.9
     million in the six months  ended  September  30,  2001  compared  to $107.1
     million  in the same  period in fiscal  2001.  The rate paid on  borrowings
     decreased  by 30 basis points in the fiscal 2002 period to 5.81% from 6.11%
     in the same six month period in fiscal 2001.  The combined  effect of these
     changes  resulted  in  an  increase  of  $98,000  in  interest  expense  on
     borrowings  to $3.4  million in the six months  ended  September  30,  2001
     compared to $3.3 million for the six months ended September 30, 2000.

     The average balance of total  interest-bearing  liabilities increased $23.4
     million  while the rates paid on these  liabilities  decreased  by 21 basis
     points during the six months ended  September 30, 2001 when compared to the
     same period one year ago.

     These developments resulted in a $210,000 decrease in interest and dividend
     income and an  increase  of $93,000 in interest  expense.  The  combination
     resulted in a $303,000  decrease in net interest  and dividend  income from
     the six months ended September 30, 2000 to the same period in fiscal 2002.

     The  provision  for loan losses is made to maintain the  allowance for loan
     losses at a level  which  management  considers  adequate  to  provide  for
     probable  losses based on an evaluation of known and inherent  risks in the
     loan  portfolio.  Consistent  with  the  current  evaluation  of  the  loan
     portfolio,  the Company did not make any provision for the six months ended
     September 30, 2001 or 2000.

<PAGE>
     Non-interest  income  increased  by $54,000 to  $746,000  in the six months
     ended  September  30, 2001 from $692,000 in the same period in fiscal 2001.
     The  Company  recorded  $324,000  and  $376,000  in net gains from sales of
     investment  securities  during the six months ended  September 30, 2001 and
     2000, respectively.

     Operating expenses increased $602,000 in the six months ended September 30,
     2001 compared to the same period of fiscal 2001. This increase is primarily
     attributable to an increase of $420,000 in salaries and employee  benefits,
     an increase of $199,000 in data processing  service fees and an increase in
     professional fees of $41,000 as a result of added personnel, a new computer
     processing system and increased legal and consulting fees.

     The provision  for Federal and state income taxes  amounted to $630,000 and
     $933,000  during  the  six  months  ended  September  30,  2001  and  2000,
     respectively.  The  decreased  expense  relates  primarily to the decreased
     level of pre-tax income.

LIQUIDITY AND CAPITAL RESOURCES:
-------------------------------

     The Company's  principal sources of liquidity are loan  amortization,  loan
     prepayments,  increases in deposits and advances from The Federal Home Loan
     Bank (FHLB) of Boston.  The  Company is a  voluntary  member of the FHLB of
     Boston  and as such is  generally  entitled  to  borrow.  Cash  from  these
     liquidity sources is used to fund loan originations,  security investments,
     deposit maturities and repayment of FHLB of Boston advances.  The Company's
     capital to assets ratio was 9.07% on September  30,  2001,  which  exceeded
     regulatory requirements.

NEW ACCOUNTING PRONOUNCEMENT:
----------------------------

     In July,  2001, the Financial  Accounting  Standards  Board ("FASB") issued
     Statement  of  Financial   Accounting  Standards  ("SFAS")  141,  "Business
     Combinations"  and SFAS 142,  "Goodwill and Other Intangible  Assets." SFAS
     141  requires  the use of purchase  method of  accounting  for all business
     combinations  initiated after June 30, 2001, thereby eliminating the use of
     the  pooling of  interests  method.  It also  provides  new  criteria  that
     determine  whether  an  acquired  intangible  asset  should  be  recognized
     separately from goodwill.  The Company does not expect the adoption of this
     statement to have a material impact on its financial statements.

     SFAS 142  requires  that  upon  adoption  of the  Statement,  any  goodwill
     recorded on an entity's  balance sheet would no longer be  amortized.  This
     would include existing  goodwill (i.e.,  recorded  goodwill at the date the
     statements  are  issued),  as well as goodwill  arising  subsequent  to the
     effective date of the Statement. Goodwill will not be amortized but will be
     reviewed for  impairment  periodically  or upon the  occurrence  of certain
     triggering  events.  This Statement is effective for fiscal years beginning
     after  December  15, 2001 which for the Company  will  commence on April 1,
     2002.  At September  30, 2001,  the Company had $2.4 million of goodwill on
     its balance sheet that was being amortized at a rate of $288,000 annually.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
----------------------------------------------------------

     The Company has  experienced  no material  changes in market risk since the
     discussion of this in the annual report as of March 31, 2001.
<PAGE>

FORWARD-LOOKING STATEMENTS
--------------------------

     This report includes forward-looking statements that involve inherent risks
     and uncertainties. A number of important factors could cause actual results
     to differ materially from those in the  forward-looking  statements.  Those
     factors include the economic environment, competition, products and pricing
     in geographic and business areas in which the Company operates,  prevailing
     interest rates,  changes in government  regulations and policies  affecting
     financial   services   companies,   and  credit  quality  and  credit  risk
     management.  Central  Bancorp,  Inc.  undertakes  no  obligation to release
     revisions  to  these  forward-looking   statements  or  reflect  events  or
     circumstances after the date of this report.


<PAGE>

                           PART II. OTHER INFORMATION

         Item 1.     Legal Proceedings
                           None

         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
                           None

         Item 5.     Other Information
                           On October 10, 2001, the Company's ESOP received
                           clearance from the Federal Reserve Board to purchase
                           an additional 5% of the Company's outstanding shares.
                           The ESOP will borrow funds from the Company to
                           acquire the additional shares which it intends to
                           purchase from time to time on the open market. Until
                           allocated to participants, shares acquired by the
                           ESOP with borrowed funds will be deducted from
                           stockholders' equity as unearned compensation.

         Item 6.     Exhibits and Reports on Form 8-K
                           (a)      Exhibits
                                            None

                           (b)      Reports on Form 8-K
                                    During the quarter ended September 30, 2001,
                                    the Registrant filed the following Current
                                    Reports on Form 8-K:

                                    Date       Items Reported
                                    -------------------------------
                                    7/26/01    Item 5 -  Registrant's  response
                                               to the  filing of a Schedule 13D
                                               by the PL Capital Group.

                                    8/1/01     Item 5 -  Registrant's  response
                                               to a  letter  dated  7/31/01 from
                                               the PL Capital Group.

                                    No financial statements were filed with the
                                    foregoing Current Reports on Form 8-K.


<PAGE>

                      CENTRAL BANCORP, INC. AND SUBSIDIARY

                                   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. AND SUBSIDIARY
                      ------------------------------------

 11/13/01                                 /s/ John D. Doherty
 --------                                 -------------------
   Date                                   John D. Doherty
                                          President and Chief Executive Officer





 11/13/01                                 /s/ Paul S. Feeley
---------                                 ------------------
   Date                                   Paul S. Feeley
                                          Senior Vice President, Treasurer
                                          and Chief Financial Officer