##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the fiscal year ended March 31, 2008
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission file number 0-25251
 CENTRAL BANCORP, INC.
  Massachusetts
    
    04-3447594(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)399 Highland Avenue, Somerville, Massachusetts
    
    02144(Address of principal executive offices)
    
    (Zip Code)
 (617) 628-4000
  Title of each class
    
    Name of each exchange on which registeredCommon Stock, par value $1.00 per share, and
    
    The NASDAQ Stock Market, LLCRelated Stock Purchase Rights
 None
 o þ
 o þ
 þ o
 þ
  Large Accelerated Filer o
    
    Accelerated Filer o
    
    Non-accelerated Filer o
    
    Smaller Reporting Company þ(Do not check if a smaller reporting company)
 o þ
 SM
  DOCUMENTS INCORPORATED BY REFERENCE




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##### 



CENTRAL BANCORP, INC.
 ANNUAL REPORT ON FORM 10-K
 TABLE OF CONTENTS
 PagePART IItem 1. Business
    
    
    1Item 1A. Risk Factors
    
    
    21Item 1B. Unresolved Staff Comments
    
    
    25Item 2. Properties
    
    
    26Item 3. Legal Proceedings
    
    
    27Item 4. Submission of Matters to a Vote of Security Holders
    
    
    27PART IIItem 5. Market for the Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    27Item 6. Selected Financial Data
    
    
    28Item 7. Managements Discussion and Analysis of Financial Condition and Results
of Operations
    
    
    30Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    37Item 8. Financial Statements and Supplementary Data
    
    
    39Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    71Item 9A(T). Controls and Procedures
    
    
    71Item 9B. Other Information
    
    
    71PART IIIItem 10. Directors, Executive Officers and Corporate Governance
    
    
    71Item 11. Executive Compensation
    
    
    72Item 12. Security Ownership of Certain Beneficial Owners and Management
and Related Stockholder Matters
    
    
    72Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    73Item 14. Principal Accounting Fees and Services
    
    
    73PART IVItem 15. Exhibits and Financial Statement Schedules
    
    
    73Signatures
    
    
    75EX-21 SUBSIDIARIES OF THE REGISTRANTEX-23.1 CONSENT OF VITALE, CATARANO & COMPANY, LTD.EX-31.1 SECTION 302 CERTIFICATION OF THE CEOEX-31.2 SECTION 302 CERTIFICATION OF THE CFOEX-32 SECTION 906 CERTIFICATION OF THE CEO AND CFO




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PART I
 Note on Forward-Looking Statements
 When used in this Annual Report on Form 10-K , 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 advises readers that various
factors, including changes in regional and national economic conditions, changes in local
demographics, unfavorable judicial decisions, substantial changes in levels of market interest
rates, technological innovations, 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 the occurrence of anticipated or unanticipated events or
circumstances after the date of such statements.
 
 Item 1. Business
 General
 The Company.
 The Bank.
   1




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www.centralbk.com.
  Market Area
  Competition
     Future Expansion Plans
  2




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Lending Activities
    3




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##### Table of Contents



Loan Portfolio Composition.
 At March 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %(Dollars in Thousands)Mortgage loans:Residential
    
    $
    178,727
    
    
    
    37.6
    %
    
    $
    175,259
    
    
    
    38.1
    %
    
    $
    160,381
    
    
    
    38.6
    %
    
    $
    159,838
    
    
    
    41.4
    %
    
    $
    171,682
    
    
    
    48.2
    %Commercial
    
    
    244,496
    
    
    
    51.5
    
    
    
    235,535
    
    
    
    51.1
    
    
    
    213,935
    
    
    
    51.1
    
    
    
    194,326
    
    
    
    50.3
    
    
    
    146,107
    
    
    
    41.0Construction
    
    
    30,950
    
    
    
    6.5
    
    
    
    35,011
    
    
    
    7.6
    
    
    
    27,680
    
    
    
    6.7
    
    
    
    17,187
    
    
    
    4.4
    
    
    
    25,112
    
    
    
    7.0Home equity
    
    
    6,559
    
    
    
    1.4
    
    
    
    6,901
    
    
    
    1.5
    
    
    
    7,505
    
    
    
    1.8
    
    
    
    9,194
    
    
    
    2.4
    
    
    
    9,397
    
    
    
    2.6Total mortgage loan
    
    
    460,732
    
    
    
    97.00
    
    
    
    452,706
    
    
    
    98.3
    
    
    
    409,501
    
    
    
    98.6
    
    
    
    380,545
    
    
    
    98.5
    
    
    
    352,298
    
    
    
    98.8Other loans:Commercial and industrial
    
    
    13,173
    
    
    
    2.8
    
    
    
    6,605
    
    
    
    1.4
    
    
    
    4,457
    
    
    
    1.1
    
    
    
    4,786
    
    
    
    1.2
    
    
    
    3,198
    
    
    
    0.9Consumer
    
    
    1,037
    
    
    
    0.2
    
    
    
    1,231
    
    
    
    0.3
    
    
    
    1,360
    
    
    
    0.3
    
    
    
    1,051
    
    
    
    0.3
    
    
    
    1,129
    
    
    
    0.3Total other loan
    
    
    14,210
    
    
    
    3.0
    
    
    
    7,836
    
    
    
    1.7
    
    
    
    5,817
    
    
    
    1.4
    
    
    
    5,837
    
    
    
    1.5
    
    
    
    4,327
    
    
    
    1.2Total loans
    
    
    474,942
    
    
    
    100.0
    %
    
    
    460,542
    
    
    
    100.0
    %
    
    
    415,318
    
    
    
    100.0
    %
    
    
    386,382
    
    
    
    100.0
    %
    
    
    356,625
    
    
    
    100.0
    %Less:Allowance for loan losses
    
    
    3,613
    
    
    
    
    
    
    
    3,881
    
    
    
    
    
    
    
    3,788
    
    
    
    
    
    
    
    3,681
    
    
    
    
    
    
    
    3,537Loans, net
    
    $
    471,329
    
    
    
    
    
    
    $
    456,661
    
    
    
    
    
    
    $
    411,530
    
    
    
    
    
    
    $
    382,701
    
    
    
    
    
    
    $
    353,088
 Loan Portfolio Sensitivity.
 Due AfterDue Within
    
    
    One Through
    
    
    Due AfterOne Year
    
    
    Five Years
    
    
    Five Years
    
    
    Total(In Thousands)Commercial and industrial loans
    
    $
    12,225
    
    
    $
    541
    
    
    $
    407
    
    
    $
    13,173Construction loans
    
    
    20,595
    
    
    
    1,922
    
    
    
    8,433
    
    
    
    30,950Total
    
    $
    32,820
    
    
    $
    2,463
    
    
    $
    8,840
    
    
    $
    44,123
 Residential Lending.
 e.g.,
  4




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Commercial Real Estate and Construction Lending .
   Home Equity Lines of Credit . Wall Street Journal
 Commercial and Industrial, Consumer and Other Loans .
 Risks of Commercial Real Estate, Construction and Commercial and Industrial Lending .
 5




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Nonperforming Assets
 Origination Fees and Other Fees .
  Loan Solicitation and Processing .
  Nonperforming Assets .
   6




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##### Table of Contents



At March 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Dollars in Thousands)Loans accounted for on a nonaccrual basis,
nonperforming loans
    
    $
    9,606
    
    
    $
    330
    
    
    $
    1,220
    
    
    $
    190
    
    
    $
    Restructured loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real estate acquired by foreclosure
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total nonperforming assets
    
    $
    9,606
    
    
    $
    330
    
    
    $
    1,220
    
    
    $
    190
    
    
    $
    Impaired loans, accruing
    
    $
    136
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Nonperforming loans to total loans
    
    
    2.02
    %
    
    
    0.07
    %
    
    
    0.29
    %
    
    
    0.05
    %
    
    
    0.00
    %Nonperforming assets to total assets
    
    
    1.68
    %
    
    
    0.06
    %
    
    
    0.22
    %
    
    
    0.04
    %
    
    
    0.00
    %
 Item 7, Managements Discussion and Analysis of Financial
Condition and Results of Operations, Provision for Loan Losses.
 Allowance for Loan Losses .
 7




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At or for the Years Ended March 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(Dollars in Thousands)Balance at beginning of year
    
    $
    3,881
    
    
    $
    3,788
    
    
    $
    3,681
    
    
    $
    3,537
    
    
    $
    3,284(Reduction of provision) provision
    
    
    (70
    )
    
    
    80
    
    
    
    100
    
    
    
    100
    
    
    
    200Charge-offs:Residential mortgage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Commercial mortgage
    
    
    (173
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other loans
    
    
    (76
    )
    
    
    (48
    )
    
    
    (39
    )
    
    
    (3
    )
    
    
    (29
    )Total charge-offs
    
    
    (249
    )
    
    
    (48
    )
    
    
    (39
    )
    
    
    (3
    )
    
    
    (29
    )Recoveries:Residential mortgage
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19Commercial mortgage
    
    
    37
    
    
    
    43
    
    
    
    37
    
    
    
    39
    
    
    
    33Other loans
    
    
    14
    
    
    
    18
    
    
    
    9
    
    
    
    8
    
    
    
    30Total recoveries
    
    
    51
    
    
    
    61
    
    
    
    46
    
    
    
    47
    
    
    
    82Net (charge-offs) recoveries
    
    
    (198
    )
    
    
    13
    
    
    
    7
    
    
    
    44
    
    
    
    53Balance at end of year
    
    $
    3,613
    
    
    $
    3,881
    
    
    $
    3,788
    
    
    $
    3,681
    
    
    $
    3,537Average loans outstanding during the
year
    
    $
    462,164
    
    
    $
    433,935
    
    
    $
    406,474
    
    
    $
    365,130
    
    
    $
    367,094Ratio of net charge-offs to average
loans
    
    
    0.04
    %
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aTotal loans outstanding at end of year
    
    $
    474,942
    
    
    $
    460,542
    
    
    $
    415,318
    
    
    $
    386,382
    
    
    $
    356,625Ratio of allowance for loan losses to
loans at end of year
    
    
    0.76
    %
    
    
    0.84
    %
    
    
    0.91
    %
    
    
    0.95
    %
    
    
    0.99
    %
 
 n/a
    
    means either not applicable or not meaningful 8




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At March 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004% of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % of
    
    
    
    
    
    
    % ofLoans to
    
    
    
    
    
    
    Loans to
    
    
    
    
    
    
    Loans to
    
    
    
    
    
    
    Loans to
    
    
    
    
    
    
    Loans toAmount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans
    
    
    Amount
    
    
    Total Loans(Dollars in Thousands)Mortgage loans:Residential
    
    $
    520
    
    
    
    37.60
    %
    
    $
    456
    
    
    
    38.10
    %
    
    $
    443
    
    
    
    38.60
    %
    
    $
    422
    
    
    
    41.40
    %
    
    $
    446
    
    
    
    48.20
    %Commercial
    
    
    1,616
    
    
    
    51.50
    
    
    
    2,642
    
    
    
    51.10
    
    
    
    2,653
    
    
    
    51.50
    
    
    
    2,740
    
    
    
    50.30
    
    
    
    2,434
    
    
    
    41.00Construction
    
    
    1,246
    
    
    
    6.50
    
    
    
    587
    
    
    
    7.60
    
    
    
    523
    
    
    
    6.70
    
    
    
    334
    
    
    
    4.40
    
    
    
    494
    
    
    
    7.00Home equity
    
    
    86
    
    
    
    1.40
    
    
    
    84
    
    
    
    1.50
    
    
    
    88
    
    
    
    1.80
    
    
    
    100
    
    
    
    2.40
    
    
    
    101
    
    
    
    2.60Total mortgage loans
    
    
    3,468
    
    
    
    97.00
    
    
    
    3,769
    
    
    
    98.30
    
    
    
    3,707
    
    
    
    98.60
    
    
    
    3,596
    
    
    
    98.50
    
    
    
    3,475
    
    
    
    98.80Other loans
    
    
    145
    
    
    
    3.00
    
    
    
    112
    
    
    
    1.70
    
    
    
    81
    
    
    
    1.40
    
    
    
    85
    
    
    
    1.50
    
    
    
    62
    
    
    
    1.20Total
    
    $
    3,613
    
    
    
    100.00
    %
    
    $
    3,881
    
    
    
    100.00
    %
    
    $
    3,788
    
    
    
    100.00
    %
    
    $
    3,681
    
    
    
    100.00
    %
    
    $
    3,537
    
    
    
    100.00
    %
 9




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Investment Activities
    At March 31,2008
    
    
    2007
    
    
    2006(Dollars in Thousands)U.S. Government and agency obligations
    
    $
    3,547
    
    
    $
    19,768
    
    
    $
    25,407Corporate bonds
    
    
    8,312
    
    
    
    13,697
    
    
    
    28,297Mortgage-backed securities
    
    
    22,450
    
    
    
    27,387
    
    
    
    38,948Trust preferred securities
    
    
    1,012
    
    
    
    
    
    
    
    Total debt securities
    
    
    35,321
    
    
    
    60,852
    
    
    
    92,652Preferred stock
    
    
    11,422
    
    
    
    
    
    
    
    Common stock
    
    
    6,217
    
    
    
    4,911
    
    
    
    4,543Total investment securities
    
    $
    52,960
    
    
    $
    65,763
    
    
    $
    97,195Percentage of total assets
    
    
    9.27
    %
    
    
    11.6
    %
    
    
    17.8
    %
  Issuer
    
    Amortized Cost
    
    Market ValueFord Motor Credit
    
    $
    4,512
    
    
    $
    4,438
 10




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##### Table of Contents



One Year or Less
    
    
    One to Five Years
    
    
    Five to Ten Years
    
    
    More than Ten Years
    
    
    Total Investment PortfolioAmortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Average
    
    
    Amortized
    
    
    Fair
    
    
    AverageCost
    
    
    Yield
    
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Cost
    
    
    Cost
    
    
    Yield
    
    
    Cost
    
    
    Value
    
    
    Yield(Dollars in Thousands)U.S. government and agency
obligations
    
    $
    1,995
    
    
    
    4.33
    %
    
    $
    1,500
    
    
    
    4.11
    %
    
    $
    
    
    
    
    
    %
    
    $
    
    
    
    
    
    %
    
    $
    3,495
    
    
    $
    3,547
    
    
    
    4.23
    %Corporate bonds
    
    
    6,513
    
    
    
    5.50
    
    
    
    
    
    
    
    
    
    
    
    1,983
    
    
    
    7.02
    
    
    
    
    
    
    
    
    
    
    
    8,496
    
    
    
    8,312
    
    
    
    5.85Mortgage-backed securities
    
    
    21
    
    
    
    2.91
    
    
    
    100
    
    
    
    6.74
    
    
    
    10,223
    
    
    
    4.19
    
    
    
    11,891
    
    
    
    4.95
    
    
    
    22,235
    
    
    
    22,450
    
    
    
    4.61Trust Preferred securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,004
    
    
    
    7.77
    
    
    
    1,004
    
    
    
    1,012
    
    
    
    7.77Total
    
    $
    8,529
    
    
    
    
    
    
    $
    1,600
    
    
    
    
    
    
    $
    12,206
    
    
    
    
    
    
    $
    12,895
    
    
    
    
    
    
    $
    35,230
    
    
    $
    35,321
 Deposits and Borrowed Funds
 General .
 Deposits .
 Deposit Accounts.
 Years Ended March 31,2008
    
    
    2007
    
    
    2006Average
    
    
    
    
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    % of
    
    
    Rate
    
    
    Average
    
    
    % of
    
    
    Rate
    
    
    Average
    
    
    % of
    
    
    RateBalance
    
    
    Deposits
    
    
    Paid
    
    
    Balance
    
    
    Deposits
    
    
    Paid
    
    
    Balance
    
    
    Deposits
    
    
    Paid(Dollars in Thousands)Demand deposit accounts
    
    $
    37,863
    
    
    
    10.38
    %
    
    
    
    %
    
    $
    38,832
    
    
    
    9.95
    %
    
    
    
    %
    
    $
    37,990
    
    
    
    10.7
    %
    
    
    
    %NOW accounts
    
    
    28,384
    
    
    
    7.78
    
    
    
    0.63
    
    
    
    30,005
    
    
    
    7.69
    
    
    
    0.61
    
    
    
    33,604
    
    
    
    9.5
    
    
    
    0.54Passbook and other savings
accounts
    
    
    52,071
    
    
    
    14.28
    
    
    
    0.60
    
    
    
    59,354
    
    
    
    15.22
    
    
    
    0.64
    
    
    
    69,336
    
    
    
    19.6
    
    
    
    0.66Money market deposit accounts
    
    
    58,211
    
    
    
    15.97
    
    
    
    3.64
    
    
    
    35,287
    
    
    
    9.05
    
    
    
    2.28
    
    
    
    43,490
    
    
    
    12.3
    
    
    
    1.44Term deposit certificates
    
    
    188,101
    
    
    
    51.59
    
    
    
    4.34
    
    
    
    226,630
    
    
    
    58.09
    
    
    
    4.33
    
    
    
    169,303
    
    
    
    47.9
    
    
    
    3.34Total deposits
    
    $
    364,630
    
    
    
    100.00
    %
    
    
    2.96
    %
    
    $
    390,108
    
    
    
    100.00
    %
    
    
    2.86
    %
    
    $
    353,723
    
    
    
    100.0
    %
    
    
    1.96
    %
 11




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##### Table of Contents



Time Deposits in Excess of $100,000.
 Maturity Period:Three months or less
    
    $
    37,583Three through six months
    
    $
    31,592Six through twelve months
    
    
    4,090Over twelve months
    
    
    787Total
    
    $
    74,052
 Borrowings .
  At or for theYears Ended March 31,2008
    
    2007
    
    2006(Dollars in Thousands)Amounts outstanding at end of period
    
    $
    156,691
    
    
    $
    125,000
    
    
    $
    103,500Weighted average rate at end of period
    
    
    4.57
    %
    
    
    5.11
    %
    
    
    5.15
    %Maximum amount of borrowings outstanding at any month end
    
    $
    161,700
    
    
    $
    140,371
    
    
    $
    147,800Approximate average amounts outstanding at any month end
    
    $
    140,925
    
    
    $
    112,070
    
    
    $
    134,299Approximate weighted average rate during the year
    
    
    4.97
    %
    
    
    5.40
    %
    
    
    4.93
    %
 Subsidiaries
  12




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##### Table of Contents



REGULATION AND SUPERVISION
 Regulation and Supervision of the Company
 General .
 Activities.
  13




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##### Table of Contents



Acquisitions.
   Capital Requirements. Regulation and
Supervision of the BankCapital Requirements.
 Dividends . Regulation and Supervision of the BankPrompt Corrective
Regulatory Action.
 Stock Repurchases.
 14




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##### Table of Contents



The Sarbanes-Oxley Act of 2002
    Regulation and Supervision of the Bank
 General .
 Massachusetts State Law .
 15




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##### Table of Contents



Capital Requirements .
   Dividend Limitations .
  Regulation and Supervision of the BankPrompt Corrective
Regulatory Action.
 Investment Activities.
 16




---



##### Table of Contents



Insurance of Deposit Accounts.
       17




---



##### Table of Contents



Prompt Corrective Regulatory Action .
  Adequately
    
    
    
    SignificantlyWell Capitalized
    
    Capitalized
    
    Undercapitalized
    
    UndercapitalizedTotal risk-based capital ratio
    
    10.0% or more
    
    8.0% or more
    
    Less than 8.0%
    
    Less than 6.0%Tier 1 risk-based capital ratio
    
    6.0% or more
    
    4.0% or more
    
    Less than 4.0%
    
    Less than 3.0%Leverage ratio
    
    5.0% or more
    
    4.0% or more *
    
    Less than 4.0% *
    
    Less than 3.0%
 
 *
    
    3.0% if the institution has a composite 1 CAMELS rating.  18




---



##### Table of Contents



Loans to Executive Officers, Directors and Principal Stockholders .
 Transactions with Affiliates .
 Enforcement.
 Prompt Corrective Regulatory Action.
 Federal Reserve System.
 19




---



##### Table of Contents



Community Reinvestment Act.
  Federal Home Loan Bank System.
  Employees
  20




---



##### Table of Contents



Item 1A. Risk Factors
 An investment in shares of our common stock involves various risks. Before deciding to invest
in our common stock, you should carefully consider the risks described below in conjunction with
the other information in this annual report on Form 10-K and information incorporated by reference
into this annual report on Form 10-K , including our consolidated financial statements and related
notes. Our business, financial condition and results of operations could be harmed by any of the
following risks or by other risks that have not been identified or that we may believe are
immaterial or unlikely. The value or market price of our common stock could decline due to any of
these risks, and you may lose all or part of your investment. The risks discussed below also
include forward-looking statements and our actual results may differ substantially from those
discussed in these forward-looking statements.
 Our nonresidential real estate and construction lending may expose us to a greater risk of loss and
hurt our earnings and profitability.
    Our business is subject to the success of the local economy in which we operate.
  21




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##### Table of Contents



If the value of real estate in northwestern suburbs of Boston were to decline materially, a
significant portion of our loan portfolio could become under-collateralized, which could have a
material adverse effect on us.
  Our continued pace of growth may require us to raise additional capital in the future, but that
capital may not be available when it is needed.
   Competition from financial institutions and other financial service providers may adversely affect
our growth and profitability.
  22




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##### Table of Contents



Fluctuations in interest rates could reduce our profitability and affect the value of our assets.
 e.g.
 .
   7A, Quantitative
and Qualitative Disclosures About Market Risk.
 Our allowance for loan losses may prove to be insufficient to absorb losses in our loan portfolio.
   23




---



##### Table of Contents



We are dependent upon the services of our management team.
  Our failure to continue to recruit and retain qualified loan originators could adversely affect our
ability to compete successfully and affect our profitability.
  We operate in a highly regulated environment and we may be adversely affected by changes in laws
and regulations.
  We are subject to security and operational risks relating to our use of technology that could
damage our reputation and our business.
  24




---



##### Table of Contents



We may have fewer resources than many of our competitors to invest in technological improvements.
  Our ability to service our debt, pay dividends and otherwise pay our obligations as they come due
is substantially dependent on capital distributions from Central Co-operative Bank, and these
distributions are subject to regulatory limits and other restrictions.
  
 Item 1B. Unresolved Staff Comments
  25




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##### Table of Contents



Item 2. Properties
  Net BookYear
    
    Value atOffice Location
    
    Opened
    
    March 31, 2008(In Thousands)Main Office
399 Highland Avenue
Somerville, MA (owned)
    
    
    1974
    
    
    $
    243Branch Offices:
175 Broadway
Arlington, MA (owned)
    
    
    1982
    
    
    
    13485 Wilmington Road
Burlington, MA (leased)
    
    
    1978
    (a)
    
    
    761192 Boylston Street
Chestnut Hill (Brookline), MA (owned)
    
    
    1954
    
    
    
    117137 Pleasant Street
Malden, MA (leased)
    
    
    1975
    (b)
    
    
    50846 Main Street
Melrose, MA (owned)
    
    
    1994
    
    
    
    194275 Main Street
Woburn, MA (owned)
    
    
    1980
    
    
    
    469198 Lexington Street
Woburn, MA (owned)
    
    
    1974
    
    
    
    208Woburn High School
Woburn, MA (leased)
    
    
    2002
    (c)
    
    
    24Stand-Alone ATM:
94 Highland Avenue
Somerville, MA (leased)
    
    
    2004
    (d)
    
    
    61Loan Center
401 Highland Avenue
Somerville, MA (leased)
    
    
    2002
    (e)
    
    
    258Operations Center/Branch Office
270 Mystic Avenue
Medford, MA (leased)
    
    
    2006
    (f)
    
    
    599
 
 (a)
    
    The lease for the Burlington branch expires 10/31/2012 with a five-year renewal option.(b)
    
    The lease for the Malden branch expires 8/31/2015.(c)
    
    The lease for the Woburn High School branch is for one year, renewable annually on an automatic basis.(d)
    
    The lease for the stand-alone ATM expires 11/30/10 with an option to extend for three three-year terms.(e)
    
    The lease for the Commercial Loan Center expires 5/1/2015 with two five-year renewal options. 26




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##### Table of Contents



(f)
    
    In March, 2005, the Bank signed a lease for a combined retail branch and operations center to
be located at 270 Mystic Avenue, Medford. The lease was subsequently renegotiated and the
Bank took occupancy in May 2006. The initial rent under the lease is for $150,000 per year
and the initial term is 10 years. There are options to extend the lease by two five-year
terms.  
 Item 3. Legal Proceedings
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 PART II
 
 Item 5. Market for the Registrants Common Equity and Related Stockholder Matters and Issuer Purchases of Securities
 Market for Common Equity and Related Stockholder Matters
 SM
  Common Stock Prices
    
    
    
    
    
    Cash Dividends(payable dates)Fiscal 2008
    
    High
    
    Low
    
    Fiscal 2008
    
    Amount6/30/07
    
    $
    30.01
    
    
    $
    25.05
    
    
    5/18/07
    
    $
    0.189/30/07
    
    
    26.73
    
    
    
    20.12
    
    
    8/17/07
    
    
    0.1812/31/07
    
    
    24.20
    
    
    
    20.00
    
    
    11/16/07
    
    
    0.183/31/08
    
    
    22.24
    
    
    
    17.52
    
    
    2/15/08
    
    
    0.18
 Fiscal 2007
    
    High
    
    Low
    
    Fiscal 2007
    
    Amount6/30/06
    
    $
    36.20
    
    
    $
    28.25
    
    
    5/19/06
    
    $
    0.189/30/06
    
    
    33.46
    
    
    
    30.00
    
    
    8/18/06
    
    
    0.1812/31/06
    
    
    33.90
    
    
    
    30.50
    
    
    11/17/06
    
    
    0.183/31/07
    
    
    32.80
    
    
    
    30.02
    
    
    2/16/07
    
    
    0.18
 27




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##### Table of Contents



Item 6. Selected Financial Data
  At or for the Year Ended March 31,2008
    
    2007
    
    2006
    
    2005
    
    2004(Dollars and Shares in Thousands, Except Per Share Data)Balance SheetTotal assets
    
    $
    571,245
    
    
    $
    566,140
    
    
    $
    547,275
    
    
    $
    521,071
    
    
    $
    490,897Total loans
    
    
    474,942
    
    
    
    460,542
    
    
    
    415,318
    
    
    
    386,382
    
    
    
    356,625Investments available for sale
    
    
    52,960
    
    
    
    65,763
    
    
    
    97,195
    
    
    
    108,616
    
    
    
    83,771Deposits
    
    
    361,089
    
    
    
    388,573
    
    
    
    393,413
    
    
    
    333,215
    
    
    
    295,920Total borrowings
    
    
    168,173
    
    
    
    137,053
    
    
    
    111,290
    
    
    
    146,455
    
    
    
    145,256Total stockholders equity
    
    
    38,816
    
    
    
    37,702
    
    
    
    39,189
    
    
    
    38,239
    
    
    
    43,454Shares outstanding
    
    
    1,640
    
    
    
    1,640
    
    
    
    1,591
    
    
    
    1,589
    
    
    
    1,665Statements of OperationsNet interest and dividend income
    
    $
    13,596
    
    
    $
    14,449
    
    
    $
    16,317
    
    
    $
    15,731
    
    
    $
    15,570(Reduction of provision) provision for loans losses
    
    
    (70
    )
    
    
    80
    
    
    
    100
    
    
    
    100
    
    
    
    200Net gain (loss) from sale and write-downs of
investment securities
    
    
    645
    
    
    
    581
    
    
    
    419
    
    
    
    453
    
    
    
    (135
    )Gain on sale of loans
    
    
    158
    
    
    
    99
    
    
    
    208
    
    
    
    252
    
    
    
    295Other noninterest income
    
    
    1,429
    
    
    
    1,314
    
    
    
    1,370
    
    
    
    950
    
    
    
    966Total noninterest expenses
    
    
    13,859
    
    
    
    14,856
    
    
    
    14,183
    
    
    
    13,518
    
    
    
    12,401Net income
    
    
    1,447
    
    
    
    1,020
    
    
    
    2,643
    
    
    
    2,463
    
    
    
    2,936Earnings per common share  diluted
    
    
    1.07
    
    
    
    0.70
    
    
    
    1.83
    
    
    
    1.65
    
    
    
    1.88Selected RatiosInterest rate spread
    
    
    2.06
    %
    
    
    2.21
    %
    
    
    2.72
    %
    
    
    2.85
    %
    
    
    2.96
    %Net yield on interest-earning assets
    
    
    2.51
    
    
    
    2.68
    
    
    
    3.11
    
    
    
    3.20
    
    
    
    3.36Noninterest expenses to average assets
    
    
    2.49
    
    
    
    2.69
    
    
    
    2.64
    
    
    
    2.68
    
    
    
    2.60Book equity-to-assets
    
    
    6.79
    
    
    
    6.66
    
    
    
    7.16
    
    
    
    7.34
    
    
    
    8.85Return on average assets
    
    
    0.26
    
    
    
    0.18
    
    
    
    0.49
    
    
    
    0.49
    
    
    
    0.62Return on average assets stockholders equity
    
    
    3.76
    
    
    
    2.59
    
    
    
    6.78
    
    
    
    6.12
    
    
    
    6.98Dividend payout ratio
    
    
    67.29
    
    
    
    100.00
    
    
    
    35.68
    
    
    
    28.91
    
    
    
    23.23Book value per share
    
    $
    23.67
    
    
    $
    22.99
    
    
    $
    24.64
    
    
    $
    24.07
    
    
    $
    26.10Tangible book value per share
    
    $
    22.31
    
    
    $
    21.63
    
    
    $
    23.24
    
    
    $
    22.67
    
    
    $
    24.72
 28




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##### Table of Contents



Quarterly Results of Operations
  2008First
    
    
    Second
    
    
    Third
    
    
    FourthInterest and dividend income
    
    $
    8,038
    
    
    $
    7,933
    
    
    $
    8,062
    
    
    $
    8,050Interest expense
    
    
    4,698
    
    
    
    4,680
    
    
    
    4,605
    
    
    
    4,504Net interest and dividend income
    
    
    3,340
    
    
    
    3,253
    
    
    
    3,457
    
    
    
    3,546(Reduction of provision) provision
for loan losses
    
    
    
    
    
    
    (300
    )
    
    
    
    
    
    
    230Noninterest income
    
    
    525
    
    
    
    534
    
    
    
    786
    
    
    
    387Noninterest expenses
    
    
    3,516
    
    
    
    3,383
    
    
    
    3,340
    
    
    
    3,620Income before income taxes
    
    
    349
    
    
    
    704
    
    
    
    903
    
    
    
    83Income tax
    
    
    124
    
    
    
    239
    
    
    
    247
    
    
    
    (18
    )Net income
    
    $
    225
    
    
    $
    465
    
    
    $
    656
    
    
    $
    101Earnings per common share  basic
    
    $
    0.16
    
    
    $
    0.33
    
    
    $
    0.48
    
    
    $
    0.07Earnings per common share  diluted
    
    $
    0.16
    
    
    $
    0.33
    
    
    $
    0.48
    
    
    $
    0.07
 2007First
    
    
    Second
    
    
    Third
    
    
    FourthInterest and dividend income
    
    $
    7,489
    
    
    $
    8,246
    
    
    $
    8,352
    
    
    $
    8,200Interest expense
    
    
    3,911
    
    
    
    4,365
    
    
    
    4,732
    
    
    
    4,830Net interest and dividend income
    
    
    3,578
    
    
    
    3,881
    
    
    
    3,620
    
    
    
    3,370Provision for loan losses
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    30Noninterest income
    
    
    490
    
    
    
    442
    
    
    
    475
    
    
    
    587Noninterest expenses
    
    
    3,846
    
    
    
    3,787
    
    
    
    3,310
    
    
    
    3,913Income before income taxes
    
    
    172
    
    
    
    536
    
    
    
    785
    
    
    
    14Income tax
    
    
    59
    
    
    
    185
    
    
    
    271
    
    
    
    (28
    )Net income
    
    $
    113
    
    
    $
    351
    
    
    $
    514
    
    
    $
    42Earnings per common share  basic
    
    $
    0.08
    
    
    $
    0.24
    
    
    $
    0.36
    
    
    $
    0.03Earnings per common share  diluted
    
    $
    0.08
    
    
    $
    0.24
    
    
    $
    0.35
    
    
    $
    0.03
 29




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##### Table of Contents



Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 General
    Application of Critical Accounting Policies
  Allowance for Loan Losses Item 1. Business
   30




---



##### Table of Contents



Results of Operations
 Overview .
 Interest Rate Spread.
 31




---



##### Table of Contents



Years Ended March 31,2008
    
    
    2007Average
    
    
    
    
    
    
    
    
    
    
    AverageAverage
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance
    
    
    Interest
    
    
    Cost
    
    
    Balance
    
    
    Interest
    
    
    Cost(Dollars in Thousands)Assets:Interest-earning assets:Mortgage loans
    
    $
    450,047
    
    
    $
    27,212
    
    
    
    6.05
    %
    
    $
    426,670
    
    
    $
    26,589
    
    
    
    6.23
    %Other loans
    
    
    12,117
    
    
    
    879
    
    
    
    7.25
    
    
    
    7,265
    
    
    
    581
    
    
    
    8.00Total loans
    
    
    462,164
    
    
    
    28,091
    
    
    
    6.08
    
    
    
    433,935
    
    
    
    27,170
    
    
    
    6.26Short-term investments
    
    
    9,324
    
    
    
    423
    
    
    
    4.54
    
    
    
    6,721
    
    
    
    329
    
    
    
    4.90Investment securities
    
    
    69,670
    
    
    
    3,569
    
    
    
    5.12
    
    
    
    98,621
    
    
    
    4,788
    
    
    
    4.85Total investments
    
    
    78,994
    
    
    
    3,992
    
    
    
    5.05
    
    
    
    105,342
    
    
    
    5,117
    
    
    
    4.86Total interest-earnings assets
    
    
    541,158
    
    
    
    32,083
    
    
    
    5.93
    
    
    
    539,277
    
    
    
    32,287
    
    
    
    5.99Allowance for loan losses
    
    
    (3,614
    )
    
    
    
    
    
    
    
    
    
    
    (3,840
    )Noninterest-earning assets
    
    
    19,504
    
    
    
    
    
    
    
    
    
    
    
    17,548Total assets
    
    $
    557,048
    
    
    
    
    
    
    
    
    
    
    $
    552,985Liabilities and Stockholders Equity:Interest-bearing liabilities:Deposits
    
    $
    326,767
    
    
    
    10,733
    
    
    
    3.28
    
    
    $
    351,276
    
    
    
    11,136
    
    
    
    3.17Other borrowings
    
    
    11,857
    
    
    
    838
    
    
    
    7.07
    
    
    
    8,479
    
    
    
    653
    
    
    
    7.70Advances from FHLB of Boston
    
    
    139,110
    
    
    
    6,916
    
    
    
    4.97
    
    
    
    112,069
    
    
    
    6,049
    
    
    
    5.40Total interest-bearing liabilities
    
    
    477,734
    
    
    
    18,487
    
    
    
    3.87
    
    
    
    471,824
    
    
    
    17,838
    
    
    
    3.78Noninterest-bearing deposits
    
    
    37,863
    
    
    
    
    
    
    
    
    
    
    
    38,832Other liabilities
    
    
    2,968
    
    
    
    
    
    
    
    
    
    
    
    2,991Total liabilities
    
    
    518,565
    
    
    
    
    
    
    
    
    
    
    
    513,647Stockholders equity
    
    
    38,483
    
    
    
    
    
    
    
    
    
    
    
    39,338Total liabilities and stockholders
equity
    
    $
    557,048
    
    
    
    
    
    
    
    
    
    
    $
    552,985Net interest and dividend income
    
    
    
    
    
    $
    13,596
    
    
    
    
    
    
    
    
    
    
    $
    14,449Interest rate spread
    
    
    
    
    
    
    
    
    
    
    2.06
    %
    
    
    
    
    
    
    
    
    
    
    2.21
    %Net yield on interest-earning assets
    
    
    
    
    
    
    
    
    
    
    2.51
    %
    
    
    
    
    
    
    
    
    
    
    2.68
    %
 32




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##### Table of Contents



Rate/Volume Analysis.
 2008 vs. 2007
    
    
    2007 vs. 2006Changes due to
    
    
    Changes due toIncrease (decrease) in:
    
    
    Increase (decrease) in:Volume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    Total(In Thousands)Interest income:Mortgage loans
    
    $
    1,413
    
    
    $
    (791
    )
    
    $
    622
    
    
    $
    1,630
    
    
    $
    534
    
    
    $
    2,164Other loans
    
    
    356
    
    
    
    (58
    )
    
    
    298
    
    
    
    106
    
    
    
    47
    
    
    
    153Total income from loans
    
    
    1,769
    
    
    
    (849
    )
    
    
    920
    
    
    
    1,736
    
    
    
    581
    
    
    
    2,317Short-term investments
    
    
    120
    
    
    
    (25
    )
    
    
    95
    
    
    
    5
    
    
    
    92
    
    
    
    97Investment securities
    
    
    (1,472
    )
    
    
    253
    
    
    
    (1,219
    )
    
    
    (654
    )
    
    
    186
    
    
    
    (468
    )Total income from investments
    
    
    (1,352
    )
    
    
    228
    
    
    
    (1,124
    )
    
    
    (649
    )
    
    
    278
    
    
    
    (371
    )Total interest and dividend income
    
    
    417
    
    
    
    (621
    )
    
    
    (204
    )
    
    
    1,087
    
    
    
    859
    
    
    
    1,946Interest expense:Deposits
    
    
    (785
    )
    
    
    382
    
    
    
    (403
    )
    
    
    843
    
    
    
    3,400
    
    
    
    4,243Other borrowings  including
short-term
advances from FHLB
    
    
    134
    
    
    
    (5
    )
    
    
    129
    
    
    
    89
    
    
    
    83
    
    
    
    172Long-term advance  FHLB of Boston
    
    
    1,451
    
    
    
    (528
    )
    
    
    923
    
    
    
    (1,214
    )
    
    
    613
    
    
    
    (601
    )Total interest expense
    
    
    800
    
    
    
    (151
    )
    
    
    649
    
    
    
    (282
    )
    
    
    4,097
    
    
    
    3,815Net interest and dividend income
    
    $
    (383
    )
    
    $
    (470
    )
    
    $
    (853
    )
    
    $
    1,369
    
    
    $
    (3,237
    )
    
    
    (1,868
    )
 Interest and Dividend Income.
   Interest Expense.
 33




---



##### Table of Contents



Provision for Loan Losses.
 Noninterest Income.
 Noninterest Expenses.
  34




---



##### Table of Contents



Income Taxes .
 Financial Condition
      35




---



##### Table of Contents



Liquidity
     Commitments, Contingencies and Off-Balance Sheet Risk
    36




---



##### Table of Contents



Impact of Inflation and Changing Prices
  Capital Resources
   
 Item 7A. Quantitative and Qualitative Disclosures About Market Risk
   37




---



##### Table of Contents



At March 31,2008
    
    2007Amount
    
    % Change
    
    Amount
    
    % Change(Dollars in Thousands)300 basis point increase in rates
    
    $
    (2,517
    )
    
    
    (14.63
    )%
    
    $
    
    
    
    
    
    %200 basis point increase in rates
    
    
    
    
    
    
    
    
    
    $
    (1,956
    )
    
    
    (13.39
    )100 basis point decrease in rates
    
    
    170
    
    
    
    0.99
    
    
    
    
    
    
    
    200 basis point decrease in rates
    
    
    
    
    
    
    
    
    
    
    320
    
    
    
    2.19
  38




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##### Table of Contents



Item 8. Financial Statements and Supplementary Data
 PageConsolidated Balance Sheets at March 31, 2008 and 2007
    
    
    40Consolidated Statements of Income for the Years Ended March 31, 2008 and 2007
    
    
    41Consolidated Statement of Changes in Stockholders Equity and Comprehensive Income for the Years
Ended March 31, 2008 and 2007
    
    
    42Consolidated Statements of Cash Flows for the Years Ended March 31, 2008 and 2007
    
    
    44Notes to Consolidated Financial Statements
    
    
    45Report of Independent Registered Public Accounting Firm
    
    
    70
 39




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##### Table of Contents



CENTRAL BANCORP, INC. AND SUBSIDIARY
 
 Consolidated Balance Sheets
(Dollars in Thousands, Except Per Share Data)
 March 31,2008
    
    
    2007ASSETSCash and due from banks
    
    $
    5,837
    
    
    $
    6,147Short-term investments
    
    
    11,888
    
    
    
    14,470Cash and cash equivalents
    
    
    17,725
    
    
    
    20,617Investment securities available for sale (Note 2)
    
    
    52,960
    
    
    
    65,763Stock in Federal Home Loan Bank of Boston (Notes 2 and 7)
    
    
    8,518
    
    
    
    7,366The Co-operative Central Bank Reserve Fund (Note 2)
    
    
    1,576
    
    
    
    1,576Total investments
    
    
    63,054
    
    
    
    74,705Loans held for sale (Note 1)
    
    
    195
    
    
    
    575Loans (Note 3)
    
    
    474,942
    
    
    
    460,542Less allowance for loan losses (Note 4)
    
    
    3,613
    
    
    
    3,881Net loans
    
    
    471,329
    
    
    
    456,661Accrued interest receivable
    
    
    1,981
    
    
    
    2,415Banking premises and equipment, net (Note 5)
    
    
    3,969
    
    
    
    4,756Deferred tax asset, net (Note 8)
    
    
    2,557
    
    
    
    2,212Goodwill, net (Note 1)
    
    
    2,232
    
    
    
    2,232Bank-owned life insurance (Note 1)
    
    
    6,084
    
    
    
    Other assets
    
    
    2,119
    
    
    
    1,967Total assets
    
    $
    571,245
    
    
    $
    566,140LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits (Note 6)
    
    $
    361,089
    
    
    $
    388,573Short-term borrowings
    
    
    141
    
    
    
    712Federal Home Loan Bank advances (Notes 2 and 7)
    
    
    156,691
    
    
    
    125,000Subordinated debenture (Note 1)
    
    
    11,341
    
    
    
    11,341Advance payments by borrowers for taxes and insurance
    
    
    1,308
    
    
    
    1,229Accrued expenses and other liabilities
    
    
    1,859
    
    
    
    1,583Total liabilities
    
    
    532,429
    
    
    
    528,438Commitments and Contingencies (Notes 8, 9 and 12)Stockholders equity (Note 10)Preferred stock $1.00 par value; 5,000,000 shares authorized;
none issued at March 31, 2008 or 2007
    
    
    
    
    
    
    Common stock $1.00 par value; 15,000,000 shares authorized;
1,639,951 shares issued at March 31, 2008 and March 31, 2007
    
    
    1,640
    
    
    
    1,640Additional paid-in capital
    
    
    3,690
    
    
    
    3,479Retained earnings
    
    
    40,825
    
    
    
    40,394Accumulated other comprehensive loss
    
    
    (236
    )
    
    
    (20
    )Unearned compensation  ESOP (Note 11)
    
    
    (7,103
    )
    
    
    (7,791
    )Total stockholders equity
    
    
    38,816
    
    
    
    37,702Total liabilities and stockholders equity
    
    $
    571,245
    
    
    $
    566,140
 See accompanying notes to consolidated financial statements.
 40




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##### Table of Contents



CENTRAL BANCORP, INC. AND SUBSIDIARY
 
 Consolidated Statements of Income
(In Thousands, Except Per Share Data)
 Years Ended March 31,2008
    
    
    2007Interest and dividend income:Mortgage loans
    
    $
    27,212
    
    
    $
    26,589Other loans
    
    
    879
    
    
    
    581Short-term investments
    
    
    423
    
    
    
    329Investments
    
    
    3,569
    
    
    
    4,788Total interest and dividend income
    
    
    32,083
    
    
    
    32,287Interest expense:Deposits
    
    
    10,733
    
    
    
    11,136Advances from Federal Home Loan Bank of Boston
    
    
    6,916
    
    
    
    6,049Other borrowings
    
    
    838
    
    
    
    653Total interest expense
    
    
    18,487
    
    
    
    17,838Net interest and dividend income
    
    
    13,596
    
    
    
    14,449(Reduction of provision) provision for loan losses (Note 4)
    
    
    (70
    )
    
    
    80Net interest and dividend income after
provision for loan losses
    
    
    13,666
    
    
    
    14,369Noninterest income:Deposit service charges
    
    
    991
    
    
    
    1,024Net gains from sales and write-downs of investment securities (Note 2)
    
    
    645
    
    
    
    581Net gain on sales of loans
    
    
    158
    
    
    
    99Bank-owned life insurance income
    
    
    84
    
    
    
    Brokerage income
    
    
    157
    
    
    
    98Other income
    
    
    197
    
    
    
    192Total noninterest income
    
    
    2,232
    
    
    
    1,994Noninterest expenses:Salaries and employee benefits (Note 11)
    
    
    8,197
    
    
    
    8,598Occupancy and equipment (Note 5)
    
    
    2,208
    
    
    
    2,156Data processing fees
    
    
    885
    
    
    
    933Professional fees (Note 12)
    
    
    772
    
    
    
    869Advertising and marketing
    
    
    26
    
    
    
    449Other expenses (Note 1)
    
    
    1,771
    
    
    
    1,851Total noninterest expenses
    
    
    13,859
    
    
    
    14,856Income before income taxes
    
    
    2,039
    
    
    
    1,507Provision for income taxes (Note 1)
    
    
    592
    
    
    
    487Net income
    
    $
    1,447
    
    
    $
    1,020Earnings per common share (Note 1)Basic
    
    $
    1.07
    
    
    $
    0.72Diluted
    
    $
    1.07
    
    
    $
    0.70Weighted average common shares outstanding  basic
    
    
    1,350
    
    
    
    1,419Weighted average common and equivalent shares
outstanding  diluted
    
    
    1,355
    
    
    
    1,452
 See accompanying notes to consolidated financial statements.
 41




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##### Table of Contents



CENTRAL BANCORP, INC. AND SUBSIDIARY
 
 Consolidated Statements of Changes in Stockholders Equity and Comprehensive Income
(In Thousands)
 AccumulatedAdditional
    
    
    
    
    
    
    Other
    
    
    Unearned
    
    
    TotalCommon
    
    
    Paid-In
    
    
    Retained
    
    
    Comprehensive
    
    
    Compensation
    
    
    StockholdersStock
    
    
    Capital
    
    
    Income
    
    
    Income (Loss)
    
    
    ESOP
    
    
    EquityBalances at March 31, 2006
    
    $
    1,591
    
    
    $
    3,380
    
    
    $
    40,421
    
    
    $
    (1,281
    )
    
    $
    (4,922
    )
    
    $
    39,189Net income
    
    
    
    
    
    
    
    
    
    
    1,020
    
    
    
    
    
    
    
    
    
    
    
    1,020Other comprehensive income, net of tax:Unrealized gain on securities, net
of reclassification adjustment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,078
    
    
    
    
    
    
    
    1,078Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,098Adjustment to initially apply SFAS 158, net
of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    183
    
    
    
    
    
    
    
    183Purchase of 103,500 shares by ESOP (Note 11)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,415
    )
    
    
    (3,415
    )Proceeds from exercise of stock options
(770 shares)
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13Tax benefit of stock option exercises
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    Stock-based compensation
    
    
    
    
    
    
    134
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    134Grant of restricted stock
    
    
    49
    
    
    
    (49
    )Dividends paid ($0.72 per share)
    
    
    
    
    
    
    
    
    
    
    (1,047
    )
    
    
    
    
    
    
    
    
    
    
    (1,047
    )Amortization of unearned compensation  ESOP
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    546
    
    
    
    543Balances at March 31, 2007
    
    
    1,640
    
    
    
    3,479
    
    
    
    40,394
    
    
    
    (20
    )
    
    
    (7,791
    )
    
    
    37,702Net income
    
    
    
    
    
    
    
    
    
    
    1,447
    
    
    
    
    
    
    
    
    
    
    
    1,447Other comprehensive income, net of tax:Unrealized gain on securities, net
of 
reclassification adjustment (Note 2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (199
    )
    
    
    
    
    
    
    (199
    )Unrealized loss on post-retirement
benefits
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (17
    )
    
    
    
    
    
    
    (17
    )Comprehensive Income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,231Stock-based compensation (Note 1)
    
    
    
    
    
    
    322
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    322Dividends paid ($0.72 per share)
    
    
    
    
    
    
    
    
    
    
    (1,016
    )
    
    
    
    
    
    
    
    
    
    
    (1,016
    )Amortization of unearned compensation  ESOP
    
    
    
    
    
    
    (111
    )
    
    
    
    
    
    
    
    
    
    
    688
    
    
    
    577Balances at March 31, 2008
    
    $
    1,640
    
    
    $
    3,690
    
    
    $
    40,825
    
    
    $
    (236
    )
    
    $
    (7,103
    )
    
    $
    38,816
 See accompanying notes to consolidated financial statements
 42




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##### Table of Contents



CENTRAL BANCORP, INC. AND SUBSIDIARY
Consolidated Statements of Changes in Stockholders Equity and Comprehensive Income (continued)
(In Thousands)
  Before Tax
    
    
    Tax (Benefit)
    
    
    After-TaxAmount
    
    
    Expense
    
    
    AmountUnrealized loss on post-retirement benefits
    
    $
    (22
    )
    
    $
    (5
    )
    
    $
    (17
    )Unrealized gains on securities:Unrealized net holding loss during period
    
    
    (1,027
    )
    
    
    (377
    )
    
    
    (650
    )Less reclassification adjustment for net gains
included in net income
    
    
    645
    
    
    
    194
    
    
    
    451Other comprehensive loss
    
    $
    (404
    )
    
    $
    (188
    )
    
    $
    (216
    )
 Before-Tax
    
    
    Tax (Benefit)
    
    
    After-TaxAmount
    
    
    Expense
    
    
    AmountUnrealized gains on securities:Unrealized net holding gains during period
    
    $
    2,275
    
    
    $
    816
    
    
    $
    1,459Less reclassification adjustment for net gains
included in net income
    
    
    (518
    )
    
    
    (200
    )
    
    
    (381
    )Other comprehensive gain
    
    $
    1,694
    
    
    $
    616
    
    
    $
    1,078
 See accompanying notes to consolidated financial statements.
 43




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##### Table of Contents



CENTRAL BANCORP, INC. AND SUBSIDIARY
 
 Consolidated Statements of Cash Flows
(Dollars in Thousands)
 Years Ended March 31,2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    1,447
    
    
    $
    1,020Adjustments to reconcile net income to net cash provided
by operating activitiesDepreciation and amortization
    
    
    955
    
    
    
    835Loss on retirement of Banking premises and equipment
    
    
    
    
    
    
    16Amortization of premiums and discounts
    
    
    53
    
    
    
    226Provision for loan losses
    
    
    (70
    )
    
    
    80Stock-based compensation
    
    
    899
    
    
    
    677(Increase) decrease in deferred tax assets, net
    
    
    (179
    )
    
    
    (482
    )Net gains from sales and write-downs of investment
securities
    
    
    (645
    )
    
    
    (581
    )Bank-owned life insurance income
    
    
    (84
    )
    
    
    Gain on sales of loans held for sale
    
    
    (158
    )
    
    
    (99
    )Originations of loans held for sale
    
    
    (13,225
    )
    
    
    (7,475
    )Proceeds from the sale of loans originated for sale
    
    
    13,763
    
    
    
    7,044Decrease in accrued interest receivable
    
    
    434
    
    
    
    263Increase in other assets, net
    
    
    (152
    )
    
    
    (355
    )Increase (decrease) in advance payments by borrowers for
taxes and insurance
    
    
    79
    
    
    
    (48
    )Increase (decrease) in accrued expenses and other
liabilities, net
    
    
    276
    
    
    
    (339
    )Net cash provided by operating activities
    
    
    3,393
    
    
    
    782Cash flows from investing activities:Net increase in loans
    
    
    (14,598
    )
    
    
    (45,211
    )Principal payments on mortgage-backed securities
    
    
    5,568
    
    
    
    8,068Purchases of investment securities
    
    
    (21,365
    )
    
    
    (12,892
    )Proceeds from sales of investment securities
    
    
    19,811
    
    
    
    17,405Maturities and redemptions of investment securities
    
    
    8,999
    
    
    
    20,900Purchases of restricted equity  FHLB
    
    
    (1,152
    )
    
    
    (1,433
    )Proceeds from sales of restricted equity  FHLB
    
    
    
    
    
    
    2,367Decrease in certificate of deposit
    
    
    
    
    
    
    627Purchase of bank owned life insurance
    
    
    (6,000
    )
    
    
    Purchase of banking premises and equipment
    
    
    (168
    )
    
    
    (1,737
    )Net cash used in investing activities
    
    
    (8,905
    )
    
    
    (11,906
    )Cash flows from financing activities:Net decrease in deposits
    
    
    (27,484
    )
    
    
    (4,840
    )Proceeds from FHLB of Boston advances
    
    
    136,700
    
    
    
    148,983Repayments of FHLB of Boston advances
    
    
    (105,009
    )
    
    
    (127,483
    )Repayments of ESOP loan
    
    
    
    
    
    
    (2,532
    )Net increase (decrease) in short-term borrowings
    
    
    (571
    )
    
    
    712Issuance of subordinated debenture
    
    
    
    
    
    
    6,083Proceeds from exercise of stock options
    
    
    
    
    
    
    13Tax benefit from exercise of stock options
    
    
    
    
    
    
    4Payments of dividends, net
    
    
    (1,016
    )
    
    
    (1,047
    )Purchase of common stock by ESOP
    
    
    
    
    
    
    (3,415
    )Net cash provided by financing activities
    
    
    2,620
    
    
    
    16,478Net (decrease) increase in cash and cash equivalents
    
    
    (2,892
    )
    
    
    5,354Cash and cash equivalents at beginning of year
    
    
    20,617
    
    
    
    15,263Cash and cash equivalents at end of year
    
    $
    17,725
    
    
    $
    20,617Supplementary disclosure of cash flow information:Cash paid during the period for:Interest
    
    $
    18,367
    
    
    $
    17,820Income taxes
    
    $
    680
    
    
    $
    1,353
 See accompanying notes to consolidated financial statements
 44




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##### Table of Contents



CENTRAL BANCORP, INC. AND SUBSIDIARY
 
 Notes to Consolidated Financial Statements
 March 31, 2008
 Note 1. Summary of Significant Accounting Policies
     
  Cash and Cash Equivalents
   Investments
  45




---



##### Table of Contents



Loans
      46




---



##### Table of Contents



Subordinated Debentures
    Allowance for Loan Losses
    47




---



##### Table of Contents



Income Taxes
  Banking Premises and Equipment
  Goodwill
 e.g.,
 Pension Benefits
   Stock-Based Compensation
   48




---



##### Table of Contents



Number of
    
    
    Weighted AverageShares
    
    
    Exercise PriceBalance March 31, 2006
    
    
    59,891
    
    
    $
    24.356Exercised
    
    
    (770
    )
    
    
    18.489Granted
    
    
    10,000
    
    
    
    31.200Balance at March 31, 2007
    
    
    69,121
    
    
    
    25.411Exercised
    
    
    
    
    
    
    Forfeited
    
    
    (903
    )
    
    
    28.990Granted
    
    
    
    
    
    
    Balance at March 31, 2008
    
    
    68,218
    
    
    $
    25.364
 49




---



##### Table of Contents



Fiscal year ending
    
    2009
    
    2010
    
    2011
    
    2012
    
    TotalCompensation Expense
    
    $
    322,000
    
    
    $
    322,000
    
    
    $
    322,000
    
    
    $
    188,000
    
    
    $
    1,154,000
   WeightedAverageRemaining

    
    WeightedNumber

    
    Contractual

    
    Average
    
    
    AggregateExercise
    
    
    of Shares

    
    Life

    
    Exercise
    
    
    IntrinsicPrice
    
    
    Outstanding

    
    (Years)

    
    Price
    
    
    Value (1)$
    16.625
    
    
    
    12,077
    (2)
    
    
    2.7
    
    
    $
    16.625
    
    
    $
    30,49420.250
    
    
    
    13,745
    (2)
    
    
    1.6
    
    
    
    20.25028.990
    
    
    
    32,396
    (2)
    
    
    6.9
    
    
    
    28.99031.200
    
    
    
    10,000
    (3)
    
    
    8.4
    
    
    
    31.200Average/Total
    
    
    
    
    
    
    68,218
    
    
    
    5.4
    
    
    $
    25.364
    
    
    $
    30,494
 
 (1)
    
    Represents the total intrinsic value, based on the Companys closing stock price of $19.15 as
of March 31, 2008, which would have been received by the option holders had all option holders
exercised their options as of that date.(2)
    
    Fully vested and exercisable at the time of grant.(3)
    
    Subject to vesting over five years, 20% vested at March 31, 2008.  Weighted AverageNumber of
    
    Grant DateNon-Vested Shares
    
    Shares
    
    Fair ValueBalance at March 31, 2007
    
    
    49,000
    
    
    $
    31.20Granted
    
    
    
    
    
    
    Vested
    
    
    (9,800
    )
    
    
    31.20Forfeited
    
    
    
    
    
    
    Non-vested at March 31, 2008
    
    
    39,200
    
    
    $
    31.20
  50




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##### Table of Contents



Earnings Per Share
   2008
    
    
    2007(Amounts in thousands, exceptper share amounts)Net income available to common stockholders
    
    $
    1,447
    
    
    $
    1,020Weighted average number of common shares outstanding
    
    
    1,640
    
    
    
    1,640Weighted average number of unallocated ESOP and
unvested restricted shares
    
    
    (290
    )
    
    
    (221
    )Weighted average number of common shares
outstanding used in calculation of basic earnings
per share
    
    
    1,350
    
    
    
    1,419Incremental shares from the assumed exercise of
dilutive common stock shares
    
    
    5
    
    
    
    33Weighted average number of common shares
outstanding used in calculating diluted earnings
per share
    
    
    1,355
    
    
    
    1,452Earnings per share:Basic
    
    $
    1.07
    
    
    $
    0.72Diluted
    
    $
    1.07
    
    
    $
    0.70
  Bank-Owned Life Insurance
  51




---



##### Table of Contents



Other Comprehensive Income (Loss)
  Recent Accounting Pronouncements
     52




---



##### Table of Contents



53




---



##### Table of Contents



Note 2. Investments
  March 31, 2008Amortized
    
    
    Gross Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(Dollars in Thousands)U.S. Government and agency obligations
    
    $
    3,495
    
    
    $
    52
    
    
    $
    
    
    
    $
    3,547Corporate bonds
    
    
    8,496
    
    
    
    8
    
    
    
    (192
    )
    
    
    8,312Mortgage-backed securities
    
    
    22,235
    
    
    
    257
    
    
    
    (42
    )
    
    
    22,450Trust preferred securities
    
    
    1,004
    
    
    
    8
    
    
    
    
    
    
    
    1,012Total debt securities
    
    
    35,230
    
    
    
    325
    
    
    
    (234
    )
    
    
    35,321Preferred stock
    
    
    12,173
    
    
    
    
    
    
    
    (751
    )
    
    
    11,422Common stock
    
    
    6,209
    
    
    
    384
    
    
    
    (376
    )
    
    
    6,217Total
    
    $
    53,612
    
    
    $
    709
    
    
    $
    (1,361
    )
    
    $
    52,960
 March 31, 2007Amortized
    
    
    Gross Unrealized
    
    
    FairCost
    
    
    Gains
    
    
    Losses
    
    
    Value(Dollars in Thousands)U.S. Government and agency obligations
    
    $
    19,984
    
    
    $
    
    
    
    $
    (216
    )
    
    $
    19,768Corporate bonds
    
    
    13,565
    
    
    
    250
    
    
    
    (118
    )
    
    
    13,697Mortgage-backed securities
    
    
    27,829
    
    
    
    61
    
    
    
    (503
    )
    
    
    27,387Total debt securities
    
    
    61,378
    
    
    
    311
    
    
    
    (837
    )
    
    
    60,852Common stock
    
    
    4,655
    
    
    
    293
    
    
    
    (37
    )
    
    
    4,911Total
    
    $
    66,033
    
    
    $
    604
    
    
    $
    (874
    )
    
    $
    65,763
  Less Than
    
    
    Greater Than12 Months
    
    
    12 MonthsFair
    
    
    Unrealized
    
    
    
    
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Fair Value
    
    
    Losses(Dollars in Thousands)Corporate bonds
    
    $
    1,955
    
    
    $
    (28
    )
    
    $
    4,348
    
    
    $
    (164
    )Mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    3,358
    
    
    
    (42
    )Preferred stock
    
    
    11,422
    
    
    
    (751
    )
    
    
    
    
    
    
    Common stock
    
    
    3,061
    
    
    
    (376
    )
    
    
    
    
    
    
    Total temporarily impaired securities
    
    $
    16,438
    
    
    $
    (1,155
    )
    
    $
    7,706
    
    
    $
    (206
    )
 54




---



##### Table of Contents



Amortized
    
    
    Fair
    
    
    AnnualCost
    
    
    Value
    
    
    Yield(Dollars in Thousands)Due within one year
    
    $
    8,529
    
    
    $
    8,397
    
    
    
    5.22
    %Due after one year but within five years
    
    
    1,600
    
    
    
    1,632
    
    
    
    4.27Due after five years but within ten years
    
    
    12,206
    
    
    
    12,270
    
    
    
    4.65Due after ten years
    
    
    12,895
    
    
    
    13,022
    
    
    
    5.17Total
    
    $
    35,230
    
    
    $
    35,321
   2008
    
    
    2007(Dollars in Thousands)Proceeds from sales
    
    $
    19,811
    
    
    $
    17,405Gross gains
    
    $
    886
    
    
    $
    674Gross losses
    
    
    (56
    )
    
    
    (93
    )Other than temporary impairment
    
    
    (185
    )
    
    
    Net realized gains
    
    $
    645
    
    
    $
    581
     55




---



##### Table of Contents



Note 3. Loans
  2008
    
    
    2007Real estate loans:Residential real estate (1-4 family)
    
    $
    178,727
    
    
    $
    175,259Commercial real estate
    
    
    244,496
    
    
    
    235,535Construction
    
    
    30,950
    
    
    
    35,011Home equity lines of credit
    
    
    6,559
    
    
    
    6,901Total real estate loans
    
    
    460,732
    
    
    
    452,706Commercial loans
    
    
    13,173
    
    
    
    6,605Consumer loans
    
    
    1,037
    
    
    
    1,231Total loans
    
    
    474,942
    
    
    
    460,542Less: allowance for losses
    
    
    (3,613
    )
    
    
    (3,881
    )Total loans, net
    
    $
    471,329
    
    
    $
    456,661
      At March 31,2008
    
    
    2007Impaired loans with a valuation allowance
    
    $
    4,766
    
    
    $
    Impaired loans without a valuation allowance
    
    
    4,562
    
    
    
    330Total impaired loans
    
    $
    9,328
    
    
    $
    330Specific valuation allowance related to impaired loans
    
    $
    601
    
    
    $
    
 Years ended March 31,2008
    
    2007Average recorded investment in impaired loans
    
    $
    5,910
    
    
    $
    1,221Cash receipts applied to reduce principal balance
    
    
    355
    
    
    
    332Interest income recognized for cash payments
    
    
    99
    
    
    
    11
  56




---



##### Table of Contents



2008
    
    
    2007Balance at beginning of year
    
    $
    654
    
    
    $
    702New loans
    
    
    11
    
    
    
    Repayment of principal
    
    
    (284
    )
    
    
    (48
    )Balance at end of year
    
    $
    381
    
    
    $
    654
  Note 4. Allowance for Loan Losses
  Years Ended March 31,2008
    
    
    2007Balance at beginning of year
    
    $
    3,881
    
    
    $
    3,788(Reduction of provision) provision charged
to expense
    
    
    (70
    )
    
    
    80Amounts charged-off
    
    
    (249
    )
    
    
    (48
    )Recoveries on accounts previously charged-off
    
    
    51
    
    
    
    61Balance at end of year
    
    $
    3,613
    
    
    $
    3,881
 Note 5. Banking Premises and Equipment
  Estimated2008
    
    
    2007
    
    
    Useful LivesLand
    
    $
    589
    
    
    $
    589Buildings and improvements
    
    
    2,213
    
    
    
    2,162
    
    
    50 yearsFurniture and fixtures
    
    
    3,187
    
    
    
    3,093
    
    
    3-5 yearsLeasehold improvements
    
    
    1,561
    
    
    
    1,538
    
    
    5-10 years7,550
    
    
    
    7,382Less accumulated depreciation and
amortization
    
    
    (3,581
    )
    
    
    (2,626
    )Total
    
    $
    3,969
    
    
    $
    4,756
  57




---



##### Table of Contents



Note 6. Deposits
  2008
    
    
    2007Demand deposit accounts
    
    $
    38,250
    
    
    $
    40,026NOW accounts
    
    
    27,065
    
    
    
    28,591Passbook and other savings accounts
    
    
    50,252
    
    
    
    56,495Money market deposit accounts
    
    
    67,243
    
    
    
    45,586Total non-certificate accounts
    
    
    182,810
    
    
    
    170,698Term deposit certificatesCertificates of $100 and above
    
    
    74,052
    
    
    
    82,159Certificates less than $100
    
    
    104,227
    
    
    
    135,716Total term deposit certificates
    
    
    178,279
    
    
    
    217,875$
    361,089
    
    
    $
    388,573
  Amount
    
    
    RateWithin 1 year
    
    $
    172,300
    
    
    
    3.87
    %Over 1 to 3 years
    
    
    5,277
    
    
    
    3.37Over 3 years
    
    
    702
    
    
    
    3.68$
    178,279
 Note 7. Federal Home Loan Bank Advances
  2008
    
    
    2007Amount
    
    
    Rate
    
    
    Amount
    
    
    RateWithin 1 year
    
    $
    12,000
    
    
    
    5.27
    %
    
    $
    36,000
    
    
    
    5.34
    %1-2 years
    
    
    27,000
    
    
    
    5.55
    
    
    
    10,000
    
    
    
    5.462-3 years
    
    
    26,000
    
    
    
    5.37
    
    
    
    20,000
    
    
    
    5.973-4 years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4-5 years
    
    
    29,691
    
    
    
    3.92
    
    
    
    20,000
    
    
    
    5.97Over 5 to 10 years
    
    
    62,000
    
    
    
    3.99
    
    
    
    39,000
    
    
    
    4.02$
    156,691
    
    
    
    4.57
    %
    
    $
    125,000
    
    
    
    5.11
    %
   58




---



##### Table of Contents



Note 8. Income Taxes
  Years Ended March 31,2008
    
    
    2007CurrentFederal
    
    $
    746
    
    
    $
    726State
    
    
    136
    
    
    
    127Total current provision
    
    
    882
    
    
    
    853Deferred (prepaid)
    
    
    (290
    )
    
    
    (366
    )$
    592
    
    
    $
    487
  Years Ended March 31,2008
    
    2007Statutory Federal tax rate
    
    
    34.0
    %
    
    
    34.0
    %Items affecting Federal income tax rate:Dividends received deduction
    
    
    (4.4
    )
    
    
    (2.2
    )State income taxes
    
    
    1.5
    
    
    
    0.1Bank-owned life insurance deduction
    
    
    (1.4
    )
    
    
    Other
    
    
    (0.7
    )
    
    
    0.4Effective tax rate
    
    
    29.0
    %
    
    
    32.3
    %
  2008
    
    
    2007Deferred tax assets:Allowance for loan losses
    
    $
    1,479
    
    
    $
    1,267Depreciation
    
    
    490
    
    
    
    418Post-employee retirement benefit accrual
    
    
    256
    
    
    
    246Write-down of investments securities
    
    
    85
    
    
    
    43Unrealized loss on securities, net
    
    
    250
    
    
    
    195Capital loss carry forward
    
    
    30
    
    
    
    202Other
    
    
    234
    
    
    
    103Gross deferred tax asset
    
    
    2,824
    
    
    
    2,474Deferred tax liabilities:Deferred loan origination costs
    
    
    267
    
    
    
    262Gross deferred tax liability
    
    
    267
    
    
    
    262Net deferred tax asset
    
    $
    2,557
    
    
    $
    2,212
   59




---



##### Table of Contents



AmountUnrecognized tax benefits at April 1, 2007
    
    $
    176,000Additions for tax positions related to the current year
    
    
    Additions for tax positions of prior years
    
    
    Reductions for tax positions of prior years
    
    
    Unrecognized tax benefits at March 31, 2008
    
    $
    176,000
  Note 9. Financial Instruments with Off-Balance Sheet Risk
   60




---



##### Table of Contents



2008
    
    
    2007Unused home equity and personal lines of credit
    
    $
    15,009
    
    
    $
    17,164Unadvanced portions of construction loans
    
    
    3,852
    
    
    
    5,552Unadvanced portions of commercial loans
    
    
    1,681
    
    
    
    1,296Commitments to originate commercial mortgage loans
    
    
    4,372
    
    
    
    6,894Commitments to originate residential mortgage loans
    
    
    6,493
    
    
    
    3,152Commitments to sell residential mortgage loans
    
    
    4,524
    
    
    
    1,796Total off-balance sheet commitments
    
    $
    35,931
    
    
    $
    35,854
   Years
EndingMarch
31,2009
    
    $
    3522010
    
    
    3522011
    
    
    3482012
    
    
    3402013
    
    
    340Thereafter
    
    
    1,285
  Note 10. Stockholders Equity
    61




---



##### Table of Contents



To Be WellFor Capital
    
    Capitalized UnderAdequacy
    
    Prompt CorrectiveActual
    
    Purposes
    
    Action provisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioAs of March 31, 2008:Company (consolidated)Total risk-based capital
    
    $
    51,444
    
    
    
    11.44
    %
    
    $
    35,975
    
    
    
    38.00
    %
    
    
    N/A
    
    
    
    N/ATier 1 capital
    
    
    47,831
    
    
    
    10.63
    
    
    
    17,998
    
    
    
    34.00
    %
    
    
    N/A
    
    
    
    N/ATier 1 leverage capital
    
    
    47,831
    
    
    
    8.49
    
    
    
    22,535
    
    
    
    34.00
    %
    
    
    N/A
    
    
    
    N/ABankTotal risk-based capital
    
    $
    43,646
    
    
    
    10.50
    %
    
    $
    33,254
    
    
    
    38.00
    %
    
    $
    41,568
    
    
    
    310.00
    %Tier 1 capital
    
    
    40,033
    
    
    
    9.63
    
    
    
    16,628
    
    
    
    34.00
    %
    
    
    24,972
    
    
    
    36.00Tier 1 leverage capital
    
    
    40,033
    
    
    
    7.08
    
    
    
    22,618
    
    
    
    34.00
    %
    
    
    28,272
    
    
    
    35.00As of March 31, 2007:Company (consolidated)Total risk-based capital
    
    $
    50,455
    
    
    
    13.09
    %
    
    $
    30,836
    
    
    
    38.00
    %
    
    
    N/A
    
    
    
    N/ATier 1 capital
    
    
    46,459
    
    
    
    12.05
    
    
    
    15,422
    
    
    
    34.00
    
    
    
    N/A
    
    
    
    N/ATier 1 leverage capital
    
    
    46,459
    
    
    
    8.21
    
    
    
    22,635
    
    
    
    34.00
    
    
    
    N/A
    
    
    
    N/ABankTotal risk-based capital
    
    $
    41,822
    
    
    
    10.86
    %
    
    $
    30,808
    
    
    
    38.00
    %
    
    $
    38,510
    
    
    
    310.00
    %Tier 1 capital
    
    
    37,826
    
    
    
    9.83
    
    
    
    15,392
    
    
    
    34.00
    
    
    
    23,088
    
    
    
    36.00Tier 1 leverage capital
    
    
    37,826
    
    
    
    6.69
    
    
    
    22,616
    
    
    
    34.00
    
    
    
    28,271
    
    
    
    35.00
 Note 11. Employee Benefits
 Pension and Savings Plans
   62




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##### Table of Contents



Employee Stock Ownership Plan
     Stock Option and Long-Term Incentive Plans
    63




---



##### Table of Contents



Other Post-Retirement Benefits
  2008
    
    
    2007Life
    
    
    Medical
    
    
    Life
    
    
    MedicalActuarial present value of benefits obligation:Retirees
    
    $
    (235
    )
    
    $
    (216
    )
    
    $
    (230
    )
    
    $
    (199
    )Fully eligible participants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    (235
    )
    
    $
    (216
    )
    
    $
    (230
    )
    
    $
    (199
    )Change in projected benefit obligation:Accumulated benefit obligations at prior year-end
    
    $
    (230
    )
    
    $
    (199
    )
    
    $
    (258
    )
    
    $
    (210
    )Service cost less expense component
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Interest cost
    
    
    (13
    )
    
    
    (12
    )
    
    
    (13
    )
    
    
    (11
    )Actuarial gain (loss)
    
    
    7
    
    
    
    9
    
    
    
    39
    
    
    
    5Amendment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Assumptions
    
    
    
    
    
    
    (34
    )
    
    
    
    
    
    
    Benefits paid
    
    
    1
    
    
    
    20
    
    
    
    2
    
    
    
    17Accumulated benefit obligations at year-end
    
    $
    (235
    )
    
    $
    (216
    )
    
    $
    230
    
    
    $
    (199
    )Change in plan assets:Fair value of plan assets at prior year-end
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Actual return on plan assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Employer contribution
    
    
    1
    
    
    
    20
    
    
    
    1
    
    
    
    17Benefits paid and expenses
    
    
    (1
    )
    
    
    (20
    )
    
    
    (1
    )
    
    
    (17
    )Fair value of plan assets at current year-end
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Change in Other Comprehensive Income:Other Comprehensive Income at prior fiscal year-end
    
    $
    (54
    )
    
    $
    (130
    )
    
    
    n/a
    
    
    
    n/aImplementation of FAS #158
    
    
    n/a
    
    
    
    n/a
    
    
    
    (54
    )
    
    
    (129
    )Plan Amendment
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aG(L) Actuarial Experience
    
    
    (7
    )
    
    
    (9
    )
    
    
    n/a
    
    
    
    n/aG(L) Assumptions
    
    
    n/a
    
    
    
    34
    
    
    
    n/a
    
    
    
    n/aAmortization included in Pension Expense
    
    
    (2
    )
    
    
    1
    
    
    
    n/a
    
    
    
    n/aOther Comprehensive Income at current year-end
    
    $
    (63
    )
    
    $
    (104
    )
    
    $
    (54
    )
    
    $
    (129
    )Amounts with Deferred Recognition
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aReconciliation of (accrual) prepaid:(Accrued) prepaid pension cost at beginning of year
    
    $
    (283
    )
    
    $
    (329
    )
    
    $
    (269
    )
    
    $
    (339
    )Minus net periodic cost
    
    
    (15
    )
    
    
    (12
    )
    
    
    (15
    )
    
    
    (7
    )Plus employer contributions, net
    
    
    1
    
    
    
    20
    
    
    
    1
    
    
    
    17(Accrued) prepaid cost at end of year
    
    $
    (297
    )
    
    $
    (321
    )
    
    $
    (283
    )
    
    $
    (329
    )Benefit obligation weighted average assumption as
Change in projected benefit obligation:Discount rate
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    5.75
    %Expected return on plan assets
    
    
    5.75
    
    
    
    5.75
    
    
    
    5.75
    
    
    
    5.75Rate of compensation increase
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
 64




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##### Table of Contents



2008
    
    
    2007Life
    
    
    Medical
    
    
    Life
    
    
    MedicalComponents of net periodic benefit cost:Service cost
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Interest cost
    
    
    13
    
    
    
    12
    
    
    
    13
    
    
    
    11Expected return on plan assets
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Amortization of prior service cost
    
    
    9
    
    
    
    14
    
    
    
    9
    
    
    
    14Recognized actuarial (gain) loss
    
    
    (7
    )
    
    
    (14
    )
    
    
    (7
    )
    
    
    (18
    )Net periodic benefit cost
    
    $
    15
    
    
    $
    12
    
    
    $
    15
    
    
    $
    7Periodic benefit cost weighted average
assumptions:Discount rate
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    5.75
    %Expected return on plan assets
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    5.75
    %
    
    
    5.75
    %Rate of compensation increase
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/a
    
    
    
    n/aAmounts recognized in the statement of
Financial Position consist of:Noncurrent Assets
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Current Liabilities
    
    
    (22
    )
    
    
    (20
    )
    
    
    (20
    )
    
    
    (21
    )Noncurrent Liabilities
    
    
    (213
    )
    
    
    (196
    )
    
    
    (210
    )
    
    
    (178
    )$
    (235
    )
    
    $
    (216
    )
    
    $
    (230
    )
    
    $
    (199
    )Amounts recognized in Accumulated Other
Comprehensive Income consist of:Net Loss (Gain)
    
    $
    (104
    )
    
    $
    (143
    )
    
    $
    (104
    )
    
    $
    (182
    )Prior Service Cost (Credit)
    
    
    
    
    
    
    (85
    )
    
    
    
    
    
    
    (96
    )Transition Liability (Asset)
    
    
    43
    
    
    
    124
    
    
    
    51
    
    
    
    149$
    (61
    )
    
    $
    (104
    )
    
    $
    (53
    )
    
    $
    (129
    )Amounts anticipated to be recognized in expense
for fiscal year ending in 2009
    
    $
    (9
    )
    
    $
    (14
    )
    
    
    n/a
    
    
    
    n/aNet Loss (Gain)
    
    
    
    
    
    
    (11
    )
    
    
    n/a
    
    
    
    n/aPrior Service Cost (Credit)
    
    
    9
    
    
    
    25
    
    
    
    n/a
    
    
    
    n/aTransition Liability (Asset)
    
    $
    
    
    
    $
    
  65




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##### Table of Contents



Before
    
    
    
    
    
    
    AfterApplication of
    
    
    
    
    
    
    Application ofSFAS # 158
    
    
    Adjustments
    
    
    SFAS # 158Deferred income taxes
    
    $
    2,212
    
    
    $
    
    
    
    $
    2,212Total Assets
    
    
    566,140
    
    
    
    
    
    
    
    566,140Other liabilities
    
    
    1,762
    
    
    
    179
    
    
    
    1,583Total liabilities
    
    
    528,617
    
    
    
    179
    
    
    
    528,438Retained Income
    
    
    40,398
    
    
    
    4
    
    
    
    40,394Accumulated other comprehensive loss
    
    
    20,150
    
    
    
    (183
    )
    
    
    20,333Total shareholders equity
    
    $
    37,523
    
    
    $
    (179
    )
    
    $
    37,702
 Note 12. Legal Proceedings
  Note 13. Fair Values of Financial Instruments
 i.e.,
  Cash and Due from Banks
  Short-Term Investments
  Investment and Mortgage-Backed Securities
  Loans and Loans Held for Sale
  Accrued Interest Receivable
  66




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##### Table of Contents



Stock in FHLB of Boston
  The Co-operative Central Bank Reserve Fund
  Deposits
  Advances from FHLB of Boston
  Short-Term Borrowings, Advance Payments by Borrowers for Taxes and Insurance and Accrued
Interest Payable
  Off-Balance Sheet Instruments
  67




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##### Table of Contents



March 31, 2008
    
    
    March 31, 2007Carrying
    
    
    Estimated
    
    
    Carrying
    
    
    EstimatedAmount
    
    
    Fair Value
    
    
    Amount
    
    
    Fair ValueAssetsCash and due from banks
    
    $
    5,837
    
    
    $
    5,837
    
    
    $
    6,147
    
    
    $
    6,147Short-term investments
    
    
    11,888
    
    
    
    11,888
    
    
    
    14,470
    
    
    
    14,470Investment securities
    
    
    52,960
    
    
    
    52,960
    
    
    
    65,763
    
    
    
    65,763Loans held for sale
    
    
    195
    
    
    
    195
    
    
    
    575
    
    
    
    575Net loans
    
    
    471,329
    
    
    
    471,131
    
    
    
    456,661
    
    
    
    458,789Stock in Federal Home Loan Bank of Boston
    
    
    8,518
    
    
    
    8,518
    
    
    
    7,366
    
    
    
    7,366The Co-operative Central Bank Reserve Fund
    
    
    1,576
    
    
    
    1,576
    
    
    
    1,576
    
    
    
    1,576Accrued interest receivable
    
    
    1,981
    
    
    
    1,981
    
    
    
    2,415
    
    
    
    2,415LiabilitiesDeposits
    
    $
    361,089
    
    
    $
    349,506
    
    
    $
    388,573
    
    
    $
    372,325Short-term borrowings
    
    
    141
    
    
    
    141
    
    
    
    712
    
    
    
    712Advances from FHLB of Boston
    
    
    156,691
    
    
    
    164,667
    
    
    
    125,000
    
    
    
    126,082Subordinated debenture
    
    
    11,341
    
    
    
    11,341
    
    
    
    11,341
    
    
    
    11,341Advance payments by borrowers for taxes and insurance
    
    
    1,308
    
    
    
    1,308
    
    
    
    1,229
    
    
    
    1,229Accrued interest payable
    
    
    677
    
    
    
    677
    
    
    
    565
    
    
    
    565
 Note 14. Parent Company Only Condensed Financial Statements
  March 31,Balance Sheets
    
    2008
    
    
    2007AssetsCash deposit in subsidiary bank
    
    $
    238
    
    
    $
    572Investment in subsidiary
    
    
    42,127
    
    
    
    40,066ESOP loan (Note 11)
    
    
    7,375
    
    
    
    7,917Investment in unconsolidated subsidiary
    
    
    341
    
    
    
    341Other assets
    
    
    113
    
    
    
    190Total assets
    
    $
    50,194
    
    
    $
    49,086Liabilities and Stockholders EquitySubordinated debentures (Note 1)
    
    $
    11,341
    
    
    $
    11,341Accrued taxes and other liabilities
    
    
    37
    
    
    
    43Total stockholders equity
    
    
    38,816
    
    
    
    37,702Total liabilities and stockholders equity
    
    $
    50,194
    
    
    $
    49,086
 68




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##### Table of Contents



Years Ended March 31,Statements of Income
    
    2008
    
    
    2007Dividends from subsidiary
    
    $
    450
    
    
    $
    800Interest income
    
    
    615
    
    
    
    231Interest expense on subordinated debentures
    
    
    (841
    )
    
    
    (482
    )Noninterest income (expenses)
    
    
    (352
    )
    
    
    (494
    )(Loss)/income before income tax benefit
    
    
    (128
    )
    
    
    55Income tax benefit
    
    
    197
    
    
    
    258Income before equity in undistributed net income of subsidiary
    
    
    69
    
    
    
    313Equity in undistributed net income of subsidiary
    
    
    1,378
    
    
    
    707Net income
    
    $
    1,447
    
    
    $
    1,020
 Years Ended March 31,Statements of Cash Flows
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    1,447
    
    
    $
    1,020Adjustments to reconcile net income to net cash provided by operating
activities:Equity in undistributed net income of subsidiary
    
    
    (1,378
    )
    
    
    (707
    )Decrease in other assets
    
    
    77
    
    
    
    (Decrease) increase in accrued taxes and other liabilities
    
    
    (6
    )
    
    
    14Net cash provided by operating activities
    
    
    140
    
    
    
    327Cash flows from investing activities:ESOP loans, net of repayment
    
    
    542
    
    
    
    (5,465
    )Redemption of certificate of deposit
    
    
    
    
    
    
    627Investment in subsidiary
    
    
    
    
    
    
    (183
    )Net cash provided by (used in) investing activities
    
    
    542
    
    
    
    (5,021
    )Cash flows from financing activities:Proceeds from issuance of subordinated debenture
    
    
    
    
    
    
    6,083Cash dividends paid, net
    
    
    (1,016
    )
    
    
    (1,047
    )Other, net
    
    
    
    
    
    
    13Net cash (used in) provided by financing activities
    
    
    (1,016
    )
    
    
    5,049Net (decrease) increase in cash in subsidiary bank
    
    
    (334
    )
    
    
    355Cash in subsidiary bank at beginning of year
    
    
    572
    
    
    
    217Cash in subsidiary bank at end of year
    
    $
    238
    
    
    $
    572
 69




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
 
  70




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##### Table of Contents



Item 9.  Changes in and Disagreements With Accountants on Accounting and Financial
Disclosure
 Not applicable.
 
 Item 9A(T). Controls and Procedures
 (a)
    
    Disclosure Controls and ProceduresThe Companys management, including the Companys principal executive officer and
principal financial officer, have evaluated the effectiveness of the Companys
disclosure controls and procedures, as such term is defined in Rule 13a-15(e)
promulgated under the Securities Exchange Act of 1934, as amended, (the Exchange
Act). Based upon their evaluation, the principal executive officer and principal
financial officer concluded that, as of the end of the period covered by this
report, the Companys disclosure controls and procedures were effective for the
purpose of ensuring that the information required to be disclosed in the reports
that the Company files or submits under the Exchange Act with the Securities and
Exchange Commission (the SEC) (1) is recorded, processed, summarized and reported
within the time periods specified in the SECs rules and forms, and (2) is
accumulated and communicated to the Companys management, including its principal
executive and principal financial officers, as appropriate to allow timely decisions
regarding required disclosure.(b)
    
    Internal Controls Over Financial ReportingThe Companys management is responsible for establishing and maintaining adequate
internal control over financial reporting as defined in Rules 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934, and management has assessed the
effectiveness of the Companys internal control over financial reporting as of March
31, 2008 based upon the criteria set forth in a report entitled Internal
ControlIntegrated Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission. Based on its assessment, the Companys management has
concluded that the Company maintained effective internal control over financial
reporting as of March 31, 2008.This annual report does not include an attestation report of the Companys
registered public accounting firm regarding internal control over financial
reporting. Managements report was not subject to attestation by the Companys
independent registered public accounting firm pursuant to temporary rules of the
Securities and Exchange Commission that permit the Company to provide only
managements report in this annual report.(c)
    
    Changes to Internal Control Over Financial ReportingExcept as indicated herein, there were no changes in the Companys internal control
over financial reporting during the three months ended March 31, 2008 that have
materially affected, or are reasonable likely to materially affect, the Companys
internal control over financial reporting.
 
 Item 9B. Other Information
  
 PART III
 
 Item 10.  Directors, Executive Officers and Corporate Governance
 Directors
 Proposal I  Election of Directors
 71




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##### Table of Contents



Executive Officers
 Proposal I  Election of Directors 
Executive Officers Who Are Not Directors
 Compliance with Section 16(a) of the Exchange Act
 Section 16(a) Beneficial Ownership
Reporting Compliance
 Code of Ethics
  Corporate Governance
 Meetings of and Committees of the Board of Directors 
Audit Committee
 
 Item 11.  Executive Compensation
 Executive Compensation
 Executive Compensation Director Compensation
 Corporate Governance
 Meetings and Committees of the Board of Directors  Compensation Committee
 
 Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
 (a)
    
    Security Ownership of Certain Beneficial OwnersThe information required by this item is incorporated herein by reference to the
section captioned Principal Holders of Voting Securitiesin the Proxy Statement.(b)
    
    Security Ownership of ManagementThe information required by this item is incorporated herein by reference to the
section captioned Proposal I  Election of Directors  Security Ownership of
Managementin the Proxy Statement.(c)
    
    Changes in ControlManagement of the Company knows of no arrangements, including any pledge by any
person of securities of the Company, the operation of which may at a subsequent date
result in a change in control of the Company.
 72




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##### Table of Contents



(d)
    
    Equity Compensation PlansThe Company has adopted the 1999 Stock Option and Incentive Plan and the 2006
Long-Term Incentive Plan, pursuant to which equity may be awarded to participants.
Both plans have been approved by stockholders.
  (c)Number of securities remaining(a)
    
    
    (b)
    
    
    available for future issuanceNumber of securities to be issued
    
    
    Weighted-average exercise
    
    
    under equity compensationupon exercise of outstanding
    
    
    price of outstanding
    
    
    plan (excluding securitiesPlan Category
    
    options, warrants and rights
    
    
    options, warrants and rights
    
    
    reflected in column (a))Equity compensation plans
approved by security holders
    
    
    68,218
    
    
    $
    25.364
    
    
    
    91,000Equity compensation plans not
approved by security holders
    
    
    
    
    
    
    
    
    
    
    Total (1)
    
    
    68,218
    
    
    $
    25.364
    
    
    
    91,000
 
 (1)
    
    The 1999 Stock Option Plan and the 2006 Long-Term Incentive Plan provides for a proportionate
adjustment to the number of shares reserved thereunder in the event of a stock split, stock
dividend, reclassification or similar event. 
 Item 13.  Certain Relationships and Related Transactions, and Director Independence
 Certain Relationships and Related Transactions
 Certain Transactions
 Director Independence
 Proposal 1  Election of Directors
 
 Item 14. Principal Accounting Fees and Services
 Independent Auditors
 
 PART IV
 
 Item 15.  Exhibits and Financial Statement Schedules
 (a)
 (1)
    
    Financial StatementsFor the Financial Statements filed as part of this Annual Report on Form 10-K,
reference is made to Item 8  Financial Statements and Supplementary Data.(2)
    
    Financial Statement SchedulesAll financial statement schedules have been omitted as not applicable or not
required or because they are included in the financial statements appearing at Item
8.
 73




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##### Table of Contents



(3)
    
    ExhibitsThe exhibits required by Item 601 of Regulation S-K are either filed as part of this
Annual Report on Form 10-K or incorporated by reference herein.
  Exhibit No.
    
    Description3.11
    
    Articles of Organization of Central Bancorp, Inc.3.22
    
    Amended Bylaws of Central Bancorp, Inc.4.13
    
    Shareholder Rights Agreement, dated as of October 11, 2001, by and between Central Bancorp, Inc. and Registrar
and Transfer
Company, as Rights
Agent, as amended
and restated as of
January 29, 2003,
and as amended on
February 11, 2003,
May 22, 2003, July
24, 2003 and August
4, 200310.14
    
    Employment Agreement by and between Central Co-operative Bank and John D. Doherty10.24
    
    Employment Agreement by and between Central Co-operative Bank and William P. Morrissey 10.34
    
    Executive Salary Continuation Agreement by and between Central Co-operative Bank
and John D. Doherty, as amended 10.44
    
    Executive Salary Continuation Agreement by and between Central Co-operative Bank
and William P. Morrissey, as amended 10.54
    
    Executive Health Insurance Plan Agreement by and between Central Co-operative Bank
and John D. Doherty 10.64
    
    Executive Health Insurance Plan Agreement by and between Central Co-operative Bank
and John D. Doherty 10.74
    
    Executive Health Insurance Plan Agreement by and between Central Co-operative Bank
and William P. Morrissey 10.81
    
    Severance Agreement between the Bank and William P. Morrissey, dated December 14,
1994 10.91
    
    Severance Agreement between the Bank and David W. Kearn, dated December 14, 1994 10.101
    
    Severance Agreement between the Bank and Paul S. Feeley, dated May 14, 1998 10.111
    
    Amendments to Severance Agreements between the Bank and Messrs. Feeley, Kearn and
Morrissey, dated January 8, 1999 10.125
    
    1999 Stock Option and Incentive Plan 10.136
    
    Deferred Compensation Plan for Non-Employee Directors 10.143
    
    Senior Management Incentive Plan, as amended 10.157
    
    Severance Agreement between the Bank and Bryan E. Greenbaum dated March 17, 200510.168
    
    Central Bancorp, Inc. 2006 Long-Term Incentive Plan 149
    
    Code of Ethics21
    
    Subsidiaries of Registrant23.1
    
    Consent of Vitale, Caturano & Company, Ltd.31.1
    
    Rule 13a-14(a) Certification of Chief Executive Officer31.2
    
    Rule 13a-14(a) Certification of Chief Financial Officer32
    
    Section 1350 Certifications
 
 
    
    Management contract or compensatory plan.(1)
    
    Incorporated by reference to the Form 10-K for the fiscal year ended March 31, 1999 (File No.
0-25251) filed with the SEC on June 28, 1999.(2)
    
    Incorporated by reference to the exhibits filed with the Companys Current Report on Form 8-K
(File No. 0-25251) filed with the SEC on October 22, 2007.(3)
    
    Incorporated by reference to the Form 10-K for the fiscal year ended March 31, 2004 (File No.
0-25251) filed with the SEC on June 28, 2004.(4)
    
    Incorporated by reference to the exhibits filed with the Companys Current Report on Form 8-K
(File No. 0-25251) filed with the SEC on December 21, 2007.(5)
    
    Incorporated by reference to the Registration Statement on Form S-8 (File No. 333-87005)
filed on September 13, 1999.(6)
    
    Incorporated by reference to the Registration Statement on Form S-8 (File No. 333-49264)
filed on November 3, 2000.(7)
    
    Incorporated by reference to the Form 10-K for the fiscal year ended March 31, 2004 (File No.
0-25251) filed with the SEC on June 29, 2005.(8)
    
    Incorporated by reference to the Registration Statement on Form S-8 (File No. 333-136234)
filed with the SEC on August 2, 2006.(9)
    
    Incorporated by reference to the Current Report on Form 8-K (File No. 0-25251) filed with the
SEC on April 13, 2004. 74




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##### Table of Contents



SIGNATURES
  CENTRAL BANCORP, INC.Date:  June 20, 2008
    By:
    /s/       John D. DohertyJohn D. DohertyChairman, President and Chief Executive Officer
(Duly Authorized Representative)  /s/ John D. Doherty
    
    June 20, 2008John D. DohertyChairman, President and Chief Executive Officer/s/ Paul S. Feeley
    
    June 20, 2008Paul S. Feeley
Senior Vice President, Chief Financial Officer and
Treasurer
(Principal Financial and Accounting Officer)/s/ Gregory W. Boulos
    
    June 20, 2008Gregory W. Boulos 

Director/s/ Paul E. Bulman
    
    June 20, 2008Paul E. Bulman 

Director/s/ Joseph R. Doherty
    
    June 20, 2008Joseph R. Doherty

Director/s/ James F. Linnehan
    
    June 20, 2008James F. Linnehan 

Director/s/ Albert J. Mercuri, Jr.
    
    June 20, 2008Albert J. Mercuri, Jr. 

Director/s/ John J. Morrissey
    
    June 20, 2008John J. Morrissey 

Director/s/ Richard E. Stevens
    
    June 20, 2008Richard E. Stevens 

Director/s/ Edward F. Sweeney, Jr.
    
    June 20, 2008Edward F. Sweeney, Jr. 

Director
 75