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Central Bancorp Inc Reports Operating Results (10-Q)

February 15, 2011 | About:
10qk

10qk

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Central Bancorp Inc (CEBK) filed Quarterly Report for the period ended 2010-12-31.

Central Bancorp Inc. has a market cap of $25.3 million; its shares were traded at around $15.2 with a P/E ratio of 15 and P/S ratio of 0.8. The dividend yield of Central Bancorp Inc. stocks is 1.3%.
This is the annual revenues and earnings per share of CEBK over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of CEBK.


Highlight of Business Operations:

$461.5 million at March 31, 2010, representing a decrease of $56.3 million, or 12.2%. This decrease was primarily due to decreases in residential and home equity loans of $30.4 million and $357 thousand, respectively, as well as decreases in construction and commercial real estate loans of $23.9 million. Construction and commercial real estate loans declined as management de-emphasized these types of lending in the current economic environment. Residential and home equity loans decreased from $225.9 million at March 31, 2010 to $195.1 million at December 31, 2010 due to higher than expected residential loan payoffs. Commercial and industrial loans decreased from $4.0 million at March 31, 2010 to $2.5 million at December 31, 2010 primarily due to the scheduled repayment of principal. Management’s efforts to reduce the levels of commercial real estate and construction loans are reflected in changes in the Bank’s commercial real estate concentration ratio, which is calculated as total non-owner occupied commercial real estate and construction loans divided by the Bank’s risk-based capital. At December 31, 2010, the commercial real estate concentration ratio was 402%, compared to a ratio of 466% at March 31, 2010 and 600% at March 31, 2009.

Investment securities totaled $38.3 million at December 31, 2010 compared to $44.5 million at March 31, 2010, representing a decrease of $6.1 million, or 13.8%. The decrease in investment securities is primarily due to the repayment of $7.1 million in principal on mortgage-backed securities, the sale of $2.1 million in corporate bonds, partially offset by the purchase of two government sponsored mortgage backed securities totaling $3.2 million and a net increase of $230 thousand in the fair value of available for sale securities. Stock in the Federal Home Loan Bank of Boston (“FHLBB’) totaled $8.5 million at both December 31, 2010 and March 31, 2010, respectively.

Total deposits amounted to $325.2 million at December 31, 2010 compared to $339.2 million at March 31, 2010, representing a decrease of $14 million, or 4.1%. The decrease was a result of the combined effect of a $12.2 million decrease in certificates of deposit and a net decrease in core deposits of $1.8 million (consisting of all non-certificate accounts). Management utilized cash and short-term investments to fund certain maturing higher-cost certificates of deposit in an effort to improve the Company’s net interest rate spread and net interest margin.

Net income available to common shareholders for the quarter ended December 31, 2010 was $191 thousand, or $0.12 per diluted common share, as compared to net income available to common shareholders of $213 thousand, or $0.14 per diluted common share, for the comparable prior year quarter. The decrease was primarily due to a $200 thousand increase in the provision for loan losses, a $129 thousand decrease in net interest income and a $23 thousand increase in the provision for income taxes, partially offset by a $173 thousand increase in non-interest income and a $158 thousand decrease in non-interest expenses. Additionally, for each of the quarters ended December 31, 2010 and 2009, net income available to common shareholders was reduced by $125 thousand for allocated dividends paid to preferred shareholders related to the Company’s December 2008 sale of $10.0 million of preferred stock and a warrant to purchase 234,732 shares of the Company’s common stock to the U.S. Treasury Department as a participant in the federal government’s TARP Capital Purchase Program.

Interest and Dividend Income. Interest and dividend income decreased by $901 thousand, or 12.7%, to $6.2 million for the quarter ended December 31, 2010 as compared to $7.1 million during the same period of 2009. During the quarter ended December 31, 2010, the yield on interest-earning assets decreased by 46 basis points primarily due to a 31 basis point reduction in the yield on mortgage loans. Contributing to the reduced yield on mortgage loans were decreases in commercial real estate and construction loans as management refocused its lending emphasis in the current market environment in an effort to reduce risk and increase regulatory capital ratios in accordance with the Company’s business plan, and a general decline in the market interest rates on loans. Included in interest and dividend for the quarter ended December 31, 2010 was the receipt of a Share Insurance Fund special dividend of $133 thousand compared to $0 during the quarter ended December 31, 2009.

Interest Expense. Interest expense decreased by $772 thousand, or 28.5%, to $1.9 million for the quarter ended December 31, 2010 as compared to $2.7 million for the same period of 2009 primarily due to decreases in the average rates paid on deposits and FHLBB borrowings. The cost of deposits decreased by 41 basis points from 1.20% for the quarter ended December 31, 2009 to 0.79% for the quarter ended December 31, 2010, as some higher-cost certificates of deposit were either not renewed or were replaced by lower-costing deposits. The average balance of certificates of deposit totaled $126.7 million for the quarter ended December 31, 2010, compared to $137.2 million for the same period in 2009, a decline of $10.5 million. The average balance of lower-costing non-maturity deposits increased by $1.2 million to $162.7 million for the quarter ended December 31, 2010, as compared to an average balance of $161.5 million during the same period of 2009. The average balance of FHLBB borrowings decreased by $21.2 million, from $149.3 million for the quarter ended December 31, 2009 to $128.1 million for the quarter ended December 31, 2010. The average cost of these funds declined as management utilized short-term investments to fund maturing, relatively higher-rate advances during the quarter ended December 31, 2010.

Read the The complete Report

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