SOURCE: Center Bancorp, Inc.

October 26, 2007 13:26 ET

Center Bancorp, Inc. Reports Third Quarter 2007 Earnings

Center Also Announces the Termination of the Beacon Trust Company Merger Agreement and the Termination of Pending Litigation

UNION, NJ--(Marketwire - October 26, 2007) - Center Bancorp, Inc. (NASDAQ: CNBC), parent company of Union Center National Bank, today reported operating results for the third quarter ended September 30, 2007. Earnings amounted to approximately $1.0 million for the quarter ended September 30, 2007 as compared with net income for the quarter ended September 30, 2006 of $1.3 million. Basic and fully diluted earnings per common share for the quarter ended September 30, 2007 were $0.07 and $0.07, respectively. By comparison, for the quarter ended September 30, 2006, basic and fully diluted earnings per common share were $0.09 and $0.09, respectively.

The results for the third quarter of 2007 included certain amounts associated with the Corporation's previously announced cost-cutting measures. As a result of the Corporation's freezing of its Defined Benefit Pension Plan the Corporation recorded a pension curtailment benefit of $1.2 million. The Corporation recorded salary and benefit expense of $1.6 million related to salary and benefit severance payments. The cumulative effect of these items was to reduce income before income tax by $410,000 or $.03 per share.

For the nine months ended September 30, 2007, net income amounted to $3.3 million, an increase of $1.7 million from September 30, 2006. Basic and fully diluted earnings per common share for the nine-months ended September 30, 2007 were $0.24 and $0.24, respectively. By comparison, for the nine-months ended September 30, 2006, basic and fully diluted earnings per common share were $0.11 and $0.11, respectively.


Quarterly Condensed Consolidated Income Statements (unaudited)

(dollars in thousands, except share and per share data)

For the
 quarter
 ended:    9/30/07    6/30/07    3/31/07   12/31/06    9/30/06    6/30/06
           --------  ---------  ---------  ---------  ---------  ---------
Net
 interest
 income    $  5,481  $   5,225  $   5,621  $   5,691  $   5,952  $   6,308
Provision
 for loan
 losses         100        100          0         57          0          0
Net
 interest
 income
 after
 loan loss
 provision    5,381      5,125      5,621      5,634      5,952      6,308
Non
 interest
 income         911      1,177      1,410      1,618      1,007        873
Non
 interest
 expense     (6,080)    (6,056)    (6,428)    (6,656)    (5,735)    (5,766)
Income
 before
 income
 tax            212        246        603        596      1,224      1,415
Income tax
 expense/
 (benefit)     (786)      (771)      (706)    (1,695)       (78)        43
NET INCOME $    998  $   1,017  $   1,309  $   2,291  $   1,302  $   1,372
EPS
 (basic)   $   0.07  $    0.07  $    0.09  $    0.16  $    0.09  $    0.10
EPS
 (diluted) $   0.07  $    0.07  $    0.09  $    0.16  $    0.09  $    0.10
Weighted average common shares outstanding adjusted for 5% stock dividend:
Basic    13,864,272 13,910,450 13,910,450 13,898,178 13,896,165 13,940,396
Diluted  13,938,892 13,962,934 13,986,333 13,980,270 13,989,262 14,020,835
         ---------- ---------- ---------- ---------- ---------- ----------

Beacon Trust Company

The Corporation announced that the Boards of Directors of the Corporation and Beacon Trust Company have mutually agreed to terminate their Agreement and Plan of Merger dated as of March 15, 2007. Concurrently, the parties have agreed to a dismissal of the litigation commenced by Beacon Trust Company to compel consummation of the merger. During the fourth quarter of 2007, the Corporation will recognize merger-related expenses, reflecting the cost of the transaction from the outset of negotiations, in an amount expected to be approximately $600,000. Acting Chief Executive Officer Anthony C. Weagley stated: "We part in the same manner as we began -- as friends. We will explore opportunities to work together with Beacon in the future, but not as part of a combined enterprise."

Total average loan volume for the third quarter of 2007 increased to $538.8 million on average, an increase of $6.3 million from $532.5 million for the comparable quarter of the previous year. On a linked sequential quarter comparison, total average loans increased by $6.0 million, from $532.8 million on average during the second quarter of 2007. The Corporation had total loans of $550.8 million at September 30, 2007, representing a $17.1 million, or 3.20%, increase on a linked sequential quarter basis. Payoff levels subsided during the quarter; there was $22.4 million in payoffs received, versus new loan volume booked of $36.4 million.

Loan Mix:
(unaudited)
(dollars in thousands)

At quarter
 ended:        9/30/2007 6/30/2007 3/31/2007 12/31/2006 9/30/2006 6/30/2006
               --------- --------- --------- ---------- --------- ---------
Real estate
 loans
   Residential $ 265,301 $ 261,849 $ 262,958 $  268,748 $ 261,652 $ 259,520
   Commercial    136,289   135,707   135,062    135,802   132,032   128,270
   Construction,
    development
    and land
    loans         53,286    47,910    60,135     70,340    63,583    55,583
Total real
 estate loans    454,876   445,466   458,155    474,890   457,267   443,373
Commercial
 loans            94,444    86,848    71,020     74,135    77,925    85,492
Consumer and
 other loans         960       741       754        699     1,443     1,042
               --------- --------- --------- ---------- --------- ---------
Total loans
 before
 unearned fees
 and costs       550,280   533,055   529,929    549,724   536,635   529,907
Unearned fees
 and costs           567       620       644        690       715       743
               --------- --------- --------- ---------- --------- ---------
Total loans    $ 550,847 $ 533,675 $ 530,573 $  550,414 $ 537,350 $ 530,650
               ========= ========= ========= ========== ========= =========

"We are pleased with the growth achieved for the quarter and are optimistic that the Corporation will continue to build its loans outstanding volume from this level through the fourth quarter. Our pipelines are strong; we expect that increased activity in the commercial sectors of the portfolio will support our strategic goals of increased loan volume and improving our earning-asset mix," said Mr. Weagley, President. "Notwithstanding a slow down in the general markets, we believe that our increased business development efforts should position us for further growth. Our emphasis will continue to be on the commercial mortgage, construction and commercial loan sectors of the portfolio." At September 30, 2007, the Corporation had $26.8 million in overall undispersed loan commitments, $12.0 million of which it expected to fund over the next 90 days. This includes $10.7 million in commitments for commercial and commercial real estate loans.

Asset Quality

Selected credit quality ratios
(unaudited)

(dollars in thousands)
As of or
 for the
 quarter
 ended:     9/30/07   6/30/07    3/31/07   12/31/06    9/30/06    6/30/06
            -------  ---------  ---------  ---------  ---------  ---------
Non-accrual
 loans      $   986  $   1,070  $   1,207  $     475  $     315  $     431
Past due
 loans 90
 days or
 more and
 still
 accruing
 interest         0          0          0        225        346      2,000
Total non
 performing
 loans          986      1,070      1,207        700        661      2,431
Other real
 estate
 owned
 ("OREO")       586        586          0          0          0          0
Repossessed
 assets
 other than
 real-estate      0          0          0          0          0          0
            -------  ---------  ---------  ---------  ---------  ---------
Total non
 performing
 assets     $ 1,572  $   1,656  $   1,207  $     700  $     661  $   2,431
Non performing
 assets as a
 percentage
 of total
 assets        0.16%      0.17%      0.12%      0.07%      0.06%      0.23%
Non performing
 loans as a
 percentage
 of total
 loans         0.29%      0.31%      0.23%      0.13%      0.12%      0.46%
Net
 charge-offs
 (recoveries)   139         86          2         34         29          2
Net
 charge-offs
 as a
 percentage
 of average
 loans for
 the period    0.03%      0.02%      0.00%      0.01%      0.01%      0.00%
Allowance
 for loan
 losses as a
 percentage
 of period
 end loans     0.91%      0.93%      0.93%      0.90%      0.91%      0.93%
            -------  ---------  ---------  ---------  ---------  ---------

Total
 Assets     987,790  1,001,622  1,048,966  1,051,384  1,030,426  1,072,713
Total Loans 550,847    533,675    530,573    550,414    537,350    530,650
Average
 loans for
 the
 quarter    538,798    532,799    540,971    543,707    532,452    510,126
Allowance
 for loan
 losses       5,021      4,974      4,958      4,960      4,908      4,935
            -------  ---------  ---------  ---------  ---------  ---------

At September 30, 2007, non-performing assets totaled $1.6 million or 0.16% of total assets at September 30, 2007, as compared with $700,000 or 0.07% at December 31, 2006 and $661,000 or 0.06% at September 30, 2006. The allowance for loan losses as a percent of total non-performing assets amounted to 319.4% for the third quarter of 2007 as compared 708.6% at December 31, 2006 and 742.5% at September 30, 2006. Non-performing assets at September 30, 2007 consisted of a commercial mortgage, a construction loan, term commercial loan, commercial line of credit and two residential mortgages.

During the third quarter of 2007, there were provisions to the allowance for loan losses in the amount of $100,000. The provisions were primarily related to loan growth and $55,000 in charges offs made during the period, including a write-down on foreclosed property. At September 30, 2007, the Corporation had other real estate owned amounting to $586,000.

At September 30, 2007, the total allowance for loan losses amounted to approximately $5.0 million, or 0.91% of total loans.

Net Interest Income

Selected financial ratios


As of or for the quarter     9/30/   6/30/   3/31/  12/31/   9/30/   6/30/
 ended:                      2007    2007    2007    2006    2006    2006
                            ------  ------  ------  ------  ------  ------
Return on average assets
 (annualized)                 0.40%   0.40%   0.50%   0.88%   0.50%   0.54%
Return on average equity
 (annualized)                 4.21%   4.15%   5.37%   9.46%   5.48%   5.75%
Net interest margin (tax
 equivalent basis)            2.63%   2.43%   2.55%   2.62%   2.70%   2.92%
Loan/Deposit ratio           84.62%  78.71%  73.42%  75.73%  73.44%  68.65%
Stockholders' equity/total
 assets                       9.49%   9.57%   9.36%   9.28%   9.38%   8.78%
Efficiency ratio              89.3%   92.8%   92.8%   94.5%   78.3%   75.6%
Book value per share        $ 6.85  $ 6.89  $ 7.06  $ 7.02  $ 6.96  $ 6.78

For the three-months ended September 30, 2007, total interest income on a fully taxable-equivalent basis declined by $840,000, or 5.91%, to $13.4 million, as compared to the three-months ended September 30, 2006. For the three-month period ended September 30, 2007, total interest expense declined by $225,000 or 2.93%, to $7.5 million, as compared to the same quarterly period last year.

For the nine-months ended September 30, 2007, total interest income on a fully taxable-equivalent basis declined by $860,000, or 2.07%, to $40.7 million, as compared to the nine-months ended September 30, 2006. For the nine-month period ended September 30, 2007, total interest expense increased by $1.7 million or 8.22%, to $23.0 million, as compared to the same period last year.

The Corporation recorded net interest income on a fully taxable equivalent basis of $5.9 million for the three-months ended September 30, 2007 and $6.5 million for the comparable period of 2006. The decrease in net interest income for the three-months ended September 30, 2007 related principally to the decrease in interest income during this period.

The Corporation recorded net interest income on a fully taxable equivalent basis of $17.7 million for the nine-months ended September 31, 2007 and $20.3 million for the comparable period of 2006. The decrease in net interest income for the nine-months ended September 30, 2007 related principally to an increase in interest expense of $1.7 million coupled with a decrease of $860,000 in interest income during this period.

The interest rate environment did not improve in the third quarter, making it difficult for the Corporation to reduce its overall cost of funds. The Corporation sought to improve its net interest margin by allowing a runoff of certain high rate deposits. The result, while still a decline in margin from the comparison period in 2006 and from earlier this year, was an improvement of the margin on a linked sequential basis from the second quarter of 2007. Recent action by the Federal Open Market Committee and recent turmoil in the markets has brought short-term rates down and should benefit the Corporation's strategies to seek to continue to reduce liability costs in the fourth quarter. However, due to the uncertainty of the timing and direction of interest rates in general, the Corporation expects that its net interest margin for 2007 will continue to come under pressure should the markets continue to exhibit volatility. This pressure could dampen earnings performance as compared to prior periods.

For both the three and nine-month periods the increase in interest expense reflects the impact of higher short-term interest rates and the sustained flatness of the yield curve that prevailed during 2007. This, coupled with intense competition for deposits in the Corporation's marketplace, continued to place pressure on funding costs. For the three-months ended September 30, 2007, the Corporation reduced its average borrowings by $3.4 million (including subordinated debentures) as compared to the comparable quarter ended September 30, 2006. The average balance of interest-bearing liabilities, including borrowings, decreased $58.2 million from the third quarter 2006 and decreased $32.2 million compared to the second quarter 2007. The positive effect of the reduction in this type of funding source as well as a reduction in time deposits was offset by an increase in the average cost of funds, which rose (on an annualized basis) by 18 basis points to 3.94% from 3.76% during the quarter ended September 30, 2006 and on a linked sequential quarter increased 3 basis point as compared to the second quarter of 2007.

For the nine-months ended September 30, 2007, the average balance of interest-bearing liabilities, including borrowings, declined by $31.1 million, or 3.81%, to $784.9 million compared to nine months ended September 30, 2006. However, the decline in the volume of interest-bearing liabilities was offset by an increase in the average cost of funds, which rose (on an annualized basis) by 44 basis points to 3.91% from 3.47% at September 30, 2006.

Average interest-earning assets for the three-months ended September 30, 2007 decreased by $64.7 million, or 6.70%, to $900.9 million, reflecting a decline in securities and an increase in loans. The annualized average yield on earning assets for the third quarter of 2007 increased 5 basis points over the annualized average yield during the comparable quarterly period in 2006. While the loan portfolio increased on average $6.3 million, the 1 basis point increase in yield was not sufficient to offset the decline in volume and associated yield in the investment portfolio. Reductions in net interest income and the net interest margin were due to tighter spreads on deposits caused by the current interest rate environment and shifts in deposit mix driven by customer preference for higher rates.

For the nine-months ended September 30, 2007, average interest-earning assets declined by $39.0 million, or 4.02%, to $931.6 million, reflecting a decline in securities and an increase in loans. The annualized average yield on earning assets for the nine-months period of 2007 improved 12 basis points over the annualized average yield during the comparable nine-months period in 2006. While the loan portfolio increased on average $22.4 million, the 14 basis point increase in yield was not sufficient to offset the decline in volume and associated yield in the investment portfolio. The increase in yield did in part offset the effect of the rise in the average cost of funds over the same period. Reductions in net interest income and the net interest margin were due to a higher cost of deposits caused by the current interest rate environment and shifts in deposit mix driven by customer preference for higher rates.

For the three-months ended September 30, 2007, the Corporation's net interest spread declined 13 basis points to 2.00% (annualized) as compared to 2.13% (annualized) for the comparable three-month period in 2006 and the Corporation's net interest margin (net interest income as a percentage of earning assets, calculated on an annualized basis) declined by 7 basis points from 2.70% to 2.63%. On a linked sequential quarter basis, the net interest margin improved to 2.63% from 2.43% for the second quarter of 2007.

For the nine-months ended September 30, 2007, the Corporation's net interest spread declined 32 basis points to 1.92% (annualized) as compared to 2.24% (annualized) for the comparable nine-month period in 2006 and the Corporation's net interest margin declined by 26 basis points from 2.79% to 2.53%.

Other Income

Quarterly Condensed Consolidated Non Interest Income (unaudited)

(dollars in thousands)

                             9/30/   6/30/   3/31/  12/31/   9/30/   6/30/
For the quarter ended:       2007    2007    2007    2006    2006    2006
                            ------- ------- ------- ------- ------- -------
Service charges on deposit
 accounts                   $   312 $   306 $   288 $   295 $   307 $   307
Commissions from mortgage
 broker activities               15      25      46      45      32      10
Loan related fees (LOC)          49      26      35      41      30      39
Commissions from sale of
 mutual funds and annuities     131      60      63      60      40      53
Debit card and ATM fees         126     130     131     134     136     142
BOLI income                     223     230     223     183     213     203
Net gain on sale of
 investments                     14     341     588     801     212      77
Other service charges and
 fees                            41      59      36      59      37      42
                            ------- ------- ------- ------- ------- -------
Total non interest income   $   911 $ 1,177 $ 1,410 $ 1,618 $ 1,007 $   873




                          9/30/   6/30/   3/31/   12/31/   9/30/    6/30/
For the period ended :    2007    2007    2007    2006     2006     2006
                         ------- ------- ------- -------  ------  --------
Service charges on
 deposit accounts        $   906 $   594 $   288 $ 1,218  $  923  $    616
Commissions from
 mortgage broker
 activities                   86      71      46     106      61        29
Loan related fees (LOC)      110      61      35     157     116        86
Commissions from sale of
 mutual funds and
 annuities                   254     123      63     205     145       105
Debit card and ATM fees      387     261     131     541     407       271
BOLI income                  676     453     223     780     597       384
Gain (loss) on sale of
 investments                 943     929     588  (2,565) (3,366)   (3,578)
Other service charges
 and fees                    136      95      36     191     132        95
                         ------- ------- ------- -------  ------  --------
Total non interest
 income                  $ 3,498 $ 2,587 $ 1,410 $   633  $ (985) $ (1,992)

Total other income decreased $96,000 for the third quarter of 2007 compared with the comparable quarter of 2006, primarily as a result of decreases in gains on securities sold. Excluding net securities gains and losses in the respective periods, the Corporation recorded other income of $897,000 in the three-months ended September 30, 2007, compared to $795,000 in the three-months ended September 30, 2006. This increase was primarily attributable to a $101,000 increase in commissions from sales of mutual funds and annuities. Net securities gains on securities available for sale, which amounted to $14,000 for the current quarter, were sold in the ordinary course of business.

For the nine-months ended September 30, 2007, total other income increased $4.5 million as compared with the nine-months of 2006, primarily as a result of increases in gains on securities sold. Excluding net securities gains and losses in the respective periods, the Corporation recorded other income of $2.6 million in the nine-months ended September 30, 2007, compared to $2.4 million in the nine-months ended September 30, 2006. This increase was primarily attributable to a $188,000 increase in commissions from sales of mutual funds and annuities and bank owned life insurance income. This was offset in part by lower overdraft fees and service charge income on deposit accounts. Net securities gains on securities available for sale, which amounted to $943,000 for the current nine-months, were sold in the ordinary course of business.

Other Expense

Quarterly Condensed Consolidated Non Interest Expense (unaudited)

(dollars in thousands)

For the quarter        9/30/    6/30/    3/31/    12/31/   9/30/    6/30/
 ended:                2007     2007     2007     2006     2006     2006
                      -------  -------  -------  -------  -------  -------
Employee salaries and
 wages                $ 3,632  $ 2,133  $ 2,372  $ 2,303  $ 2,214  $ 2,311
Employee
 incentive/bonus
 compensation               0        0        0        0        0        0
Employee stock option
 expense                   46       35       24       41       45       44
Health insurance and
 other employee
 benefits                (687)     543      575      561      561      548
Payroll taxes             183      181      234      167      184      186
Other employee
 related expenses          14       16        9       32       21       27
Incremental direct
 cost of loan
 origination              (81)     (74)     (72)     (88)     (70)     (79)
                      -------  -------  -------  -------  -------  -------
Total salaries, wages
 and employee
 benefits             $ 3,107  $ 2,834  $ 3,142  $ 3,016  $ 2,955  $ 3,037

Occupancy expense         728      674      797      700      595      568
Depreciation of
 premises and
 equipment                406      391      388      482      430      420
Supplies stationary
 and printing              87      115      159      144      159      178
Marketing expenses        152      109      163      266      164      187
Data processing
 expenses                 151      148      165      196      181      168
Legal, auditing and
 other professional
 fees                     311      599      539      403      223      220
Bank regulatory
 related expenses          60       60       60       57       60       79
Postage and delivery       73       75       84       96       82       78
ATM related expenses       63       77       61       53       58       58
Amortization of CDI        26       27       29       29       28       31
Other expenses            916      947      841    1,214      800      742
                      -------  -------  -------  -------  -------  -------
Total non interest
 expense              $ 6,080  $ 6,056  $ 6,428  $ 6,656  $ 5,735  $ 5,766

Other expense for the third quarter of 2007 totaled $6.1 million, an increase of $345,000 or 6.02% over the comparable period in 2006. Included in the current quarter period are unusual charges for termination benefits, which amounted to $1.6 million and the recording of a curtailment benefit in the amount of $1.2 million related to the freezing of the Corporation's Defined Benefit Pension Plan. Salary and benefit expense increased by $152,000 or 5.14% to $3.1 million. Such expenses included $400,000 in employment termination expenses. Full time equivalent staffing levels were 180 at September 30, 2007 compared to 210 as of September 30, 2006 and 214 at December 31, 2006. The change in staffing levels was primarily due to the previously announced 10% workforce reduction in the first quarter period 2007. The Corporation also recorded increases in occupancy and premise expense and other general and administrative expenses. The increase in occupancy and bank premise expense was largely attributable to the expansion of the branch network in connection with the opening of the Boonton Mountain Lakes office and the Corporation's newest location in Florham Park. The Corporation is currently undergoing a branch rationalization strategy and has determined that it will not open its Florham Park location and is holding the site for sale. It is currently reviewing several other locations for closure. Other general and administrative expense increased $193,000, associated with increases in professional consulting, compliance, audit fees, and insurance expense. The amortization of core deposit intangibles ("CDI") accounted for $26,000 and $28,000, respectively, of other expense in the current and year-earlier third quarters, with the increase reflecting the CDI amortization stemming from the acquisition of Red Oak Bank in May 20, 2005.

For the nine-months ended September 30, 2007, total salaries and benefits decreased by $191,000 or 2.06% to $9.1 million. Full time equivalent staffing levels were 180 at September 30, 2007 compared to 212 as of September 30, 2006 and 214 at December 31, 2006. The change in staffing levels was primarily due to the previously announced 10% workforce reduction in the first quarter period 2007.

The previously announced reduction in workforce resulted in a one-time, pre tax charge of $140,000 in the first quarter of 2007 related to termination benefits. The salary and benefit reductions, as a result of the reduction in workforce, are expected to amount to $1.1 million on an annualized basis.

Other expense for the nine-months ended September 30, 2007 totaled $18.6 million, an increase of $862,000, or 4.87%, over the comparable period in 2006. Higher operating expenses during the nine-month period resulted included the one time charges for primarily from increases in occupancy and premise expense and other general and administrative expenses. The $318,000 increase in occupancy and bank premise expense was largely attributable to the expansion of the branch network in connection with the Red Oak acquisition in 2005, while other general and administrative expense increased $1.053 million associated with increases in professional consulting, compliance, audit fees, insurance and stationary and printing expense. CDI amortization accounted for $82,000 and $91,000, respectively, of other expense in the current nine-month period and the comparable nine- month period in 2006.

The Corporation's other expenses totaled $6.1 million and $18.6 million for the three and nine-months ended September 30, 2007, respectively, and were equivalent to 0.61% and 1.82% of average assets, respectively.

Income Tax Expense

The effective tax rate continues to be less than statutory rates. During the second quarter of 2006, the Corporation effected an internal entity reorganization. This reorganization resulted in continued tax savings in both the current third quarter and the nine-month period ended September 30 , 2007, which offset some declines in the level of tax advantaged investments during the quarter in comparison to the prior year. Tax-free income generated from the Corporation's municipal and other tax advantaged investments continues to reduce the effective tax rate.

The Corporation recorded an income tax benefit of $786,000 in the third quarter of 2007, compared to a benefit of $78,000 in for the third quarter of 2006. The change was primarily due to the impact of a reduction in pre-tax income and the tax benefits from the entity restructuring. For the three months ended September 30, 2007 pre-tax income declined to $212,000 compared with $1.2 million for the three-months ended September 30, 2006.

Balance Sheet Summary

Quarterly Condensed Consolidated
Balance Sheets (unaudited)

(dollars in thousands )

At quarter
 ended:    9/30/2007 6/30/2007  3/31/2007  12/31/2006 9/30/2006  6/30/2006
           --------  ---------  ---------  ---------  ---------  ---------
Cash and
 due from
 banks     $ 15,277  $  24,363  $  19,245  $  34,088  $  18,431  $  17,007
Fed funds
 and money
 market           0          0     35,374     10,275      7,884     30,228
Investments 343,979    366,224    381,493    381,733    393,006    425,389
Loans       550,847    533,675    530,573    550,414    537,350    530,650
Allowance
 for loan
 losses      (5,021)    (4,974)    (4,958)    (4,960)    (4,908)    (4,935)
Restricted
 investment
 in bank
 stocks,
 at cost      7,347      8,299      7,832      7,805      6,924      6,952
Premises
 and
 equipment,
 net         17,662     18,400     18,314     18,829     18,621     18,425
Goodwill     16,804     16,804     16,804     16,804     16,804     16,804
Core
 deposit
 intangible     426        452        479        508        542        571
Bank owned
 life
 insurance   22,044     21,822     21,591     21,368     21,185     20,972
Other
 assets      18,425     16,557     22,219     14,520     14,587     10,650
TOTAL
 ASSETS    $987,790 $1,001,622 $1,048,966 $1,051,384 $1,030,426 $1,072,713
Deposits    650,999    678,011    722,648    726,771    731,727    772,963

Other
 borrowings 237,744    221,994    220,327    211,589    197,953    202,520
Other
 liabilities  5,317      5,804      7,828     15,411      4,069      3,012
Stockholders'
 equity      93,730     95,813     98,163     97,613     96,677     94,218
TOTAL
 LIABILITIES
 AND
 STOCKHOLDERS'
 EQUITY    $987,790 $1,001,622 $1,048,966 $1,051,384 $1,030,426 $1,072,713




Condensed Consolidated Average Balance Sheets (unaudited)

(dollars in thousands)

For three
 month
 period
 ended:    9/30/2007 6/30/2007  3/31/2007  12/31/2006 9/30/2006  6/30/2006
           --------  ---------  ---------  ---------  ---------  ---------
Investments,
 fed funds,
 and other $362,119  $ 404,975  $ 415,980  $ 408,684  $ 433,175  $ 425,846
Loans       538,798    532,799    540,971    543,707    532,452    510,126
Allowance
 for loan
 losses      (4,984)    (4,986)    (4,959)    (4,918)    (4,939)    (4,936)
All other
 assets      90,533     92,038     94,773     88,008     85,271     88,349
TOTAL
 ASSETS    $986,466 $1,024,826 $1,046,765 $1,035,481 $1,045,959 $1,019,385
Deposits-
 interest
 bearing    557,555    578,819    592,073    586,388    612,376    556,021
Deposits-
 non interest
 bearing    128,449    130,701    135,161    140,745    132,094    137,102
Other
 borrowings 200,257    211,228    215,198    207,524    203,675    228,014
Other
 liabilities  5,372      6,159      6,867      4,004      2,858      2,782
Stockholders'
 equity      94,833     97,919     97,466     96,820     94,956     95,466
TOTAL
 LIABILITIES
 AND
 STOCKHOLDERS'
 EQUITY    $986,466 $1,024,826 $1,046,765 $1,035,481 $1,045,959 $1,019,385

The Corporation had total assets of $987.8 million at September 30, 2007, a decrease of $42.6 million from September 30, 2006 and a $63.6 million decrease from December 31, 2006. The decrease in assets was primarily through reductions in cash and securities. At September 30, 2007 the Corporation experienced a decline of $40.9 million in its deposits and borrowings compared to September 30, 2006. Net loans totaled $545.8 million at September 30, 2007, up $13.4 million from September 30, 2006. At September 30, 2007, securities totaled $344.0 million, a decline of $49.0 million, or 12.47%, from September 30, 2006.

Securities

Investment securities reflected a decline of $49.0 million at September 30, 2007 compared to the comparable period in 2006. The decline is consistent with maintaining the balance sheet strategies the Corporation has previously outlined in seeking to reduce the size of its investment securities portfolio while increasing loans as a percentage of the earning-asset mix. Securities totaled $344.0 million at September 30 2007, representing 34.8% of total assets, compared to $393.0 million, representing 38.1% of total assets, at September 30, 2006.

Reflecting the lower balance of the securities portfolio and a moderation in the U.S. Treasury yield curve at September 30, 2007, the net unrealized loss on securities available for sale increased to $4.0 million, net of tax, from $2.5 million at December 31, 2006 and $2.6 million at September 30, 2006.

Deposits/Funding Sources

Deposit Mix

(dollars in thousands)

At quarter
 ended:        9/30/2007 6/30/2007 3/31/2007 12/31/2006 9/30/2006 6/30/2006
               --------- --------- --------- ---------- --------- ---------
Checking
 accounts
   Non
    interest
    bearing    $ 121,451 $ 127,479 $ 128,394 $  136,284 $ 134,774 $ 131,722
   Interest
    bearing      110,177   126,112   131,337    107,359    74,316   101,376
Savings
 deposits         93,222    92,792    95,542     99,823   107,038   114,094
Money market
 accounts        167,442   171,923   173,569    184,102   197,816   161,418
Time Deposits    158,707   159,705   193,806    199,203   217,783   264,353
               --------- --------- --------- ---------- --------- ---------
     Total
      Deposits $ 650,999 $ 678,011 $ 722,648 $  726,771 $ 731,727 $ 772,963
               ========= ========= ========= ========== ========= =========

Deposits totaled $651 million at September 30, 2007, a decrease of $80.7 million from September 30, 2006. The decrease in deposits primarily reflects a decline in money market deposits, savings deposits and time deposits, offsetting an increase in interest bearing checking deposits. The declines were a result of a moderation in the yield curve and a decision to reduce the Corporation's dependence on more rate sensitive high costing funds, which were subject to maturity and repricing in favor of lower costing wholesale funds available. More volatile certificates of deposit of $100,000 or more declined as well as part of this strategy.

Borrowings totaled $237.7 million at September 30, 2007, reflecting an increase of $39.8 million, or 20.1%, from September 30, 2006. Federal Home Loan Bank of New York advances represented approximately $101.7 million of the September 30, 2007 total, with repurchase agreements representing $75.9 million at the same date. Overnight customer repurchase transactions covering commercial customer sweep accounts comprised $32.9 million of the securities sold under repurchase agreements figure at September 30, 2007 as compared with $24.9 million at September 30, 2006. The Corporation had $35.0 million in borrowings called during the second quarter; these borrowings were subsequently replaced with overnight funding.

Stockholders' Equity

Total stockholders' equity amounted to $93.7 million or 9.49% of total assets at September 30, 2007, compared to $97.6 million or 9.28% of total assets at December 31, 2006. The change in stockholders' equity at September 30, 2007 reflects a change in other comprehensive income related to, among other things, a change in unrealized losses on securities and the impact of the recording of a pension curtailment associated with the reduction in workforce (under which the Corporation recorded a $813,000 net of tax charge to the other comprehensive income component of stockholders' equity.) Book value per common share was $6.85 at September 30, 2007, compared to $6.96 at September 30, 2006. Tangible book value (total stockholders' equity less goodwill and other intangible assets) per common share was $5.59 at September 30, 2007 and $5.71 at September 30, 2006.

During the three months ended September 30, 2007 the Corporation purchased 292,174 shares of common stock at an average cost of $12.20 per share.

As of September 30, 2007, the Corporation has purchased 635,427 common shares at an average cost per share of $11.76 under the stock buyback program amended on March 27, 2006 for the repurchase of up to 705,392 shares of the Corporation's outstanding common stock. The repurchased shares were recorded as Treasury Stock, which resulted in a decrease in stockholder's equity. On September 27, 2007 the Board approved an increase in its current share buyback program to an additional 5% of outstanding shares, enhancing its current authorization by 684,627 shares. Any purchases by the Corporation may be made, from time to time, in the open market, in privately negotiated transactions or otherwise. At September 30, 2007, there were 754,592 shares available for repurchase under the Corporation's stock buyback program.

At September 30, 2007, the Corporation's capital ratios continued to exceed the minimum Federal requirements for a bank holding company, and Union Center National Bank's capital ratios continued to exceed each of the minimum levels required for classification as a "well capitalized institution" under the Federal Deposit Insurance Corporation Improvement Act ("FDICIA").

At September 30, 2007, the Corporation's Tier 1 Capital Leverage ratio was 8.85%, the Corporation's total Tier 1 Risk Based Capital ratio was 13.09 % and the Corporation's total Risk Based Capital ratio was 13.86%. Total Tier 1 capital decreased to approximately $85.8 million at September 30, 2007 from $88.0 million at December 31, 2006 but decreased from $97.4 million at September 30, 2006. The reduction in Tier 1 Capital at September 30, 2007 and December 31, 2006 compared to September 30, 2006 reflects the Corporation's redemption of Trust Preferred securities by its subsidiary Center Bancorp, Inc. Statutory Trust I on December 18, 2006. The Trust redeemed $10 million of its floating rate capital trust pass through securities due December 18, 2031.

SUMMARY SELECTED YEAR-TO-DATE STATISTICAL INFORMATION AND FINANCIAL DATA

(Dollars in Thousands, Except per Share Data)


Summary of financial condition data through
 stockholders equity                                9/30/2007   9/30/2006
                                                    ----------  ----------

Interest income                                     $   39,332  $   39,917
Interest expense                                        23,005      21,257
Net interest income                                     16,327      18,660
Provision for loan losses                                  200           0
Net interest income after provision for loan losses     16,127      18,660
Other income                                             3,498        (985)
Other expense                                           18,564      17,702
Income before income tax expense                         1,061         (27)
Income tax (benefit) expense                            (2,263)     (1,634)
Net income                                          $    3,324  $    1,607
Statement of Financial Condition Data

Investments                                         $  343,979  $  393,006
Total loans                                            550,847     537,350
Goodwill and other intangibles                          17,230      17,346
Total assets                                           987,790   1,030,426
Deposits                                               650,999     731,727
Borrowings                                             237,744     197,953

Stockholders' equity                                $   93,730  $   96,677
Summary of Income
Dividends
Cash Dividends                                      $    3,714  $    3,612
Dividend payout ratio                                   111.73%     224.77%
Cash Dividends Per Share
Cash Dividends                                      $     0.27  $     0.26
Earnings Per Share
Basic                                               $     0.24  $     0.11
Diluted                                             $     0.24  $     0.11
Weighted Average Common Shares Outstanding
Basic                                               13,894,888  13,980,411
Diluted                                             13,950,298  14,060,089
Operating Ratios
Return on average assets                                  0.43%       0.20%
Average stockholders' equity to average assets            9.49%       9.17%
Return on average equity                                  4.58%       2.22%
Return on average tangible stockholders' equity           5.58%       2.71%
Book Value
Book value per common share                         $     6.85  $     6.96
Tangible book value per common share                $     5.59  $     5.71
Non-Financial Information
Common stockholders of record                              689         738
Staff-full time equivalent                                 180         212

                                                     9/30/2007   9/30/2006
                                                    ----------  ----------
Common shares outstanding                           13,692,534  13,885,936
Stockholders' equity                                $   93,730  $   96,677
Less: Goodwill and other intangible assets              17,230      17,346
Tangible Stockholders' Equity                       $   76,500  $   79,331
Tangible Book Value                                 $     5.59  $     5.71

Net Income                                          $    3,324  $    1,607
Average Stockholders' Equity                            96,730      96,398
Less: Average Goodwill and other intangible assets      17,272      17,393
Average Tangible Stockholders' Equity                   79,458      79,005
Return on Average Tangible Stockholders' Equity           5.58%       2.71%

About Center Bancorp

Center Bancorp, Inc., through its wholly owned subsidiary, Union Center National Bank, Union, New Jersey, currently operates 15 banking locations. Banking centers are located in Union Township (6 locations), Berkeley Heights, Boonton/Mountain Lakes, Madison, Millburn/Vauxhall, Morristown (3 locations), Springfield, and Summit, New Jersey. Construction will begin shortly on a new banking location in Florham Park, New Jersey and plans are underway to add a branch in Cranford, New Jersey as well. The Bank also operates remote ATM locations in the Union, Chatham and Madison New Jersey Transit train stations, Union Hospital and the Boys and Girls Club of Union.

Union Center National Bank is the largest commercial bank headquartered in Union County; it was chartered in 1923 and is a full-service banking company.

For further information regarding Center Bancorp, Inc., call 1-(800)-862-3683. For information regarding Union Center National Bank, visit our web site at http://www.centerbancorp.com

Non-GAAP Financial Measures

The Corporation's reference to its total other income, exclusive of gains or losses recorded on securities sales, may constitute a "non-GAAP financial measure." The Corporation has provided a reconciliation by also reporting its total other income for the applicable periods. The Corporation believes that the above-mentioned reference enhances the public's ability to compare results between the applicable periods in 2006 and 2007. Tangible stockholders' equity represents a non-GAAP financial measure and equals total stockholders' equity minus recorded goodwill and other intangible assets. The Corporation has provided reconciliation by also reporting its total stockholders' equity. The Corporation believes that a disclosure of tangible stockholders' equity may be helpful for those investors who seek to evaluate the Corporation's total stockholders' equity without giving effect to intangible assets. Tangible book value is also a non-GAAP financial measure and represents total stockholders' equity less goodwill and other intangible assets, calculated on a per common share basis. The Corporation has provided reconciliation by also reporting its total book value per share. The Corporation believes that a disclosure of tangible book value per share may be helpful for those investors who seek to evaluate the Corporation's book value per share without giving effect to goodwill and other intangible assets.

Forward-Looking Statements

All non-historical statements in this press release (including statements regarding growth in loan volume, changes in earning asset mix, the funding of loan commitments, cost reduction strategies and future net interest margin) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may use such forward-looking terminology as "expect," "look," "believe," "plan," "anticipate," "may," "will" or similar statements or variations of such terms or otherwise express views concerning trends and the future. Such forward-looking statements involve certain risks and uncertainties. These include, but are not limited to, the direction of interest rates, continued levels of loan quality and origination volume, continued relationships with major customers including sources for loans, as well as the effects of international, national, regional and local economic conditions and legal and regulatory barriers and structure, including those relating to the deregulation of the financial services industry, and other risks cited in reports filed by the Corporation with the Securities and Exchange Commission. Actual results may differ materially from such forward-looking statements. Center Bancorp, Inc. assumes no obligation for updating any such forward-looking statement at any time.

                  CENTER BANCORP, INC. AND SUBSIDIARIES
                   CONSOLIDATED STATEMENTS OF CONDITION



                                              September 30,  December 31,
(Dollars in Thousands)                            2007           2006
                                              -------------  -------------
                                               (unaudited)
ASSETS
Cash and due from banks                       $      15,277  $      34,088
Federal funds sold and securities purchased
 under agreement to resell                                0         10,275
                                              -------------  -------------
  Total cash and cash equivalents                    15,277         44,363
Investment securities available-for-sale            229,517        250,603
Investment securities held to maturity
 (approximate market value of $113,340
  in 2007 and $130,900 in 2006)                     114,462        131,130
                                              -------------  -------------
Total investment securities                         343,979        381,733
Loans, net of unearned income                       550,847        550,414
Less -- Allowance for loan losses                     5,021          4,960
                                              -------------  -------------
  Net Loans                                         545,826        545,454
Restricted investment in bank stocks, at cost         7,347          7,805
Premises and equipment, net                          17,662         18,829
Accrued interest receivable                           5,163          4,932
Bank owned life insurance                            22,044         21,368
Other Assets                                         13,262          9,588
Goodwill and other intangible assets                 17,230         17,312
                                              -------------  -------------
Total assets                                  $     987,790  $   1,051,384
                                              =============  =============
LIABILITIES
Deposits:
  Non-interest bearing                        $     121,884  $     136,453
  Interest-bearing
     Time deposits $100 and over                     68,085         83,623
     Interest-bearing transactions, savings
      and time deposits $100 and less               461,030        506,695
                                              -------------  -------------
     Total deposits                                 650,999        726,771
Overnight Federal funds and securities sold
 under agreement to repurchase                       87,906         29,443
Short-term borrowings                                10,202          2,000
Long-term borrowings                                134,481        174,991
Subordinated debentures                               5,155          5,155
Accounts payable and accrued liabilities              5,317         15,411
                                              -------------  -------------
     Total liabilities                              894,060        953,771
                                              -------------  -------------
STOCKHOLDERS' EQUITY
Preferred Stock, no par value:
  Authorized 5,000,000 shares; none issued               --             --
Common stock, no par value:
  Authorized 20,000,000 shares; issued
   15,190,984 shares at September 30, 2007
   and December 31, 2006; outstanding
   13,692,534 shares at September 30, 2007
   and 13,910,450 shares at December 31, 2006,
   respectively                                      86,908         77,130
Additional paid in capital                            4,912          4,535
Retained earnings                                    15,805         25,989

Treasury stock,  at cost (1,498,450 shares at
 September 30, 2007 and
 1,280,534 shares at December 31, 2006)              (9,788)        (6,631)
Accumulated other comprehensive loss                 (4,107)        (3,410)
                                              -------------  -------------
Total stockholders' equity                           93,730         97,613
                                              -------------  -------------
Total liabilities and stockholders' equity    $     987,790  $   1,051,384
                                              =============  =============




                         CENTER BANCORP, INC. AND SUBSIDIARIES
                            CONSOLIDATED STATEMENTS OF INCOME


                        Three Months Ended          Nine Months Ended
                           September 30               September 30

                    ==========================  ==========================
(Dollars in
 Thousands, Except
 Per Share Data)        2007          2006          2007          2006
                    ============  ============  ============  ============
                    (unaudited)                  (unaudited)
Interest income:

Interest and fees
 on loans           $      8,460  $      8,345  $     25,087  $     23,483
Interest and
 dividends on
 investment
 securities:
  Taxable interest
   income                  3,390         3,666        10,344        12,067
Non-taxable
 interest income             792           945         2,399         2,971
  Dividends                  254           442           981         1,011
Interest on Federal
 funds sold and
 securities
 purchased under
 agreement to resell          40           234           521           385
                    ------------  ------------  ------------  ------------
  Total interest
   income                 12,936        13,632        39,332        39,917
                    ------------  ------------  ------------  ------------
Interest expense:
  Interest on
   certificates of
   deposit $100 or
   more                    1,132         1,180         3,022         3,883
  Interest on other
   deposits                3,954         4,049        12,704         8,938
  Interest on
   borrowings              2,369         2,451         7,279         8,436
                    ------------  ------------  ------------  ------------
Total interest
 expense                   7,455         7,680        23,005        21,257
                    ------------  ------------  ------------  ------------
  Net interest
   income                  5,481         5,952        16,327        18,660
  Provision for
   loan losses               100             0           200             0
                    ------------  ------------  ------------  ------------
Net interest income
 after provision
 for loan losses           5,381         5,952        16,127        18,660
                    ------------  ------------  ------------  ------------
Other income:
 Service charges,
  commissions and
  fees                       438           443         1,293         1,330
 Other income                105            99           332           309
 Annuity and
  insurance                  131            40           254           145
 Bank owned life
  insurance                  223           213           676           597
 Net Gain (loss) on
  securities sold             14           212           943        (3,366)
                    ------------  ------------  ------------  ------------
Total other income
 (loss)                      911         1,007         3,498          (985)
                    ------------  ------------  ------------  ------------
Other expense:
  Salaries and
   employee
   benefits                3,107         2,955         9,083         9,274
  Occupancy, net             692           563         2,044         1,690
  Premises and
   equipment                 442           461         1,340         1,376
  Professional and
   consulting                311           223         1,449           776
  Stationery and
   printing                   87           159           361           548
  Marketing and
   advertising               152           164           424           465
  Computer expense           151           181           464           545
  Other                    1,138         1,029         3,399         3,028
                    ------------  ------------  ------------  ------------
Total other expense        6,080         5,735        18,564        17,702
                    ------------  ------------  ------------  ------------
  Income (loss)
   before income
   tax expense
   (benefit)                 212         1,224         1,061           (27)
  Income tax
   benefit                  (786)          (78)       (2,263)       (1,634)
                    ------------  ------------  ------------  ------------
Net income          $        998  $      1,302  $      3,324  $      1,607
                    ============  ============  ============  ============
Earnings per share:
  Basic             $       0.07  $       0.09  $       0.24  $       0.11
  Diluted           $       0.07  $       0.09  $       0.24  $       0.11
                    ------------  ------------  ------------  ------------
Weighted average
 common shares
 outstanding:
  Basic               13,864,272    13,896,165    13,894,888    13,980,411
  Diluted             13,938,892    13,989,262    13,950,298    14,060,089
                    ============  ============  ============  ============


All common share and per common share amounts have been adjusted to
reflect the 5 percent stock dividend declared on March 29, 2007 paid
on June 1, 2007.

            Average Statements of Condition with Interest and Average Rates

                                Three Months Ended September 30,
                      ----------------------------------------------------
                                2007                       2006
                      ------------------------  --------------------------
                                         Aver-                       Aver-
(Tax-Equivalent                 Interest  age               Interest  age
 Basis, Dollars        Average   Income/ Yield/   Average    Income/ Yield/
 in Thousands)         Balance   Expense  Rate    Balance    Expense  Rate
                      ---------  -------  ----  -----------  -------  ----

Assets:
Interest-earning
 assets:
Investment
 securities:(1)
  Taxable             $ 261,005  $ 3,423  5.25% $   285,968  $ 3,709  5.19%
  Tax-exempt             90,124    1,309  5.81      122,772    1,814  5.91
Loans, net of
 unearned income(2)     538,798    8,460  6.28      532,452    8,345  6.27
Federal funds sold
 and securities
 purchased under
 agreement to resell      3,238       40  4,94       17,489      234  5.35
Restricted investment
 in bank stocks           7,752      138  7.12        6,946      108  6.22
                      ---------  -------  ----  -----------  -------  ----
Total
 interest-earning
 assets                 900,917   13,370  5.94      965,627   14,210  5.89
                      =========  =======  ====  ===========  =======  ====
Non-interest-earning
 assets:
Cash and due from
 banks                   16,691                      18,083
Bank owned life
 insurance               21,910                      21,059
Intangible assets        17,245                      17,363
Other assets             34,687                      28,766
Allowance for loan
 losses                  (4,984)                     (4,939)
                      ---------  -------  ----  -----------  -------  ----
Total non-interest
 earning assets          85,549                      80,332
                      ---------  -------  ----  -----------  -------  ----
Total assets          $ 986,466                 $ 1,045,959
                      =========  =======  ====  ===========  =======  ====
Liabilities and
 stockholders' equity
Interest-bearing
 liabilities:
Money market deposits $ 140,221  $ 1,643  4.69% $   165,757  $ 1,614  3.89%
Savings deposits         67,644      375  2.22       86,544      438  2.02
Time deposits           177,667    2,095  4.72      238,731    2,671  4.48
Other
 interest-bearing
 deposits               172,023      973  2.26      121,344      506  1.67
Short-term borrowings
 and FHLB advances      195,102    2,264  4.64      188,210    2,109  4.48
Subordinated
 debentures               5,155      105  8.15       15,465      342  8.85
                      ---------  -------  ----  -----------  -------  ----
Total
 interest-bearing
 liabilities            757,812    7,455  3.94      816,051    7,680  3.76
                      =========  =======  ====  ===========  =======  ====
Non-interest-bearing
 liabilities:
Demand deposits         128,118                     131,692
Other
 non-interest-bearing
 deposits                   331                         402
Other liabilities         5,372                       2,858
                      ---------  -------  ----  -----------  -------  ----
Total
 non-interest-bearing
 liabilities            133,821                     134,952
Stockholders' equity     94,833                      94,956
                      ---------  -------  ----  -----------  -------  ----
Total liabilities and
 stockholders' equity $ 986,466                 $ 1,045,959
                      =========  =======  ====  ===========  =======  ====
Net interest income
 (tax-equivalent
 basis)                          $ 5,915                     $ 6,530
                      ---------  -------  ----  -----------  -------  ----
Net interest spread                       2.00%                       2.13%
                      ---------  -------  ----  -----------  -------  ----
Net interest income
 as percent of
 earning-assets (net
 interest margin)                         2.63%                       2.70%

                      ---------  -------  ----  -----------  -------  ----
Tax-equivalent
 adjustment(3)                      (434)                       (578)
                      ---------  -------  ----  -----------  -------  ----
Net interest income              $ 5,481                     $ 5,952
                      =========  =======  ====  ===========  =======  ====


(1) Average balances for available-for-sale securities are based on
    amortized cost
(2) Average balances for loans include loans on non-accrual status
(3) The tax-equivalent adjustment was computed based on a statutory
    Federal income tax rate of 34 percent




            Average Statements of Condition with Interest and Average Rates

                               Nine months Ended September 30,
                  --------------------------------------------------------
                              2007                         2006
                  ---------------------------  ---------------------------
                                        Aver-                        Aver-
                               Interest  age                Interest  age
(Tax-Equivalent    Average     Income/  Yield/  Average     Income/  Yield/
 Basis, Dollars    Balance     Expense   Rate   Balance     Expense   Rate
 in Thousands)    -----------  --------  ----  -----------  --------  ----
Assets:
Interest-earning
 assets:
Investment
 securities:(1)
  Taxable         $   275,504  $ 10,449  5.06% $   320,886  $ 12,268  5.10%
  Tax-exempt           97,512     4,257  5.82      116,018     5,041  5.79
Loans, net of
 unearned
 income(2)            537,515    25,087  6.22      515,156    23,483  6.08
Federal funds
 sold and
 securities
 purchased under
 agreement to
 resell                13,256       521  5.24       10,041       385  5.11
Restricted
 investment in
 bank stocks            7,784       402  6.89        8,479       399  6.27
                  -----------  --------  ----  -----------  --------  ----
Total
 interest-earning
 assets               931,571    40,716  5.83      970,580    41,576  5.71
                  ===========  ========  ====  ===========  ========  ====
Non-interest-
 earning assets:
Cash and due from
 banks                 19,037                       20,554
Bank owned life
 insurance             21,689                       19,876
Intangible assets      17,272                       17,393
Other assets           34,539                       28,320
Allowance for
 loan losses           (4,977)                      (4,937)
                  -----------  --------  ----  -----------  --------  ----
Total
 non-interest
 earning assets        87,560                       81,206
                  -----------  --------  ----  -----------  --------  ----
Total assets      $ 1,019,131                  $ 1,051,786
                  ===========  ========  ====  ===========  ========  ====
Liabilities and
 stockholders'
 equity
Interest-bearing
 liabilities:
Money market
 deposits         $   141,613  $  4,856  4.57% $   108,251  $  2,572  3.17%
Savings deposits       70,829     1,129  2.13       94,862     1,395  1.96
Time deposits         191,364     6,770  4.72      239,473     7,470  4.16
Other
 interest-bearing
 deposits             172,217     2,971  2.30      120,961     1,384  1.53
Short-term
 borrowings and
 FHLB advances        203,685     6,969  4.56      236,914     7,429  4.18
Subordinated
 debentures             5,155       310  8.02       15,465     1,007  8.68
                  -----------  --------  ----  -----------  --------  ----
Total
 interest-bearing
 liabilities          784,863    23,005  3.91      815,926    21,257  3.47
                  ===========  ========  ====  ===========  ========  ====
Non-interest-
 bearing
 liabilities:
Demand deposits       131,031                      134,222
Other
 non-interest-
 bearing deposits         381                        1,825
Other liabilities       6,126                        3,415
                  -----------  --------  ----  -----------  --------  ----
Total
 non-interest-
 bearing
 liabilities          137,538                      139,462
Stockholders'
 equity                96,730                       96,398
                  -----------  --------  ----  -----------  --------  ----
Total liabilities
 and
 stockholders'
 equity           $ 1,019,131                  $ 1,051,786
                  ===========  ========  ====  ===========  ========  ====
Net interest
 income
 (tax-equivalent
 basis)                        $ 17,711                     $ 20,319
                  -----------  --------  ----  -----------  --------  ----
Net interest
 spread                                  1.92%                        2.24%
                  -----------  --------  ----  -----------  --------  ----
Net interest
 income as
 percent of
 earning-assets
 (net interest
 margin)                                 2.53%                        2.79%
                  -----------  --------  ----  -----------  --------  ----
Tax-equivalent
 adjustment(3)                   (1,384)                      (1,659)
                  -----------  --------  ----  -----------  --------  ----
Net interest
 income                        $ 16,327                     $ 18,660
                  -----------  --------  ----  -----------  --------  ----


(1)Average balances for available-for-sale securities are based on
amortized cost
(2)Average balances for loans include loans on non-accrual status
(3)The tax-equivalent adjustment was computed based on a statutory Federal
income tax rate of 34 percent

Contact Information

  • Investor Inquiries:
    Anthony C. Weagley
    President
    Center Bancorp, Inc
    (908) 206-2886