8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported): October 26, 2007

CENTER BANCORP, INC.

(Exact Name of Registrant as Specified in its Charter)

New Jersey	2-81353	52-1273725
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

2455 Morris Avenue, Union, New Jersey	07083
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code (800) 862-3683

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act(17 CFR 240.14d-2(b))

oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 1.02. Termination of a Material Definitive Agreement.

On October 26, 2007, Center Bancorp, Inc. (the “Registrant”) announced that the Boards of Directors of the Registrant 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.

Item 2.02. Results of Operations and Financial Condition.

On October 26, 2007, the Registrant issued a press release regarding results for the third quarter ended September 30, 2007. A copy of this press release is being included as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

Exhibit 99.1 - Press release, dated October 26, 2007, regarding third quarter results.

The only portions of Exhibit 99.1 which are to be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 are the Registrant’s consolidated statements of condition, consolidated statements of income and average balance sheets with interest and average rates. All other portions of Exhibit 99.1 are deemed “furnished”, and not “filed”, for purposes of Section 18 of the Securities Exchange Act of 1934.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CENTER BANCORP, INC.
By:	/s/ Anthony C. Weagley
	Name:Anthony C. Weagley
	Title:President

Dated: October 29, 2007

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EXHIBIT INDEX

Exhibit 99.1 - Press release, dated October 26, 2007, regarding third quarter results

- 4 -

EX-99.1

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 -- (MARKET WIRE) -- 10/25/07 -- 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 319.45 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 consistedofa 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 ended:		9/30/2007			6/30/2007			3/31/2007			12/31/2006			9/30/2006			6/30/2006
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)
For the quarter ended:		9/30/2007		6/30/2007		3/31/2007		12/31/2006		9/30/2006		6/30/2006
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

For the period ended :		9/30/2007		6/30/2007		3/31/2007		12/31/2006			9/3020/06			6/30/2006
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 ended:		9/30/2007			6/30/2007			3/31/2007			12/31/2006			9/30/2006			6/30/2006
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 recordedincreases 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 September30, 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.

Investor Inquiries:

Anthony C. Weagley

President

Center Bancorp, Inc

(908) 206-2886

CENTER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION

(Dollars in Thousands)		September 30, 2007			December 31, 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
Interest income:	(unaudited)						(unaudited)
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
(Tax-Equivalent Basis, Dollars in Thousands)		Average Balance			Interest Income/ Expense		Average Yield/ Rate			Average Balance			Interest Income/ Expense		Average Yield/ 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
(Tax-Equivalent Basis, Dollars in Thousands)	Average Balance			Interest Income/ Expense			Average Yield/ Rate		Average Balance			Interest Income/ Expense			Average Yield/ Rate
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

(1)