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 28, 2010

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):

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

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

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

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

Item 2.02.  Results of Operations and Financial Condition.

On October 28, 2010, the Registrant issued a press release regarding results for the three and nine months ended September 30, 2010.  A copy of this press release is 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 28, 2010, regarding results for the three and nine months ended September 30, 2010.

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 and consolidated statements of income.  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 and Chief Executive Officer

Dated:  October 29, 2010

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EXHIBIT INDEX

Exhibit 99.1 – Press release, dated October 28, 2010, regarding results for the three and nine months ended September 30, 2010.

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EX-99.1

Center Bancorp, Inc. Reports Third Quarter 2010 Earnings

UNION, NJ—October 28, 2010—Center Bancorp, Inc. (Nasdaq:CNBC) (the "Corporation", or "Center"), parent company of Union Center National Bank, today reported operating results for the third quarter ended September 30, 2010. Net income available to common stockholders amounted to $2.0 million, or $0.14 per fully diluted common share, for the quarter ended September 30, 2010, as compared with net income available to common stockholders of $1.4 million, or $0.11 per fully diluted common share, for the quarter ended September 30, 2009.

"The Corporation's performance for the third quarter of 2010 reflected sustained progress on multiple levels with solid core results that underscores Center's sustained progress in improving growth of revenue streams and balance sheet strength. Results are consistent with the work started in prior quarters and scheduled to continue into 2011. With these actions, we enter the remainder of 2010 with a marked improvement in our balance sheet positioned to expand net interest margins, and with adequate loan loss reserves, good credit quality in the asset portfolios and a strong underpinning to reduce operating overhead and support net income levels," remarked Anthony C. Weagley, President & CEO.

"We are pleased with the performance achieved for the quarter and are optimistic that the Corporation will build its outstanding loan volume from this level through the fourth quarter of 2010. Our pipelines are strong, and 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.

"Notwithstanding a slowdown in the general markets and a volatile yield curve, we believe that our increased business development efforts and brand recognition offer a unique window of opportunity for Center to expand its franchise as the market and businesses seek a strong community bank with the capacity and commitment to meet their needs.  Our emphasis will continue to be on the commercial mortgage, construction and commercial loan sectors of the portfolio." At September 30, 2010, the Corporation had $163.0 million in overall undisbursed loan commitments, which includes largely unused commercial lines of credit, home equity lines of credit and available usage from active construction facilities.  Our “Approved, Accepted but Unfunded” pipelines include $12.4 million in commercial and commercial real estate loans expected to fund over the next 90 days.

“Our allowance for loan loss level, our ability to reduce credit exposures and our low credit losses provide us the opportunity to continue to manage risk exposures as we grow the loan portfolio. The increase in this quarter's loan loss provision was primarily related to one large troubled debt restructuring of a commercial real estate loan, which is performing, coupled with some charge-offs in the residential mortgage portfolio. At September 30, 2010, our non-performing loans were 1.67% of total loans, down from 1.80% a year ago. Net charge-offs for the third quarter were an annualized 0.63% of average loans and were an annualized 0.55% for the nine months ended September 30, 2010, well below industry peer levels,” added Mr. Weagley.

Earnings for the current quarter included the effects of actions taken to further improve the strength of the Corporation’s balance sheet.  Certain bank-owned life insurance policies, with insurance carriers that had deteriorated credit ratings and investment yields, were surrendered and the proceeds were reinvested with more creditworthy carriers. The surrender of the policies had the effect of increasing income tax expense by $633,000.  In addition, the provision for loan losses for the quarter was higher than anticipated by $670,000, which increased the allowance for loan losses to 1.25% of total loans.  The earnings effect of these actions during the quarter was offset in part by a recognized income tax benefit of $204,000 and a recapture of income tax interest reserves of $121,000.Although earnings for the current quarter included these one-time charges and benefits, the results for the quarter and the year to date period nonetheless continue to reflect the core growth in key performance areas of the Corporation:  asset growth, margin expansion and a reduction in operating overhead.

For the nine months ended September 30, 2010, net income available to common stockholders amounted to $4.0 million, or $0.27 per fully diluted common share, compared to $3.1 million, or $0.24 per fully diluted common share, for the same period in 2009.  The results for the nine months ended September 30, 2010 included various one-time charges and benefits which, if excluded, would have reflected additional net income available to common shareholders of $3.0 million, or $0.21 per fully diluted common share. Such charges and benefits primarily included:  $5.1 million in other-than-temporary impairment charges on investment securities; a $594,000 early termination charge incurred to unwind a structured repurchase agreement; a one-time charge of $437,000 in connection with the lease/sale of the Corporation’s former operations facility; $633,000 in increased income tax expense due to the surrender of bank-owned life insurance policies; and $1.2 million in recognized income tax benefits.

Highlights for the quarter include:

· Net interest income increased to $8.4 million, compared to $7.4 million for the third quarter 2009. Net interest margin on a fully taxable equivalent basis increased 51 basis points to 3.30%, compared to 2.79% for the third quarter of 2009, primarily the result of lower interest rates on deposits and borrowings and changes in volume mix.

· Deposits increased to $836.9 million at September 30, 2010, or 4.3%, from $802.5 million at June 30, 2010 and decreased $124.3 million from the balance reported at September 30, 2009. The growth in the current quarter was primarily in noninterest-bearing checking deposits, savings and money market deposit accounts, while the decline from a year ago was largely in time deposits.

· At September 30, 2010, total loans amounted to $701.9 million, a decrease of $20.6 million, compared to total loans at June 30, 2010. The decrease occurred primarily in the real estate loan portfolio.

· Overall credit quality in the loan portfolio declined slightly during the quarter. Non-performing assets, consisting of non-accrual loans, accruing loans past due 90 days or more and other real estate owned (“OREO”), amounted to 1.12% of total assets at September 30, 2010, compared to 0.79% at June 30, 2010 and 0.94% at December 31, 2009. However, in early October the Corporation disposed of $1.8 million in OREO property and recorded a loss of approximately $185,000. Excluding this item from total non-performing assets reported at September 30, 2010, non-performing assets as a percent of total assets would have been 0.97%.   At September 30, 2010, the allowance for loan losses amounted to approximately $8.8 million, or 1.25% of total loans. The allowance for loan losses as a percentage of total non-performing loans was 74.7% at September 30, 2010 compared to 112.4% at June 30, 2010 and 77.2% at December 31, 2009.

· The Corporation added $11.4 million to its capital base as a result of its successful common stock offerings in September 2010. The Tier 1 leverage capital ratio of 9.60% at September 30, 2010, compared to 6.74% at September 30, 2009, and 7.73% at December 31, 2009, exceeding regulatory guidelines.

· Book value per common share was $6.90 at September 30, 2010, compared to $6.32 at December 31, 2009 and $6.36 at September 30, 2009. Tangible book value per common share was $5.86 at September 30, 2010, compared to $5.15 at December 31, 2009 and $5.04 at September 30, 2009.

Selected Financial Ratios

(unaudited; annualized where applicable)

Asoforforthequarterended:	9/30/10			6/30/10			3/31/10			12/31/09			9/30/09
Return on average assets		0.72	%		0.69	%		0.10	%		0.07	%		0.46	%
Return on average equity		7.74	%		7.60	%		1.07	%		0.91	%		6.77	%
Net interest margin (tax equivalent basis)		3.30	%		3.37	%		3.35	%		3.05	%		2.79	%
Loans / deposits ratio		83.87	%		90.04	%		90.08	%		88.44	%		74.50	%
Stockholders’ equity / total assets		10.00	%		8.98	%		8.81	%		8.51	%		6.83	%
Efficiency ratio (1)		57.3	%		65.9	%		67.5	%		57.6	%		62.0	%
Book value per common share	$	6.90		$	6.71		$	6.52		$	6.32		$	6.36
Return on average tangible stockholders’ equity (1)		9.14	%		9.06	%		1.28	%		1.09	%		8.33	%
Tangible common stockholders’ equity / tangible assets (1)		7.93	%		6.87	%		6.66	%		6.37	%		4.92	%
Tangible book value per common share (1)	$	5.86		$	5.54		$	5.35		$	5.15		$	5.04

(1)Information reconciling non-GAAP measures to GAAP measures is presented elsewhere in this press release.

Earnings Summary for the Period Ended September 30, 2010

The following presents condensed consolidated statement of income data for the periods indicated.

Condensed Consolidated Statements of Income (unaudited)

(dollars in thousands, except per share data)

For the quarter ended:	9/30/10		6/30/10		3/31/10			12/31/09			9/30/09
Net interest income	$	8,382	$	8,657	$	8,509		$	8,018		$	7,441
Provision for loan losses		1,307		781		940			2,740			280
Net interest income after provision for loan losses		7,075		7,876		7,569			5,278			7,161
Other income (charges)		2,135		1,482		(2,449	)		(340	)		311
Other expense		5,442		6,268		6,392			5,238			5,186
Income before income tax expense		3,768		3,090		(1,272	)		(300	)		2,286
Income tax expense (benefit)		1,629		1,076		(1,553	)		(536	)		751
Net income	$	2,139	$	2,014	$	281		$	236		$	1,535
Net income available to common stockholders	$	1,993	$	1,868	$	136		$	94		$	1,387
Earnings per common share:
Basic	$	0.14	$	0.13	$	0.01		$	0.01		$	0.11
Diluted	$	0.14	$	0.13	$	0.01		$	0.01		$	0.11
Weighted average common shares outstanding:
Basic		14,649,397		14,574,832		14,574,832			14,531,387			13,000,601
Diluted		14,649,397		14,576,223		14,579,871			14,534,255			13,005,101

Net Interest Income

For the threemonths ended September 30, 2010, total interest income on a fully taxable equivalent basis decreased $1.5 million or 11.3%, to $12.0 million,compared to the threemonths ended September 30, 2009. Total interest expense decreased by $2.4 million, or 39.6%, to $3.7 million, for the threemonths ended September 30, 2010, compared to the same period last year. Net interest income on a fully taxable equivalent basis was $8.4 million for the three months ended September 30, 2010, increasing $857,000, or 11.4%, from $7.5 million for the comparable period in2009.

The decrease in interest expense reflects the impact of the sustained low levels in short-term interest rates and lower volume of time deposits. Thecombined positive effect was a decrease in the average cost of funds, which declined 60basis points to 1.58% from 2.18% for the quarter ended September 30, 2009 and on a linked sequential quarter decreased 9 basis pointscompared to the second quarter of 2010.

For the quarter ended September 30, 2010, the Corporation’s net interest spread increased 30 basis points to 3.16% as compared to 2.86% for the same threemonth period in 2009, and the Corporation’s net interest margin (net interest income as a percentage of interest-earning assets) widened by 51 basis points from 2.79% to 3.30%, in all cases on an annualized basis.

For the nine months ended September 30, 2010, net interest income on a fully taxable equivalent basis amounted to $25.6 million, compared to $20.8 million for the same period in 2009. Interest income decreased by $1.2 million while interest expense decreased by $6.0 million from the same period last year. Compared to the same period in 2009, for the nine months ended September 30, 2010, average interest earning assets increased $20.8 million while net interest spread and margin increased on an annualized basis by 47 basis points and 57 basis points, respectively. The Corporation’s net interest income andmargin were favorably impacted primarily by lower interest rates on deposits and borrowings and changes in volume mix.

Other Income

The following presents the components of other income for the periods indicated.

(inthousands, unaudited)
Forthequarterended:	9/30/10		6/30/10		3/31/10			12/31/09			9/30/09
Service charges on deposit accounts	$	413	$	337	$	325		$	371		$	350
Fees from mortgage banking activity		-		-		-			1			4
Loan related fees		104		40		45			25			35
Mutual funds and annuities commissions		3		23		93			24			17
Debit card and ATM fees		122		122		105			111			114
Bank-owned life insurance		429		264		264			408			273
Net investment securities gains (losses)		1,033		657		(3,344	)		(1,308	)		(511	)
Other service charges and fees		31		39		63			28			29
Total other income (charges)	$	2,135	$	1,482	$	(2,449	)	$	(340	)	$	311

Other income increased $1.8 million for the third quarter of 2010 compared with the same period in 2009. During the third quarter of 2010, the Corporation recorded net investment securities gains of $1.0 million compared to $511,000 in net investment securities losses for the same period last year. Excluding net securities gains, the Corporation recorded other income of $1.1 million for the three months ended September 30, 2010 compared to other income, excluding net securities gains, of $825,000 on a sequential linked quarter basis and other income, excluding net securities losses, of $822,000 for the three months ended September 30, 2009. The increase in other income in the third quarter 2010 when compared to the second quarter 2010 was primarily in service charges on deposit accounts, loan fees and bank-owned life insurance income.

For the nine months ended September 30, 2010, total other income decreased $3.1 million compared to the same period in 2009, primarily as a result of net securities losses including impairment charges taken on investment securities. Excluding net securities losses, the Corporation recorded other income of $2.8 million for the nine months ended September 30, 2010 compared to $2.4 million for the comparable period in 2009, an increase of $375,000 or 15.3%. Increases in other income for the nine months ended September 30, 2010 when compared to the nine months ended September 30, 2009 were primarily in service charges on deposits accounts, loan fees and bank-owned life insurance income.

Other Expense

The following presents the components of other expense for the periods indicated.

(inthousands, unaudited)
Forthequarterended:	9/30/10		6/30/10		3/31/10			12/31/09		9/30/09
Salaries	$	2,178	$	2,103	$	2,043		$	1,934	$	1,981
Employee benefits		543		624		614			552		548
Occupancy and equipment		754		734		889			917		862
Professional and consulting		153		422		274			173		190
Stationery and printing		68		90		84			86		81
FDIC Insurance		510		458		618			430		320
Marketing and advertising		36		105		93			20		75
Computer expense		320		340		340			302		220
Bank regulatory related expenses		97		97		98			68		63
Postage and delivery		65		74		91			76		72
ATM related expenses		59		66		64			63		63
Other real estate owned expense		20		43		-			-		30
Amortization of core deposit intangible		16		19		19			19		19
Loss (gain) on fixed assets		-		437		(10	)		-		-
Repurchase agreement termination fee		-		-		594			-		-
All other expenses		623		656		581			598		662
Total other expense	$	5,442	$	6,268	$	6,392		$	5,238	$	5,186

Other expense for the thirdquarter of 2010 totaled $5.4 million, which was approximately $826,000 lower t hanother expense for the three months ended June 30, 2010.Professional and consulting expense for the three months ended September 30, 2010 decreased $269,000 compared to the three months ended June 30, 2010, and there were also decreases in employee benefits, primarily in pension expense of $81,000, and in marketing and advertising expense of $69,000. The increase in other expense for the three months ended September 30, 2010 when compared to the same period in 2009 was approximately $256,000 and was primarily associated with FDIC insurance expense.

For the nine months ended September 30, 2010, total other expense increased $282,000, or 1.6%, compared to the same period in 2009. A decrease in other real estate owned expense of $1.4 million served to largely offset increases in other expense categories which primarily included $1.0 million in one-time charges incurred with the lease/sale of the Corporation’s former operations facility and the early termination of a structure repurchase agreement.

Asset Quality

The following presents the components of non-performing assets and other asset quality data for the periods indicated.

(dollarsinthousands, unaudited)
Asoforforthequarterended:	9/30/10			6/30/10			3/31/10			12/31/09			9/30/09
Non-accrual loans	$	8,339		$	7,312		$	9,770		$	11,245		$	11,448
Loans 90 days or more past due and still accruing		3,402			336			1,584			39			1,477
Total non-performing loans		11,741			7,648			11,354			11,284			12,925
Other real estate owned		1,927			1,780			-			-			-
Total non-performing assets	$	13,668		$	9,428		$	11,354		$	11,284		$	12,925
Troubled debt restructured loans	$	10,417		$	9,388		$	4,465		$	966		$	970
Non-performing assets / total assets		1.12	%		0.79	%		0.96	%		0.94	%		0.96	%
Non-performing loans / total loans		1.67	%		1.06	%		1.59	%		1.57	%		1.80	%
Net charge-offs	$	1,133		$	325		$	1,512		$	1,171		$	55
Net charge-offs / average loans (1)		0.63	%		0.18	%		0.85	%		0.66	%		0.03	%
Allowance for loan losses / total loans		1.25	%		1.19	%		1.14	%		1.21	%		1.00	%
Allowance for loan losses / non-performing loans		74.7	%		112.4	%		71.7	%		77.2	%		55.3	%
Total assets	$	1,221,278		$	1,195,819		$	1,187,655		$	1,195,488		$	1,349,516
Total loans		701,936			722,527			713,906			719,606			716,100
Average loans		715,849			718,078			711,860			709,612			693,670
Allowance for loan losses		8,770			8,595			8,139			8,711			7,142

(1) Annualized.

At September 30, 2010, non-performing assets totaled $13.7 million, or 1.12% of total assets, as compared with $11.3 million, or 0.94%, at December 31, 2009 and $12.9 million, or 0.96%, at September 30, 2009.

The allowance for loan losses at September 30, 2010 amounted to approximately $8.8 million, or 1.25% of total loans compared to 1.21% of total loans at December 31, 2009. The allowance for loan losses as a percentage of total non-performing loans was 74.7% at September 30, 2010 compared to 77.2% at December 31, 2009.

Non-accrual loans increased from $7.3 million at June 30, 2010 to $8.3 million at September 30, 2010. Loans past due 90 days or more and still accruing increased from $336,000 at June 30, 2010 to $3.4 million at September 30, 2010. The increase in this category was primarily attributable to four residential loans totaling $1.4 million that are believed to be temporarily in this category, and a $1.6 million commercial loan currently being reviewed for potential modification. The borrower owns a building occupied by a day care center that has sought rent relief thus straining our borrower’s ability to pay per the loan contract. Other real estate owned at September 30, 2010 amounting to $1.9 million consisted of two residential properties, one of which for $1.8 million was disposed of in early October 2010 at a loss of approximately $185,000 and another that is under contract of sale and subject to close in the fourth quarter of 2010. Troubled debt restructured loans, which are performing loans, increased $1.0 million from June 30, 2010 to $10.4 million at September 30, 2010, due to the addition of two restructurings totaling $1.5 million, offset in part by the charge-off of one restructured loan for $473,000.

A discussion of the significant components of non-performing assets at September 30, 2010 is outlined below.

· A $3.0 million nonaccrual loan secured by a commercial property located in Essex County, New Jersey. This non-accrual loan represents an expired participation with Highlands State Bank.

· A $2.0 million nonaccrual loan secured by a commercial property located in Monmouth County, New Jersey. At present, the borrower has changed listing brokers to one that specializes in this type of property. Aggressive marketing is anticipated, and the Corporation expects to be repaid in full from the ultimate sale of the property.

· A $1.0 million nonaccrual loan for a construction project secured by a commercial property in Union County, New Jersey. The borrower has entered into a contract of sale with a closing expected during the fourth quarter of 2010. From a combination of the net sales proceeds and a restructuring agreement entered into with the borrower, guarantors and affiliated entities, the Corporation expects to be repaid as a result.

· A $1.6 million loan 90 days past due and still accruing secured by a commercial property in Atlantic County, New Jersey. The borrower is renegotiating the lease with its tenants and has been making partial payments regularly and may be looking to restructure the loan with the Corporation.

· Other real estate owned at September 30, 2010 totaled $1.9 million and consisted of two residential properties. One of the properties carried at $1.8 million was disposed of in early October 2010 at a loss of approximately $185,000, and the other property is under contract of sale scheduled to close in the fourth quarter 2010.

· Troubled debt restructured loans at September 30, 2010 totaled $10.4 million, increasing $1.0 million from June 30, 2010. These loans are all performing according to their restructured terms.

Capital

The Corporation completed a capital offering on September 27, 2010. Center sold an aggregate of 1,715,000 shares of its common stock under its previously filed shelf registration statement, which was declared effective by the Securities and Exchange Commission on May 5, 2010. Center sold, through Stifel Nicolaus Weisel as underwriter, 1,430,000 shares of common stock at a price of $7.00 per share, with underwriting discounts and commissions of $0.39 per share, for gross proceeds from this offering of $10,010,000. Center also sold 285,000 shares of common stock directly to certain of its directors at a price of $7.50 per share, for gross proceeds from this offering of $2,137,500.

At September 30, 2010, total stockholders' equity amounted to $122.2 million, or 10.0% of total assets. Tangible common stockholders' equity was $95.5 million, or 7.93% of tangible assets. Book value per common share was $6.90 at September 30, 2010, compared to $6.36 at September30, 2009. Tangible book value per common share was $5.86 at September 30, 2010 compared to $5.04 at September 30, 2009.

At September 30, 2010, the Corporation’s Tier 1 leverage capital ratio was 9.60%, the Tier 1 risk-based capital ratio was 13.09% and the Total risk-based capital ratio was 14.12%. Tier 1 capital increased to approximately $112.3 million at September 30, 2010 from $89.6 million at September 30, 2009, reflecting the Corporation’s proceeds from a rights offering and private placement with its standby purchaser in October 2009, proceeds from the Corporation’s common stock offerings in September 2010 and increases in retained earnings.

Statement of Condition Highlights at September 30, 2010

· Total assets amounted to $1.2 billion at September 30, 2010.

· Total loans were $701.9 million at September 30, 2010, decreasing $14.2 million, or 2.0%, from September 30, 2009. Total real estate loans declined $36.5 million from the comparable period in 2009 as a result of a decrease in the residential real estate portfolio. Commercial loans increased $22.9 million, or 13.9%, year over year.

· Investment securities totaled $362.7 million at September 30, 2010, decreasing $13.4 million compared to September 30, 2009, and reflecting an increase from December 31, 2009 of $64.6 million.

· Deposits totaled $836.9 million at September 30, 2010, increasing $23.2 million, or 2.9%, since December 31, 2009. Total deposits decreased $124.3 million from September 30, 2009, primarily in time certificates of deposit of $100,000 or more which were CDARS Reciprocal deposits.

· Total deposit funding sources, including overnight repurchase agreements (which agreements are considered part of the demand deposit base), amounted to $873.3 million at September 30, 2010, a decrease of $140.0 million from September 30, 2009, reflecting outflows of CDARS time deposits. The Corporation’s core deposit gathering efforts remain strong.

· Borrowings totaled $232.6 million at September 30, 2010, decreasing $41.8 million from December 31, 2009, primarily due to repayment of a Federal Home Loan Bank advance and a structured repurchase agreement, coupled with a reduction in overnight repurchase agreement activity.

The following reflects the composition of the Corporation’s loan portfolio as of the dates indicated.

Loans (unaudited)
(in thousands)
At quarter ended:	9/30/10		6/30/10		3/31/10		12/31/09		9/30/09
Real estate loans:
Residential	$	165,535	$	176,697	$	184,598	$	190,138	$	200,533
Commercial		295,003		299,694		297,167		304,662		291,133
Construction		52,518		58,118		50,574		51,099		57,898
Total real estate loans		513,056		531,516		532,339		545,899		549,564
Commercial loans		188,052		187,104		180,597		172,226		165,173
Consumer and other loans		445		467		505		954		952
Total loans before deferred fees and costs		701,553		722,080		713,441		719,079		715,689
Deferred costs, net		383		447		465		527		411
Total loans	$	701,936	$	722,527	$	713,906	$	719,606	$	716,100

The following reflects the composition of the Corporation’s deposits as of the dates indicated.

Deposits (unaudited)
(in thousands)
At quarter ended:	9/30/10		6/30/10		3/31/10		12/31/09		9/30/09
Demand:
Non interest-bearing	$	147,213	$	138,152	$	137,422	$	130,518	$	126,205
Interest-bearing		176,728		176,284		156,865		156,738		136,070
Savings		202,242		189,920		188,712		192,996		215,275
Money market		139,440		125,055		126,647		116,450		132,395
Time		171,279		173,048		182,864		217,003		351,212
Total deposits	$	836,902	$	802,459	$	792,510	$	813,705	$	961,157

Condensed Statements of Condition

The following tables present condensed statements of condition at or for the periods indicated.

Condensed Consolidated Statements of Condition (unaudited)

(in thousands)
At quarter ended:	9/30/10			6/30/10			3/31/10			12/31/09			9/30/09
Cash and due from banks	$	75,478		$	97,651		$	66,863		$	89,168		$	172,401
Investment securities		362,683			294,277			322,309			298,124			376,097
Loans		701,936			722,527			713,906			719,606			716,100
Allowance for loan losses		(8,770	)		(8,595	)		(8,139	)		(8,711	)		(7,142	)
Restricted investment in bank stocks, at cost		10,255			10,707			10,551			10,672			10,673
Premises and equipment, net		13,178			13,349			17,635			17,860			18,155
Goodwill		16,804			16,804			16,804			16,804			16,804
Core deposit intangible		170			186			205			224			243
Bank-owned life insurance		27,636			26,832			26,568			26,304			26,162
Other real estate owned		1,927			1,780			-			-			-
Other assets		19,981			20,301			20,953			25,437			20,023
Total assets	$	1,221,278		$	1,195,819		$	1,187,655		$	1,195,488		$	1,349,516
Deposits	$	836,902		$	802,459		$	792,510		$	813,705		$	961,157
Borrowings		232,568			248,883			258,477			274,408			280,509
Other liabilities		29,651			37,058			32,065			5,626			15,623
Stockholders' equity		122,157			107,419			104,603			101,749			92,227
Total liabilities and stockholders’ equity	$	1,221,278		$	1,195,819		$	1,187,655		$	1,195,488		$	1,349,516

Condensed Consolidated Average Statements of Condition (unaudited)

(in thousands)

For the quarter ended:	9/30/10			6/30/10			3/31/10			12/31/09			9/30/09
Investment securities	$	301,316		$	313,905		$	310,525		$	357,471		$	385,270
Loans		715,849			718,078			711,860			709,612			693,670
Allowance for loanlosses		(8,738	)		(8,362	)		(8,378	)		(7,401	)		(6,978	)
All other assets		180,974			150,842			164,708			233,341			274,103
Total assets	$	1,189,401		$	1,174,463		$	1,178,715		$	1,293,023		$	1,346,065
Non interest-bearing deposits	$	142,829		$	139,759		$	135,358		$	134,325		$	129,592
Interest-bearing deposits		685,830			659,608			661,630			764,469		$	845,504
Borrowings		238,266			256,854			268,775			279,344			266,825
Other liabilities		11,932			12,295			8,316			11,018			13,411
Stockholders’ equity		110,544			105,947			104,636			103,867			90,733
Total liabilities and stockholders’ equity	$	1,189,401		$	1,174,463		$	1,178,715		$	1,293,023		$	1,346,065

Non-GAAP Financial Measures

Reported amounts are presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). The Corporation's management believes that the supplemental non-GAAP information is utilized by market analysts and others to evaluate a company's financial condition and, therefore, such information is useful to investors. These disclosures should not be viewed as a substitute for financial results determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures which may be presented by other companies.

“Return on average tangible stockholders’ equity” is a non-GAAP financial measure and is defined as net income as a percentage of tangible stockholders’ equity. Tangible stockholders’ equity is defined as common stockholders’ equity less goodwill and other intangible assets. The return on average tangible stockholders’ equity measure may be important to investors that are interested in analyzing our return on equity excluding the effect of changes in intangible assets on equity.

The following presents a reconciliation of average tangible stockholders’ equity and a reconciliation of return on average tangible stockholders’ equity for the periods presented.

(dollars in thousands)
For the quarter ended:	9/30/10			6/30/10			3/31/10			12/31/09			9/30/09
Net income	$	2,139		$	2,014		$	281		$	236		$	1,535
Average stockholders’ equity	$	110,544		$	105,947		$	104,636		$	103,867		$	90,733
Less:
Average goodwill and other intangible assets		16,984			17,001			17,020			17,039			17,058
Average tangible stockholders’ equity	$	93,560		$	88,946		$	87,616		$	86,828		$	73,675
Return on average stockholders’ equity		7.74	%		7.60	%		1.07	%		0.91	%		6.77	%
Add:
Average goodwill and other intangible assets		1.40	%		1.46	%		0.21	%		0.18	%		1.56	%
Return on average tangible stockholders’ equity		9.14	%		9.06	%		1.28	%		1.09	%		8.33	%

“Tangible book value per common share” is a non-GAAP financial measure and represents tangible stockholders’ equity (or tangible book value) calculated on a per common share basis. The disclosure of tangible book value per common share may be helpful to those investors who seek to evaluate the Corporation’s book value per common share without giving effect to goodwill and other intangible assets.

The following presents a reconciliation of book value per common share to tangible book value per common share as of the dates presented.

(dollars inthousands, except per share data)
Atquarterended:	9/30/10		6/30/10		3/31/10		12/31/09		9/30/09
Common shares outstanding		16,289,832		14,574,832		14,574,832		14,572,029		13,000,601
Stockholders’ equity	$	122,157	$	107,419	$	104,603	$	101,749	$	92,227
Less: Preferred stock		9,680		9,660		9,639		9,619		9,599
Less: Goodwill and other intangible assets		16,974		16,990		17,009		17,028		17,047
Tangible common stockholders’ equity	$	95,503	$	80,769	$	77,955	$	75,102	$	65,581
Book value per common share	$	6.90	$	6.71	$	6.52	$	6.32	$	6.36
Less: Goodwill and other intangible assets		1.04		1.17		1.17		1.17		1.32
Tangible book value per common share	$	5.86	$	5.54	$	5.35	$	5.15	$	5.04

"Tangible common stockholders' equity/tangible assets" is a non-GAAP financial measure and is defined as tangible common stockholders' equity as a percentage of total assets minus goodwill and other intangible assets. This measure may be important to investors that are interested in analyzing the financial condition of the Corporation without consideration of intangible assets, inasmuch as tangible common stockholders' equity and tangible assets both exclude goodwill and other intangible assets.

The following presents a reconciliation of total assets to tangible assets and a reconciliation of total stockholders' equity/total assets to tangible common stockholders' equity/tangible assets as of the dates presented.

(dollarsinthousands)
Atquarterended:	9/30/10			6/30/10			3/31/10			12/31/09			9/30/09
Total assets	$	1,221,278		$	1,195,819		$	1,187,655		$	1,195,488		$	1,349,516
Less: Goodwill and other intangible assets		16,974			16,990			17,009			17,028			17,047
Tangible assets	$	1,204,304		$	1,178,829		$	1,170,646		$	1,178,460		$	1,332,469
Total stockholders' equity / total assets		10.00	%		8.98	%		8.81	%		8.51	%		6.83	%
Tangible common stockholders' equity / tangible assets		7.93	%		6.85	%		6.66	%		6.37	%		4.92	%

Other income is presented in the table below including and excluding net securities gains (losses). We believe that many investors desire to evaluate other income without regard for securities gains (losses).

(inthousands)
Forthequarterended:	9/30/10		6/30/10		3/31/10			12/31/09			9/30/09
Other income (charges)	$	2,135	$	1,482	$	(2,449	)	$	(340	)	$	311
Less: Net investment securities gains (losses)		1,033		657		(3,344	)		(1,308	)		(511	)
Other income, excluding net investment securities gains (losses)	$	1,102	$	825	$	895		$	968		$	822

“Efficiency ratio” is a non-GAAP financial measure and is defined as other expense as a percentage of net interest income on a tax equivalent basis plus other income, excluding net securities gains (losses), calculated as follows:

(dollarsinthousands)
Forthequarterended:	9/30/10			6/30/10			3/31/10			12/31/09			9/30/09
Other expense	$	5,442		$	6,268		$	6,392		$	5,238		$	5,186
Net interest income (tax equivalent basis)	$	8,393		$	8,686		$	8,569		$	8,129		$	7,536
Other income, excluding net investment securities gains (losses)		1,102			825			895			968			822
Total	$	9,495		$	9,511		$	9,464		$	9,097		$	8,358
Efficiency ratio		57.3	%		65.9	%		67.5	%		57.6	%		62.0	%

About Center Bancorp

Center Bancorp, Inc. is a bank holding company which operates Union Center National Bank, its main subsidiary. Chartered in 1923, Union Center National Bank is one of the oldest national banks headquartered in the state of New Jersey and currently the largest commercial bank headquartered in Union County. Its primary market niche is its commercial banking business. The Bank focuses its lending activities on commercial lending to small and medium-sized businesses, real estate developers and high net worth individuals.

The Bank, through its Private Wealth Management Division, which includes its wholly-owned subsidiary, Center Financial Group LLC, provides financial services including brokerage services, insurance and annuities, mutual funds, financial planning, estate and tax planning, trust, elder care and benefit plan administration.

The Bank currently operates 13 banking locations in Union and Morris Counties in New Jersey. Banking centers are located in Union Township (6 locations), Berkeley Heights, Boonton/Mountain Lakes, Madison, Millburn/Vauxhall, Morristown, Springfield, and Summit, New Jersey. The Bank also operates remote ATM locations in the Chatham and Madison New Jersey Transit train stations, and the Boys and Girls Club of Union.

While the Bank’s primary market area is comprised of Union and Morris Counties, New Jersey, the Corporation has expanded to northern and central New Jersey. At September 30, 2010, the Corporation had total assets of $1.2 billion, total deposit funding sources, which includes overnight repurchase agreements, of $873.3 million and stockholders’ equity of $122.2 million. For further information regarding Center Bancorp, Inc., visit our web site at http://www.centerbancorp.com or call (800) 862-3683. For information regarding Union Center National Bank, visit our web site at http://www.ucnb.com.

Forward-Looking Statements

All non-historical statements in this press release (including statements regarding work started in prior quarters and scheduled to continue into 2011, future net interest margins, future loan volumes, including future commercial loan volumes, the potential expansion of the Corporation’s franchise, the Corporation’s intention to focus on the commercial mortgage, construction and commercial loan sectors, the future funding of undisbursed loan commitments and the Corporation’s ability to manage risk exposures in the future) constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may use forward-looking terminology such 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 protracted global financial crisis and the deregulation of the financial services industry, and other risks cited in the Corporation’s most recent Annual Report on Form 10-K and other 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 & Chief Executive Officer

 (908) 206-2886

Joseph Gangemi

Investor Relations

 (908) 206-2863

CENTER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CONDITION

(in thousands, except for share data)	September 30, 2010			December 31, 2009
	(Unaudited)
ASSETS
Cash and due from banks	$	75,478		$	89,168
Investment securities		362,683			298,124
Loans		701,936			719,606
Less: Allowance for loan losses		8,770			8,711
Net loans		693,166			710,895
Restricted investment in bank stocks, at cost		10,255			10,672
Premises and equipment, net		13,178			17,860
Accrued interest receivable		4,091			4,033
Bank-owned life insurance		27,636			26,304
Goodwill		16,804			16,804
Prepaid FDIC assessments		4,042			5,374
Other real estate owned		1,927			—
Other assets		12,018			16,254
Total assets	$	1,221,278		$	1,195,488
LIABILITIES
Deposits:
Non-interest bearing	$	147,213		$	130,518
Interest-bearing:
Time deposits $100 and over		114,019			144,802
Interest-bearing transaction, savings and time deposits $100 and less		575,670			538,385
Total deposits		836,902			813,705
Short-term borrowings		36,386			46,109
Long-term borrowings		191,027			223,144
Subordinated debentures		5,155			5,155
Accounts payable and accrued liabilities		7,456			5,626
Due to brokers for investment securities		22,195			—
Total liabilities		1,099,121			1,093,739
STOCKHOLDERS’ EQUITY
Preferred stock, $1,000 liquidation value per share, authorized 5,000,000 shares; issued 10,000 shares at September 30, 2010 and December 31, 2009		9,680			9,619
Common stock, no par value, authorized 25,000,000 shares; issued 18,477,412 shares at September 30, 2010 and 16,762,412 shares at December 31, 2009; outstanding 16,289,832 shares at September 30, 2010 and 14,572,029 shares at December 31, 2009		110,056			97,908
Additional paid in capital		5,500			5,650
Retained earnings		19,192			17,068
Treasury stock, at cost (2,187,580 common shares at September 30, 2010 and 2,190,383 common shares at December 31, 2009)		(17,698	)		(17,720	)
Accumulated other comprehensive loss		(4,573	)		(10,776	)
Total stockholders’ equity		122,157			101,749
Total liabilities and stockholders’ equity	$	1,221,278		$	1,195,488

CENTER BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

	Three Months Ended  September 30,						Nine Months Ended  September 30,
(in thousands, except for share data)	2010			2009			2010			2009
Interest income
Interest and fees on loans	$	9,378		$	9,255		$	28,165		$	27,568
Interest and dividends on investment securities:
Taxable		2,464			3,874			8,337			9,333
Tax-exempt		21			185			194			773
Dividends		43			27			97			85
Dividends on restricted investment in bank stocks		129			150			402			380
Total interest income		12,035			13,491			37,195			38,139
Interest expense
Interest on certificates of deposit $100 or more		282			1,077			1.036			2,844
Interest on other deposits		1,213			2,362			3,712			7,191
Interest on borrowings		2,158			2,611			6,899			7,657
Total interest expense		3,653			6,050			11,647			17,692
Net interest income		8,382			7,441			25,548			20,447
Provision for loan losses		1,307			280			3,028			1,857
Net interest income after provision for loan losses		7,075			7,161			22,520			18,590
Other income
Service charges, commissions and fees		535			464			1,424			1,353
Annuities and insurance commissions		3			17			119			102
Bank-owned life insurance		429			273			957			748
Other		135			68			322			244
Other-than-temporary impairment losses on investment securities		(23	)		(1,878	)		(8,495	)		(2,018	)
Portion of losses recognized in other comprehensive income, before taxes		—			478			3,377			478
Net other-than-temporary impairment losses on investment securities		(23	)		(1,400	)		(5,118	)		(1,540	)
Net gains on sale of investment securities		1,056			889			3,464			3,339
Net investment securities gains (losses)		1,033			(511	)		(1,654	)		1,799
Total other income		2,135			311			1,168			4,246
Other expense
Salaries and employee benefits		2,721			2,529			8,106			7,429
Occupancy and equipment		754			862			2,377			2,882
FDIC insurance		510			320			1,586			1,625
Professional and consulting		153			190			849			638
Stationery and printing		68			81			242			253
Marketing and advertising		36			75			234			346
Computer expense		320			220			1,001			662
Other real estate owned		20			30			63			1,438
Loss on fixed assets, net		—			—			427			—
Repurchase agreement termination fee		—			—			594			—
All other		860			879			2,622			2,546
Total other expense		5,442			5,186			18,101			17,819
Income before income tax expense		3,768			2,286			5,587			5,017
Income tax expense		1,629			751			1,153			1,482
Net Income		2,139			1,535			4,434			3,535
Preferred stock dividends and accretion		146			148			437			425
Net income available to common stockholders	$	1,993		$	1,387		$	3,997		$	3,110
Earnings per common share
Basic	$	0.14		$	0.11		$	0.27		$	0.24
Diluted	$	0.14		$	0.11		$	0.27		$	0.24
Weighted Average Common Shares Outstanding
Basic		14,649,397			13,000,601			14,599,919			12,995,481
Diluted		14,649,397			13,005,101			14,601,478			12,998,211

CENTER BANCORP, INC. AND SUBSIDIARIES

SELECTED QUARTERLY FINANCIAL AND STATISTICAL DATA

(Unaudited)

	Three Months Ended
(in thousands, except for share data)	9/30/2010			6/30/2010			9/30/2009
Statements of Income Data
Interest income	$	12,035		$	12,488		$	13,491
Interest expense		3,653			3,831			6,050
Net interest income		8,382			8,657			7,441
Provision for loan losses		1,307			781			280
Net interest income after provision for loan losses		7,075			7,876			7,161
Other income		2,135			1,482			311
Other expense		5,442			6,268			5,186
Income before income tax expense		3,768			3,090			2,286
Income tax expense		1,629			1,076			751
Net income		2,139		$	2,014		$	1,535
Net income available to common stockholders		1,993		$	1,868		$	1,387
Earnings per Common Share
Basic	$	0.14		$	0.13		$	0.11
Diluted	$	0.14		$	0.13		$	0.11
Statements of Condition Data (Period-End)
Investment securities	$	362,683		$	294,277		$	376,097
Loans		701,936			722,527			716,100
Assets		1,221,278			1,195,819			1,349,516
Deposits		836,902			802,459			961,157
Borrowings		232,568			248,883			280,509
Stockholders' equity		122,157			107,419			92,227
Common Shares Dividend Data
Cash dividends	$	437		$	437		$	390
Cash dividends per share	$	0.03		$	0.03		$	0.03
Dividend payout ratio		21.93	%		23.39	%		28.12	%
Weighted Average Common Shares Outstanding
Basic		14,649,397			14,574,832			13,000,601
Diluted		14,649,397			14,576,223			13,005,101
Operating Ratios
Return on average assets		0.72	%		0.69	%		0.46	%
Return on average equity		7.74	%		7.60	%		6.77	%
Return on average tangible equity		9.14	%		9.06	%		8.33	%
Average equity / average assets		9.29	%		9.02	%		6.74	%
Book value per common share (period-end)	$	6.90		$	6.71		$	6.36
Tangible book value per common share (period-end)	$	5.86		$	5.54		$	5.04
Non-Financial Information (Period-End)
Common stockholders of record		592			592			617
Full-time equivalent staff		165			163			165