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Century Bancorp, Inc. Announces Increased Earnings for Q1 2019 up 22.2%; Asset Growth to Record $5.3 BB; Regular Dividend Declared

MEDFORD, Mass.--(BUSINESS WIRE)--

Century Bancorp, Inc. (CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $9.4 million for the quarter ended March 31, 2019, or $1.69 per Class A share diluted, an increase of 22.2% compared to net income of $7.7 million, or $1.38 per Class A share diluted, for the same period a year ago. Total assets increased 2.8% from $5.16 billion at December 31, 2018 to $5.31 billion at March 31, 2019.

Net interest income totaled $23.4 million for the quarter ended March 31, 2019 compared to $22.5 million for the same period in 2018. The 4.3% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.19% on a fully taxable equivalent basis in 2018 to 2.11% for the same period in 2019. This was primarily the result of increased rates paid on deposits. The average balances of earning assets increased by 8.7% combined with an average yield increase of 0.40%, resulting in an increase in interest income of $7.6 million. The average balance of interest bearing liabilities increased 7.7% combined with an average cost of funds increase of 0.61%, resulting in an increase in interest expense of $6.7 million.

The Company’s effective tax rate decreased from 6.1% for the quarter ended March 31, 2018 to (1.3%) for the same period in 2019. This was primarily as a result of a reduction in tax accruals related to sequestration of the refundable portion of our alternative minimum tax (AMT) credit carryforward. On January 14, 2019, the IRS updated its announcement “Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations” to clarify that refundable AMT credits under Section 53(e) of the Internal Revenue Code are not subject to sequestration for taxable years beginning after December 31, 2017. Therefore, the full amount of the AMT credit carryover will be refunded to the Company.

At March 31, 2019, total equity was $309.3 million compared to $300.4 million at December 31, 2018. The Company’s equity increased primarily as a result of earnings, offset somewhat by dividends paid.

The Company’s leverage ratio stood at 6.92% at March 31, 2019, compared to 6.91% at December 31, 2018. The increase in the leverage ratio was due to an increase in stockholders’ equity, offset somewhat by an increase in quarterly average assets. Book value as of March 31, 2019 was $55.55 per share compared to $53.96 at December 31, 2018.

The Company’s allowance for loan losses was $28.8 million or 1.25% of loans outstanding at March 31, 2019 compared to $28.5 million or 1.25% of loans outstanding at December 31, 2018, and $26.7 million or 1.22% of loans outstanding at March 31, 2018. The ratio of the allowance for loan losses to loans outstanding has increased from the same period last year, primarily as a result of changes in qualitative factors related to general economic factors pertaining to certain industries. Non-performing assets totaled $3.7 million at March 31, 2019, compared to $3.5 million at December 31, 2018, and $1.4 million at March 31, 2018. Nonperforming assets increased from the same period last year, mainly as a result of one residential real estate property classified as other real estate owned.

The Company's Board of Directors voted a regular quarterly dividend of 12.00 cents ($0.12) per share on the Company's Class A common stock, and 6.00 cents ($0.06) per share on the Company's Class B common stock. The dividends were declared payable May 15, 2019 to stockholders of record on May 1, 2019.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-seven full-service branches in the Greater Boston area, offers a full range of Business, Personal and Institutional Services.

Century Bank and Trust Company is a member of the FDIC and is an Equal Housing Lender.

This press release contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of the Company. Actual results may differ from those contemplated by these statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements. The Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise.

       
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Condition (unaudited)
(in thousands)
March 31, December 31,

Assets

2019 2018
Cash and Due From Banks $ 77,121 $ 89,540
Federal Funds Sold and Interest-bearing Deposits In Other Banks 301,240 252,963
 
Securities Available-for-Sale (AFS) 346,707 338,327
 
Securities Held-to-Maturity 2,110,555 2,046,647
 
Federal Home Loan Bank of Boston stock, at cost 14,244 17,974
 
Loans:
Commercial & Industrial 767,455 761,775
Municipal 105,269 97,140
Construction & Land Development 13,305 13,628
Commercial Real Estate 746,703 750,362
Residential Real Estate 349,966 348,250
Consumer and Other 22,123 22,083
Home Equity   305,839   292,340
 
Total Loans 2,310,660 2,285,578
Less: Allowance for Loan Losses   28,848   28,543
 
Net Loans 2,281,812 2,257,035
 
Bank Premises and Equipment, net 24,494 23,921
Accrued Interest Receivable 14,464 14,406
Goodwill 2,714 2,714
Other Assets   132,715   120,408
 
Total Assets $ 5,306,066 $ 5,163,935
 

Liabilities

Demand Deposits $ 764,545 $ 813,478
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,783,987 1,707,019
Money Market Accounts 1,359,016 1,325,888
Time Deposits   542,079   560,579
 
Total Interest Bearing Deposits   3,685,082   3,593,486
 
Total Deposits 4,449,627 4,406,964
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 164,500 154,240
Other Borrowed Funds   257,148   202,378
 
Total Borrowed Funds 421,648 356,618
 
Other Liabilities 89,384 63,831
Subordinated Debentures   36,083   36,083
 
Total Liabilities 4,996,742 4,863,496
 
Total Stockholders' Equity   309,324   300,439
 
Total Liabilities & Stockholders' Equity $ 5,306,066 $ 5,163,935
       
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter ended March 31, 2019 and 2018
(in thousands)
 
Quarter ended March 31,
2019     2018
 
Interest Income:
Loans $ 21,309 $ 18,267
Securities Held-to-Maturity 13,788 10,288
Securities Available-for-Sale 2,631 1,992
Federal Funds Sold and Interest-bearing Deposits In Other Banks   1,349   883
 
Total Interest Income 39,077 31,430
 
Interest Expense:
Savings and NOW Deposits 5,466 2,223
Money Market Accounts 5,343 2,453
Time Deposits 2,793 2,363
Securities Sold Under Agreements to Repurchase 385 181
Other Borrowed Funds and Subordinated Debentures   1,652   1,742
 
Total Interest Expense   15,639   8,962
 
Net Interest Income 23,438 22,468
 
Provision For Loan Losses   375   450
 
Net Interest Income After
Provision for Loan Losses 23,063 22,018
 
Other Operating Income
Service Charges on Deposit Accounts 2,209 2,067
Lockbox Fees 1,089 791
Net Gain on Sales of Loans 15 -
Net Gain on Sales of Securities - 197
Other Income   1,114   1,138
 
Total Other Operating Income 4,427 4,193
 
Operating Expenses
Salaries and Employee Benefits 11,035 11,225
Occupancy 1,701 1,637
Equipment 783 794
FDIC Assessment 373 383
Other   4,298   3,962
 
Total Operating Expenses   18,190   18,001
 
Income Before Income Taxes 9,300 8,210
 
Income Tax (Benefit) Expense   (118)   501
 
Net Income $ 9,418 $ 7,709
       
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
March 31, March 31,

Assets

2019 2018
Cash and Due From Banks $ 74,836 $ 72,612
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 225,870 230,194
 
Securities Available-For-Sale (AFS) 351,869 406,087
Securities Held-to-Maturity (HTM) 2,078,626 1,741,492
 
Total Loans 2,292,606 2,175,170
Less: Allowance for Loan Losses   28,708     26,546  
 
Net Loans 2,263,898 2,148,624
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (3,562 ) (4,586 )
Bank Premises and Equipment 24,164 23,430
Accrued Interest Receivable 14,147 10,731
Goodwill 2,714 2,714
Other Assets   134,962     123,550  
 
Total Assets $ 5,167,524   $ 4,754,848  
 

Liabilities

Demand Deposits $ 782,794 $ 706,959
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,812,119 1,494,919
Money Market Accounts 1,271,707 1,180,436
Time Deposits   516,781     604,814  
Total Interest Bearing Deposits   3,600,607     3,280,169  
 
Total Deposits 4,383,401 3,987,128
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 168,447 160,223
Other Borrowed Funds   195,837     238,260  
 
Total Borrowed Funds 364,284 398,483
 
Other Liabilities 79,156 69,218
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 4,862,924 4,490,912
 
Total Stockholders' Equity   304,600     263,936  
 
Total Liabilities & Stockholders' Equity $ 5,167,524   $ 4,754,848  
 
Total Average Earning Assets - QTD $ 4,948,971   $ 4,552,943  
       
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data) March 31, March 31,
2019 2018
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.69 $ 1.38
Return on average assets, quarter 0.74% 0.66%
Return on average stockholders' equity, quarter 12.54% 11.85%
Net interest margin (taxable equivalent), quarter 2.11% 2.19%
Efficiency ratio, quarter- Non-GAAP (1) 60.3% 62.6%
Book value per share $ 55.55 $ 48.17
Tangible book value per share - Non-GAAP (1) $ 55.07 $ 47.68
Capital / assets 5.83% 5.61%
Tangible capital / tangible assets - Non-GAAP (1) 5.78% 5.56%
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,567,909 5,567,909
 
Shares outstanding Class A 3,610,329 3,608,029
Shares outstanding Class B   1,957,580   1,959,880
Total shares outstanding at period end   5,567,909   5,567,909
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.25% 1.22%
Nonaccrual loans $ 1,502 $ 1,386
Nonperforming assets $ 3,727 $ 1,386
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 2,542 $ 5,415
Net charge-offs(recoveries), quarter $ 70 $ 10
 
Leverage ratio 6.92% 6.77%
Common equity tier 1 risk weighted capital ratio 11.49% 10.79%
Tier 1 risk weighted capital ratio 12.74% 12.10%
Total risk weighted capital ratio 13.76% 13.10%
Total risk weighted assets $ 2,808,321 $ 2,660,535
 
 
(1) Non-GAAP Financial Measures are reconciled in the following tables:
 
Calculation of Efficiency ratio:
 
Total operating expenses(numerator) $ 18,190 $ 18,001
 
Net interest income $ 23,438 $ 22,468
Total other operating income 4,427 4,193
Tax equivalent adjustment   2,294   2,077
Total income(denominator) $ 30,159 $ 28,738
 
Efficiency ratio, quarter - Non-GAAP       60.3%       62.6%
 
Calculation of tangible book value per share:
 
Total stockholders' equity $ 309,324 $ 268,200
Less: goodwill   2,714   2,714
Tangible stockholders' equity(numerator) $ 306,610 $ 265,486
 
Total shares outstanding at period end(denominator) 5,567,909 5,567,909
 
Tangible book value per share - Non-GAAP     $ 55.07     $ 47.68
Book value per share - GAAP     $ 55.55     $ 48.17
 
Calculation of tangible capital / tangible assets:
 
Total stockholders' equity $ 309,324 $ 268,200
Less: goodwill   2,714   2,714
Tangible stockholders' equity(numerator) $ 306,610 $ 265,486
 
Total assets $ 5,306,066 $ 4,776,682
Less: goodwill   2,714   2,714
Tangible assets(denominator) $ 5,303,352 $ 4,773,968
 
Tangible capital / tangible assets - Non-GAAP       5.78%       5.56%
Capital / assets - GAAP       5.83%       5.61%

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