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Century Bancorp, Inc. Announces Record Earnings for Q3 2019; Asset Growth to $5.3 BB; Regular Dividend Declared

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

Century Bancorp, Inc. (CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $28,967,000 for the nine months ended September 30, 2019, or $5.20 per Class A share diluted, an increase of 10.2% compared to net income of $26,288,000, or $4.72 per Class A share diluted, for the same period a year ago. Total assets increased 2.6% from $5.16 billion at December 31, 2018 to $5.30 billion at September 30, 2019. For the quarter ended September 30, 2019, net income totaled $10,084,000 or $1.81 per Class A share diluted, an increase of 5.2% compared to net income of $9,581,000, or $1.72 per Class A share diluted, for the same period a year ago.

Net interest income totaled $70.5 million for the nine months ended September 30, 2019 compared to $68.9 million for the same period in 2018. The 2.3% 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 2.08% 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 7.9% combined with an average yield increase of 0.30%, resulting in an increase in interest income of $19.0 million. The average balance of interest bearing liabilities increased 7.6% combined with an average cost of funds increase of 0.50%, resulting in an increase in interest expense of $17.4 million.

The Company’s effective tax rate decreased from 4.6% for the first nine months of 2018 to 2.0% 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 September 30, 2019, total equity was $329.0 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 7.25% at September 30, 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 September 30, 2019 was $59.08 per share compared to $53.96 at December 31, 2018.

The Company’s allowance for loan losses was $29.1 million or 1.22% of loans outstanding at September 30, 2019 compared to $28.5 million or 1.25% of loans outstanding at December 31, 2018, and $28.5 million or 1.26% of loans outstanding at September 30, 2018. The ratio of the allowance for loan losses to loans outstanding has decreased from the same period last year, primarily as a result of improvements in historical loss rates. Non-performing assets totaled $1.1 million at September 30, 2019, compared to $3.5 million at December 31, 2018, and $3.7 million at September 30, 2018. Nonperforming assets decreased from the same period last year, mainly as a result of the resolution of one residential real estate property during the third quarter of 2019.

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 November 15, 2019 to stockholders of record on November 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)

 
Assets

September 30,
2019

December 31,
2018

Cash and Due From Banks

$

85,014

$

89,540

Federal Funds Sold and Interest-bearing Deposits In Other Banks

 

249,091

 

252,963

 
Securities Available-for-Sale (AFS)

 

263,411

 

338,355

 
Securities Held-to-Maturity

 

2,164,135

 

2,046,647

 
Federal Home Loan Bank of Boston stock, at cost

 

14,025

 

17,974

 
Loans:
Commercial & Industrial

 

783,950

 

761,775

Municipal

 

121,802

 

97,140

Construction & Land Development

 

7,824

 

13,628

Commercial Real Estate

 

765,385

 

750,362

Residential Real Estate

 

364,317

 

348,250

Consumer and Other

 

21,748

 

22,083

Home Equity

 

310,635

 

292,340

 
Total Loans

 

2,375,661

 

2,285,578

Less: Allowance for Loan Losses

 

29,097

 

28,543

 
Net Loans

 

2,346,564

 

2,257,035

 
Bank Premises and Equipment, net

 

31,520

 

23,921

Accrued Interest Receivable

 

13,275

 

14,406

Goodwill

 

2,714

 

2,714

Other Assets

 

129,432

 

120,380

 
Total Assets

$

5,299,181

$

5,163,935

 
Liabilities
Demand Deposits

$

797,455

$

813,478

 
Interest Bearing Deposits:
Savings and NOW Deposits

 

1,759,401

 

1,707,019

Money Market Accounts

 

1,249,923

 

1,325,888

Time Deposits

 

533,074

 

560,579

 
Total Interest Bearing Deposits

 

3,542,398

 

3,593,486

 
Total Deposits

 

4,339,853

 

4,406,964

 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase

 

307,235

 

154,240

Other Borrowed Funds

 

209,188

 

202,378

 
Total Borrowed Funds

 

516,423

 

356,618

 
Other Liabilities

 

77,862

 

63,831

Subordinated Debentures

 

36,083

 

36,083

 
Total Liabilities

 

4,970,221

 

4,863,496

 
Total Stockholders' Equity

 

328,960

 

300,439

 
Total Liabilities & Stockholders' Equity

$

5,299,181

$

5,163,935

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the quarter and nine months ended September 30, 2019 and 2018
(in thousands)

 

Quarter ended September 30,

 

 

Nine months ended September 30,

2019

 

2018

 

 

2019

 

2018

 
Interest Income:
Loans

$

22,117

$

20,167

$

65,106

$

57,613

Securities Held-to-Maturity

 

14,623

 

11,507

 

43,006

 

32,930

Securities Available-for-Sale

 

2,184

 

2,500

 

7,305

 

6,821

Federal Funds Sold and Interest-bearing Deposits In Other Banks

 

928

 

591

 

3,204

 

2,239

 
Total Interest Income

 

39,852

 

34,765

 

118,621

 

99,603

 
Interest Expense:
Savings and NOW Deposits

 

5,445

 

2,972

 

16,788

 

7,778

Money Market Accounts

 

5,050

 

3,652

 

15,805

 

9,039

Time Deposits

 

3,038

 

2,571

 

8,724

 

7,465

Securities Sold Under Agreements to Repurchase

 

697

 

288

 

1,572

 

657

Other Borrowed Funds and Subordinated Debentures

 

1,852

 

2,078

 

5,274

 

5,793

 
Total Interest Expense

 

16,082

 

11,561

 

48,163

 

30,732

 
Net Interest Income

 

23,770

 

23,204

 

70,458

 

68,871

 
Provision For Loan Losses

 

75

 

-

 

700

 

900

 
Net Interest Income After
Provision for Loan Losses

 

23,695

 

23,204

 

69,758

 

67,971

 
Other Operating Income
Service Charges on Deposit Accounts

 

2,310

 

2,137

 

6,801

 

6,268

Lockbox Fees

 

937

 

892

 

3,018

 

2,304

Net Gain on Sales of Loans

 

-

 

-

 

154

 

-

Net Gain on Sales of Securities

 

53

 

105

 

61

 

302

Other Income

 

986

 

1,035

 

3,676

 

3,210

 
Total Other Operating Income

 

4,286

 

4,169

 

13,710

 

12,084

 
Operating Expenses
Salaries and Employee Benefits

 

10,670

 

10,570

 

32,621

 

32,331

Occupancy

 

1,463

 

1,481

 

4,686

 

4,579

Equipment

 

862

 

781

 

2,440

 

2,355

Other

 

4,467

 

4,516

 

14,170

 

13,243

 
Total Operating Expenses

 

17,462

 

17,348

 

53,917

 

52,508

 
Income Before Income Taxes

 

10,519

 

10,025

 

29,551

 

27,547

 
Income Tax Expense

 

435

 

444

 

584

 

1,259

 
Net Income

$

10,084

$

9,581

$

28,967

$

26,288

Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)

 
Assets

September 30,
2019

September 30,
2018

Cash and Due From Banks

$

74,413

 

$

71,034

 

Federal Funds Sold and Interest-Bearing Deposits in Other Banks

 

184,035

 

 

171,773

 

 
Securities Available-For-Sale (AFS)

 

325,036

 

 

406,022

 

Securities Held-to-Maturity (HTM)

 

2,128,082

 

 

1,816,745

 

 
Total Loans

 

2,325,136

 

 

2,206,194

 

Less: Allowance for Loan Losses

 

28,936

 

 

27,235

 

 
Net Loans

 

2,296,200

 

 

2,178,959

 

 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers

 

(3,352

)

 

(4,154

)

Bank Premises and Equipment

 

26,273

 

 

23,481

 

Accrued Interest Receivable

 

13,942

 

 

11,608

 

Goodwill

 

2,714

 

 

2,714

 

Other Assets

 

133,754

 

 

122,502

 

 
Total Assets

$

5,181,097

 

$

4,800,684

 

 
Liabilities
Demand Deposits

$

764,852

 

$

718,215

 

 
Interest Bearing Deposits:
Savings and NOW Deposits

 

1,818,017

 

 

1,495,464

 

Money Market Accounts

 

1,249,531

 

 

1,208,547

 

Time Deposits

 

512,228

 

 

587,742

 

Total Interest Bearing Deposits

 

3,579,776

 

 

3,291,753

 

 
Total Deposits

 

4,344,628

 

 

4,009,968

 

 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase

 

205,185

 

 

149,970

 

Other Borrowed Funds

 

201,804

 

 

262,397

 

 
Total Borrowed Funds

 

406,989

 

 

412,367

 

 
Other Liabilities

 

79,327

 

 

69,404

 

Subordinated Debentures

 

36,083

 

 

36,083

 

 
Total Liabilities

 

4,867,027

 

 

4,527,822

 

 
Total Stockholders' Equity

 

314,070

 

 

272,862

 

 
Total Liabilities & Stockholders' Equity

$

5,181,097

 

$

4,800,684

 

 
Total Average Earning Assets - QTD

$

4,971,831

 

$

4,625,880

 

 
Total Average Earning Assets - YTD

$

4,962,289

 

$

4,600,734

 

Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)
 

September 30,
2019

 

September 30,
2018

Performance Measures:
 
Earnings per average Class A share, diluted, quarter

$

1.81

 

$

1.72

 

Earnings per average Class A share, diluted, year-to-date

$

5.20

 

$

4.72

 

Return on average assets, year-to-date

 

0.75

%

 

0.73

%

Return on average stockholders' equity, year-to-date

 

12.33

%

 

12.88

%

Net interest margin (taxable equivalent), quarter

 

2.08

%

 

2.19

%

Net interest margin (taxable equivalent), year-to-date

 

2.08

%

 

2.19

%

Efficiency ratio, Non-GAAP (1)

 

59.1

%

 

60.0

%

Book value per share

$

59.08

 

$

51.52

 

Tangible book value per share - Non-GAAP (1)

$

58.59

 

$

51.04

 

Capital / assets

 

6.21

%

 

5.89

%

Tangible capital / tangible assets - Non-GAAP (1)

 

6.16

%

 

5.84

%

 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter and year-to-date

 

5,567,909

 

 

5,567,909

 

 
Shares outstanding Class A

 

3,650,449

 

 

3,608,329

 

Shares outstanding Class B

 

1,917,460

 

 

1,959,580

 

Total shares outstanding at period end

 

5,567,909

 

 

5,567,909

 

 
 
Asset Quality and Other Data:
 
Allowance for loan losses / loans

 

1.22

%

 

1.26

%

Nonaccrual loans

$

1,066

 

$

3,729

 

Nonperforming assets

$

1,066

 

$

3,729

 

Loans 90 days past due and still accruing

$

-

 

$

471

 

Accruing troubled debt restructures

$

2,404

 

$

2,598

 

Net charge-offs(recoveries), year-to-date

$

146

 

$

(1,390

)

 
Leverage ratio

 

7.25

%

 

7.03

%

Common equity tier 1 risk weighted capital ratio

 

11.90

%

 

11.14

%

Tier 1 risk weighted capital ratio

 

13.12

%

 

12.42

%

Total risk weighted capital ratio

 

14.13

%

 

13.46

%

Total risk weighted assets

$

2,867,422

 

$

2,733,491

 

 
 
(1) Non-GAAP Financial Measures are reconciled in the following tables:
 
Calculation of Efficiency ratio:
 
Total operating expenses

$

53,917

 

$

52,508

 

Less: other real estate owned expenses

 

(139

)

 

-

 

Total adjusted operating expenses(numerator)

$

53,778

 

$

52,508

 

 
Net interest income

$

70,458

 

$

68,871

 

Total other operating income

 

13,710

 

 

12,084

 

Tax equivalent adjustment

 

6,875

 

 

6,547

 

Total income(denominator)

$

91,043

 

$

87,502

 

 
Efficiency ratio - Non-GAAP

 

59.1

%

 

60.0

%

 
Calculation of tangible book value per share:
 
Total stockholders' equity

$

328,960

 

$

286,877

 

Less: goodwill

 

2,714

 

 

2,714

 

Tangible stockholders' equity(numerator)

$

326,246

 

$

284,163

 

 
Total shares outstanding at period end(denominator)

 

5,567,909

 

 

5,567,909

 

 
Tangible book value per share - Non-GAAP

$

58.59

 

$

51.04

 

Book value per share - GAAP

$

59.08

 

$

51.52

 

 
Calculation of tangible capital / tangible assets:
 
Total stockholders' equity

$

328,960

 

$

286,877

 

Less: goodwill

 

2,714

 

 

2,714

 

Tangible stockholders' equity(numerator)

$

326,246

 

$

284,163

 

 
Total assets

$

5,299,181

 

$

4,870,423

 

Less: goodwill

 

2,714

 

 

2,714

 

Tangible assets(denominator)

$

5,296,467

 

$

4,867,709

 

 
Tangible capital / tangible assets - Non-GAAP

 

6.16

%

 

5.84

%

Capital / assets - GAAP

 

6.21

%

 

5.89

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20191008005827/en/