Century Bancorp, Inc. Announces Earnings for Q3 2015, Up 8.1%; Loan Growth of 23%; Asset Growth to $3.9 BB; Regular Dividend Declared

MEDFORD, Mass.--()--Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced record net income of $17,050,000 for the nine months ended September 30, 2015, or $3.06 per Class A share diluted, an increase of 5.0% compared to net income of $16,237,000, or $2.92 per Class A share diluted, for the same period a year ago. Total assets increased 6.4% from $3.6 billion at December 31, 2014 to $3.9 billion at September 30, 2015. For the quarter ended September 30, 2015, net income totaled $6,166,000 or $1.11 per Class A share diluted, an increase of 8.1% compared to net income of $5,706,000, or $1.03 per Class A share diluted, for the same period a year ago.

Net interest income totaled $52.7 million for the nine months ended September 30, 2015 compared to $50.0 million for the same period in 2014. The 5.4% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.23% on a fully taxable equivalent basis in 2014 to 2.20% on the same basis for 2015. This was primarily the result of a decrease in rates on earning assets. The average balances of earning assets increased by 7.6% combined with a similar increase in average deposits. Also, interest expense increased 3.9% as a result of an increase in deposit balances.

The provision for loan losses decreased by $1,450,000 from $1,650,000 for the nine months ended September 30, 2014 to $200,000 for the same period in 2015, primarily as a result changes in portfolio composition. The Company’s effective tax rate decreased from 4.4% in 2014 to 3.6% in 2015 primarily as a result of an increase in tax-exempt income.

At September 30, 2015, total equity was $211.1 million compared to $192.5 million at December 31, 2014. The Company’s equity increased primarily as a result of earnings and a decrease in other comprehensive loss, net of taxes, offset somewhat by dividends paid. Other comprehensive loss, net of taxes, decreased primarily as a result of a decrease in unrealized losses on securities transferred from available-for-sale to held-to-maturity and amortization of the pension liability. During the third quarter of 2013, $987.0 million of securities available-for-sale with unrealized losses of $25.3 million were transferred to securities held-to-maturity. This was done in response to rising interest rates.

The Company’s leverage ratio stood at 6.71% at September 30, 2015, compared to 6.91% at December 31, 2014. The decrease in the leverage ratio was due to an increase in quarterly average assets, offset somewhat by an increase in stockholders’ equity. Book value as of September 30, 2015 was $37.92 per share compared to $34.57 at December 31, 2014.

The Company’s allowance for loan losses was $22.3 million or 1.36% of loans outstanding at September 30, 2015, compared to $22.3 million or 1.68% of loans outstanding at December 31, 2014 and $22.5 million or 1.66% of loans outstanding at September 30, 2014. The change in the ratio of the allowance for loan losses to loans outstanding was primarily due to changes in portfolio composition. Non-performing assets totaled $1.8 million at September 30, 2015, compared to $4.1 million at December 31, 2014 and $6.0 million at September 30, 2014.

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 16, 2015 to stockholders of record on November 2, 2015.

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)
September 30, December 31,

Assets

  2015   2014
Cash and Due From Banks $ 51,558 $ 43,367
Federal Funds Sold and Interest-bearing Deposits In Other Banks 61,706 261,991
 
Short-term Investments 2,139 2,131
 
Securities Available-For-Sale (AFS) 410,214 448,390
 
Securities Held-to-Maturity 1,543,775 1,406,792
 
Federal Home Loan Bank of Boston stock, at cost 29,698 24,916
 
Loans:
Commercial & Industrial 378,154 149,732
Municipal 87,016 41,850
Construction & Land Development 27,308 22,744
Commercial Real Estate 701,523 696,272
Residential Real Estate 264,105 257,305
Consumer and Other 10,633 12,188
Home Equity   172,091   151,275
 
Total Loans 1,640,830 1,331,366
Less: Allowance for Loan Losses   22,330   22,318
 
Net Loans 1,618,500 1,309,048
 
Bank Premises and Equipment, net 24,214 24,182
Accrued Interest Receivable 7,306 6,241
Goodwill 2,714 2,714
Other Assets   104,583   94,264
 
Total Assets $ 3,856,407 $ 3,624,036
 

Liabilities

Demand Deposits $ 534,870 $ 484,928
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,071,773 978,619
Money Market Accounts 896,509 890,899
Time Deposits   406,420   383,145
 
Total Interest Bearing Deposits   2,374,702   2,252,663
 
Total Deposits 2,909,572 2,737,591
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 211,770 212,360
Other Borrowed Funds   432,500   395,500
 
Total Borrowed Funds 644,270 607,860
 
Other Liabilities 55,350 50,002
Subordinated Debentures   36,083   36,083
 
Total Liabilities 3,645,275 3,431,536
 
Total Stockholders' Equity   211,132   192,500
 
Total Liabilities & Stockholders' Equity $ 3,856,407 $ 3,624,036
 
       
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Nine months ended September 30, 2015 and 2014
(in thousands)
 
Quarter ended September 30, Nine months ended September 30,
  2015     2014   2015     2014
 
Interest Income:
Loans $ 14,051 $ 12,708 $ 38,597 $ 37,768
Securities Held-to-Maturity 8,834 8,104 26,373 23,904
Securities Available-for-Sale 830 752 2,299 2,366
Federal Funds Sold and Interest-bearing Deposits In Other Banks   35   60   328   271
 
Total Interest Income 23,750 21,624 67,597 64,309
 
Interest Expense:
Savings and NOW Deposits 729 642 2,049 1,911
Money Market Accounts 760 725 2,276 2,033
Time Deposits 1,231 1,089 3,594 3,315
Securities Sold Under Agreements to Repurchase 129 90 371 284
Other Borrowed Funds and Subordinated Debentures   2,285   2,333   6,570   6,753
 
Total Interest Expense   5,134   4,879   14,860   14,296
 
Net Interest Income 18,616 16,745 52,737 50,013
 
Provision For Loan Losses   -   600   200   1,650
 

Net Interest Income After Provision for Loan Losses

18,616 16,145 52,537 48,363
 
Other Operating Income
Service Charges on Deposit Accounts 1,941 2,022 5,788 6,068
Lockbox Fees 782 723 2,458 2,345
Net Gain on Sales of Loans 225 133 742 221
Other Income   882   880   2,557   2,209
 
Total Other Operating Income 3,830 3,758 11,545 10,843
 
Operating Expenses
Salaries and Employee Benefits 10,087 8,681 28,701 26,332
Occupancy 1,499 1,341 4,621 4,105
Equipment 697 552 1,949 1,709
FDIC Assessment 511 502 1,602 1,476
Other   3,306   2,900   9,531   8,602
 
Total Operating Expenses   16,100   13,976   46,404   42,224
 
Income Before Income Taxes 6,346 5,927 17,678 16,982
 
Income Tax Expense   180   221   628   745
 
Net Income $ 6,166 $ 5,706 $ 17,050 $ 16,237
 
   
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
September 30, September 30,

Assets

  2015     2014  
Cash and Due From Banks $ 67,363 $ 64,909
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 163,144 133,929
 
Securities Available-For-Sale (AFS) 462,104 499,851
Securities Held-to-Maturity (HTM) 1,640,388 1,514,604
 
Total Loans 1,441,589 1,297,392
Less: Allowance for Loan Losses   22,432     21,603  
 
Net Loans 1,419,157 1,275,789
 

Unrealized (Loss) Gain on Securities AFS and HTM Transfers

(15,107 ) (21,223 )
Bank Premises and Equipment 24,332 23,418
Accrued Interest Receivable 7,462 7,229
Goodwill 2,714 2,714
Other Assets   102,373     87,635  
 
Total Assets $ 3,873,930   $ 3,588,855  
 

Liabilities

Demand Deposits $ 507,855 $ 476,954
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,134,195 1,105,228
Money Market Accounts 959,191 929,328
Time Deposits   395,915     379,565  
Total Interest Bearing Deposits   2,489,301     2,414,121  
 
Total Deposits 2,997,156 2,891,075
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 254,521 213,511
Other Borrowed Funds   334,069     228,033  
 
Total Borrowed Funds 588,590 441,544
 
Other Liabilities 50,908 34,241
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 3,672,737 3,402,943
 
Total Stockholders' Equity   201,193     185,912  
 
Total Liabilities & Stockholders' Equity $ 3,873,930   $ 3,588,855  
 
Total Average Earning Assets - QTD $ 3,745,957   $ 3,459,358  
 
Total Average Earning Assets - YTD $ 3,707,225   $ 3,445,776  
 
   
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data) September 30, September 30,
  2015     2014  
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.11 $ 1.03
Earnings per average Class A share, diluted, year-to-date $ 3.06 $ 2.92
Return on average assets, year-to-date 0.59 % 0.60 %
Return on average stockholders' equity, year-to-date 11.33 % 11.68 %
Net interest margin (taxable equivalent), quarter 2.28 % 2.22 %
Net interest margin (taxable equivalent), year-to-date 2.20 % 2.23 %
Efficiency ratio, year-to-date 64.0 % 61.9 %
Book value per share $ 37.92 $ 35.14
Tangible book value per share $ 37.43 $ 34.65
Tangible capital / tangible assets 5.41 % 5.37 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,567,909 5,563,278
Average Class A shares outstanding, diluted, year-to-date 5,567,909 5,559,909
 
Shares outstanding Class A 3,600,729 3,599,729
Shares outstanding Class B   1,967,180     1,967,180  
Total shares outstanding at period end   5,567,909     5,566,909  
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.36 % 1.66 %
Nonaccrual loans $ 1,760 $ 6,018
Nonperforming assets $ 1,760 $ 6,018
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 2,994 $ 3,697

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

$ 188 $ 122
 
Leverage ratio 6.71 % * 6.70 %
Common equity tier 1 risk weighted capital ratio 10.18 % * n/a
Tier 1 risk weighted capital ratio 11.74 % * 13.65 %
Total risk weighted capital ratio 12.74 % * 14.90 %
Total risk weighted assets $ 2,240,879 * $ 1,772,301
 
* computed utilizing recently implemented Basel III regulatory capital framework.

Contacts

Century Bancorp, Inc.
William P. Hornby, 781-393-4630
Fax: 781-393-4071
whornby@centurybank.com

Contacts

Century Bancorp, Inc.
William P. Hornby, 781-393-4630
Fax: 781-393-4071
whornby@centurybank.com