Century Bancorp, Inc. Announces Earnings for Q2 2015, Up 5.8%; Loan Growth of 16%; Asset Growth to Record Size of $3.9 BB; Regular Dividend Declared

MEDFORD, Mass.--()--Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $10,884,000 for the six months ended June 30, 2015, or $1.95 per Class A share diluted, an increase of 3.4% compared to net income of $10,531,000, or $1.89 per Class A share diluted, for the same period a year ago. Total assets increased 8.0% from $3.6 billion at December 31, 2014 to $3.9 billion at June 30, 2015. For the quarter ended June 30, 2015, net income totaled $5,925,000 or $1.06 per Class A share diluted, an increase of 5.8% compared to net income of $5,599,000, or $1.01 per Class A share diluted, for the same period a year ago.

Net interest income totaled $34.1 million for the six months ended June 30, 2015 compared to $33.3 million for the same period in 2014. The 2.6% 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 2.16% 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 7.2% combined with a similar increase in average deposits. Also, interest expense increased 3.3% as a result of an increase in deposit balances.

The provision for loan losses decreased by $850,000 from $1,050,000 for the six months ended June 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 4.7% in 2014 to 4.0% in 2015 primarily as a result of an increase in tax-exempt income.

At June 30, 2015, total equity was $204.4 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 6.58% at June 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 June 30, 2015 was $36.71 per share compared to $34.57 at December 31, 2014.

The Company’s allowance for loan losses was $22.2 million or 1.44% of loans outstanding at June 30, 2015, compared to $22.3 million or 1.68% of loans outstanding at December 31, 2014 and $21.7 million or 1.65% of loans outstanding at June 30, 2014. The change in the allowance for loan losses was primarily due to changes in portfolio composition. Non-performing assets totaled $4.1 million at June 30, 2015, compared to $4.1 million at December 31, 2014 and $2.8 million at June 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 August 17, 2015 to stockholders of record on August 3, 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)
June 30, December 31,

Assets

  2015   2014
Cash and Due From Banks $ 60,547 $ 43,367
Federal Funds Sold and Interest-bearing Deposits In Other Banks 24,522 261,991
 
Short-term Investments 2,139 2,131
 
Securities Available-For-Sale (AFS) 440,059 448,390
 
Securities Held-to-Maturity 1,683,568 1,406,792
 
Federal Home Loan Bank of Boston stock, at cost 27,748 24,916
 
Loans:
Commercial & Industrial 291,142 149,732
Municipal 87,241 41,850
Construction & Land Development 26,521 22,744
Commercial Real Estate 713,770 696,272
Residential Real Estate 248,103 257,305
Consumer and Other 10,646 12,188
Home Equity   167,271   151,275
 
Total Loans 1,544,694 1,331,366
Less: Allowance for Loan Losses   22,245   22,318
 
Net Loans 1,522,449 1,309,048
 
Bank Premises and Equipment, net 24,416 24,182
Accrued Interest Receivable 7,281 6,241
Goodwill 2,714 2,714
Other Assets   118,375   94,264
 
Total Assets $ 3,913,818 $ 3,624,036
 

Liabilities

Demand Deposits $ 512,167 $ 484,928
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,054,132 978,619
Money Market Accounts 902,106 890,899
Time Deposits   383,284   383,145
 
Total Interest Bearing Deposits   2,339,522   2,252,663
 
Total Deposits 2,851,689 2,737,591
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 283,830 212,360
Other Borrowed Funds   485,500   395,500
 
Total Borrowed Funds 769,330 607,860
 
Other Liabilities 52,343 50,002
Subordinated Debentures   36,083   36,083
 
Total Liabilities 3,709,445 3,431,536
 
Total Stockholders' Equity   204,373   192,500
 
Total Liabilities & Stockholders' Equity $ 3,913,818 $ 3,624,036
 
       
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Six months ended June 30, 2015 and 2014
(in thousands)
 
Quarter ended June 30, Six months ended June 30,
  2015     2014   2015     2014
 
Interest Income:
Loans $ 12,470 $ 12,611 $ 24,546 $ 25,060
Securities Held-to-Maturity 9,371 8,020 17,539 15,800
Securities Available-for-Sale 737 794 1,469 1,614
Federal Funds Sold and Interest-bearing Deposits In Other Banks   97   129   293   211
 
Total Interest Income 22,675 21,554 43,847 42,685
 
Interest Expense:
Savings and NOW Deposits 692 660 1,320 1,269
Money Market Accounts 734 669 1,516 1,308
Time Deposits 1,207 1,141 2,363 2,226
Securities Sold Under Agreements to Repurchase 128 93 242 194
Other Borrowed Funds and Subordinated Debentures   2,200   2,237   4,285   4,420
 
Total Interest Expense   4,961   4,800   9,726   9,417
 
Net Interest Income 17,714 16,754 34,121 33,268
 
Provision For Loan Losses   -   450   200   1,050
 
Net Interest Income After
Provision for Loan Losses 17,714 16,304 33,921 32,218
 
Other Operating Income
Service Charges on Deposit Accounts 1,934 2,012 3,847 4,046
Lockbox Fees 888 845 1,676 1,622
Net Gain on Sales of Loans 418 81 517 88
Other Income   970   677   1,675   1,329
 
Total Other Operating Income 4,210 3,615 7,715 7,085
 
Operating Expenses
Salaries and Employee Benefits 9,480 8,776 18,614 17,651
Occupancy 1,517 1,322 3,122 2,764
Equipment 659 585 1,252 1,157
FDIC Assessment 545 494 1,048 974
Other   3,565   2,912   6,268   5,702
 
Total Operating Expenses   15,766   14,089   30,304   28,248
 
Income Before Income Taxes 6,158 5,830 11,332 11,055
 
Income Tax Expense   233   231   448   524
 
Net Income $ 5,925 $ 5,599 $ 10,884 $ 10,531
 
   
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
June 30, June 30,

Assets

  2015     2014  
Cash and Due From Banks $ 69,139 $ 65,048
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 221,727 157,958
 
Securities Available-For-Sale (AFS) 464,679 495,406
Securities Held-to-Maturity (HTM) 1,637,599 1,507,529
 
Total Loans 1,363,532 1,277,980
Less: Allowance for Loan Losses   22,482     21,380  
 
Net Loans 1,341,050 1,256,600
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (15,774 ) (22,127 )
Bank Premises and Equipment 24,312 23,395
Accrued Interest Receivable 7,262 7,255
Goodwill 2,714 2,714
Other Assets   99,258     86,909  
 
Total Assets $ 3,851,966   $ 3,580,687  
 

Liabilities

Demand Deposits $ 500,241 $ 471,114
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,142,838 1,113,224
Money Market Accounts 973,696 919,844
Time Deposits   383,832     388,236  
Total Interest Bearing Deposits   2,500,366     2,421,304  
 
Total Deposits 3,000,607 2,892,418
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 256,883 219,336
Other Borrowed Funds   309,601     215,939  
 
Total Borrowed Funds 566,484 435,275
 
Other Liabilities 50,804 34,025
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 3,653,978 3,397,801
 
Total Stockholders' Equity   197,988     182,886  
 
Total Liabilities & Stockholders' Equity $ 3,851,966   $ 3,580,687  
 
Total Average Earning Assets - QTD $ 3,738,382   $ 3,503,801  
 
Total Average Earning Assets - YTD $ 3,687,537   $ 3,438,873  
 
   
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data) June 30, June 30,
  2015   2014
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.06 $ 1.01
Earnings per average Class A share, diluted, year-to-date $ 1.95 $ 1.89
Return on average assets, year-to-date 0.57% 0.59%
Return on average stockholders' equity, year-to-date 11.09% 11.61%
Net interest margin (taxable equivalent), quarter 2.19% 2.20%
Net interest margin (taxable equivalent), year-to-date 2.16% 2.23%
Efficiency ratio, year-to-date 64.3% 62.5%
Book value per share $ 36.71 $ 33.88
Tangible book value per share $ 36.22 $ 33.39
Tangible capital / tangible assets 5.16% 5.22%
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,567,909 5,558,032
Average Class A shares outstanding, diluted, year-to-date 5,567,909 5,558,105
 
Shares outstanding Class A 3,600,729 3,589,129
Shares outstanding Class B   1,967,180   1,967,580
Total shares outstanding at period end   5,567,909   5,556,709
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.44% 1.65%
Nonaccrual loans $ 2,186 $ 2,845
Nonperforming assets $ 4,101 $ 2,845
Loans 90 days past due and still accruing $ - $ 614
Accruing troubled debt restructures $ 3,024 $ 5,883
Net (recoveries)charge-offs, year-to-date $ 274 $ 269
 
Leverage ratio 6.58% * 6.47%
Common equity tier 1 risk weighted capital ratio 10.24% * n/a
Tier 1 risk weighted capital ratio 11.85% * 13.64%
Total risk weighted capital ratio 12.87% * 14.89%
Total risk weighted assets $ 2,174,045 * $ 1,733,137
 
* 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