Century Bancorp, Inc. Announces Increased Earnings For Q2 2019; Record YTD Earnings, up 13%; Asset Growth To $5.2 BB; Regular Dividend Declared

Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $18,884,000 for the six months ended June 30, 2019, or $3.39 per Class A share diluted, an increase of 13.0% compared to net income of $16,707,000, or $3.00 per Class A share diluted, for the same period a year ago. Total assets increased 0.7% from $5.16 billion at December 31, 2018 to $5.20 billion at June 30, 2019. For the quarter ended June 30, 2019, net income totaled $9,466,000 or $1.70 per Class A share diluted, an increase of 5.2% compared to net income of $8,998,000, or $1.62 per Class A share diluted, for the same period a year ago.

Net interest income totaled $46.7 million for the six months ended June 30, 2019 compared to $45.7 million for the same period in 2018. The 2.2% 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 2.09% 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 8.1% combined with an average yield increase of 0.36%, resulting in an increase in interest income of $13.9 million. The average balance of interest bearing liabilities increased 7.6% combined with an average cost of funds increase of 0.57%, resulting in an increase in interest expense of $12.9 million.

The Company’s effective tax rate decreased from 4.7% for the first six months of 2018 to 0.8% 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 June 30, 2019, total equity was $318.9 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 7.07% at June 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 June 30, 2019 was $57.28 per share compared to $53.96 at December 31, 2018.

The Company’s allowance for loan losses was $29.1 million or 1.26% of loans outstanding at June 30, 2019 compared to $28.5 million or 1.25% of loans outstanding at December 31, 2018, and $27.1 million or 1.22% of loans outstanding at June 30, 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 $5.0 million at June 30, 2019, compared to $3.5 million at December 31, 2018, and $1.5 million at June 30, 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 August 15, 2019 to stockholders of record on August 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			June 30, 2019			December 31, 2018
Cash and Due From Banks			$	69,317		$	89,540
Federal Funds Sold and Interest-bearing Deposits In Other Banks				181,409			252,963
Securities Available-for-Sale (AFS)				293,051			338,327
Securities Held-to-Maturity				2,178,568			2,046,647
Federal Home Loan Bank of Boston stock, at cost				21,139			17,974
Loans:
Commercial & Industrial				764,492			761,775
Municipal				95,682			97,140
Construction & Land Development				13,751			13,628
Commercial Real Estate				758,242			750,362
Residential Real Estate				346,585			348,250
Consumer and Other				22,609			22,083
Home Equity				311,210			292,340
Total Loans				2,312,571			2,285,578
Less: Allowance for Loan Losses				29,070			28,543
Net Loans				2,283,501			2,257,035
Bank Premises and Equipment, net				25,296			23,921
Accrued Interest Receivable				14,655			14,406
Goodwill				2,714			2,714
Other Assets				130,851			120,408
Total Assets			$	5,200,501		$	5,163,935
Liabilities
Demand Deposits			$	765,127		$	813,478
Interest Bearing Deposits:
Savings and NOW Deposits				1,668,802			1,707,019
Money Market Accounts				1,172,283			1,325,888
Time Deposits				489,948			560,579
Total Interest Bearing Deposits				3,331,033			3,593,486
Total Deposits				4,096,160			4,406,964
Borrowed Funds:
Securities Sold Under Agreements to Repurchase				219,510			154,240
Other Borrowed Funds				451,419			202,378
Total Borrowed Funds				670,929			356,618
Other Liabilities				78,392			63,831
Subordinated Debentures				36,083			36,083
Total Liabilities				4,881,564			4,863,496
Total Stockholders' Equity				318,937			300,439
Total Liabilities & Stockholders' Equity			$	5,200,501		$	5,163,935

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the quarter and six months ended June 30, 2019 and 2018
(in thousands)
			Quarter ended June 30,							Six months ended June 30,
			2019			2018				2019			2018
Interest Income:
Loans			$	21,680		$	19,179			$	42,989		$	37,446
Securities Held-to-Maturity				14,595			11,135				28,383			21,423
Securities Available-for-Sale				2,490			2,329				5,121			4,321
Federal Funds Sold and Interest-bearing Deposits In Other Banks				927			765				2,276			1,648
Total Interest Income				39,692			33,408				78,769			64,838
Interest Expense:
Savings and NOW Deposits				5,877			2,583				11,343			4,806
Money Market Accounts				5,412			2,934				10,755			5,387
Time Deposits				2,893			2,531				5,686			4,894
Securities Sold Under Agreements to Repurchase				490			188				875			369
Other Borrowed Funds and Subordinated Debentures				1,770			1,973				3,422			3,715
Total Interest Expense				16,442			10,209				32,081			19,171
Net Interest Income				23,250			23,199				46,688			45,667
Provision For Loan Losses				250			450				625			900
Net Interest Income After
Provision for Loan Losses				23,000			22,749				46,063			44,767
Other Operating Income
Service Charges on Deposit Accounts				2,282			2,064				4,491			4,131
Lockbox Fees				992			621				2,081			1,412
Net Gain on Sales of Loans				139			-				154			-
Net Gain on Sales of Securities				-			-				-			197
Other Income				1,584			1,037				2,698			2,175
Total Other Operating Income				4,997			3,722				9,424			7,915
Operating Expenses
Salaries and Employee Benefits				10,916			10,536				21,951			21,761
Occupancy				1,522			1,461				3,223			3,098
Equipment				795			780				1,578			1,574
FDIC Assessment				349			359				722			742
Other				4,682			4,023				8,980			7,985
Total Operating Expenses				18,264			17,159				36,454			35,160
Income Before Income Taxes				9,733			9,312				19,033			17,522
Income Tax Expense				267			314				149			815
Net Income			$	9,466		$	8,998			$	18,884		$	16,707

Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
Assets			June 30, 2019				June 30, 2018
Cash and Due From Banks			$	74,948			$	71,146
Federal Funds Sold and Interest-Bearing Deposits in Other Banks				189,568				199,454
Securities Available-For-Sale (AFS)				340,664				404,032
Securities Held-to-Maturity (HTM)				2,121,043				1,795,422
Total Loans				2,306,165				2,189,044
Less: Allowance for Loan Losses				28,864				26,743
Net Loans				2,277,301				2,162,301
Unrealized (Loss)Gain on Securities AFS and HTM Transfers				(3,560	)			(4,369	)
Bank Premises and Equipment				24,483				23,290
Accrued Interest Receivable				14,167				11,189
Goodwill				2,714				2,714
Other Assets				134,524				123,101
Total Assets			$	5,175,852			$	4,788,280
Liabilities
Demand Deposits			$	759,653			$	708,858
Interest Bearing Deposits:
Savings and NOW Deposits				1,834,278				1,506,828
Money Market Accounts				1,270,952				1,196,783
Time Deposits				509,710				601,207
Total Interest Bearing Deposits				3,614,940				3,304,818
Total Deposits				4,374,593				4,013,676
Borrowed Funds:
Securities Sold Under Agreements to Repurchase				181,252				149,139
Other Borrowed Funds				195,318				252,054
Total Borrowed Funds				376,570				401,193
Other Liabilities				79,440				69,242
Subordinated Debentures				36,083				36,083
Total Liabilities				4,866,686				4,520,194
Total Stockholders' Equity				309,166				268,086
Total Liabilities & Stockholders' Equity			$	5,175,852			$	4,788,280
Total Average Earning Assets - QTD			$	4,965,815			$	4,622,577
Total Average Earning Assets - YTD			$	4,957,440			$	4,587,952

Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)
			June 30, 2019				June 30, 2018
Performance Measures:
Earnings per average Class A share, diluted, quarter			$	1.70			$	1.62
Earnings per average Class A share, diluted, year-to-date			$	3.39			$	3.00
Return on average assets, year-to-date				0.74	%			0.70	%
Return on average stockholders' equity, year-to-date				12.32	%			12.57	%
Net interest margin (taxable equivalent), quarter				2.06	%			2.20	%
Net interest margin (taxable equivalent), year-to-date				2.09	%			2.19	%
Efficiency ratio, quarter- Non-GAAP (1)				59.8	%			60.8	%
Book value per share			$	57.28			$	49.84
Tangible book value per share - Non-GAAP (1)			$	56.79			$	49.35
Capital / assets				6.13	%			5.67	%
Tangible capital / tangible assets - Non-GAAP (1)				6.08	%			5.61	%
Common Share Data:
Average Class A shares outstanding, diluted, quarter and year-to-date				5,567,909				5,567,909
Shares outstanding Class A				3,620,449				3,608,029
Shares outstanding Class B				1,947,460				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				1.26	%			1.22	%
Nonaccrual loans			$	2,899			$	1,456
Nonperforming assets			$	4,999			$	1,456
Loans 90 days past due and still accruing			$	-			$	-
Accruing troubled debt restructures			$	2,520			$	5,295
Net charge-offs(recoveries), year-to-date			$	98			$	11
Leverage ratio				7.07	%			6.85	%
Common equity tier 1 risk weighted capital ratio				11.79	%			10.90	%
Tier 1 risk weighted capital ratio				13.03	%			12.19	%
Total risk weighted capital ratio				14.06	%			13.19	%
Total risk weighted assets			$	2,813,302			$	2,709,841
(1) Non-GAAP Financial Measures are reconciled in the following tables:
Calculation of Efficiency ratio:
Total operating expenses(numerator)			$	36,296			$	35,160
Net interest income			$	46,688			$	45,667
Total other operating income				9,424				7,915
Tax equivalent adjustment				4,576				4,249
Total income(denominator)			$	60,688			$	57,831
Efficiency ratio, quarter - Non-GAAP				59.8	%			60.8	%
Calculation of tangible book value per share:
Total stockholders' equity			$	318,937			$	277,481
Less: goodwill				2,714				2,714
Tangible stockholders' equity(numerator)			$	316,223			$	274,767
Total shares outstanding at period end(denominator)				5,567,909				5,567,909
Tangible book value per share - Non-GAAP			$	56.79			$	49.35
Book value per share - GAAP			$	57.28			$	49.84
Calculation of tangible capital / tangible assets:
Total stockholders' equity			$	318,937			$	277,481
Less: goodwill				2,714				2,714
Tangible stockholders' equity(numerator)			$	316,223			$	274,767
Total assets			$	5,200,501			$	4,898,099
Less: goodwill				2,714				2,714
Tangible assets(denominator)			$	5,197,787			$	4,895,385
Tangible capital / tangible assets - Non-GAAP				6.08	%			5.61	%
Capital / assets - GAAP				6.13	%			5.67	%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20190709005826/en/