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

Century Bancorp, Inc. (NASDAQ: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/