Century Bancorp, Inc. Announces Record Earnings for Q2 2017, up 30.7%; Asset Growth to $4.5 BB; Regular Dividend Declared

MEDFORD, Mass.--()--Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $14,253,000 for the six months ended June 30, 2017, or $2.56 per Class A share diluted, an increase of 23.4% compared to net income of $11,549,000, or $2.07 per Class A share diluted, for the same period a year ago. Total assets increased 1.9% from $4.46 billion at December 31, 2016 to $4.55 billion at June 30, 2017. For the quarter ended June 30, 2017, net income totaled $8,157,000 or $1.47 per Class A share diluted, an increase of 30.7% compared to net income of $6,241,000, or $1.12 per Class A share diluted, for the same period a year ago.

Net interest income totaled $42.6 million for the six months ended June 30, 2017 compared to $36.1 million for the same period in 2016. The 17.9% increase in net interest income for the period is primarily due to an increase in average earning assets and an increase in the net interest margin. The net interest margin increased from 2.16% on a fully taxable equivalent basis in 2016 to 2.23% for the same period in 2017. This was primarily the result of an increase in rates on earning assets and prepayment penalties collected. The average balances of earning assets increased by 12.9% combined with a similar increase in average deposits. Also, interest expense increased 18.2% primarily as a result of an increase in rates and an increase in deposit balances.

The provision for loan losses increased by $90,000 from $800,000 for the six months ended June 30, 2016 to $890,000 for the same period in 2017, primarily as a result of an increase in loan growth offset, somewhat, by changes in historical loss factors. The Company’s effective tax rate increased from 0.7% for the first six months of 2016 to 4.7% for the same period in 2017 primarily as a result of an increase in taxable income.

At June 30, 2017, total equity was $254.6 million compared to $240.0 million at December 31, 2016. 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, a decrease in unrealized losses on securities available-for-sale, and amortization of the pension liability.

The Company’s leverage ratio stood at 6.31% at June 30, 2017, compared to 6.28% at December 31, 2016. 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, 2017 was $45.73 per share compared to $43.11 at December 31, 2016.

The Company’s allowance for loan losses was $25.3 million or 1.24% of loans outstanding at June 30, 2017, compared to $24.4 million or 1.27% of loans outstanding at December 31, 2016 and $23.9 million or 1.32% of loans outstanding at June 30, 2016. The change in the ratio of the allowance for loan losses to loans outstanding, when compared to June 30, 2016, was primarily due to changes in portfolio composition and lower historical loss rates. Non-performing assets totaled $1.1 million at June 30, 2017, compared to $1.1 million at December 31, 2016 and $1.5 million at June 30, 2016.

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, 2017 to stockholders of record on August 1, 2017.

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

2017 2016
Cash and Due From Banks $ 74,787 $ 62,400
Federal Funds Sold and Interest-bearing Deposits In Other Banks 153,374 173,751
 
Short-term Investments - 3,183
 
Securities Available-for-Sale (AFS) 411,340 499,297
 
Securities Held-to-Maturity 1,722,875 1,653,986
 
Federal Home Loan Bank of Boston stock, at cost 25,588 21,042
 
Loans:
Commercial & Industrial 650,542 612,503
Municipal 127,259 135,418
Construction & Land Development 14,159 14,928
Commercial Real Estate 736,603 696,173
Residential Real Estate 264,744 241,357
Consumer and Other 11,218 11,697
Home Equity   229,274   211,857
 
Total Loans 2,033,799 1,923,933
Less: Allowance for Loan Losses   25,289   24,406
 
Net Loans 2,008,510 1,899,527
 
Bank Premises and Equipment, net 23,177 23,417
Accrued Interest Receivable 10,309 9,645
Goodwill 2,714 2,714
Other Assets   116,563   113,646
 
Total Assets $ 4,549,237 $ 4,462,608
 

Liabilities

Demand Deposits $ 687,219 $ 689,286
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,409,327 1,304,394
Money Market Accounts 897,241 1,181,179
Time Deposits   575,410   478,359
 
Total Interest Bearing Deposits   2,881,978   2,963,932
 
Total Deposits 3,569,197 3,653,218
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 167,340 182,280
Other Borrowed Funds   455,500   293,000
 
Total Borrowed Funds 622,840 475,280
 
Other Liabilities 66,492 57,986
Subordinated Debentures   36,083   36,083
 
Total Liabilities 4,294,612 4,222,567
 
Total Stockholders' Equity   254,625   240,041
 
Total Liabilities & Stockholders' Equity $ 4,549,237 $ 4,462,608
               
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the quarter and six months ended June 30, 2017 and 2016
(in thousands)
 
Quarter ended June 30,   Six months ended June 30,
2017     2016 2017     2016
 
Interest Income:
Loans $ 16,910 $ 14,162 $ 32,010 $ 28,335
Securities Held-to-Maturity 9,824 8,128 19,359 15,940
Securities Available-for-Sale 1,723 1,144 3,334 2,107
Federal Funds Sold and Interest-bearing Deposits In Other Banks   349   308   742   623
 
Total Interest Income 28,806 23,742 55,445 47,005
 
Interest Expense:
Savings and NOW Deposits 1,500 938 2,727 1,776
Money Market Accounts 1,234 781 2,508 1,576
Time Deposits 1,902 1,394 3,553 2,752
Securities Sold Under Agreements to Repurchase 120 126 223 241
Other Borrowed Funds and Subordinated Debentures   1,945   2,247   3,873   4,554
 
Total Interest Expense   6,701   5,486   12,884   10,899
 
Net Interest Income 22,105 18,256 42,561 36,106
 
Provision For Loan Losses   490   350   890   800
 
Net Interest Income After
Provision for Loan Losses 21,615 17,906 41,671 35,306
 
Other Operating Income
Service Charges on Deposit Accounts 2,074 1,962 4,090 3,899
Lockbox Fees 861 883 1,632 1,672
Net Gain on Sales of Loans 269 798 370 798
Other Income   1,087   1,000   2,108   1,928
 
Total Other Operating Income 4,291 4,643 8,200 8,297
 
Operating Expenses
Salaries and Employee Benefits 10,719 10,040 21,862 19,816
Occupancy 1,495 1,551 3,236 3,130
Equipment 757 679 1,463 1,315
FDIC Assessment 440 592 878 1,160
Other   3,786   3,426   7,483   6,549
 
Total Operating Expenses   17,197   16,288   34,922   31,970
 
Income Before Income Taxes 8,709 6,261 14,949 11,633
 
Income Tax (Benefit) Expense   552   20   696   84
 
Net Income $ 8,157 $ 6,241 $ 14,253 $ 11,549
       
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
June 30, June 30,

Assets

2017 2016
Cash and Due From Banks $ 73,301 $ 69,805
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 170,604 242,004
 
Securities Available-For-Sale (AFS) 512,153 443,409
Securities Held-to-Maturity (HTM) 1,761,470 1,477,252
 
Total Loans 2,018,274 1,789,952
Less: Allowance for Loan Losses   24,849     23,524  
 
Net Loans 1,993,425 1,766,428
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (7,207 ) (10,324 )
Bank Premises and Equipment 23,437 23,892
Accrued Interest Receivable 10,261 8,124
Goodwill 2,714 2,714
Other Assets   118,137     111,848  
 
Total Assets $ 4,658,295   $ 4,135,152  
 

Liabilities

Demand Deposits $ 670,241 $ 573,303
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,494,059 1,258,231
Money Market Accounts 1,140,030 983,562
Time Deposits   529,038     448,890  
Total Interest Bearing Deposits   3,163,127     2,690,683  
 
Total Deposits 3,833,368 3,263,986
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 198,394 227,888
Other Borrowed Funds   283,964     329,731  
 
Total Borrowed Funds 482,358 557,619
 
Other Liabilities 59,506 56,817
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 4,411,315 3,914,505
 
Total Stockholders' Equity   246,980     220,647  
 
Total Liabilities & Stockholders' Equity $ 4,658,295   $ 4,135,152  
 
Total Average Earning Assets - QTD $ 4,450,981   $ 4,023,022  
 
Total Average Earning Assets - YTD $ 4,462,501   $ 3,952,617  
       
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data) June 30, June 30,
2017 2016
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.47 $ 1.12
Earnings per average Class A share, diluted, year-to-date $ 2.56 $ 2.07
Return on average assets, year-to-date 0.62 % 0.56 %
Return on average stockholders' equity, year-to-date 11.64 % 10.53 %
Net interest margin (taxable equivalent), quarter 2.31 % 2.15 %
Net interest margin (taxable equivalent), year-to-date 2.23 % 2.16 %
Efficiency ratio, year-to-date - Non-GAAP (1) 60.6 % 62.9 %
Book value per share $ 45.73 $ 40.80
Tangible book value per share - Non-GAAP (1) $ 45.24 $ 40.32
Capital / assets 5.60 % 5.42 %
Tangible capital / tangible assets - Non-GAAP (1) 5.54 % 5.36 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter & year-to-date 5,567,909 5,567,909
 
Shares outstanding Class A 3,603,729 3,600,729
Shares outstanding Class B   1,964,180     1,967,180  
Total shares outstanding at period end   5,567,909     5,567,909  
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.24 % 1.32 %
Nonaccrual loans $ 1,122 $ 1,486
Nonperforming assets $ 1,122 $ 1,486
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 2,872 $ 4,146
Net (recoveries)charge-offs, year-to-date $ 7 $ (72 )
 
Leverage ratio 6.31 % 6.63 %
Common equity tier 1 risk weighted capital ratio 10.43 % 10.59 %
Tier 1 risk weighted capital ratio 11.74 % 12.11 %
Total risk weighted capital ratio 12.76 % 13.14 %
Total risk weighted assets $ 2,490,113 $ 2,304,563
 
 
(1) Non-GAAP Financial Measures are reconciled in the following tables:      
 
Calculation of Efficiency ratio:
 
Total operating expenses(numerator) $ 34,922   $ 31,970  
 
Net interest income $ 42,561 $ 36,106
Total other operating income 8,200 8,297
Tax equivalent adjustment   6,827     6,387  
Total income(denominator) $ 57,588   $ 50,790  
 
Efficiency ratio, year - Non-GAAP       60.6 %       62.9 %
 
Calculation of tangible book value per share:
 
Total stockholders' equity $ 254,625 $ 227,186
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 251,911   $ 224,472  
 
Total shares outstanding at period end(denominator) 5,567,909 5,567,909
 
Tangible book value per share - Non-GAAP     $ 45.24       $ 40.32  
Book value per share - GAAP     $ 45.73       $ 40.80  
 
Calculation of tangible capital / tangible assets:
 
Total stockholders' equity $ 254,625 $ 227,186
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 251,911   $ 224,472  
 
Total assets $ 4,549,237 $ 4,190,312
Less: goodwill   2,714     2,714  
Tangible assets(denominator) $ 4,546,523   $ 4,187,598  
 
Tangible capital / tangible assets - Non-GAAP       5.54 %       5.36 %
Capital / assets - GAAP         5.60 %       5.42 %

Contacts

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

Recent Stories

RSS feed for Century Bancorp, Inc.

Century Bancorp, Inc.