Century Bancorp, Inc. Announces 6th Consecutive Year of Record Earnings for 2015, up 5.3%; Loan Growth of 30%; 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 $23,021,000 for the year ended December 31, 2015, or $4.13 per Class A share diluted, an increase of 5.3% compared to net income of $21,860,000, or $3.93 per Class A share diluted, for 2014. Total assets increased 8.9% from $3.6 billion at December 31, 2014 to $3.9 billion at December 31, 2015. For the quarter ended December 31, 2015, net income totaled $5,971,000 or $1.07 per Class A share diluted, an increase of 6.2% compared to net income of $5,623,000, or $1.01 per Class A share diluted, for the same period a year ago.

Net interest income totaled $70.0 million for the year ended December 31, 2015 compared to $66.2 million for the same period in 2014. The 5.6% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.22% on a fully taxable equivalent basis in 2014 to 2.18% 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 8.3% combined with a similar increase in average deposits. Also, interest expense increased 5.2% as a result of an increase in deposit balances.

The provision for loan losses decreased by $1,850,000 from $2,050,000 for the year ended December 31, 2014 to $200,000 for 2015, primarily as a result of changes in portfolio composition, related methodology enhancements to address these changes, as well as net recoveries being realized during the year. The Company’s effective tax rate decreased from 3.8% in 2014 to 2.3% in 2015 primarily as a result of an increase in tax-exempt income.

At December 31, 2015, total equity was $214.5 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.

The Company’s leverage ratio stood at 6.79% at December 31, 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 December 31, 2015 was $38.53 per share compared to $34.57 at December 31, 2014.

The Company’s allowance for loan losses was $23.1 million or 1.33% of loans outstanding at December 31, 2015, compared to $22.3 million or 1.68% of loans outstanding at December 31, 2014. The change in the ratio of the allowance for loan losses to loans outstanding was primarily due to changes in portfolio composition and related methodology enhancements to address these changes. Non-performing assets totaled $2.3 million at December 31, 2015, compared to $4.1 million at December 31, 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 February 16, 2016 to stockholders of record on February 1, 2016.

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)
December 31, December 31,

Assets

2015 2014
Cash and Due From Banks $ 52,877 $ 43,367
Federal Funds Sold and Interest-bearing Deposits In Other Banks 167,847 261,991
 
Short-term Investments 3,233 2,131
 
Securities Available-For-Sale (AFS) 404,623 448,390
 
Securities Held-to-Maturity 1,438,903 1,406,792
 
Federal Home Loan Bank of Boston stock, at cost 28,807 24,916
 
Loans:
Commercial & Industrial 452,235 149,732
Municipal 85,685 41,850
Construction & Land Development 27,421 22,744
Commercial Real Estate 721,506 696,272
Residential Real Estate 255,346 257,305
Consumer and Other 11,323 12,188
Home Equity   178,020   151,275
 
Total Loans 1,731,536 1,331,366
Less: Allowance for Loan Losses   23,075   22,318
 
Net Loans 1,708,461 1,309,048
 
Bank Premises and Equipment, net 24,106 24,182
Accrued Interest Receivable 8,002 6,241
Goodwill 2,714 2,714
Other Assets   107,868   94,264
 
Total Assets $ 3,947,441 $ 3,624,036
 

Liabilities

Demand Deposits $ 541,955 $ 484,928
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,070,585 978,619
Money Market Accounts 989,094 890,899
Time Deposits   473,426   383,145
 
Total Interest Bearing Deposits   2,533,105   2,252,663
 
Total Deposits 3,075,060 2,737,591
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 197,850 212,360
Other Borrowed Funds   368,000   395,500
 
Total Borrowed Funds 565,850 607,860
 
Other Liabilities 55,904 50,002
Subordinated Debentures   36,083   36,083
 
Total Liabilities 3,732,897 3,431,536
 
Total Stockholders' Equity   214,544   192,500
 
Total Liabilities & Stockholders' Equity $ 3,947,441 $ 3,624,036
 
                       
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Year ended December 31, 2015 and 2014
(in thousands)
 
Quarter ended December 31, Year ended December 31,
2015 2014 2015 2014
 
Interest Income:
Loans $ 13,531 $ 12,340 $ 52,128 $ 50,108
Securities Held-to-Maturity 8,015 7,841 34,388 31,745
Securities Available-for-Sale 842 800 3,141 3,166
Federal Funds Sold and Interest-bearing Deposits In Other Banks   108     81   436   352
 
Total Interest Income 22,496 21,062 90,093 85,371
 
Interest Expense:
Savings and NOW Deposits 768 628 2,817 2,539
Money Market Accounts 762 682 3,038 2,715
Time Deposits 1,293 1,106 4,887 4,421
Securities Sold Under Agreements to Repurchase 116 107 487 391
Other Borrowed Funds and Subordinated Debentures   2,335     2,317   8,905   9,070
 
Total Interest Expense   5,274     4,840   20,134   19,136
 
Net Interest Income 17,222 16,222 69,959 66,235
 
Provision For Loan Losses   -     400   200   2,050
 
Net Interest Income After
Provision for Loan Losses 17,222 15,822 69,759 64,185
 
Other Operating Income
Service Charges on Deposit Accounts 1,944 1,995 7,732 8,063
Lockbox Fees 753 754 3,211 3,099
Net Gain on Sales of Investments 424 450 594 450
Net Gain on Sales of Loans 292 536 1,034 757
Other Income   1,035     693   3,422   2,902
 
Total Other Operating Income 4,448 4,428 15,993 15,271
 
Operating Expenses
Salaries and Employee Benefits 9,895 8,764 38,596 35,096
Occupancy 1,495 1,398 6,116 5,503
Equipment 677 620 2,626 2,329
FDIC Assessment 550 494 2,152 1,970
Other   3,177     3,230   12,708   11,832
 
Total Operating Expenses   15,794     14,506   62,198   56,730
 
Income Before Income Taxes 5,876 5,744 23,554 22,726
 
Income Tax (Benefit) Expense   (95 )   121   533   866
 
Net Income $ 5,971   $ 5,623 $ 23,021 $ 21,860
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
        December 31,     December 31,

Assets

  2015     2014  
Cash and Due From Banks $ 67,700 $ 65,599
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 157,765 129,472
 
Securities Available-For-Sale (AFS) 454,638 500,928
Securities Held-to-Maturity (HTM) 1,603,530 1,499,995
 
Total Loans 1,507,546 1,307,888
Less: Allowance for Loan Losses   22,559     21,876  
 
Net Loans 1,484,987 1,286,012
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (14,430 ) (20,172 )
Bank Premises and Equipment 24,261 23,516
Accrued Interest Receivable 7,537 7,095
Goodwill 2,714 2,714
Other Assets   103,918     88,040  
 
Total Assets $ 3,892,620   $ 3,583,199  
 

Liabilities

Demand Deposits $ 518,161 $ 481,035
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,139,449 1,096,303
Money Market Accounts 951,197 920,485
Time Deposits   408,712     372,699  
Total Interest Bearing Deposits   2,499,358     2,389,487  
 
Total Deposits 3,017,519 2,870,522
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 245,276 216,937
Other Borrowed Funds   338,025     235,627  
 
Total Borrowed Funds 583,301 452,564
 
Other Liabilities 51,246 35,033
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 3,688,149 3,394,202
 
Total Stockholders' Equity   204,471     188,997  
 
Total Liabilities & Stockholders' Equity $ 3,892,620   $ 3,583,199  
 
Total Average Earning Assets - QTD $ 3,771,711   $ 3,416,046  
 
Total Average Earning Assets - YTD $ 3,723,479   $ 3,438,283  
 
       

Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)

 

December 31, December 31,
  2015     2014  
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.07 $ 1.01
Earnings per average Class A share, diluted, year $ 4.13 $ 3.93
Return on average assets, year 0.59 % 0.61 %
Return on average stockholders' equity, year 11.26 % 11.57 %
Net interest margin (taxable equivalent), quarter 2.12 % 2.18 %
Net interest margin (taxable equivalent), year 2.18 % 2.22 %
Efficiency ratio, year - Non-GAAP (1) 64.1 % 62.0 %
Book value per share $ 38.53 $ 34.57
Tangible book value per share - Non-GAAP (1) $ 38.04 $ 34.09
Tangible capital / tangible assets - Non-GAAP (1) 5.37 % 5.24 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,567,909 5,567,855
Average Class A shares outstanding, diluted, year 5,567,909 5,562,209
 
Shares outstanding Class A 3,600,729 3,600,729
Shares outstanding Class B   1,967,180     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 1.33 % 1.68 %
Nonaccrual loans $ 2,336 $ 4,146
Nonperforming assets $ 2,336 $ 4,146
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 2,893 $ 3,296
Net (recoveries)charge-offs, year $ (557 ) $ 673
 
Leverage ratio 6.79 % * 6.91 %
Common equity tier 1 risk weighted capital ratio 10.04 % * n/a
Tier 1 risk weighted capital ratio 11.55 % * 13.87 %
Total risk weighted capital ratio 12.54 % * 15.12 %
Total risk weighted assets $ 2,325,258 * $ 1,779,573
 
* computed utilizing recently implemented Basel III regulatory capital framework.
 
(1) Non-GAAP Financial Measures are reconciled in the following tables:
 
Calculation of Efficiency ratio:
 
Total operating expenses(numerator) $ 62,198   $ 56,730  
 
Net interest income $ 69,959 $ 66,235
Total other operating income 15,993 15,271
Tax equivalent adjustment   11,140     10,033  
Total income(denominator) $ 97,092   $ 91,539  
 
Efficiency ratio, year - Non-GAAP         64.1 %       62.0 %
 
Calculation of tangible book value per share:
 
Total stockholders' equity $ 214,544 $ 192,500
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 211,830   $ 189,786  
 
Total shares outstanding at period end(denominator) 5,567,909 5,567,909
 
Tangible book value per share - Non-GAAP       $ 38.04       $ 34.09  
Book value per share - GAAP       $ 38.53       $ 34.57  
 
Calculation of tangible capital / tangible assets:
 
Total stockholders' equity $ 214,544 $ 192,500
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 211,830   $ 189,786  
 
Total assets $ 3,947,441 $ 3,624,036
Less: goodwill   2,714     2,714  
Tangible assets(denominator) $ 3,944,727   $ 3,621,322  
 
Tangible capital / tangible assets - Non-GAAP         5.37 %       5.24 %
Capital / assets - GAAP         5.44 %       5.31 %
 

Contacts

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

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