Century Bancorp, Inc. Announces Record Earnings for 2019, up 10%; Asset Growth to Record $5.5 BB; Regular Dividend Declared

Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $39,699,000 for the year ended December 31, 2019, or $7.13 per Class A share diluted, an increase of 9.6% compared to net income of $36,213,000, or $6.50 per Class A share diluted, for the same period a year ago. Total assets increased 6.4% from $5.16 billion at December 31, 2018 to $5.49 billion at December 31, 2019. For the quarter ended December 31, 2019, net income totaled $10,732,000 or $1.93 per Class A share diluted, an increase of 8.1% compared to net income of $9,925,000 or $1.78 per Class A share diluted, for the same period a year ago.

Net interest income totaled $95.8 million for the year ended December 31, 2019 compared to $92.6 million for the same period in 2018. The 3.5% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.18% on a fully taxable equivalent basis in 2018 to 2.10% for 2019. This was primarily the result of increased rates paid on deposits. The average balances of earning assets increased by $335.8 million or 7.2%, combined with an average yield increase of 0.23%, resulting in an increase in interest income of $22.1 million. The average balance of interest bearing liabilities increased by $298.1 million or 7.9%, combined with an average cost of funds increase of 0.38%, resulting in an increase in interest expense of $18.9 million.

The Company’s effective tax rate decreased from 4.2% for the year ended December 31, 2018 to 2.7% 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 December 31, 2019, total equity was $332.6 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 December 31, 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 December 31, 2019 was $59.73 per share compared to $53.96 at December 31, 2018.

The Company’s allowance for loan losses was $29.6 million or 1.22% of loans outstanding at December 31, 2019 compared to $28.5 million or 1.25% of loans outstanding at December 31, 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 $2.0 million at December 31, 2019, compared to $3.5 million at December 31, 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 February 18, 2020 to stockholders of record on February 3, 2020.

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

2019

2018

Cash and Due From Banks

$

44,420

$

89,540

Federal Funds Sold and Interest-bearing Deposits In Other Banks

214,273

252,963

 
Securities Available-for-Sale (AFS)

262,190

338,355

 
Securities Held-to-Maturity

2,351,120

2,046,647

 
Federal Home Loan Bank of Boston stock, at cost

19,471

17,974

 
Loans:

Commercial & Industrial

812,417

761,775

Municipal

120,455

97,140

Construction & Land Development

8,992

13,628

Commercial Real Estate

786,102

750,362

Residential Real Estate

371,897

348,250

Consumer and Other

21,893

22,083

Home Equity

304,363

292,340

 
Total Loans

2,426,119

2,285,578

Less: Allowance for Loan Losses

29,585

28,543

 

Net Loans

2,396,534

2,257,035

 
Bank Premises and Equipment, net

33,952

23,921

Accrued Interest Receivable

13,110

14,406

Goodwill

2,714

2,714

Other Assets

154,640

120,380

 
Total Assets

$

5,492,424

$

5,163,935

 
Liabilities
Demand Deposits

$

712,842

$

813,478

 
Interest Bearing Deposits:
Savings and NOW Deposits

1,678,250

1,707,019

Money Market Accounts

1,453,572

1,325,888

Time Deposits

555,447

560,579

 
Total Interest Bearing Deposits

3,687,269

3,593,486

 
Total Deposits

4,400,111

4,406,964

 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase

266,045

154,240

Other Borrowed Funds

370,955

202,378

 
Total Borrowed Funds

637,000

356,618

 
Other Liabilities

86,649

63,831

Subordinated Debentures

36,083

36,083

 
Total Liabilities

5,159,843

4,863,496

 
Total Stockholders' Equity

332,581

300,439

 

Total Liabilities & Stockholders' Equity

$

5,492,424

$

5,163,935

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the quarter and year ended December 31, 2019 and 2018
(in thousands)
 
Quarter ended December 31,Year ended December 31,

2019

2018

2019

2018

 
Interest Income:
Loans

$

22,781

$

20,938

$

87,887

$

78,551

Securities Held-to-Maturity

15,030

12,626

58,036

45,556

Securities Available-for-Sale

1,860

2,630

9,165

9,451

Federal Funds Sold and Interest-bearing Deposits In Other Banks

847

1,259

4,051

3,498

 
Total Interest Income

40,518

37,453

159,139

137,056

 
Interest Expense:
Savings and NOW Deposits

4,395

3,979

21,183

11,757

Money Market Accounts

5,365

4,883

21,170

13,922

Time Deposits

3,080

2,743

11,804

10,208

Securities Sold Under Agreements to Repurchase

775

319

2,347

976

Other Borrowed Funds and Subordinated Debentures

1,572

1,824

6,846

7,617

 
Total Interest Expense

15,187

13,748

63,350

44,480

 
Net Interest Income

25,331

23,705

95,789

92,576

 
Provision For Loan Losses

550

450

1,250

1,350

 
Net Interest Income After
Provision for Loan Losses

24,781

23,255

94,539

91,226

 
Other Operating Income:
Service Charges on Deposit Accounts

2,419

2,292

9,220

8,560

Lockbox Fees

955

970

3,973

3,274

Net Gain on Sales of Loans

258

-

412

-

Net Gain on Sales of Securities

-

-

61

302

Other Income

1,057

902

4,733

4,112

 
Total Other Operating Income

4,689

4,164

18,399

16,248

 
Operating Expenses:
Salaries and Employee Benefits

11,393

10,379

44,014

42,710

Occupancy

1,560

1,513

6,246

6,092

Equipment

798

777

3,238

3,132

Other

4,461

4,516

18,631

17,759

 
Total Operating Expenses

18,212

17,185

72,129

69,693

 
Income Before Income Taxes

11,258

10,234

40,809

37,781

 
Income Tax Expense

526

309

1,110

1,568

 
Net Income

$

10,732

$

9,925

$

39,699

$

36,213

Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
December 31,December 31,
Assets

2019

2018

Cash and Due From Banks

$

75,025

$

71,943

Federal Funds Sold and Interest-Bearing Deposits in Other Banks

189,710

183,903

 
Securities Available-For-Sale (AFS)

313,604

400,098

Securities Held-to-Maturity (HTM)

2,152,580

1,854,328

 
Total Loans

2,341,190

2,222,946

Less: Allowance for Loan Losses

29,004

27,531

 
Net Loans

2,312,186

2,195,415

 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers

(3,198

)

(4,017

)

Bank Premises and Equipment

27,867

23,642

Accrued Interest Receivable

13,752

12,014

Goodwill

2,714

2,714

Other Assets

134,704

122,948

 
Total Assets

$

5,218,944

$

4,862,988

 
Liabilities
Demand Deposits

$

760,420

$

753,604

 
Interest Bearing Deposits:
Savings and NOW Deposits

1,810,481

1,514,259

Money Market Accounts

1,273,389

1,230,010

Time Deposits

519,761

577,975

Total Interest Bearing Deposits

3,603,631

3,322,244

 
Total Deposits

4,364,051

4,075,848

 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase

224,361

147,944

Other Borrowed Funds

195,843

255,591

 
Total Borrowed Funds

420,204

403,535

 
Other Liabilities

79,437

70,020

Subordinated Debentures

36,083

36,083

 
Total Liabilities

4,899,775

4,585,486

 
Total Stockholders' Equity

319,169

277,502

 
Total Liabilities & Stockholders' Equity

$

5,218,944

$

4,862,988

 
Total Average Earning Assets - QTD

$

5,100,333

$

4,840,923

 
Total Average Earning Assets - YTD

$

4,997,084

$

4,661,275

Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)December 31,December 31,

2019

2018

 
Performance Measures:
 
Earnings per average Class A share, diluted, quarter

$

1.93

$

1.78

Earnings per average Class A share, diluted, year

$

7.13

$

6.50

Return on average assets, year

0.76

%

0.74

%

Return on average stockholders' equity, year

12.44

%

13.05

%

Net interest margin (taxable equivalent), quarter

2.14

%

2.13

%

Net interest margin (taxable equivalent), year

2.10

%

2.18

%

Efficiency ratio, Non-GAAP (1)

58.4

%

59.2

%

Book value per share

$

59.73

$

53.96

Tangible book value per share - Non-GAAP (1)

$

59.24

$

53.47

Capital / assets

6.06

%

5.82

%

Tangible capital / tangible assets - Non-GAAP (1)

6.01

%

5.77

%

 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter and year

5,567,909

5,567,909

 
Shares outstanding Class A

3,650,949

3,608,329

Shares outstanding Class B

1,916,960

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

%

1.25

%

Nonaccrual loans

$

2,014

$

1,313

Nonperforming assets

$

2,014

$

3,538

Loans 90 days past due and still accruing

$

-

$

-

Accruing troubled debt restructures

$

2,361

$

2,559

Net charge-offs (recoveries), year

$

208

$

(938

)

 
Leverage ratio

7.25

%

6.91

%

Common equity tier 1 risk weighted capital ratio

11.80

%

11.32

%

Tier 1 risk weighted capital ratio

12.98

%

12.59

%

Total risk weighted capital ratio

13.97

%

13.62

%

Total risk weighted assets

$

2,976,650

$

2,771,129

 
 
(1) Non-GAAP Financial Measures are reconciled in the following tables:
 
Calculation of Efficiency ratio:
 
Total operating expenses

$

72,129

$

69,693

Less: other real estate owned expenses

134

-

Total adjusted operating expenses(numerator)

$

71,995

$

69,693

 
Net interest income

$

95,789

$

92,576

Total other operating income

18,399

16,248

Tax equivalent adjustment

9,068

8,853

Total income(denominator)

$

123,256

$

117,677

 
Efficiency ratio - Non-GAAP

58.4

%

59.2

%

 
Calculation of tangible book value per share:
 
Total stockholders' equity

$

332,581

$

300,439

Less: goodwill

2,714

2,714

Tangible stockholders' equity(numerator)

$

329,867

$

297,725

 
Total shares outstanding at period end(denominator)

5,567,909

5,567,909

 
Tangible book value per share - Non-GAAP

$

59.24

$

53.47

Book value per share - GAAP

$

59.73

$

53.96

 
Calculation of tangible capital / tangible assets:
 
Total stockholders' equity

$

332,581

$

300,439

Less: goodwill

2,714

2,714

Tangible stockholders' equity(numerator)

$

329,867

$

297,725

 
Total assets

$

5,492,424

$

5,163,935

Less: goodwill

2,714

2,714

Tangible assets(denominator)

$

5,489,710

$

5,161,221

 
Tangible capital / tangible assets - Non-GAAP

6.01

%

5.77

%

Capital / assets - GAAP

6.06

%

5.82

%

Contacts:

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

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