Century Bancorp, Inc. Announces Increased Earnings for Q1 2018, up Significantly, 26.5%; Assets at $4.8 BB; Regular Dividend Declared

Apr 10, 2018 04:45 pm
MEDFORD, Mass. -- 

Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $7,709,000 for the quarter ended March 31, 2018, or $1.38 per Class A share diluted, an increase of 26.5% compared to net income of $6,096,000, or $1.09 per Class A share diluted, for the same period a year ago. Total assets decreased 0.2% from $4.79 billion at December 31, 2017 to $4.78 billion at March 31, 2018.

Net interest income totaled $22.5 million for the quarter ended March 31, 2018 compared to $20.5 million for the same period in 2017. The 9.8% 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 2017 to 2.19% for the same period in 2018. This was primarily the result of an increase in rates on earning assets. The average balances of earning assets increased by 1.8% combined with a similar increase in average deposits. Also, interest expense increased 44.9% primarily as a result of an increase in rates on deposit balances.

The Company’s effective tax rate increased from 2.3% for the first quarter of 2017 to 6.1% for the same period in 2018, primarily as a result of an increase in taxable income offset, somewhat, by a decrease in the federal tax rate from 34% to 21% as a result of the Tax Cuts and Jobs Act.

At March 31, 2018, total equity was $268.2 million compared to $260.3 million at December 31, 2017. The Company’s equity increased primarily as a result of earnings, offset somewhat by dividends paid.

The Company’s leverage ratio stood at 6.77% at March 31, 2018, compared to 6.70% at December 31, 2017. 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 March 31, 2018 was $48.17 per share compared to $46.75 at December 31, 2017.

The Company’s allowance for loan losses was $26.7 million or 1.22% of loans outstanding at March 31, 2018, compared to $26.3 million or 1.21% of loans outstanding at December 31, 2017, and $24.8 million or 1.22% of loans outstanding at March 31, 2017. The ratio of the allowance for loan losses to loans outstanding has remained relatively stable. Non-performing assets totaled $1.4 million at March 31, 2018, compared to $1.7 million at December 31, 2017 and $810,000 at March 31, 2017.

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 May 15, 2018 to stockholders of record on May 1, 2018.

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

    March 31,
2018 		  December 31,
2017
Cash and Due From Banks $ 64,544 $ 77,199
Federal Funds Sold and Interest-bearing Deposits In Other Banks 186,125 279,231
 
Securities Available-for-Sale (AFS) 372,601 397,475
 
Securities Held-to-Maturity 1,817,633 1,701,233
 
Federal Home Loan Bank of Boston stock, at cost 20,050 21,779
 
Loans:
Commercial & Industrial 758,621 763,807
Municipal 104,044 106,599
Construction & Land Development 17,583 18,931
Commercial Real Estate 726,440 732,491
Residential Real Estate 300,941 287,731
Consumer and Other 19,339 19,040
Home Equity   260,179   247,345
 
Total Loans 2,187,147 2,175,944
Less: Allowance for Loan Losses   26,695   26,255
 
Net Loans 2,160,452 2,149,689
 
Bank Premises and Equipment, net 23,220 23,527
Accrued Interest Receivable 10,844 11,179
Goodwill 2,714 2,714
Other Assets   118,499   121,546
 
Total Assets $ 4,776,682 $ 4,785,572
 

Liabilities

Demand Deposits $ 715,032 $ 736,020
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,409,157 1,367,358
Money Market Accounts 1,195,785 1,188,228
Time Deposits   615,822   625,361
 
Total Interest Bearing Deposits   3,220,764   3,180,947
 
Total Deposits 3,935,796 3,916,967
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 141,560 158,990
Other Borrowed Funds   317,054   347,778
 
Total Borrowed Funds 458,614 506,768
 
Other Liabilities 77,989 65,457
Subordinated Debentures   36,083   36,083
 
Total Liabilities 4,508,482 4,525,275
 
Total Stockholders' Equity   268,200   260,297
 
Total Liabilities & Stockholders' Equity $ 4,776,682 $ 4,785,572
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter ended March 31, 2018 and 2017
(in thousands)
     
Quarter ended March 31,
2018   2017
 
Interest Income:
Loans $ 18,267 $ 15,100
Securities Held-to-Maturity 10,288 9,535
Securities Available-for-Sale 1,992 1,611
Federal Funds Sold and Interest-bearing Deposits In Other Banks   883   393
 
Total Interest Income 31,430 26,639
 
Interest Expense:
Savings and NOW Deposits 2,223 1,227
Money Market Accounts 2,453 1,274
Time Deposits 2,363 1,651
Securities Sold Under Agreements to Repurchase 181 103
Other Borrowed Funds and Subordinated Debentures   1,742   1,928
 
Total Interest Expense   8,962   6,183
 
Net Interest Income 22,468 20,456
 
Provision For Loan Losses   450   400
 
Net Interest Income After
Provision for Loan Losses 22,018 20,056
 
Other Operating Income
Service Charges on Deposit Accounts 2,067 2,016
Lockbox Fees 791 771
Net Gain on Sales of Loans - 101
Net Gain on Sales of Securities 197 -
Other Income   1,138   1,021
 
Total Other Operating Income 4,193 3,909
 
Operating Expenses
Salaries and Employee Benefits 11,225 10,865
Occupancy 1,637 1,741
Equipment 794 706
FDIC Assessment 383 438
Other   3,962   3,975
 
Total Operating Expenses   18,001   17,725
 
Income Before Income Taxes 8,210 6,240
 
Income Tax Expense   501   144
 
Net Income $ 7,709 $ 6,096
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)

Assets

    March 31,
2018 		  March 31,
2017
Cash and Due From Banks $ 72,612 $ 75,497
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 230,194 204,527
 
Securities Available-For-Sale (AFS) 406,087 533,486
Securities Held-to-Maturity (HTM) 1,741,492 1,751,435
 
Total Loans 2,175,170 1,984,700
Less: Allowance for Loan Losses   26,546     24,580  
 
Net Loans 2,148,624 1,960,120
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (4,586 ) (7,751 )
Bank Premises and Equipment 23,430 23,569
Accrued Interest Receivable 10,731 10,015
Goodwill 2,714 2,714
Other Assets   123,550     116,347  
 
Total Assets $ 4,754,848   $ 4,669,959  
 

Liabilities

Demand Deposits $ 706,959 $ 675,941
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,494,919 1,453,299
Money Market Accounts 1,180,436 1,216,690
Time Deposits   604,814     501,857  
Total Interest Bearing Deposits   3,280,169     3,171,846  
 
Total Deposits 3,987,128 3,847,787
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 160,223 200,457
Other Borrowed Funds   238,260     283,650  
 
Total Borrowed Funds 398,483 484,107
 
Other Liabilities 69,218 58,663
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 4,490,912 4,426,640
 
Total Stockholders' Equity   263,936     243,319  
 
Total Liabilities & Stockholders' Equity $ 4,754,848   $ 4,669,959  
 
Total Average Earning Assets - YTD $ 4,552,943   $ 4,474,148  
 
 

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

 

    March 31,
2018 		  March 31,
2017
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.38 $ 1.09
Return on average assets, quarter 0.66 % 0.53 %
Return on average stockholders' equity, quarter 11.85 % 10.16 %
Net interest margin (taxable equivalent), quarter 2.19 % 2.16 %
Efficiency ratio, quarter - Non-GAAP (1) 62.6 % 64.0 %
Book value per share $ 48.17 $ 44.24
Tangible book value per share - Non-GAAP (1) $ 47.68 $ 43.75
Capital / assets 5.61 % 5.38 %
Tangible capital / tangible assets - Non-GAAP (1) 5.56 % 5.33 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,567,909 5,567,909
 
Shares outstanding Class A 3,608,029 3,600,729
Shares outstanding Class B   1,959,880     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 1.22 % 1.22 %
Nonaccrual loans $ 1,386 $ 810
Nonperforming assets $ 1,386 $ 810
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 5,415 $ 3,492
Net charge-offs(recoveries), quarter $ 10 $ (21 )
 
Leverage ratio 6.77 % 6.12 %
Common equity tier 1 risk weighted capital ratio 10.79 % 10.06 %
Tier 1 risk weighted capital ratio 12.10 % 11.27 %
Total risk weighted capital ratio 13.10 % 12.25 %
Total risk weighted assets $ 2,660,535 $ 2,532,933
 
 
(1) Non-GAAP Financial Measures are reconciled in the following tables:
 
Calculation of Efficiency ratio:
 
Total operating expenses(numerator) $ 18,001   $ 17,725  
 
Net interest income $ 22,468 $ 20,456
Total other operating income 4,193 3,909
Tax equivalent adjustment   2,077     3,336  
Total income(denominator) $ 28,738   $ 27,701  
 
Efficiency ratio, year - Non-GAAP       62.6 %     64.0 %
 
Calculation of tangible book value per share:
 
Total stockholders' equity $ 268,200 $ 246,328
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 265,486   $ 243,614  
 
Total shares outstanding at period end(denominator) 5,567,909 5,567,909
 
Tangible book value per share - Non-GAAP     $ 47.68     $ 43.75  
Book value per share - GAAP     $ 48.17     $ 44.24  
 
Calculation of tangible capital / tangible assets:
 
Total stockholders' equity $ 268,200 $ 246,328
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 265,486   $ 243,614  
 
Total assets $ 4,776,682 $ 4,577,385
Less: goodwill   2,714     2,714  
Tangible assets(denominator) $ 4,773,968   $ 4,574,671  
 
Tangible capital / tangible assets - Non-GAAP       5.56 %     5.33 %
Capital / assets - GAAP       5.61 %     5.38 %
 

Century Bancorp
William P. Hornby, CPA, 781-393-4630
781-393-4071 (Fax)
[email protected]