Century Bancorp : Announces Increased Earnings for Q1 2016, Up 7.0%; Asset Growth to Record Size of $4.1 BB; Regular Dividend Declared

MEDFORD, Mass.--(BUSINESS WIRE)-- Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) ('the Company') today announced net income of $5,307,000 for the quarter ended March 31, 2016, or $0.95 per Class A share diluted, an increase of 7.0% compared to net income of $4,959,000, or $0.89 per Class A share diluted, for the same period a year ago. Total assets increased 2.7% from $3.9 billion at December 31, 2015 to $4.1 billion at March 31, 2016.

Net interest income totaled $17.9 million for the quarter ended March 31, 2016 compared to $16.4 million for the same period in 2015. The 8.8% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin increased from 2.12% on a fully taxable equivalent basis for the first quarter of 2015 to 2.18% on the same basis for 2016. This was primarily the result of an increase in rates on earning assets. The average balances of earning assets increased by 6.8% combined with a similar increase in average deposits. Also, interest expense increased 13.6% as a result of an increase in deposit balances.

The provision for loan losses increased by $250,000 from $200,000 for the quarter ended March 31, 2015 to $450,000 for the same period in 2016, primarily as a result of an increase in loan balances. The Company's effective tax rate decreased from 4.2% in 2015 to 1.2% in 2016 primarily as a result of an increase in tax-exempt income.

At March 31, 2016, total equity was $220.8 million compared to $214.5 million at December 31, 2015. 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, decreases in unrealized losses on securities available-for-sale, and amortization of the pension liability.

The Company's leverage ratio stood at 6.72% at March 31, 2016, compared to 6.79% at December 31, 2015. 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 March 31, 2016 was $39.66 per share compared to $38.53 at December 31, 2015.

The Company's allowance for loan losses was $23.5 million or 1.34% of loans outstanding at March 31, 2016, compared to $23.1 million or 1.33% of loans outstanding at December 31, 2015 and $22.5 million or 1.68% of loans outstanding at March 31, 2015. The change in the ratio of the allowance for loan losses to loans outstanding, when compared to March 31, 2015, was primarily due to changes in portfolio composition and related methodology enhancements to address these changes. Non-performing assets totaled $1.5 million at March 31, 2016, compared to $2.3 million at December 31, 2015 and $4.3 million at March 31, 2015.

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 16, 2016 to stockholders of record on May 2, 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)
		March 31,			December 31,
Assets			2016			2015
Cash and Due From Banks		$	71,655		$	52,877
Federal Funds Sold and Interest-bearing Deposits In Other Banks			232,995			167,847
Short-term Investments			3,241			3,233
Securities Available-for-Sale (AFS)			380,349			404,623
Securities Held-to-Maturity			1,412,702			1,438,903
Federal Home Loan Bank of Boston stock, at cost			23,909			28,807
Loans Held-for-Sale			48,180			-
Loans:
Commercial & Industrial			529,168			452,235
Municipal			85,227			85,685
Construction & Land Development			26,572			27,421
Commercial Real Estate			715,248			721,506
Residential Real Estate			215,040			255,346
Consumer and Other			12,826			11,323
Home Equity			178,377			178,020
Total Loans			1,762,458			1,731,536
Less: Allowance for Loan Losses			23,544			23,075
Net Loans			1,738,914			1,708,461
Bank Premises and Equipment, net			23,797			24,106
Accrued Interest Receivable			7,524			8,002
Goodwill			2,714			2,714
Other Assets			108,817			107,868
Total Assets		$	4,054,797		$	3,947,441
Liabilities
Demand Deposits		$	577,842		$	541,955
Interest Bearing Deposits:
Savings and NOW Deposits			1,197,257			1,070,585
Money Market Accounts			944,621			989,094
Time Deposits			446,185			473,426
Total Interest Bearing Deposits			2,588,063			2,533,105
Total Deposits			3,165,905			3,075,060
Borrowed Funds:
Securities Sold Under Agreements to Repurchase			218,230			197,850
Other Borrowed Funds			356,000			368,000
Total Borrowed Funds			574,230			565,850
Other Liabilities			57,738			55,904
Subordinated Debentures			36,083			36,083
Total Liabilities			3,833,956			3,732,897
Total Stockholders' Equity			220,841			214,544
Total Liabilities & Stockholders' Equity		$	4,054,797		$	3,947,441

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter ended March 31, 2016 and 2015
(in thousands)
		Quarter ended March 31,
			2016			2015
Interest Income:
Loans		$	14,172		$	12,076
Securities Held-to-Maturity			7,812			8,168
Securities Available-for-Sale			964			732
Federal Funds Sold and Interest-bearing Deposits In Other Banks			315			196
Total Interest Income			23,263			21,172
Interest Expense:
Savings and NOW Deposits			838			628
Money Market Accounts			795			782
Time Deposits			1,358			1,156
Securities Sold Under Agreements to Repurchase			115			114
Other Borrowed Funds and Subordinated Debentures			2,307			2,085
Total Interest Expense			5,413			4,765
Net Interest Income			17,850			16,407
Provision For Loan Losses			450			200
Net Interest Income After
Provision for Loan Losses			17,400			16,207
Other Operating Income
Service Charges on Deposit Accounts			1,937			1,913
Lockbox Fees			789			788
Net Gain on Sales of Loans			-			99
Other Income			928			705
Total Other Operating Income			3,654			3,505
Operating Expenses
Salaries and Employee Benefits			9,776			9,134
Occupancy			1,579			1,605
Equipment			636			593
FDIC Assessment			568			503
Other			3,124			2,703
Total Operating Expenses			15,683			14,538
Income Before Income Taxes			5,371			5,174
Income Tax (Benefit) Expense			64			215
Net Income		$	5,307		$	4,959

Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
		March 31,				March 31,
Assets			2016				2015
Cash and Due From Banks		$	69,928			$	71,131
Federal Funds Sold and Interest-Bearing Deposits in Other Banks			245,933				300,638
Securities Available-For-Sale (AFS)			414,483				466,673
Securities Held-to-Maturity (HTM)			1,434,888				1,530,383
Total Loans			1,786,909				1,338,433
Less: Allowance for Loan Losses			23,283				22,511
Net Loans			1,763,626				1,315,922
Unrealized (Loss)Gain on Securities AFS and HTM Transfers			(11,047	)			(16,432	)
Bank Premises and Equipment			24,013				24,244
Accrued Interest Receivable			8,133				7,071
Goodwill			2,714				2,714
Other Assets			109,806				96,015
Total Assets		$	4,062,477			$	3,798,359
Liabilities
Demand Deposits		$	557,116			$	490,020
Interest Bearing Deposits:
Savings and NOW Deposits			1,217,853				1,096,744
Money Market Accounts			976,910				999,901
Time Deposits			448,409				377,433
Total Interest Bearing Deposits			2,643,172				2,474,078
Total Deposits			3,200,288				2,964,098
Borrowed Funds:
Securities Sold Under Agreements to Repurchase			222,579				248,508
Other Borrowed Funds			330,286				303,024
Total Borrowed Funds			552,865				551,532
Other Liabilities			55,639				51,639
Subordinated Debentures			36,083				36,083
Total Liabilities			3,844,875				3,603,352
Total Stockholders' Equity			217,602				195,007
Total Liabilities & Stockholders' Equity		$	4,062,477			$	3,798,359
Total Average Earning Assets - YTD		$	3,882,213			$	3,636,127

Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)		March 31,					March 31,
			2016					2015
Performance Measures:
Earnings per average Class A share, diluted, quarter		$	0.95				$	0.89
Return on average assets, year-to-date			0.53	%				0.53	%
Return on average stockholders' equity, year-to-date			9.81	%				10.31	%
Net interest margin (taxable equivalent), quarter			2.18	%				2.12	%
Efficiency ratio, year-to-date - Non-GAAP (1)			63.5	%				64.6	%
Book value per share		$	39.66				$	35.53
Tangible book value per share - Non-GAAP (1)		$	39.18				$	35.04
Tangible capital / tangible assets - Non-GAAP (1)			5.38	%				5.17	%
Common Share Data:
Average Class A shares outstanding, diluted, quarter			5,567,909					5,567,909
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			1.34	%				1.68	%
Nonaccrual loans		$	1,491				$	4,260
Nonperforming assets		$	1,491				$	4,260
Loans 90 days past due and still accruing		$	-				$	34
Accruing troubled debt restructures		$	2,865				$	3,238
Net (recoveries)charge-offs, year-to-date		$	(19	)			$	(11	)
Leverage ratio			6.72	%	*			6.60	%	*
Common equity tier 1 risk weighted capital ratio			9.83	%	*			11.00	%	*
Tier 1 risk weighted capital ratio			11.27	%	*			12.78	%	*
Total risk weighted capital ratio			12.24	%	*			13.93	%	*
Total risk weighted assets		$	2,424,842		*		$	1,965,046		*
* 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)		$	15,683				$	14,538
Net interest income		$	17,850				$	16,407
Total other operating income			3,654					3,505
Tax equivalent adjustment			3,175					2,588
Total income(denominator)		$	24,679				$	22,500
Efficiency ratio, year - Non-GAAP			63.5	%				64.6	%
Calculation of tangible book value per share:
Total stockholders' equity		$	220,841				$	197,828
Less: goodwill			2,714					2,714
Tangible stockholders' equity(numerator)		$	218,127				$	195,114
Total shares outstanding at period end(denominator)			5,567,909					5,567,909
Tangible book value per share - Non-GAAP		$	39.18				$	35.04
Book value per share - GAAP		$	39.66				$	35.53
Calculation of tangible capital / tangible assets:
Total stockholders' equity		$	220,841				$	197,828
Less: goodwill			2,714					2,714
Tangible stockholders' equity(numerator)		$	218,127				$	195,114
Total assets		$	4,054,797				$	3,773,323
Less: goodwill			2,714					2,714
Tangible assets(denominator)		$	4,052,083				$	3,770,609
Tangible capital / tangible assets - Non-GAAP			5.38	%				5.17	%
Capital / assets - GAAP			5.45	%				5.24	%

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Century Bancorp, Inc.
William P. Hornby, 781-393-4630
[e-mail]
Fax: [phone]

Source: Century Bancorp, Inc.