Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $10,531,000 for the six months ended June 30, 2014, or $1.89 per Class A share diluted, an increase of 10.8% compared to net income of $9,502,000, or $1.71 per Class A share diluted, for the same period a year ago. Total assets increased 3.7% from $3.4 billion at December 31, 2013 to $3.6 billion at June 30, 2014. For the quarter ended June 30, 2014, net income totaled $5,599,000 or $1.01 per Class A share diluted, an increase of 11.4% compared to net income of $5,026,000, or $0.90 per Class A share diluted, for the same period a year ago.

Net interest income totaled $33.3 million for the six months ended June 30, 2014 compared to $29.1 million for the same period in 2013. The 14.5% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin increased from 2.21% on a fully taxable equivalent basis in 2013 to 2.23% on the same basis for 2014. This was primarily the result of a decrease in rates paid on deposits and borrowed funds. Also, interest expense increased slightly as a result of an increase in deposit balances and there was a 13.3% increase in the average balances of earning assets, combined with a similar increase in average deposits.

The provision for loan losses decreased by $450,000 from $1.5 million for the six months ended June 30, 2013 to $1.1 million for the same period in 2014, primarily as a result of changes in the portfolio composition and changes in qualitative economic factors. There were no realized gains on sales of investments for the six months ended June 30, 2014, as compared to $1.7 million for the same period in 2013. The Company’s effective tax rate decreased from 5.8% in 2013 to 4.7% in 2014 primarily as a result of an increase in tax-exempt income.

At June 30, 2014, total equity was $188.3 million compared to $176.5 million at December 31, 2013. 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 as a result of a decrease in unrealized losses on securities available-for-sale and securities transferred from available-for-sale to held-to-maturity. During the third quarter of 2013, $987.0 million of securities available-for-sale with unrealized losses of $25.3 million were transferred to securities held-to-maturity. This was done in response to rising interest rates.

The Company’s leverage ratio stood at 6.47% at June 30, 2014, compared to 6.50% at December 31, 2013. The decrease in the leverage ratio was due to an increase in assets, offset somewhat, by an increase in stockholders’ equity. Book value as of June 30, 2014 was $33.88 per share compared to $31.76 at December 31, 2013.

The Company’s allowance for loan losses was $21.7 million or 1.65% of loans outstanding at June 30, 2014, compared to $20.9 million or 1.66% of loans outstanding at December 31, 2013 and $20.5 million or 1.76% of loans outstanding at June 30, 2013. The increase in the allowance for loan losses was due to the increase in the size of the loan portfolio. Non-performing assets totaled $2.8 million at June 30, 2014, compared to $2.5 million at December 31, 2013 and $3.3 million at June 30, 2013.

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, 2014 to stockholders of record on August 1, 2014.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-six 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

   2014   2013
Cash and Due From Banks $ 77,565 $ 59,956
Federal Funds Sold and Interest-bearing Deposits In Other Banks 14,212 34,722
 
Short-term Investments 2,125 4,617
 
Securities Available-For-Sale (AFS) 494,309 464,245
 
Securities Held-to-Maturity 1,536,988 1,487,884
 
Federal Home Loan Bank of Boston stock, at cost 19,656 18,072
 
Loans:
Commercial & Industrial 88,666 92,402
Construction & Land Development 25,861 33,058
Commercial Real Estate 766,965 713,327
Residential Real Estate 282,468 286,041
Consumer and Other 9,649 9,658
Home Equity   140,616   130,277
 
Total Loans 1,314,225 1,264,763
Less: Allowance for Loan Losses   21,722   20,941
 
Net Loans 1,292,503 1,243,822
 
Bank Premises and Equipment 23,456 23,400
Accrued Interest Receivable 6,714 6,539
Goodwill 2,714 2,714
Other Assets   87,392   85,183
 
Total Assets $ 3,557,634 $ 3,431,154
 

Liabilities

Demand Deposits $ 504,265 $ 475,862
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,045,987 992,796
Money Market Accounts 911,897 864,957
Time Deposits   388,189   382,224
 
Total Interest Bearing Deposits   2,346,073   2,239,977
 
Total Deposits 2,850,338 2,715,839
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 180,010 214,440
Other Borrowed Funds   267,500   255,144
 
Total Borrowed Funds 447,510 469,584
 
Other Liabilities 35,442 33,176
Subordinated Debentures   36,083   36,083
 
Total Liabilities 3,369,373 3,254,682
 
Total Stockholders' Equity   188,261   176,472
 
Total Liabilities & Stockholders' Equity $ 3,557,634 $ 3,431,154
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Six months ended June 30, 2014 and 2013
(in thousands)
         
Quarter ended June 30, Six months ended June 30,
  2014     2013   2014     2013
 
Interest Income:
Loans $ 12,611 $ 11,997 $ 25,060 $ 23,878
Securities Held-to-Maturity 8,020 1,419 15,800 2,939
Securities Available-for-Sale 794 5,571 1,614 11,188
Federal Funds Sold and Interest-bearing Deposits In Other Banks   129   145   211   264
 
Total Interest Income 21,554 19,132 42,685 38,269
 
Interest Expense:
Savings and NOW Deposits 660 649 1,269 1,259
Money Market Accounts 669 582 1,308 1,114
Time Deposits 1,141 1,234 2,226 2,568
Securities Sold Under Agreements to Repurchase 93 89 194 179
Other Borrowed Funds and Subordinated Debentures   2,237   2,066   4,420   4,092
 
Total Interest Expense   4,800   4,620   9,417   9,212
 
Net Interest Income 16,754 14,512 33,268 29,057
 
Provision For Loan Losses   450   750   1,050   1,500
 
Net Interest Income After
Provision for Loan Losses 16,304 13,762 32,218 27,557
 
Other Operating Income
Service Charges on Deposit Accounts 2,012 2,034 4,046 3,976
Lockbox Fees 845 838 1,622 1,610
Net Gain on Sales of Investments - 781 - 1,664
Net Gain on Sales of Loans 81 821 88 991
Other Income   677   747   1,329   1,414
 
Total Other Operating Income 3,615 5,221 7,085 9,655
 
Operating Expenses
Salaries and Employee Benefits 8,776 8,382 17,651 17,000
Occupancy 1,322 1,193 2,764 2,475
Equipment 585 610 1,157 1,192
FDIC Assessment 494 450 974 850
Other   2,912   3,027   5,702   5,610
 
Total Operating Expenses   14,089   13,662   28,248   27,127
 
Income Before Income Taxes 5,830 5,321 11,055 10,085
 
Income Tax Expense   231   295   524   583
 
Net Income $ 5,599 $ 5,026 $ 10,531 $ 9,502
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
  June 30,     June 30,

Assets

   2014     2013
Cash and Due From Banks $ 65,048 $ 57,758
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 157,958 188,730
 
Securities Available-For-Sale (AFS) 495,406 1,446,196
Securities Held-to-Maturity (HTM) 1,507,529 259,812
 
Total Loans 1,277,980 1,140,277
Less: Allowance for Loan Losses   21,380     19,828
 
Net Loans 1,256,600 1,120,449
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (22,127 ) 11,075
Bank Premises and Equipment 23,395 23,689
Accrued Interest Receivable 7,255 6,004
Goodwill 2,714 2,714
Other Assets   86,909     73,617
 
Total Assets $ 3,580,687   $ 3,190,044
 

Liabilities

Demand Deposits $ 471,114 $ 421,646
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,113,224 1,010,517
Money Market Accounts 919,844 727,499
Time Deposits   388,236     391,005
Total Interest Bearing Deposits   2,421,304     2,129,021
 
Total Deposits 2,892,418 2,550,667
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 219,336 203,755
Other Borrowed Funds   215,939     178,896
 
Total Borrowed Funds 435,275 382,651
 
Other Liabilities 34,025 41,724
Subordinated Debentures   36,083     36,083
 
Total Liabilities 3,397,801 3,011,125
 
Total Stockholders' Equity   182,886     178,919
 
Total Liabilities & Stockholders' Equity $ 3,580,687   $ 3,190,044
 
 
Total Average Earning Assets - QTD $ 3,503,801   $ 3,084,217
 
Total Average Earning Assets - YTD $ 3,438,873   $ 3,035,015
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)   June 30,     June 30,
  2014   2013
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.01 $ 0.90
Earnings per average Class A share, diluted, year-to-date $ 1.89 $ 1.71
Return on average assets, year-to-date 0.59% 0.60%
Return on average stockholders' equity, year-to-date 11.61% 10.71%
Net interest margin (taxable equivalent), quarter 2.20% 2.16%
Net interest margin (taxable equivalent), year-to-date 2.23% 2.21%
Efficiency ratio, year-to-date 62.5% 63.3%
Book value per share $ 33.88 $ 29.92
Tangible book value per share $ 33.39 $ 29.43
Tangible capital / tangible assets 5.22% 4.98%
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,558,032 5,557,354
Average Class A shares outstanding, diluted, year-to-date 5,558,105 5,557,655
 
Shares outstanding Class A 3,589,129 3,574,379
Shares outstanding Class B   1,967,580   1,982,180
Total shares outstanding at period end   5,556,709   5,556,559
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.65% 1.76%
Nonaccrual loans $ 2,845 $ 3,260
Nonperforming assets $ 2,845 $ 3,260
Loans 90 days past due and still accruing $ 614 $ -
Accruing troubled debt restructures $ 5,883 $ 3,492
Net charge-offs, year-to-date $ 269 $ 196
 
Leverage ratio 6.47% 6.74%
Tier 1 risk weighted capital ratio 13.64% 14.00%
Total risk weighted capital ratio 14.89% 15.25%
Total risk weighted assets $ 1,733,137 $ 1,555,727