Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $16,237,000 for the nine months ended September 30, 2014, or $2.92 per Class A share diluted, an increase of 8.1% compared to net income of $15,021,000, or $2.70 per Class A share diluted, for the same period a year ago. Total assets increased 4.8% from $3.4 billion at December 31, 2013 to $3.6 billion at September 30, 2014. For the quarter ended September 30, 2014, net income totaled $5,706,000 or $1.03 per Class A share diluted, an increase of 3.4% compared to net income of $5,519,000, or $0.99 per Class A share diluted, for the same period a year ago.

Net interest income totaled $50.0 million for the nine months ended September 30, 2014 compared to $44.9 million for the same period in 2013. The 11.5% 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 10.7% increase in the average balances of earning assets, combined with a similar increase in average deposits.

The provision for loan losses decreased by $600,000 from $2.3 million for the nine months ended September 30, 2013 to $1.7 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 nine months ended September 30, 2014, as compared to $2.7 million for the same period in 2013. The Company’s effective tax rate decreased from 5.6% in 2013 to 4.4% in 2014 primarily as a result of an increase in tax-exempt income.

At September 30, 2014, total equity was $195.6 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 6.70% at September 30, 2014, compared to 6.50% at December 31, 2013. The increase in the leverage ratio was due to an increase in stockholders’ equity and a decrease in quarterly average assets. Book value as of September 30, 2014 was $35.14 per share compared to $31.76 at December 31, 2013.

The Company’s allowance for loan losses was $22.5 million or 1.66% of loans outstanding at September 30, 2014, compared to $20.9 million or 1.66% of loans outstanding at December 31, 2013 and $21.3 million or 1.73% of loans outstanding at September 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 $6.0 million at September 30, 2014, compared to $2.5 million at December 31, 2013 and $3.7 million at September 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 November 17, 2014 to stockholders of record on November 3, 2014.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-five 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)
    September 30,   December 31,

Assets

 2014 2013
Cash and Due From Banks $ 57,425 $ 59,956
Federal Funds Sold and Interest-bearing Deposits In Other Banks 103,537 34,722
 
Short-term Investments 2,125 4,617
 
Securities Available-For-Sale (AFS) 490,683 464,245
 
Securities Held-to-Maturity 1,471,137 1,487,884
 
Federal Home Loan Bank of Boston stock, at cost 22,231 18,072
 
Loans:
Commercial & Industrial 152,823 76,675
Municipal 36,624 32,737
Construction & Land Development 25,339 33,058
Commercial Real Estate 695,074 696,317
Residential Real Estate 285,206 286,041
Consumer and Other 10,253 9,658
Home Equity   147,593   130,277
 
Total Loans 1,352,912 1,264,763
Less: Allowance for Loan Losses   22,469   20,941
 
Net Loans 1,330,443 1,243,822
 
Bank Premises and Equipment 23,451 23,400
Accrued Interest Receivable 6,317 6,539
Goodwill 2,714 2,714
Other Assets   87,350   85,183
 
Total Assets $ 3,597,413 $ 3,431,154
 

Liabilities

Demand Deposits $ 496,583 $ 475,862
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,015,626 992,796
Money Market Accounts 907,457 864,957
Time Deposits   370,779   382,224
 
Total Interest Bearing Deposits   2,293,862   2,239,977
 
Total Deposits 2,790,445 2,715,839
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 195,100 214,440
Other Borrowed Funds   337,500   255,144
 
Total Borrowed Funds 532,600 469,584
 
Other Liabilities 42,691 33,176
Subordinated Debentures   36,083   36,083
 
Total Liabilities 3,401,819 3,254,682
 
Total Stockholders' Equity   195,594   176,472
 
Total Liabilities & Stockholders' Equity $ 3,597,413 $ 3,431,154
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Nine months ended September 30, 2014 and 2013
(in thousands)
       
Quarter ended September 30, Nine months ended September 30,
2014   2013 2014   2013
 
Interest Income:
Loans $ 12,708 $ 12,856 $ 37,768 $ 36,734
Securities Held-to-Maturity 8,104 6,181 23,904 9,120
Securities Available-for-Sale 752 1,392 2,366 12,580
Federal Funds Sold and Interest-bearing Deposits In Other Banks   60   120   271   384
 
Total Interest Income 21,624 20,549 64,309 58,818
 
Interest Expense:
Savings and NOW Deposits 642 674 1,911 1,933
Money Market Accounts 725 681 2,033 1,795
Time Deposits 1,089 1,089 3,315 3,657
Securities Sold Under Agreements to Repurchase 90 89 284 268
Other Borrowed Funds and Subordinated Debentures   2,333   2,218   6,753   6,310
 
Total Interest Expense   4,879   4,751   14,296   13,963
 
Net Interest Income 16,745 15,798 50,013 44,855
 
Provision For Loan Losses   600   750   1,650   2,250
 
Net Interest Income After
Provision for Loan Losses 16,145 15,048 48,363 42,605
 
Other Operating Income
Service Charges on Deposit Accounts 2,022 2,064 6,068 6,040
Lockbox Fees 723 736 2,345 2,346
Net Gain on Sales of Investments - 1,001 - 2,665
Net Gain on Sales of Loans 133 247 221 1,238
Other Income   880   726   2,209   2,140
 
Total Other Operating Income 3,758 4,774 10,843 14,429
 
Operating Expenses
Salaries and Employee Benefits 8,681 8,858 26,332 25,858
Occupancy 1,341 1,240 4,105 3,715
Equipment 552 554 1,709 1,746
FDIC Assessment 502 462 1,476 1,312
Other   2,900   2,881   8,602   8,491
 
Total Operating Expenses   13,976   13,995   42,224   41,122
 
Income Before Income Taxes 5,927 5,827 16,982 15,912
 
Income Tax Expense   221   308   745   891
 
Net Income $ 5,706 $ 5,519 $ 16,237 $ 15,021
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)    
September 30, September 30,

Assets

 2014 2013
Cash and Due From Banks $ 64,909 $ 57,997
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 133,929 183,057
 
Securities Available-For-Sale (AFS) 499,851 1,165,760
Securities Held-to-Maturity (HTM) 1,514,604 596,938
 
Total Loans 1,297,392 1,165,695
Less: Allowance for Loan Losses   21,603     20,172  
 
Net Loans 1,275,789 1,145,523
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (21,223 ) (177 )
Bank Premises and Equipment 23,418 23,591
Accrued Interest Receivable 7,229 6,139
Goodwill 2,714 2,714
Other Assets   87,635     78,513  
 
Total Assets $ 3,588,855   $ 3,260,055  
 

Liabilities

Demand Deposits $ 476,954 $ 430,884
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,105,228 1,023,717
Money Market Accounts 929,328 769,667
Time Deposits   379,565     393,985  
Total Interest Bearing Deposits   2,414,121     2,187,369  
 
Total Deposits 2,891,075 2,618,253
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 213,511 202,548
Other Borrowed Funds   228,033     186,771  
 
Total Borrowed Funds 441,544 389,319
 
Other Liabilities 34,241 41,949
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 3,402,943 3,085,604
 
Total Stockholders' Equity   185,912     174,451  
 
Total Liabilities & Stockholders' Equity $ 3,588,855   $ 3,260,055  
 
 
Total Average Earning Assets - QTD $ 3,459,358   $ 3,261,825  
 
Total Average Earning Assets - YTD $ 3,445,776   $ 3,111,450  
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)   September 30,   September 30,
2014 2013
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.03 $ 0.99
Earnings per average Class A share, diluted, year-to-date $ 2.92 $ 2.70
Return on average assets, year-to-date 0.60 % 0.62 %
Return on average stockholders' equity, year-to-date 11.68 % 11.51 %
Net interest margin (taxable equivalent), quarter 2.22 % 2.22 %
Net interest margin (taxable equivalent), year-to-date 2.23 % 2.21 %
Efficiency ratio, year-to-date 61.9 % 62.5 %
Book value per share $ 35.14 $ 29.93
Tangible book value per share $ 34.65 $ 29.44
Tangible capital / tangible assets 5.37 % 4.87 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,563,278 5,558,031
Average Class A shares outstanding, diluted, year-to-date 5,559,909 5,557,783
 
Shares outstanding Class A 3,599,729 3,578,404
Shares outstanding Class B   1,967,180     1,978,180  
Total shares outstanding at period end   5,566,909     5,556,584  
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.66 % 1.73 %
Nonaccrual loans $ 6,018 $ 3,745
Nonperforming assets $ 6,018 $ 3,745
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 3,697 $ 6,027
Net charge-offs, year-to-date $ 122 $ 197
 
Leverage ratio 6.70 % 6.54 %
Tier 1 risk weighted capital ratio 13.65 % 13.79 %
Total risk weighted capital ratio 14.90 % 15.04 %
Total risk weighted assets $ 1,772,301 $ 1,615,748