Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) ("the Company") today announced net income of $20,046,000 for the year ended December 31, 2013, or $3.61 per Class A share diluted, an increase of 5.3% compared to net income of $19,039,000, or $3.43 per Class A share diluted, for the same period a year ago. Total assets increased 11.2% from $3.1 billion at December 31, 2012 to $3.4 billion at December 31, 2013. For the quarter ended December 31, 2013, net income totaled $5,025,000, or $0.90 per Class A share diluted, an increase of 5.2% compared to net income of $4,778,000, or $0.86 per Class A share diluted, for the same period a year ago.

Net interest income totaled $61.0 million for the year ended December 31, 2013 compared to $62.0 million for the same period in 2012. The 1.6% decrease in net interest income for the period is primarily due to $3.3 million of prepayment penalties collected during 2012 compared to $491,000 for 2013. The net interest margin decreased from 2.51% on a fully taxable equivalent basis in 2012 to 2.21% on the same basis for 2013. This was primarily the result of a decrease in asset yields. Also, interest expense decreased primarily as a result of the continued decline in market rates and there was a 13.6% increase in the average balances of earning assets, combined with a similar increase in average deposits.

The provision for loan losses decreased by $1.4 million from $4.2 million for the year ended December 31, 2012 to $2.7 million for the year ended December 31, 2013, primarily as a result of a lower level of charge-off activity and changes in portfolio composition. The Company capitalized on favorable market conditions for the year ended December 31, 2013 and realized net gains on sales of investments of $3.0 million, as compared to $1.8 million for the same period in 2012. The Company's effective tax rate decreased from 6.8% in 2012 to 4.8% in 2013 primarily as a result of an increase in tax-exempt income.

At December 31, 2013, total equity was $176.5 million compared to $180.0 million at December 31, 2012. The Company's equity decreased primarily as a result of an increase in other comprehensive loss, net of taxes, and dividends paid, offset somewhat by earnings. Other comprehensive loss, net of taxes, increased as a result of an increase in unrealized losses on securities available-for-sale and securities transferred from available-for-sale to held-to-maturity, offset, somewhat, by a decrease in the additional pension liability, net of taxes. Unrealized losses increased as a result of increases in interest rates. 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 additional pension liability decreased mainly as a result of an increase in pension assets and decrease in the projected benefit obligation on the defined benefit pension plan.

The Company's leverage ratio stood at 6.50% at December 31, 2013, compared to 6.80% at December 31, 2012. The decrease in the leverage ratio is due to an increase in assets. Book value as of December 31, 2013 was $31.76 per share compared to $32.40 at December 31, 2012.

The Company's allowance for loan losses was $20.9 million or 1.66% of loans outstanding at December 31, 2013, compared to $19.2 million or 1.73% of loans outstanding at December 31, 2012. The increase in the allowance for loan losses was due to the increase in the size and composition of the loan portfolio as well as qualitative factors. Non-performing assets totaled $2.5 million at December 31, 2013, compared to $4.5 million at December 31, 2012.

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, 2014 to stockholders of record on February 3, 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)
    December 31,     December 31,

Assets

 2013 2012
Cash and Due From Banks $ 59,956 $ 53,646
Federal Funds Sold and Interest-bearing Deposits In Other Banks 34,722 98,637
 
Short-term Investments 4,617 17,367
 
Securities Available-For-Sale (AFS) 464,245 1,434,801
 
Securities Held-to-Maturity 1,487,884 275,507
 
Federal Home Loan Bank of Boston stock, at cost 18,072 15,146
 
Loans:
Commercial & Industrial 92,402 88,475
Construction & Land Development 33,058 38,618
Commercial Real Estate 713,327 576,465
Residential Real Estate 286,041 281,857
Consumer and Other 9,658 7,450
Home Equity   130,277   118,923
 
Total Loans 1,264,763 1,111,788
Less: Allowance for Loan Losses   20,941   19,197
 
Net Loans 1,243,822 1,092,591
 
Bank Premises and Equipment 23,400 23,899
Accrued Interest Receivable 6,539 5,811
Goodwill 2,714 2,714
Other Assets   85,183   66,090
 
Total Assets $ 3,431,154 $ 3,086,209
 

Liabilities

Demand Deposits $ 475,862 $ 438,429
 
Interest Bearing Deposits:
Savings and NOW Deposits 992,796 933,316
Money Market Accounts 864,957 653,345
Time Deposits   382,224   419,983
 
Total Interest Bearing Deposits   2,239,977   2,006,644
 
Total Deposits 2,715,839 2,445,073
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 214,440 191,390
Other Borrowed Funds   255,144   195,144
 
Total Borrowed Funds 469,584 386,534
 
Other Liabilities 33,176 38,529
Subordinated Debentures   36,083   36,083
 
Total Liabilities 3,254,682 2,906,219
 
Total Stockholders' Equity   176,472   179,990
 
Total Liabilities & Stockholders' Equity $ 3,431,154 $ 3,086,209
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Year ended December 31, 2013 and 2012
(in thousands)
               
Quarter ended December 31, Year ended December 31,
2013     2012 2013     2012
 
Interest Income:
Loans $ 12,562 $ 12,301 $ 49,296 $ 51,415
Securities Held-to-Maturity 7,495 1,615 16,615 6,746
Securities Available-for-Sale 789 5,649 13,369 22,703
Federal Funds Sold and Interest-bearing Deposits In Other Banks   101   173   485   630
 
Total Interest Income 20,947 19,738 79,765 81,494
 
Interest Expense:
Savings and NOW Deposits 652 601 2,585 2,250
Money Market Accounts 677 540 2,472 2,373
Time Deposits 1,120 1,476 4,777 6,250
Securities Sold Under Agreements to Repurchase 93 93 361 367
Other Borrowed Funds and Subordinated Debentures   2,300   2,085   8,610   8,300
 
Total Interest Expense   4,842   4,795   18,805   19,540
 
Net Interest Income 16,105 14,943 60,960 61,954
 
Provision For Loan Losses   460   900   2,710   4,150
 
Net Interest Income After
Provision for Loan Losses 15,645 14,043 58,250 57,804
 
Other Operating Income
Service Charges on Deposit Accounts 2,073 1,993 8,113 7,880
Lockbox Fees 733 705 3,079 2,930
Net Gain on Sales of Investments 354 724 3,019 1,843
Net Gain on Sales of Loans 326 1 1,564 297
Other Income   700   730   2,840   2,915
 
Total Other Operating Income 4,186 4,153 18,615 15,865
 
Operating Expenses
Salaries and Employee Benefits 9,386 8,211 35,244 32,943
Occupancy 1,285 1,236 5,000 4,695
Equipment 552 501 2,298 2,255
FDIC Assessment 478 435 1,790 1,737
Other   2,989   2,896   11,480   11,608
 
Total Operating Expenses   14,690   13,279   55,812   53,238
 
Income Before Income Taxes 5,141 4,917 21,053 20,431
 
Income Tax Expense   116   139   1,007   1,392
 
Net Income $ 5,025 $ 4,778 $ 20,046 $ 19,039
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
    December 31,    

December 31,

Assets

 2013 2012
Cash and Due From Banks $ 59,603 $ 54,572
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 174,264 219,540
 
Securities Available-For-Sale (AFS) 997,983 1,263,375
Securities Held-to-Maturity (HTM) 812,448 270,525
 
Total Loans 1,184,912 1,036,296
Less: Allowance for Loan Losses   20,452     18,039
 
Net Loans 1,164,460 1,018,257
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (6,236 ) 18,362
Bank Premises and Equipment 23,551 22,804
Accrued Interest Receivable 6,247 6,091
Goodwill 2,714 2,714
Other Assets   81,121     68,205
 
Total Assets $ 3,316,155   $ 2,944,445
 

Liabilities

Demand Deposits $ 441,193 $ 386,863
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,037,320 870,046
Money Market Accounts 800,052 666,949
Time Deposits   387,514     418,789
Total Interest Bearing Deposits   2,224,886     1,955,784
 
Total Deposits 2,666,079 2,342,647
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 203,888 174,624
Other Borrowed Funds   194,949     181,459
 
Total Borrowed Funds 398,837 356,083
 
Other Liabilities 42,017 37,497
Subordinated Debentures   36,083     36,083
 
Total Liabilities 3,143,016 2,772,310
 
Total Stockholders' Equity   173,139     172,135
 
Total Liabilities & Stockholders' Equity $ 3,316,155   $ 2,944,445
 
 
Total Average Earning Assets - QTD $ 3,342,186   $ 2,938,890
 
Total Average Earning Assets - YTD $ 3,169,607   $ 2,789,736
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)     December 31,     December 31,
2013 2012
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 0.90 $ 0.86
Earnings per average Class A share, diluted, year-to-date $ 3.61 $ 3.43
Return on average assets, year-to-date 0.60 % 0.65 %
Return on average stockholders' equity, year-to-date 11.58 % 11.06 %
Net interest margin (taxable equivalent), quarter 2.20 % 2.30 %
Net interest margin (taxable equivalent), year-to-date 2.21 % 2.51 %
Efficiency ratio, year-to-date 63.0 % 62.1 %
Book value per share $ 31.76 $ 32.40
Tangible book value per share $ 31.27 $ 31.91
Tangible capital / tangible assets 5.07 % 5.75 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,557,419 5,552,121
Average Class A shares outstanding, diluted, year-to-date 5,557,693 5,549,191
 
Shares outstanding Class A 3,580,404 3,568,079
Shares outstanding Class B   1,976,180     1,986,880  
Total shares outstanding at period end   5,556,584     5,554,959  
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.66 % 1.73 %
Nonaccrual loans $ 2,549 $ 4,471
Nonperforming assets $ 2,549 $ 4,471
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 5,969 $ 3,048
Net charge-offs, year-to-date $ 966 $ 1,527
 
Leverage ratio 6.50 % 6.80 %
Tier 1 risk weighted capital ratio 13.67 % 14.34 %
Total risk weighted capital ratio 14.92 % 15.59 %
Total risk weighted assets $ 1,660,881 $ 1,462,197
 

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