Century Bancorp Inc.

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Century Bancorp, Inc. Announces 3rd Consecutive Year of Record Earnings for 2012, up 14%; Asset Growth to Record Size of $3.1 BB; Regular Dividend Declared

MEDFORD, Mass.--(BUSINESS WIRE)-- Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced record net income of $19,039,000 for the year ended December 31, 2012, or $3.43 per Class A share diluted, an increase of 14.1% compared to net income of $16,693,000, or $3.01 per Class A share diluted, for the same period a year ago. Total assets increased 12.5% from $2.7 billion at December 31, 2011 to $3.1 billion at December 31, 2012. For the quarter ended December 31, 2012, net income totaled $4,778,000, or $0.86 per Class A share diluted, an increase of 14.1% compared to net income of $4,189,000, or $0.76 per Class A share diluted, for the same period a year ago.

Net interest income totaled $62.0 million for the year ended December 31, 2012 compared to $55.3 million for 2011. The 12.0% increase in net interest income for the period is due to an 11.5% increase in the average balances of earning assets, combined with a similar increase in average deposits. The net interest margin increased from 2.48% on a fully taxable equivalent basis in 2011 to 2.51% on the same basis for 2012. This was primarily the result of prepayment penalties that were collected during 2012. Also, interest expense decreased primarily as a result of the continued decline in market rates.

The provision for loan losses decreased by $400,000 from $4.6 million for the year ended December 31, 2011 to $4.2 million, for the year ended December 31, 2012, primarily as a result of changes in the composition of the loan portfolio. The Company capitalized on favorable market conditions for the fourth quarter and year ended December 31, 2012 and realized net gains on sales of investments of $724,000 and $1.8 million, respectively, as compared to $695,000 and $1.9 million, respectively, for the same periods in 2011. FDIC assessments decreased from $2.0 million for the year ended December 31, 2011 to $1.7 million, for the year ended December 31, 2012, primarily as a result of a decrease in the assessment rate, offset somewhat by an increase in the assessment base. The Company’s effective tax rate decreased from 8.5% in 2011 to 6.8% in 2012 primarily as a result of an increase in tax-exempt income.

At December 31, 2012, total equity was $180.0 million compared to $160.6 million at December 31, 2011. The Company’s equity increased primarily as a result of earnings and other comprehensive income, net of taxes, offset somewhat by dividends paid. The Company’s leverage ratio stood at 6.80% at December 31, 2012, compared to 7.12% at December 31, 2011. This decline in the leverage ratio is due to an increase in assets, offset somewhat, by an increase in stockholders’ equity. Book value as of December 31, 2012 was $32.40 per share compared to $28.98 at December 31, 2011.

The Company’s allowance for loan losses was $19.2 million or 1.73% of loans outstanding at December 31, 2012, compared to $16.6 million or 1.68% of loans outstanding at December 31, 2011. The allowance for loan losses increased despite a decrease in the provision for loan losses due to a lower level of charge-off activity combined with changes in the portfolio composition. Non-performing assets totaled $4.5 million at December 31, 2012, compared to $7.0 million at December 31, 2011.

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 15, 2013 to stockholders of record on February 1, 2013.

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)
 
    December 31,   December 31,

Assets

2012 2011
Cash and Due From Banks $ 53,646 $ 50,187
Federal Funds Sold and Interest-bearing Deposits In Other Banks 98,637 157,579
 
Short-term Investments 17,367 18,351
 
Securities Available-For-Sale (AFS) 1,434,801 1,258,676
 
Securities Held-to-Maturity 275,507 179,368
 
Federal Home Loan Bank of Boston stock, at cost 15,146 15,531
 
Loans:
Commercial & Industrial 88,475 82,404
Construction & Land Development 38,618 56,819
Commercial Real Estate 576,465 487,495
Residential Real Estate 281,857 239,307
Consumer and Other 7,450 7,681
Home Equity   118,923   110,786
 
Total Loans 1,111,788 984,492
Less: Allowance for Loan Losses   19,197   16,574
 
Net Loans 1,092,591 967,918
 
Bank Premises and Equipment 23,899 21,757
Accrued Interest Receivable 5,811 6,022
Goodwill 2,714 2,714
Other Assets   66,090   65,122
 
Total Assets $ 3,086,209 $ 2,743,225
 

Liabilities

Demand Deposits $ 438,429 $ 365,854
 
Interest Bearing Deposits:
Savings and NOW Deposits 933,316 708,988
Money Market Accounts 653,345 616,241
Time Deposits   419,983   433,501
 
Total Interest Bearing Deposits   2,006,644   1,758,730
 
Total Deposits 2,445,073 2,124,584
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 191,390 143,320
Other Borrowed Funds   195,144   244,143
 
Total Borrowed Funds 386,534 387,463
 
Other Liabilities 38,529 34,446
Subordinated Debentures   36,083   36,083
 
Total Liabilities 2,906,219 2,582,576
 
Total Stockholders' Equity   179,990   160,649
 
Total Liabilities & Stockholders' Equity $ 3,086,209 $ 2,743,225
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Year ended December 31, 2012 and 2011
(in thousands)
       
Quarter ended December 31, Year ended December 31,
2012   2011 2012   2011
 
Interest Income:
Loans $ 12,301 $ 11,949 $ 51,415 $ 48,096
Securities Held-to-Maturity 1,615 1,221 6,746 5,816
Securities Available-for-Sale 5,649 5,935 22,703 23,039
Federal Funds Sold and Interest-bearing Deposits In Other Banks   173   147   630   1,114
 
Total Interest Income 19,738 19,252 81,494 78,065
 
Interest Expense:
Savings and NOW Deposits 601 525 2,250 2,539
Money Market Accounts 540 588 2,373 2,706
Time Deposits 1,476 2,071 6,250 9,356
Securities Sold Under Agreements to Repurchase 93 89 367 379
Other Borrowed Funds and Subordinated Debentures   2,085   1,960   8,300   7,786
 
Total Interest Expense   4,795   5,233   19,540   22,766
 
Net Interest Income 14,943 14,019 61,954 55,299
 
Provision For Loan Losses   900   950   4,150   4,550
 
Net Interest Income After
Provision for Loan Losses 14,043 13,069 57,804 50,749
 
Other Operating Income
Service Charges on Deposit Accounts 1,993 2,031 7,880 7,885
Lockbox Fees 705 641 2,930 2,770
Net Gain on Sales of Investments 724 695 1,843 1,940
Other Income   731   994   3,212   3,645
 
Total Other Operating Income 4,153 4,361 15,865 16,240
 
Operating Expenses
Salaries and Employee Benefits 8,211 7,682 32,943 29,630
Occupancy 1,236 1,126 4,695 4,411
Equipment 501 535 2,255 2,235
FDIC Assessment 435 413 1,737 2,025
Other   2,896   2,946   11,608   10,441
 
Total Operating Expenses   13,279   12,702   53,238   48,742
 
Income Before Income Taxes 4,917 4,728 20,431 18,247
 
Income Tax Expense   139   539   1,392   1,554
 
Net Income $ 4,778 $ 4,189 $ 19,039 $ 16,693
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
 
  December 31,   December 31,

Assets

2012 2011
Cash and Due From Banks $ 54,572 $ 51,963
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 219,540 276,413
 
Securities Available-For-Sale (AFS) 1,263,375 1,099,099
Securities Held-to-Maturity 270,525 178,659
 
Total Loans 1,036,296 948,883

Less: Allowance for Loan Losses

  18,039   15,767
 
Net Loans 1,018,257 933,116
 
Unrealized Gain on Securities AFS 18,362 11,004
Bank Premises and Equipment 22,804 21,537
Accrued Interest Receivable 6,091 6,658
Goodwill 2,714 2,714
Other Assets   68,205   64,421
 
Total Assets $ 2,944,445 $ 2,645,584
 

Liabilities

Demand Deposits $ 386,863 $ 326,102
 
Interest Bearing Deposits:
Savings and NOW Deposits 870,046 735,022
Money Market Accounts 666,949 584,059
Time Deposits   418,789   484,142
Total Interest Bearing Deposits   1,955,784   1,803,223
 
Total Deposits 2,342,647 2,129,325
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 174,624 129,137
Other Borrowed Funds   181,459   166,126
 
Total Borrowed Funds 356,083 295,263
 
Other Liabilities 37,497 29,253
Subordinated Debentures   36,083   36,083
 
Total Liabilities 2,772,310 2,489,924
 
Total Stockholders' Equity   172,135   155,660
 
Total Liabilities & Stockholders' Equity $ 2,944,445 $ 2,645,584
 
 
Total Average Earning Assets - QTD $ 2,938,890 $ 2,570,937
 
Total Average Earning Assets - YTD $ 2,789,736 $ 2,503,054
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)   December 31,   December 31,
2012 2011
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 0.86 $ 0.76
Earnings per average Class A share, diluted, year-to-date $ 3.43 $ 3.01
Return on average assets, year-to-date 0.65 % 0.63 %
Return on average stockholders' equity, year-to-date 11.06 % 10.72 %
Net interest margin (taxable equivalent), quarter 2.30 % 2.44 %
Net interest margin (taxable equivalent), year-to-date 2.51 % 2.48 %
Efficiency ratio, year-to-date 62.1 % 62.2 %
Book value per share $ 32.40 $ 28.98
Tangible book value per share $ 31.91 $ 28.47
Tangible capital / tangible assets 5.75 % 5.76 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,552,121 5,542,052
Average Class A shares outstanding, diluted, year-to-date 5,549,191 5,541,794
 
Shares outstanding Class A 3,568,079 3,548,317
Shares outstanding Class B   1,986,880     1,994,380  
Total shares outstanding at period end   5,554,959     5,542,697  
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.73 % 1.68 %
Nonaccrual loans $ 4,471 $ 5,827
Nonperforming assets $ 4,471 $ 7,009
Loans 90 days past due and still accruing $ - $ 18
Accruing troubled debt restructures $ 3,048 $ 4,634
Net charge-offs, year-to-date $ 1,527 $ 2,029
 
Leverage ratio 6.80 % 7.12 %
Tier 1 risk weighted capital ratio 14.34 % 14.73 %
Total risk weighted capital ratio 15.59 % 15.98 %
Total risk weighted assets $ 1,462,197 $ 1,306,874

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

Source: Century Bancorp, Inc.

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