Century Bancorp, Inc. Announces Increased Earnings for Q1 2017, up 14.9%; Asset Growth to Record Size of $4.6 BB; Regular Dividend Declared

Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) ("the Company") today announced net income of $6,096,000 for the quarter ended March 31, 2017, or $1.09 per Class A share diluted, an increase of 14.9% compared to net income of $5,307,000, or $0.95 per Class A share diluted, for the same period a year ago. Total assets increased 2.6% from $4.5 billion at December 31, 2016 to $4.6 billion at March 31, 2017.

Net interest income totaled $20.5 million for the quarter ended March 31, 2017 compared to $17.9 million for the same period in 2016. The 14.6% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.18% on a fully taxable equivalent basis in 2016 to 2.16% for the same period in 2017. This was primarily the result of a decrease in rates on earning assets. The average balances of earning assets increased by 15.2% combined with a similar increase in average deposits. Also, interest expense increased 14.2% as a result of an increase in deposit balances.

The provision for loan losses decreased by $50,000 from $450,000 for the quarter ended March 31, 2016 to $400,000 for the same period in 2017, primarily as a result of changes in historical loss factors offset, somewhat, by an increase in loan balances. The Company's effective tax rate increased from 1.2% for the first quarter of 2016 to 2.3% for the same period in 2017 primarily as a result of an increase in taxable income.

At March 31, 2017, total equity was $246.3 million compared to $240.0 million at December 31, 2016. 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, decrease in unrealized losses on securities available-for-sale, and amortization of the pension liability.

The Company's leverage ratio stood at 6.12% at March 31, 2017, compared to 6.28% at December 31, 2016. 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, 2017 was $44.24 per share compared to $43.11 at December 31, 2016.

The Company's allowance for loan losses was $24.8 million or 1.22% of loans outstanding at March 31, 2017, compared to $24.4 million or 1.27% of loans outstanding at December 31, 2016 and $23.5 million or 1.34% of loans outstanding at March 31, 2016. The change in the ratio of the allowance for loan losses to loans outstanding, when compared to March 31, 2016, was primarily due to changes in portfolio composition and lower historical loss rates. Non-performing assets totaled $810,000 at March 31, 2017, compared to $1.1 million at December 31, 2016 and $1.5 million at March 31, 2016.

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 15, 2017 to stockholders of record on May 1, 2017.

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					2017			2016
Cash and Due From Banks					$	65,100			$	62,400
Federal Funds Sold and Interest-bearing Deposits In Other Banks						2,358				173,751
Short-term Investments						2,101				3,183
Securities Available-for-Sale (AFS)						509,900				499,297
Securities Held-to-Maturity						1,809,608				1,653,986
Federal Home Loan Bank of Boston stock, at cost						20,328				21,042
Loans:
Commercial & Industrial						649,326				612,503
Municipal						153,447				135,418
Construction & Land Development						10,773				14,928
Commercial Real Estate						732,151				696,173
Residential Real Estate						264,442				241,357
Consumer and Other						11,573				11,697
Home Equity						218,782				211,857
Total Loans						2,040,494				1,923,933
Less: Allowance for Loan Losses						24,827				24,406
Net Loans						2,015,667				1,899,527
Bank Premises and Equipment, net						23,471				23,417
Accrued Interest Receivable						10,187				9,645
Goodwill						2,714				2,714
Other Assets						115,951				113,646
Total Assets					$	4,577,385			$	4,462,608
Liabilities
Demand Deposits					$	680,751			$	689,286
Interest Bearing Deposits:
Savings and NOW Deposits						1,410,229				1,304,394
Money Market Accounts						1,132,021				1,181,179
Time Deposits						520,461				478,359
Total Interest Bearing Deposits						3,062,711				2,963,932
Total Deposits						3,743,462				3,653,218
Borrowed Funds:
Securities Sold Under Agreements to Repurchase						189,920				182,280
Other Borrowed Funds						301,500				293,000
Total Borrowed Funds						491,420				475,280
Other Liabilities						60,092				57,986
Subordinated Debentures						36,083				36,083
Total Liabilities						4,331,057				4,222,567
Total Stockholders' Equity						246,328				240,041
Total Liabilities & Stockholders' Equity					$	4,577,385			$	4,462,608

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter ended March 31, 2017 and 2016
(in thousands)
				Quarter ended March 31,
				2017		2016
Interest Income:
Loans				$	15,100			$	14,172
Securities Held-to-Maturity					9,535				7,812
Securities Available-for-Sale					1,611				964
Federal Funds Sold and Interest-bearing Deposits In Other Banks					393				315
Total Interest Income					26,639				23,263
Interest Expense:
Savings and NOW Deposits					1,227				838
Money Market Accounts					1,274				795
Time Deposits					1,651				1,358
Securities Sold Under Agreements to Repurchase					103				115
Other Borrowed Funds and Subordinated Debentures					1,928				2,307
Total Interest Expense					6,183				5,413
Net Interest Income					20,456				17,850
Provision For Loan Losses					400				450
Net Interest Income After
Provision for Loan Losses					20,056				17,400
Other Operating Income
Service Charges on Deposit Accounts					2,016				1,937
Lockbox Fees					771				789
Net Gain on Sales of Loans					101				-
Other Income					1,021				928
Total Other Operating Income					3,909				3,654
Operating Expenses
Salaries and Employee Benefits					11,143				9,776
Occupancy					1,741				1,579
Equipment					706				636
FDIC Assessment					438				568
Other					3,697				3,124
Total Operating Expenses					17,725				15,683
Income Before Income Taxes					6,240				5,371
Income Tax (Benefit) Expense					144				64
Net Income				$	6,096			$	5,307

Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
				March 31,			March 31,
Assets				2017			2016
Cash and Due From Banks				$	75,497				$	69,928
Federal Funds Sold and Interest-Bearing Deposits in Other Banks					204,527					245,933
Securities Available-For-Sale (AFS)					533,486					414,483
Securities Held-to-Maturity (HTM)					1,751,435					1,434,888
Total Loans					1,984,700					1,786,909
Less: Allowance for Loan Losses					24,580					23,283
Net Loans					1,960,120					1,763,626
Unrealized (Loss)Gain on Securities AFS and HTM Transfers					(7,751	)				(11,047	)
Bank Premises and Equipment					23,569					24,013
Accrued Interest Receivable					10,015					8,133
Goodwill					2,714					2,714
Other Assets					116,347					109,806
Total Assets				$	4,669,959				$	4,062,477
Liabilities
Demand Deposits				$	675,941				$	557,116
Interest Bearing Deposits:
Savings and NOW Deposits					1,453,299					1,217,853
Money Market Accounts					1,216,690					976,910
Time Deposits					501,857					448,409
Total Interest Bearing Deposits					3,171,846					2,643,172
Total Deposits					3,847,787					3,200,288
Borrowed Funds:
Securities Sold Under Agreements to Repurchase					200,457					222,579
Other Borrowed Funds					283,650					330,286
Total Borrowed Funds					484,107					552,865
Other Liabilities					58,663					55,639
Subordinated Debentures					36,083					36,083
Total Liabilities					4,426,640					3,844,875
Total Stockholders' Equity					243,319					217,602
Total Liabilities & Stockholders' Equity				$	4,669,959				$	4,062,477
Total Average Earning Assets - YTD				$	4,474,148				$	3,882,213

Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)
			March 31,		March 31,
			2017		2016
Performance Measures:
Earnings per average Class A share, diluted, quarter			$	1.09			$	0.95
Return on average assets, year-to-date				0.53	%			0.53	%
Return on average stockholders' equity, year-to-date				10.16	%			9.81	%
Net interest margin (taxable equivalent), quarter				2.16	%			2.18	%
Efficiency ratio, year-to-date - Non-GAAP (1)				64.0	%			63.5	%
Book value per share			$	44.24			$	39.66
Tangible book value per share - Non-GAAP (1)			$	43.75			$	39.18
Capital / assets				5.38	%			5.45	%
Tangible capital / tangible assets - Non-GAAP (1)				5.33	%			5.38	%
Common Share Data:
Average Class A shares outstanding, diluted, quarter & year				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				1.22	%			1.34	%
Nonaccrual loans			$	810			$	1,491
Nonperforming assets			$	810			$	1,491
Loans 90 days past due and still accruing			$	-			$	-
Accruing troubled debt restructures			$	3,492			$	2,865
Net (recoveries)charge-offs, year-to-date			$	(21	)		$	(19	)
Leverage ratio				6.12	%			6.72	%
Common equity tier 1 risk weighted capital ratio				10.06	%			9.83	%
Tier 1 risk weighted capital ratio				11.27	%			11.27	%
Total risk weighted capital ratio				12.25	%			12.24	%
Total risk weighted assets			$	2,532,933			$	2,424,842
(1) Non-GAAP Financial Measures are reconciled in the following tables:
Calculation of Efficiency ratio:
Total operating expenses(numerator)			$	17,725			$	15,683
Net interest income			$	20,456			$	17,850
Total other operating income				3,909				3,654
Tax equivalent adjustment				3,336				3,175
Total income(denominator)			$	27,701			$	24,679
Efficiency ratio, year - Non-GAAP				64.0	%			63.5	%
Calculation of tangible book value per share:
Total stockholders' equity			$	246,328			$	220,841
Less: goodwill				2,714				2,714
Tangible stockholders' equity(numerator)			$	243,614			$	218,127
Total shares outstanding at period end(denominator)				5,567,909				5,567,909
Tangible book value per share - Non-GAAP			$	43.75			$	39.18
Book value per share - GAAP			$	44.24			$	39.66
Calculation of tangible capital / tangible assets:
Total stockholders' equity			$	246,328			$	220,841
Less: goodwill				2,714				2,714
Tangible stockholders' equity(numerator)			$	243,614			$	218,127
Total assets			$	4,577,385			$	4,054,797
Less: goodwill				2,714				2,714
Tangible assets(denominator)			$	4,574,671			$	4,052,083
Tangible capital / tangible assets - Non-GAAP				5.33	%			5.38	%
Capital / assets - GAAP				5.38	%			5.45	%

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