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Century Bancorp, Inc. Announces Increased Earnings for Q1 2016, Up 7.0%; Asset Growth to Record Size of $4.1 BB; Regular Dividend Declared

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MEDFORD, Mass.--(BUSINESS WIRE)--

Century Bancorp, Inc. (NASDAQ: CNBKA) (www.centurybank.com) ("the Company") today announced net income of $5,307,000 for the quarter ended March 31, 2016, or $0.95 per Class A share diluted, an increase of 7.0% compared to net income of $4,959,000, or $0.89 per Class A share diluted, for the same period a year ago. Total assets increased 2.7% from $3.9 billion at December 31, 2015 to $4.1 billion at March 31, 2016.

Net interest income totaled $17.9 million for the quarter ended March 31, 2016 compared to $16.4 million for the same period in 2015. The 8.8% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin increased from 2.12% on a fully taxable equivalent basis for the first quarter of 2015 to 2.18% on the same basis for 2016. This was primarily the result of an increase in rates on earning assets. The average balances of earning assets increased by 6.8% combined with a similar increase in average deposits. Also, interest expense increased 13.6% as a result of an increase in deposit balances.

The provision for loan losses increased by $250,000 from $200,000 for the quarter ended March 31, 2015 to $450,000 for the same period in 2016, primarily as a result of an increase in loan balances. The Company's effective tax rate decreased from 4.2% in 2015 to 1.2% in 2016 primarily as a result of an increase in tax-exempt income.

At March 31, 2016, total equity was $220.8 million compared to $214.5 million at December 31, 2015. 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, decreases in unrealized losses on securities available-for-sale, and amortization of the pension liability.

The Company's leverage ratio stood at 6.72% at March 31, 2016, compared to 6.79% at December 31, 2015. 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, 2016 was $39.66 per share compared to $38.53 at December 31, 2015.

The Company's allowance for loan losses was $23.5 million or 1.34% of loans outstanding at March 31, 2016, compared to $23.1 million or 1.33% of loans outstanding at December 31, 2015 and $22.5 million or 1.68% of loans outstanding at March 31, 2015. The change in the ratio of the allowance for loan losses to loans outstanding, when compared to March 31, 2015, was primarily due to changes in portfolio composition and related methodology enhancements to address these changes. Non-performing assets totaled $1.5 million at March 31, 2016, compared to $2.3 million at December 31, 2015 and $4.3 million at March 31, 2015.

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 16, 2016 to stockholders of record on May 2, 2016.

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

  2016   2015
Cash and Due From Banks $ 71,655 $ 52,877
Federal Funds Sold and Interest-bearing Deposits In Other Banks 232,995 167,847
 
Short-term Investments 3,241 3,233
 
Securities Available-for-Sale (AFS) 380,349 404,623
 
Securities Held-to-Maturity 1,412,702 1,438,903
 
Federal Home Loan Bank of Boston stock, at cost 23,909 28,807
 
Loans Held-for-Sale 48,180 -
 
Loans:
Commercial & Industrial 529,168 452,235
Municipal 85,227 85,685
Construction & Land Development 26,572 27,421
Commercial Real Estate 715,248 721,506
Residential Real Estate 215,040 255,346
Consumer and Other 12,826 11,323
Home Equity   178,377   178,020
 
Total Loans 1,762,458 1,731,536
Less: Allowance for Loan Losses   23,544   23,075
 
Net Loans 1,738,914 1,708,461
 
Bank Premises and Equipment, net 23,797 24,106
Accrued Interest Receivable 7,524 8,002
Goodwill 2,714 2,714
Other Assets   108,817   107,868
 
Total Assets $ 4,054,797 $ 3,947,441
 

Liabilities

Demand Deposits $ 577,842 $ 541,955
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,197,257 1,070,585
Money Market Accounts 944,621 989,094
Time Deposits   446,185   473,426
 
Total Interest Bearing Deposits   2,588,063   2,533,105
 
Total Deposits 3,165,905 3,075,060
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 218,230 197,850
Other Borrowed Funds   356,000   368,000
 
Total Borrowed Funds 574,230 565,850
 
Other Liabilities 57,738 55,904
Subordinated Debentures   36,083   36,083
 
Total Liabilities 3,833,956 3,732,897
 
Total Stockholders' Equity   220,841   214,544
 
Total Liabilities & Stockholders' Equity $ 4,054,797 $ 3,947,441
 
   
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter ended March 31, 2016 and 2015
(in thousands)
 
Quarter ended March 31,
  2016     2015
 
Interest Income:
Loans $ 14,172 $ 12,076
Securities Held-to-Maturity 7,812 8,168
Securities Available-for-Sale 964 732
Federal Funds Sold and Interest-bearing Deposits In Other Banks   315   196
 
Total Interest Income 23,263 21,172
 
Interest Expense:
Savings and NOW Deposits 838 628
Money Market Accounts 795 782
Time Deposits 1,358 1,156
Securities Sold Under Agreements to Repurchase 115 114
Other Borrowed Funds and Subordinated Debentures   2,307   2,085
 
Total Interest Expense   5,413   4,765
 
Net Interest Income 17,850 16,407
 
Provision For Loan Losses   450   200
 
Net Interest Income After
Provision for Loan Losses 17,400 16,207
 
Other Operating Income
Service Charges on Deposit Accounts 1,937 1,913
Lockbox Fees 789 788
Net Gain on Sales of Loans - 99
Other Income   928   705
 
Total Other Operating Income 3,654 3,505
 
Operating Expenses
Salaries and Employee Benefits 9,776 9,134
Occupancy 1,579 1,605
Equipment 636 593
FDIC Assessment 568 503
Other   3,124   2,703
 
Total Operating Expenses   15,683   14,538
 
Income Before Income Taxes 5,371 5,174
 
Income Tax (Benefit) Expense   64   215
 
Net Income $ 5,307 $ 4,959
 
   
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
March 31, March 31,

Assets

  2016     2015  
Cash and Due From Banks $ 69,928 $ 71,131
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 245,933 300,638
 
Securities Available-For-Sale (AFS) 414,483 466,673
Securities Held-to-Maturity (HTM) 1,434,888 1,530,383
 
Total Loans 1,786,909 1,338,433
Less: Allowance for Loan Losses   23,283     22,511  
 
Net Loans 1,763,626 1,315,922
 

Unrealized (Loss)Gain on Securities AFS and HTM Transfers

(11,047 ) (16,432 )
Bank Premises and Equipment 24,013 24,244
Accrued Interest Receivable 8,133 7,071
Goodwill 2,714 2,714
Other Assets   109,806     96,015  
 
Total Assets $ 4,062,477   $ 3,798,359  
 

Liabilities

Demand Deposits $ 557,116 $ 490,020
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,217,853 1,096,744
Money Market Accounts 976,910 999,901
Time Deposits   448,409     377,433  
Total Interest Bearing Deposits   2,643,172     2,474,078  
 
Total Deposits 3,200,288 2,964,098
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 222,579 248,508
Other Borrowed Funds   330,286     303,024  
 
Total Borrowed Funds 552,865 551,532
 
Other Liabilities 55,639 51,639
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 3,844,875 3,603,352
 
Total Stockholders' Equity   217,602     195,007  
 
Total Liabilities & Stockholders' Equity $ 4,062,477   $ 3,798,359  
 
Total Average Earning Assets - YTD $ 3,882,213   $ 3,636,127  
 
   
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data) March 31, March 31,
  2016     2015  
 

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 0.95 $ 0.89
Return on average assets, year-to-date 0.53 % 0.53 %
Return on average stockholders' equity, year-to-date 9.81 % 10.31 %
Net interest margin (taxable equivalent), quarter 2.18 % 2.12 %
Efficiency ratio, year-to-date - Non-GAAP (1) 63.5 % 64.6 %
Book value per share $ 39.66 $ 35.53
Tangible book value per share - Non-GAAP (1) $ 39.18 $ 35.04
Tangible capital / tangible assets - Non-GAAP (1) 5.38 % 5.17 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter 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 1.34 % 1.68 %
Nonaccrual loans $ 1,491 $ 4,260
Nonperforming assets $ 1,491 $ 4,260
Loans 90 days past due and still accruing $ - $ 34
Accruing troubled debt restructures $ 2,865 $ 3,238
Net (recoveries)charge-offs, year-to-date $ (19 ) $ (11 )
 
Leverage ratio 6.72 % * 6.60 % *
Common equity tier 1 risk weighted capital ratio 9.83 % * 11.00 % *
Tier 1 risk weighted capital ratio 11.27 % * 12.78 % *
Total risk weighted capital ratio 12.24 % * 13.93 % *
Total risk weighted assets $ 2,424,842 * $ 1,965,046 *
 
* computed utilizing recently implemented Basel III regulatory capital framework.
 
(1) Non-GAAP Financial Measures are reconciled in the following tables:
 
Calculation of Efficiency ratio:
 
Total operating expenses(numerator) $ 15,683   $ 14,538  
 
Net interest income $ 17,850 $ 16,407
Total other operating income 3,654 3,505
Tax equivalent adjustment   3,175     2,588  
Total income(denominator) $ 24,679   $ 22,500  
 
Efficiency ratio, year - Non-GAAP     63.5 %       64.6 %
 
Calculation of tangible book value per share:
 
Total stockholders' equity $ 220,841 $ 197,828
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 218,127   $ 195,114  
 
Total shares outstanding at period end(denominator) 5,567,909 5,567,909
 
Tangible book value per share - Non-GAAP   $ 39.18       $ 35.04  
Book value per share - GAAP   $ 39.66       $ 35.53  
 
Calculation of tangible capital / tangible assets:
 
Total stockholders' equity $ 220,841 $ 197,828
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 218,127   $ 195,114  
 
Total assets $ 4,054,797 $ 3,773,323
Less: goodwill   2,714     2,714  
Tangible assets(denominator) $ 4,052,083   $ 3,770,609  
 
Tangible capital / tangible assets - Non-GAAP     5.38 %       5.17 %
Capital / assets - GAAP     5.45 %       5.24 %

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

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