Market Overview

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

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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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