CNBKA Century BanCorp Inc

Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $39,699,000 for the year ended December 31, 2019, or $7.13 per Class A share diluted, an increase of 9.6% compared to net income of $36,213,000, or $6.50 per Class A share diluted, for the same period a year ago. Total assets increased 6.4% from $5.16 billion at December 31, 2018 to $5.49 billion at December 31, 2019. For the quarter ended December 31, 2019, net income totaled $10,732,000 or $1.93 per Class A share diluted, an increase of 8.1% compared to net income of $9,925,000 or $1.78 per Class A share diluted, for the same period a year ago.

Net interest income totaled $95.8 million for the year ended December 31, 2019 compared to $92.6 million for the same period in 2018. The 3.5% 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 2018 to 2.10% for 2019. This was primarily the result of increased rates paid on deposits. The average balances of earning assets increased by $335.8 million or 7.2%, combined with an average yield increase of 0.23%, resulting in an increase in interest income of $22.1 million. The average balance of interest bearing liabilities increased by $298.1 million or 7.9%, combined with an average cost of funds increase of 0.38%, resulting in an increase in interest expense of $18.9 million.

The Company’s effective tax rate decreased from 4.2% for the year ended December 31, 2018 to 2.7% for the same period in 2019. This was primarily as a result of a reduction in tax accruals related to sequestration of the refundable portion of our alternative minimum tax (AMT) credit carryforward. On January 14, 2019, the IRS updated its announcement “Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations” to clarify that refundable AMT credits under Section 53(e) of the Internal Revenue Code are not subject to sequestration for taxable years beginning after December 31, 2017. Therefore, the full amount of the AMT credit carryover will be refunded to the Company.

At December 31, 2019, total equity was $332.6 million compared to $300.4 million at December 31, 2018. The Company’s equity increased primarily as a result of earnings, offset somewhat by dividends paid.

The Company’s leverage ratio stood at 7.25% at December 31, 2019, compared to 6.91% at December 31, 2018. The increase in the leverage ratio was due to an increase in stockholders’ equity, offset somewhat by an increase in quarterly average assets. Book value as of December 31, 2019 was $59.73 per share compared to $53.96 at December 31, 2018.

The Company’s allowance for loan losses was $29.6 million or 1.22% of loans outstanding at December 31, 2019 compared to $28.5 million or 1.25% of loans outstanding at December 31, 2018. The ratio of the allowance for loan losses to loans outstanding has decreased from the same period last year, primarily as a result of improvements in historical loss rates. Non-performing assets totaled $2.0 million at December 31, 2019, compared to $3.5 million at December 31, 2018. Nonperforming assets decreased from the same period last year, mainly as a result of the resolution of one residential real estate property during the third quarter of 2019.

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, 2020 to stockholders of record on February 3, 2020.

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) December 31, December 31, Assets

 

2019

 

2018

Cash and Due From Banks

$

44,420

$

89,540

Federal Funds Sold and Interest-bearing Deposits In Other Banks

 

214,273

 

252,963

  Securities Available-for-Sale (AFS)

 

262,190

 

338,355

  Securities Held-to-Maturity

 

2,351,120

 

2,046,647

  Federal Home Loan Bank of Boston stock, at cost

 

19,471

 

17,974

  Loans:

Commercial & Industrial

812,417

761,775

Municipal

120,455

97,140

Construction & Land Development

 

8,992

 

13,628

Commercial Real Estate

 

786,102

 

750,362

Residential Real Estate

 

371,897

 

348,250

Consumer and Other

 

21,893

 

22,083

Home Equity

304,363

292,340

  Total Loans

 

2,426,119

 

2,285,578

Less: Allowance for Loan Losses

 

29,585

 

28,543

 

Net Loans

 

2,396,534

 

2,257,035

  Bank Premises and Equipment, net

 

33,952

 

23,921

Accrued Interest Receivable

 

13,110

 

14,406

Goodwill

 

2,714

 

2,714

Other Assets

 

154,640

 

120,380

  Total Assets

$

5,492,424

$

5,163,935

  Liabilities Demand Deposits

$

712,842

$

813,478

  Interest Bearing Deposits: Savings and NOW Deposits

 

1,678,250

 

1,707,019

Money Market Accounts

 

1,453,572

 

1,325,888

Time Deposits

 

555,447

 

560,579

  Total Interest Bearing Deposits

 

3,687,269

 

3,593,486

  Total Deposits

 

4,400,111

 

4,406,964

  Borrowed Funds: Securities Sold Under Agreements to Repurchase

 

266,045

 

154,240

Other Borrowed Funds

 

370,955

 

202,378

  Total Borrowed Funds

 

637,000

 

356,618

  Other Liabilities

 

86,649

 

63,831

Subordinated Debentures

 

36,083

 

36,083

  Total Liabilities

 

5,159,843

 

4,863,496

  Total Stockholders' Equity

 

332,581

 

300,439

 

Total Liabilities & Stockholders' Equity

$

5,492,424

$

5,163,935

Century Bancorp, Inc. and Subsidiaries Consolidated Comparative Statements of Income (unaudited) For the quarter and year ended December 31, 2019 and 2018 (in thousands)   Quarter ended December 31, Year ended December 31,

 

2019

 

2018

 

2019

 

2018

  Interest Income: Loans

$

22,781

$

20,938

$

87,887

$

78,551

Securities Held-to-Maturity

 

15,030

 

12,626

 

58,036

 

45,556

Securities Available-for-Sale

 

1,860

 

2,630

 

9,165

 

9,451

Federal Funds Sold and Interest-bearing Deposits In Other Banks

 

847

 

1,259

 

4,051

 

3,498

  Total Interest Income

 

40,518

 

37,453

 

159,139

 

137,056

  Interest Expense: Savings and NOW Deposits

 

4,395

 

3,979

 

21,183

 

11,757

Money Market Accounts

 

5,365

 

4,883

 

21,170

 

13,922

Time Deposits

 

3,080

 

2,743

 

11,804

 

10,208

Securities Sold Under Agreements to Repurchase

 

775

 

319

 

2,347

 

976

Other Borrowed Funds and Subordinated Debentures

 

1,572

 

1,824

 

6,846

 

7,617

  Total Interest Expense

 

15,187

 

13,748

 

63,350

 

44,480

  Net Interest Income

 

25,331

 

23,705

 

95,789

 

92,576

  Provision For Loan Losses

 

550

 

450

 

1,250

 

1,350

  Net Interest Income After Provision for Loan Losses

 

24,781

 

23,255

 

94,539

 

91,226

  Other Operating Income: Service Charges on Deposit Accounts

 

2,419

 

2,292

 

9,220

 

8,560

Lockbox Fees

 

955

 

970

 

3,973

 

3,274

Net Gain on Sales of Loans

 

258

 

-

 

412

 

-

Net Gain on Sales of Securities

 

-

 

-

 

61

 

302

Other Income

 

1,057

 

902

 

4,733

 

4,112

  Total Other Operating Income

 

4,689

 

4,164

 

18,399

 

16,248

  Operating Expenses: Salaries and Employee Benefits

 

11,393

 

10,379

 

44,014

 

42,710

Occupancy

 

1,560

 

1,513

 

6,246

 

6,092

Equipment

 

798

 

777

 

3,238

 

3,132

Other

 

4,461

 

4,516

 

18,631

 

17,759

  Total Operating Expenses

 

18,212

 

17,185

 

72,129

 

69,693

  Income Before Income Taxes

 

11,258

 

10,234

 

40,809

 

37,781

  Income Tax Expense

 

526

 

309

 

1,110

 

1,568

  Net Income

$

10,732

$

9,925

$

39,699

$

36,213

Century Bancorp, Inc. and Subsidiaries Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited) (in thousands) December 31, December 31, Assets

 

2019

 

 

2018

 

Cash and Due From Banks

$

75,025

 

$

71,943

 

Federal Funds Sold and Interest-Bearing Deposits in Other Banks

 

189,710

 

 

183,903

 

  Securities Available-For-Sale (AFS)

 

313,604

 

 

400,098

 

Securities Held-to-Maturity (HTM)

 

2,152,580

 

 

1,854,328

 

  Total Loans

 

2,341,190

 

 

2,222,946

 

Less: Allowance for Loan Losses

 

29,004

 

 

27,531

 

  Net Loans

 

2,312,186

 

 

2,195,415

 

  Unrealized (Loss)Gain on Securities AFS and HTM Transfers

 

(3,198

)

 

(4,017

)

Bank Premises and Equipment

 

27,867

 

 

23,642

 

Accrued Interest Receivable

 

13,752

 

 

12,014

 

Goodwill

 

2,714

 

 

2,714

 

Other Assets

 

134,704

 

 

122,948

 

  Total Assets

$

5,218,944

 

$

4,862,988

 

  Liabilities Demand Deposits

$

760,420

 

$

753,604

 

  Interest Bearing Deposits: Savings and NOW Deposits

 

1,810,481

 

 

1,514,259

 

Money Market Accounts

 

1,273,389

 

 

1,230,010

 

Time Deposits

 

519,761

 

 

577,975

 

Total Interest Bearing Deposits

 

3,603,631

 

 

3,322,244

 

  Total Deposits

 

4,364,051

 

 

4,075,848

 

  Borrowed Funds: Securities Sold Under Agreements to Repurchase

 

224,361

 

 

147,944

 

Other Borrowed Funds

 

195,843

 

 

255,591

 

  Total Borrowed Funds

 

420,204

 

 

403,535

 

  Other Liabilities

 

79,437

 

 

70,020

 

Subordinated Debentures

 

36,083

 

 

36,083

 

  Total Liabilities

 

4,899,775

 

 

4,585,486

 

  Total Stockholders' Equity

 

319,169

 

 

277,502

 

  Total Liabilities & Stockholders' Equity

$

5,218,944

 

$

4,862,988

 

  Total Average Earning Assets - QTD

$

5,100,333

 

$

4,840,923

 

  Total Average Earning Assets - YTD

$

4,997,084

 

$

4,661,275

 

Century Bancorp, Inc. and Subsidiaries Consolidated Selected Key Financial Information (unaudited) (in thousands, except share data) December 31, December 31,

 

2019

 

 

2018

 

  Performance Measures:   Earnings per average Class A share, diluted, quarter

$

1.93

 

$

1.78

 

Earnings per average Class A share, diluted, year

$

7.13

 

$

6.50

 

Return on average assets, year

 

0.76

%

 

0.74

%

Return on average stockholders' equity, year

 

12.44

%

 

13.05

%

Net interest margin (taxable equivalent), quarter

 

2.14

%

 

2.13

%

Net interest margin (taxable equivalent), year

 

2.10

%

 

2.18

%

Efficiency ratio, Non-GAAP (1)

 

58.4

%

 

59.2

%

Book value per share

$

59.73

 

$

53.96

 

Tangible book value per share - Non-GAAP (1)

$

59.24

 

$

53.47

 

Capital / assets

 

6.06

%

 

5.82

%

Tangible capital / tangible assets - Non-GAAP (1)

 

6.01

%

 

5.77

%

    Common Share Data: Average Class A shares outstanding, diluted, quarter and year

 

5,567,909

 

 

5,567,909

 

  Shares outstanding Class A

 

3,650,949

 

 

3,608,329

 

Shares outstanding Class B

 

1,916,960

 

 

1,959,580

 

Total shares outstanding at period end

 

5,567,909

 

 

5,567,909

 

    Asset Quality and Other Data:   Allowance for loan losses / loans

 

1.22

%

 

1.25

%

Nonaccrual loans

$

2,014

 

$

1,313

 

Nonperforming assets

$

2,014

 

$

3,538

 

Loans 90 days past due and still accruing

$

-

 

$

-

 

Accruing troubled debt restructures

$

2,361

 

$

2,559

 

Net charge-offs (recoveries), year

$

208

 

$

(938

)

  Leverage ratio

 

7.25

%

 

6.91

%

Common equity tier 1 risk weighted capital ratio

 

11.80

%

 

11.32

%

Tier 1 risk weighted capital ratio

 

12.98

%

 

12.59

%

Total risk weighted capital ratio

 

13.97

%

 

13.62

%

Total risk weighted assets

$

2,976,650

 

$

2,771,129

 

    (1) Non-GAAP Financial Measures are reconciled in the following tables:   Calculation of Efficiency ratio:   Total operating expenses

$

72,129

 

$

69,693

 

Less: other real estate owned expenses

 

134

 

 

-

 

Total adjusted operating expenses(numerator)

$

71,995

 

$

69,693

 

  Net interest income

$

95,789

 

$

92,576

 

Total other operating income

 

18,399

 

 

16,248

 

Tax equivalent adjustment

 

9,068

 

 

8,853

 

Total income(denominator)

$

123,256

 

$

117,677

 

  Efficiency ratio - Non-GAAP

 

58.4

%

 

59.2

%

  Calculation of tangible book value per share:   Total stockholders' equity

$

332,581

 

$

300,439

 

Less: goodwill

 

2,714

 

 

2,714

 

Tangible stockholders' equity(numerator)

$

329,867

 

$

297,725

 

  Total shares outstanding at period end(denominator)

 

5,567,909

 

 

5,567,909

 

  Tangible book value per share - Non-GAAP

$

59.24

 

$

53.47

 

Book value per share - GAAP

$

59.73

 

$

53.96

 

  Calculation of tangible capital / tangible assets:   Total stockholders' equity

$

332,581

 

$

300,439

 

Less: goodwill

 

2,714

 

 

2,714

 

Tangible stockholders' equity(numerator)

$

329,867

 

$

297,725

 

  Total assets

$

5,492,424

 

$

5,163,935

 

Less: goodwill

 

2,714

 

 

2,714

 

Tangible assets(denominator)

$

5,489,710

 

$

5,161,221

 

  Tangible capital / tangible assets - Non-GAAP

 

6.01

%

 

5.77

%

Capital / assets - GAAP

 

6.06

%

 

5.82

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200121006030/en/

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