CNBKA Century BanCorp Inc

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