CENTURY BANCORP INC - FORM 8-K - EX-99.1

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8-K - FORM 8-K - CENTURY BANCORP INC	d266721d8k.htm

Exhibit 99.1

LOGO

NEWS RELEASE

FOR IMMEDIATE RELEASE


Contact:		William P. Hornby, CPA
		whornby@centurybank.com

Phone:		781-393-4630

Fax:		781-393-4071

CENTURY BANCORP, INC. ANNOUNCES RECORD EARNINGS FOR Q3 2016, UP 5.2%; ASSET GROWTH TO RECORD SIZE OF $4.3 BB; REGULAR DIVIDEND DECLARED

Medford, MA, October 11, 2016—Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $18,034,000 for the nine months ended September 30, 2016, or $3.24 per Class A share diluted, an increase of 5.8% compared to net income of $17,050,000, or $3.06 per Class A share diluted, for the same period a year ago. Total assets increased 8.9% from $3.9 billion at December 31, 2015 to $4.3 billion at September 30, 2016. For the quarter ended September 30, 2016, net income totaled a record $6,486,000 or $1.16 per Class A share diluted, an increase of 5.2% compared to net income of $6,166,000, or $1.11 per Class A share diluted, for the same period a year ago.

Net interest income totaled $55.3 million for the nine months ended September 30, 2016 compared to $52.7 million for the same period in 2015. The 4.9% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.20% on a fully taxable equivalent basis for the first nine months of 2015 to 2.15% for the same period in 2016. This was primarily the result of a decrease in rates on earning assets. The average balances of earning assets increased by 9.1% combined with a similar increase in average deposits. Also, interest expense increased 12.3% as a result of an increase in deposit balances.

The provision for loan losses increased by $975,000 from $200,000 for the nine months ended September 30, 2015 to $1,175,000 for the same period in 2016, primarily as a result of an increase in loan balances. The Company’s effective tax rate decreased from 3.6% in 2015 to 0.2% in 2016 primarily as a result of an increase in tax-exempt income.

-more-

At September 30, 2016, total equity was $233.8 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 and amortization of the pension liability. This was offset, somewhat, by an increase in unrealized losses on securities available-for-sale.

The Company’s leverage ratio stood at 6.46% at September 30, 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 September 30, 2016 was $41.99 per share compared to $38.53 at December 31, 2015.

The Company’s allowance for loan losses was $24.2 million or 1.31% of loans outstanding at September 30, 2016, compared to $23.1 million or 1.33% of loans outstanding at December 31, 2015 and $22.3 million or 1.36% of loans outstanding at September 30, 2015. The change in the ratio of the allowance for loan losses to loans outstanding, when compared to September 30, 2015, was primarily due to changes in portfolio composition. Non-performing assets totaled $1.0 million at September 30, 2016, compared to $2.3 million at December 31, 2015 and $1.8 million at September 30, 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 November 15, 2016 to stockholders of record on November 1, 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)


	September 30,		December 31,
	2016		2015
Assets
Cash and Due From Banks	$	58,975	$	52,877
Federal Funds Sold and Interest-bearing Deposits In Other Banks		159,900		167,847
Short-term Investments		3,241		3,233
Securities Available-for-Sale (AFS)		526,122		404,623
Securities Held-to-Maturity		1,565,191		1,438,903
Federal Home Loan Bank of Boston stock, at cost		21,158		28,807
Loans:
Commercial & Industrial		549,290		452,235
Municipal		145,063		85,685
Construction & Land Development		19,522		27,421
Commercial Real Estate		692,778		721,506
Residential Real Estate		222,881		255,346
Consumer and Other		11,474		11,323
Home Equity		200,085		178,020

Total Loans		1,841,093		1,731,536
Less: Allowance for Loan Losses		24,208		23,075

Net Loans		1,816,885		1,708,461
Bank Premises and Equipment, net		23,334		24,106
Accrued Interest Receivable		7,597		8,002
Goodwill		2,714		2,714
Other Assets		113,206		107,868

Total Assets	$	4,298,323	$	3,947,441

Liabilities
Demand Deposits	$	645,317	$	541,955
Interest Bearing Deposits:
Savings and NOW Deposits		1,293,995		1,070,585
Money Market Accounts		1,067,170		989,094
Time Deposits		454,631		473,426

Total Interest Bearing Deposits		2,815,796		2,533,105

Total Deposits		3,461,113		3,075,060
Borrowed Funds:
Securities Sold Under Agreements to Repurchase		214,320		197,850
Other Borrowed Funds		293,000		368,000

Total Borrowed Funds		507,320		565,850
Other Liabilities		60,026		55,904
Subordinated Debentures		36,083		36,083

Total Liabilities		4,064,542		3,732,897
Total Stockholders’ Equity		233,781		214,544

Total Liabilities & Stockholders’ Equity	$	4,298,323	$	3,947,441

Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Income (unaudited)

For the Quarter and Nine months ended September 30, 2016 and 2015

(in thousands)


	Quarter ended September 30,					Nine months ended September 30,
	2016			2015		2016		2015
Interest Income:
Loans	$	15,045		$	14,051	$	43,380	$	38,597
Securities Held-to-Maturity		8,238			8,834		24,178		26,373
Securities Available-for-Sale		1,439			830		3,546		2,299
Federal Funds Sold and Interest-bearing Deposits In Other Banks		283			35		906		328

Total Interest Income		25,005			23,750		72,010		67,597
Interest Expense:
Savings and NOW Deposits		1,083			729		2,859		2,049
Money Market Accounts		909			760		2,485		2,276
Time Deposits		1,464			1,231		4,216		3,594
Securities Sold Under Agreements to Repurchase		122			129		363		371
Other Borrowed Funds and Subordinated Debentures		2,213			2,285		6,767		6,570

Total Interest Expense		5,791			5,134		16,690		14,860

Net Interest Income		19,214			18,616		55,320		52,737
Provision For Loan Losses		375			—		1,175		200

Net Interest Income After
Provision for Loan Losses		18,839			18,616		54,145		52,537
Other Operating Income
Service Charges on Deposit Accounts		1,983			1,941		5,882		5,788
Lockbox Fees		759			782		2,431		2,458
Net Gain on Sales of Loans		533			225		1,331		742
Other Income		950			882		2,878		2,557

Total Other Operating Income		4,225			3,830		12,522		11,545
Operating Expenses
Salaries and Employee Benefits		10,544			10,087		30,360		28,701
Occupancy		1,509			1,499		4,639		4,621
Equipment		772			697		2,087		1,949
FDIC Assessment		343			554		1,503		1,602
Other		3,462			3,263		10,012		9,531

Total Operating Expenses		16,630			16,100		48,601		46,404

Income Before Income Taxes		6,434			6,346		18,066		17,678
Income Tax (Benefit) Expense		(52	)		180		32		628

Net Income	$	6,486		$	6,166	$	18,034	$	17,050

Century Bancorp, Inc. and Subsidiaries

Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)

(in thousands)


	September 30,			September 30,
	2016			2015
Assets
Cash and Due From Banks	$	69,792		$	67,363
Federal Funds Sold and Interest-Bearing Deposits in Other Banks		233,531			163,144
Securities Available-For-Sale (AFS)		486,120			462,104
Securities Held-to-Maturity (HTM)		1,504,728			1,640,388
Total Loans		1,819,727			1,441,589
Less: Allowance for Loan Losses		23,714			22,432

Net Loans		1,796,013			1,419,157
Unrealized (Loss)Gain on Securities AFS and HTM Transfers		(9,873	)		(15,107	)
Bank Premises and Equipment		23,752			24,332
Accrued Interest Receivable		8,322			7,462
Goodwill		2,714			2,714
Other Assets		112,864			102,373

Total Assets	$	4,227,963		$	3,873,930

Liabilities
Demand Deposits	$	590,669		$	507,855
Interest Bearing Deposits:
Savings and NOW Deposits		1,296,861			1,134,195
Money Market Accounts		1,011,283			959,191
Time Deposits		450,800			395,915

Total Interest Bearing Deposits		2,758,944			2,489,301

Total Deposits		3,349,613			2,997,156
Borrowed Funds:
Securities Sold Under Agreements to Repurchase		229,668			254,521
Other Borrowed Funds		331,555			334,069

Total Borrowed Funds		561,223			588,590
Other Liabilities		57,150			50,908
Subordinated Debentures		36,083			36,083

Total Liabilities		4,004,069			3,672,737
Total Stockholders’ Equity		223,894			201,193

Total Liabilities & Stockholders’ Equity	$	4,227,963		$	3,873,930

Total Average Earning Assets - QTD	$	4,225,093		$	3,745,957

Total Average Earning Assets - YTD	$	4,044,106		$	3,707,225

Century Bancorp, Inc. and Subsidiaries

Consolidated Selected Key Financial Information (unaudited)

(in thousands, except share data)


	September 30,			September 30,
	2016			2015
Performance Measures:
Earnings per average Class A share, diluted, quarter	$	1.16		$	1.11
Earnings per average Class A share, diluted, year-to-date	$	3.24		$	3.06
Return on average assets, year-to-date		0.57	%		0.59	%
Return on average stockholders’ equity, year-to-date		10.76	%		11.33	%
Net interest margin (taxable equivalent), quarter		2.12	%		2.28	%
Net interest margin (taxable equivalent), year-to-date		2.15	%		2.20	%
Efficiency ratio, year-to-date - Non-GAAP (1)		62.7	%		64.0	%
Book value per share	$	41.99		$	37.92
Tangible book value per share - Non-GAAP (1)	$	41.50		$	37.43
Capital / assets		5.44	%		5.47	%
Tangible capital / tangible assets - Non-GAAP (1)		5.38	%		5.41	%
Common Share Data:
Average Class A shares outstanding, diluted, quarter & year-to-date		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		1.31	%		1.36	%
Nonaccrual loans	$	958		$	1,760
Nonperforming assets	$	958		$	1,760
Loans 90 days past due and still accruing	$	—		$	—
Accruing troubled debt restructures	$	4,104		$	2,994
Net (recoveries)charge-offs, year-to-date	$	(47	)	$	188
Leverage ratio		6.46	%*		6.71	%*
Common equity tier 1 risk weighted capital ratio		10.74	%*		10.18	%*
Tier 1 risk weighted capital ratio		12.24	%*		11.74	%*
Total risk weighted capital ratio		13.28	%*		12.74	%*
Total risk weighted assets	$	2,328,304	*	$	2,240,879	*

* 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)	$	48,601		$	46,404

Net interest income	$	55,320		$	52,737
Total other operating income		12,522			11,545
Tax equivalent adjustment		9,725			8,243

Total income(denominator)	$	77,567		$	72,525

Efficiency ratio, year - Non-GAAP		62.7	%		64.0	%

Calculation of tangible book value per share:
Total stockholders’ equity	$	233,781		$	211,132
Less: goodwill		2,714			2,714

Tangible stockholders’ equity(numerator)	$	231,067		$	208,418

Total shares outstanding at period end(denominator)		5,567,909			5,567,909
Tangible book value per share - Non-GAAP	$	41.50		$	37.43

Book value per share - GAAP	$	41.99		$	37.92

Calculation of tangible capital / tangible assets:
Total stockholders’ equity	$	233,781		$	211,132
Less: goodwill		2,714			2,714

Tangible stockholders’ equity(numerator)	$	231,067		$	208,418

Total assets	$	4,298,323		$	3,856,407
Less: goodwill		2,714			2,714

Tangible assets(denominator)	$	4,295,609		$	3,853,693

Tangible capital / tangible assets - Non-GAAP		5.38	%		5.41	%

Capital / assets - GAAP		5.44	%		5.47	%

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