Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the
Company”) today announced net income of $36.2 million for the year
ended December 31, 2018, or $6.50 per Class A share diluted, an
increase of 62.4% compared to net income of $22.3 million, or $4.01
per Class A share diluted, for the same period a year ago. The
Company’s core earnings(1) increased by $5.5 million or 17.8% from
$30.7 million in 2017 to a record $36.2 million in 2018.
On December 22, 2017, the Tax Cuts and Jobs Act (the “Tax Act”)
was enacted, which lowered the Company’s federal tax rate from 34%
to 21%. As a result of the rate reduction, the Company recorded a
reduction in the value of its net deferred tax asset resulting in a
charge of $8.4 million to 2017 income tax expense. This $8.4
million charge is excluded from core earnings.
Total assets increased 7.9% from $4.79 billion at December 31,
2017 to $5.16 billion at December 31, 2018. For the quarter ended
December 31, 2018, net income totaled $9.9 million or $1.78 per
Class A share diluted, compared to $25,000, or $0.00 per Class A
share diluted, for the same period a year ago.
Net interest income totaled $92.6 million for the year ended
December 31, 2018 compared to $85.6 million for the same period in
2017. The 8.1% increase in net interest income for the period is
primarily due to an increase in average earning assets. The net
interest margin decreased from 2.25% on a fully taxable equivalent
basis in 2017 to 2.18% for the same period in 2018. This was
primarily the result of a decrease in the federal corporate tax
rate from 34% to 21% as well as lower prepayment penalties
collected during 2018. The decrease in the tax rate results in a
lower tax equivalent yield on tax-exempt assets. The average
balances of earning assets increased by 5.1% combined with an
average yield increase of 0.26%, resulting in an increase in
interest income of $23.6 million. The average balance of interest
bearing liabilities increased 3.7% combined with an average yield
increase of 0.41%, resulting in an increase in interest expense of
$16.7 million.
The provision for loan losses decreased by $440,000 from
$1,790,000 for the year ended December 31, 2017 to $1,350,000 for
the same period in 2018, primarily as a result of net recoveries of
$938,000 offset by changes in qualitative factors.
The Company’s effective tax rate decreased from 32.9% for 2017
to 4.2% for the same period in 2018. This was primarily as a result
of a reduction in the value of its net deferred tax asset resulting
in a charge of $8.4 million to 2017 income tax expense as a result
of the Tax Act as previously discussed. Also, the federal tax rate
decreased from 34% to 21% as a result of the Tax Act, offset
somewhat by an increase in taxable income.
At December 31, 2018, total equity was $300.4 million compared
to $260.3 million at December 31, 2017. The Company’s equity
increased primarily as a result of earnings, offset somewhat by
dividends paid.
The Company’s leverage ratio stood at 6.91% at December 31,
2018, compared to 6.78% at December 31, 2017. 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, 2018 was $53.96 per share compared to
$46.75 at December 31, 2017.
The Company’s allowance for loan losses was $28.5 million or
1.25% of loans outstanding at December 31, 2018, compared to $26.3
million or 1.21% of loans outstanding at December 31, 2017. The
ratio of the allowance for loan losses to loans outstanding has
increased, primarily as a result of changes in qualitative factors
related to general economic factors pertaining to certain
industries. Non-performing assets totaled $3.5 million at December
31, 2018, compared to $1.7 million at December 31, 2017.
Nonperforming assets increased mainly as a result of one
residential real estate property classified as other real estate
owned.
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
15, 2019 to stockholders of record on February 1, 2019.
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
2018 2017 Cash and Due From Banks $ 89,540 $ 77,199 Federal Funds
Sold and Interest-bearing Deposits In Other Banks 252,963 279,231
Securities Available-for-Sale (AFS) 338,327 397,475
Securities Held-to-Maturity 2,046,647 1,701,233 Federal Home
Loan Bank of Boston stock, at cost 17,974 21,779 Loans:
Commercial & Industrial 761,775 763,807 Municipal 97,140
106,599 Construction & Land Development 13,628 18,931
Commercial Real Estate 750,362 732,491 Residential Real Estate
348,250 287,731 Consumer and Other 22,083 19,040 Home Equity
292,340 247,345 Total Loans 2,285,578 2,175,944 Less:
Allowance for Loan Losses 28,543 26,255 Net
Loans 2,257,035 2,149,689 Bank Premises and Equipment, net
23,921 23,527 Accrued Interest Receivable 14,406 11,179 Goodwill
2,714 2,714 Other Assets 120,408 121,546 Total
Assets $ 5,163,935 $ 4,785,572
Liabilities
Demand Deposits $ 813,478 $ 736,020 Interest Bearing
Deposits: Savings and NOW Deposits 1,707,019 1,367,358 Money Market
Accounts 1,325,888 1,188,228 Time Deposits 560,579
625,361 Total Interest Bearing Deposits 3,593,486
3,180,947 Total Deposits 4,406,964 3,916,967
Borrowed Funds: Securities Sold Under Agreements to Repurchase
154,240 158,990 Other Borrowed Funds 202,378 347,778
Total Borrowed Funds 356,618 506,768 Other
Liabilities 63,831 65,457 Subordinated Debentures 36,083
36,083 Total Liabilities 4,863,496 4,525,275
Total Stockholders' Equity 300,439 260,297
Total Liabilities & Stockholders' Equity $ 5,163,935 $
4,785,572
Century Bancorp, Inc. and Subsidiaries Consolidated Comparative
Statements of Income (unaudited) For the quarter and year ended
December 31, 2018 and 2017 (in thousands) Quarter ended
December 31, Year ended December 31, 2018 2017 2018
2017 Interest Income: Loans $ 20,938 $ 17,345
$ 78,551 $ 66,013 Securities Held-to-Maturity 12,626 9,542 45,556
38,348 Securities Available-for-Sale 2,630 1,835 9,451 6,978
Federal Funds Sold and Interest-bearing Deposits In Other Banks
1,259 748 3,498 2,097 Total
Interest Income 37,453 29,470 137,056 113,436 Interest
Expense: Savings and NOW Deposits 3,979 1,842 11,757 6,296 Money
Market Accounts 4,883 1,723 13,922 5,626 Time Deposits 2,743 2,271
10,208 7,919 Securities Sold Under Agreements to Repurchase 319 144
976 496 Other Borrowed Funds and Subordinated Debentures
1,824 1,788 7,617 7,483 Total Interest
Expense 13,748 7,768 44,480 27,820
Net Interest Income 23,705 21,702 92,576 85,616
Provision For Loan Losses 450 450 1,350
1,790 Net Interest Income After Provision for Loan Losses
23,255 21,252 91,226 83,826 Other Operating Income Service
Charges on Deposit Accounts 2,292 2,407 8,560 8,586 Lockbox Fees
970 923 3,274 3,290 Net Gain on Sales of Loans - - - 370 Net Gain
on Sales of Securities - - 302 47 Other Income 902
1,080 4,112 4,259 Total Other Operating Income
4,164 4,410 16,248 16,552 Operating Expenses Salaries and
Employee Benefits 10,379 9,420 42,710 40,517 Occupancy 1,513 1,477
6,092 6,140 Equipment 777 647 3,132 2,892 FDIC Assessment 361 363
1,471 1,581 Other 4,155 4,085 16,288
15,989 Total Operating Expenses 17,185 15,992
69,693 67,119 Income Before Income Taxes
10,234 9,670 37,781 33,259 Income Tax Expense 309
9,645 1,568 10,958 Net Income $ 9,925 $
25 $ 36,213 $ 22,301 Century Bancorp,
Inc. and Subsidiaries Consolidated Year-to-Date Average Comparative
Statements of Condition (unaudited) (in thousands) December 31,
December 31,
Assets
2018 2017 Cash and Due From Banks $ 71,943 $ 72,455 Federal Funds
Sold and Interest-Bearing Deposits in Other Banks 183,903 189,193
Securities Available-For-Sale (AFS) 400,098 461,635
Securities Held-to-Maturity (HTM) 1,854,328 1,725,280 Total
Loans 2,222,946 2,059,797 Less: Allowance for Loan Losses
27,531 25,329 Net Loans 2,195,415
2,034,468 Unrealized (Loss)Gain on Securities AFS and HTM
Transfers (4,017 ) (6,394 ) Bank Premises and Equipment 23,642
23,504 Accrued Interest Receivable 12,014 10,300 Goodwill 2,714
2,714 Other Assets 122,948 119,049
Total Assets $ 4,862,988 $ 4,632,204
Liabilities
Demand Deposits $ 753,604 $ 687,853 Interest Bearing
Deposits: Savings and NOW Deposits 1,514,259 1,457,872 Money Market
Accounts 1,230,010 1,105,071 Time Deposits 577,975
566,941 Total Interest Bearing Deposits
3,322,244 3,129,884 Total Deposits
4,075,848 3,817,737 Borrowed Funds: Securities Sold Under
Agreements to Repurchase 147,944 189,684 Other Borrowed Funds
255,591 273,019 Total Borrowed
Funds 403,535 462,703 Other Liabilities 70,020 60,925
Subordinated Debentures 36,083 36,083
Total Liabilities 4,585,486 4,377,448 Total
Stockholders' Equity 277,502 254,756
Total Liabilities & Stockholders' Equity $ 4,862,988
$ 4,632,204 Total Average Earning Assets - QTD
$ 4,840,923 $ 4,441,053 Total Average Earning
Assets - YTD $ 4,661,275 $ 4,435,905
Century Bancorp, Inc. and Subsidiaries Consolidated
Selected Key Financial Information (unaudited) (in thousands,
except share data) December 31, December 31, 2018 2017
Performance
Measures:
Earnings per average Class A share, diluted, quarter $ 1.78
$ 0.00 Earnings per average Class A share, diluted, year $ 6.50 $
4.01 Return on average assets, year 0.74 % 0.48 % Return on average
stockholders' equity, year 13.05 % 8.75 % Net interest margin
(taxable equivalent), quarter 2.13 % 2.26 % Net interest margin
(taxable equivalent), year 2.18 % 2.25 % Efficiency ratio, year-
Non-GAAP (1) 59.2 % 57.8 % Book value per share $ 53.96 $ 46.75
Tangible book value per share - Non-GAAP (1) $ 53.47 $ 46.26
Capital / assets 5.82 % 5.44 % Tangible capital / tangible assets -
Non-GAAP (1) 5.77 % 5.39 % Common Share Data: Average
Class A shares outstanding, diluted, quarter and year 5,567,909
5,567,909 Shares outstanding Class A 3,608,329 3,605,829
Shares outstanding Class B 1,959,580 1,962,080
Total shares outstanding at period end 5,567,909
5,567,909
Asset Quality and
Other Data:
Allowance for loan losses / loans 1.25 % 1.21 % Nonaccrual
loans $ 1,313 $ 1,684 Nonperforming assets $ 3,538 $ 1,684 Loans 90
days past due and still accruing $ - $ - Accruing troubled debt
restructures $ 2,559 $ 2,749 Net charge-offs(recoveries), year $
(938 ) $ (59 ) Leverage ratio 6.91 % 6.78 % Common equity
tier 1 risk weighted capital ratio 11.32 % 10.71 % Tier 1 risk
weighted capital ratio 12.59 % 12.05 % Total risk weighted capital
ratio 13.62 % 13.05 % Total risk weighted assets $ 2,771,129 $
2,613,116
(1) Non-GAAP Financial Measures are
reconciled in the following tables: Calculation of
Efficiency ratio: Total operating expenses(numerator) $
69,693 $ 67,119 Net interest income $ 92,576 $
85,616 Total other operating income 16,248 16,552 Tax equivalent
adjustment 8,853 13,979 Total
income(denominator) $ 117,677 $ 116,147
Efficiency ratio, year - Non-GAAP 59.2 %
57.8 %
Calculation of tangible book
value per share: Total stockholders' equity $ 300,439 $
260,297 Less: goodwill 2,714 2,714
Tangible stockholders' equity(numerator) $ 297,725 $ 257,583
Total shares outstanding at period end(denominator)
5,567,909 5,567,909 Tangible book value per share - Non-GAAP
$ 53.47 $ 46.26 Book
value per share - GAAP $ 53.96 $
46.75
Calculation of tangible capital / tangible
assets: Total stockholders' equity $ 300,439 $ 260,297
Less: goodwill 2,714 2,714 Tangible
stockholders' equity(numerator) $ 297,725 $ 257,583
Total assets $ 5,163,935 $ 4,785,572 Less: goodwill
2,714 2,714 Tangible assets(denominator) $
5,161,221 $ 4,782,858 Tangible capital /
tangible assets - Non-GAAP 5.77 %
5.39 % Capital / assets - GAAP
5.82 % 5.44 %
Calculation of
core earnings: Net income $ 36,213 $ 22,301 Add:
deferred tax remeasurement charge - 8,448
Core earnings $ 36,213
$ 30,749
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190115005825/en/
William P. Hornby, CPAwhornby@centurybank.comPhone:
781-393-4630Fax: 781-393-4071
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