Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the
Company”) today announced net income of $19,722,000 for the six
months ended June 30, 2020, or $3.54 per Class A share diluted, an
increase of 4.4% compared to net income of $18,884,000, or $3.39
per Class A share diluted, for the same period a year ago. Total
assets increased 8.3% from $5.49 billion at December 31, 2019 to
$5.95 billion at June 30, 2020. For the quarter ended June 30,
2020, net income totaled $10,056,000 or $1.81 per Class A share
diluted, an increase of 6.2% compared to net income of $9,466,000,
or $1.70 per Class A share diluted, for the same period a year
ago.
The Company's Board of Directors voted to increase its regular
quarterly dividend from 12.00 cents ($0.12) per share to 14.00
cents ($0.14) per share on the Company's Class A common stock, and
from 6.00 cents ($0.06) per share to 7.00 cents ($0.07) per share
on the Company's Class B common stock. The dividends were declared
payable August 17, 2020 to stockholders of record on August 3,
2020. This represents the first dividend increase since 2003.
Net interest income totaled $51.0 million for the six months
ended June 30, 2020 compared to $46.7 million for the same period
in 2019. The 9.3% increase in net interest income for the period is
primarily due to a decrease in interest expense as a result of
falling interest rates. Prepayment penalties collected amounted to
approximately $874,000 for the first six months of 2020 compared to
$13,000 for the same period last year. The net interest margin
decreased from 2.09% on a fully tax-equivalent basis for the first
six months of 2019 to 2.04% for the same period in 2020. This was
primarily the result of increased margin pressure during the recent
decrease in interest rates across the yield curve. The average
balances of earning assets increased for the first six months of
2020 compared to the same period last year, by $456.9 million or
9.2%, combined with an average yield decrease of 0.42%, resulting
in a decrease in interest income of $2.9 million. The average
balance of interest-bearing liabilities increased for the first six
months of 2020 compared to the same period last year, by $373.1
million or 9.3%, combined with an average interest-bearing
liabilities interest cost decrease of 0.47%, resulting in a
decrease in interest expense of $7.2 million.
The provision for loan losses increased by $2,150,000 from
$625,000 for the six months ended June 30, 2019 to $2,775,000 for
the same period in 2020, primarily as a result of the economic
uncertainties associated with the novel coronavirus disease
(COVID–19) pandemic and increased loan balances.
The Company’s effective tax rate increased from 0.8% for the six
months ended June 30, 2019 to 7.8% for the same period in 2020.
This was primarily as a result of an increase in taxable income
relative to total income and a reduction in tax accruals, during
2019, 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. On March 27, 2020, the
Coronavirus, Aid, Relief and Economic Security (CARES) Act was
signed into law. As a result of the CARES Act, the full balance of
the AMT credit will be refunded in 2020.
At June 30, 2020, total equity was $352.2 million compared to
$332.6 million at December 31, 2019. The Company’s equity increased
primarily as a result of earnings, offset somewhat by dividends
paid.
The Company’s leverage ratio stood at 6.92% at June 30, 2020,
compared to 7.25% at December 31, 2019. 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 June 30, 2020 was $63.26 per share compared to $59.73 at
December 31, 2019.
The Company’s allowance for loan losses was $32.5 million or
1.16% of loans outstanding at June 30, 2020 compared to $29.6
million or 1.22% of loans outstanding at December 31, 2019, and
$29.1 million or 1.26% of loans outstanding at June 30, 2019. The
ratio of the allowance for loan losses to loans outstanding has
decreased from December 31, 2019, primarily from approximately $230
million of Payroll Protection Program (PPP) loans that are
guaranteed by the U.S. Small Business Administration (SBA), which
require no allowance for loan losses. This was offset, somewhat, by
increased allocations for economic factors associated with the
COVID-19 pandemic. Nonperforming assets totaled $1.5 million at
June 30, 2020, compared to $2.0 million at December 31, 2019, and
$5.0 million at June 30, 2019. 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 CARES Act also allows companies to delay Financial
Accounting Standards Board (FASB) Accounting Standards Update (ASU)
2016-13, Measurement of Credit Losses on Financial Instruments
(CECL), including the current expected credit losses methodology
for estimating allowances for credit losses. The Company has
elected to delay FASB ASU 2016-13. This ASU will be delayed until
the earlier of the date on which the national emergency concerning
the COVID–19 outbreak declared by the President on March 15, 2020
terminates or December 31, 2020, with an effective retrospective
implementation date of January 1, 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)
June 30,
December 31,
Assets
2020
2019
Cash and Due From Banks
$
78,159
$
44,420
Federal Funds Sold and Interest-bearing Deposits In Other Banks
150,139
214,273
Securities Available-for-Sale (AFS)
302,882
262,190
Securities Held-to-Maturity
2,427,422
2,351,120
Federal Home Loan Bank of Boston stock, at cost
13,371
19,471
Loans: Commercial & Industrial
1,155,592
812,417
Municipal
153,017
120,455
Construction & Land Development
6,513
8,992
Commercial Real Estate
764,886
786,102
Residential Real Estate
400,867
371,897
Consumer and Other
19,857
21,893
Home Equity
297,355
304,363
Total Loans
2,798,087
2,426,119
Less: Allowance for Loan Losses
32,516
29,585
Net Loans
2,765,571
2,396,534
Bank Premises and Equipment, net
36,290
33,952
Accrued Interest Receivable
12,090
13,110
Goodwill
2,714
2,714
Other Assets
158,356
154,640
Total Assets
$
5,946,994
$
5,492,424
Liabilities
Demand Deposits
$
985,491
$
712,842
Interest Bearing Deposits: Savings and NOW
Deposits
1,967,783
1,678,250
Money Market Accounts
1,548,198
1,453,572
Time Deposits
610,496
555,447
Total Interest Bearing Deposits
4,126,477
3,687,269
Total Deposits
5,111,968
4,400,111
Borrowed Funds: Securities Sold Under
Agreements to Repurchase
204,972
266,045
Other Borrowed Funds
152,485
370,955
Total Borrowed Funds
357,457
637,000
Other Liabilities
89,284
86,649
Subordinated Debentures
36,083
36,083
Total Liabilities
5,594,792
5,159,843
Total Stockholders' Equity
352,202
332,581
Total Liabilities & Stockholders' Equity
$
5,946,994
$
5,492,424
Century Bancorp, Inc. and Subsidiaries Consolidated Comparative
Statements of Income (unaudited) For the quarter and six months
ended June 30, 2020 and 2019 (in thousands)
Quarter ended June 30,
Six months ended June 30,
2020
2019
2020
2019
Interest Income: Loans
$
19,848
$
21,680
$
42,047
$
42,989
Securities Held-to-Maturity
15,222
14,595
30,515
28,383
Securities Available-for-Sale
982
2,490
2,675
5,121
Federal Funds Sold and Interest-bearing Deposits In Other Banks
68
927
678
2,276
Total Interest Income
36,120
39,692
75,915
78,769
Interest Expense: Savings and NOW Deposits
2,118
5,877
5,843
11,343
Money Market Accounts
3,462
5,412
9,034
10,755
Time Deposits
3,111
2,893
6,283
5,686
Securities Sold Under Agreements to Repurchase
309
490
935
875
Other Borrowed Funds and Subordinated Debentures
1,302
1,770
2,801
3,422
Total Interest Expense
10,302
16,442
24,896
32,081
Net Interest Income
25,818
23,250
51,019
46,688
Provision For Loan Losses
1,700
250
2,775
625
Net Interest Income After Provision for Loan Losses
24,118
23,000
48,244
46,063
Other Operating Income: Service Charges on Deposit Accounts
2,023
2,282
4,319
4,491
Lockbox Fees
924
992
1,854
2,081
Net Gain on Sales of Loans
-
139
-
154
Other Income
1,094
1,584
2,178
2,698
Total Other Operating Income
4,041
4,997
8,351
9,424
Operating Expenses: Salaries and Employee Benefits
10,287
10,916
21,658
21,951
Occupancy
1,456
1,522
2,971
3,223
Equipment
962
795
1,799
1,578
Other
4,337
5,031
8,787
9,702
Total Operating Expenses
17,042
18,264
35,215
36,454
Income Before Income Taxes
11,117
9,733
21,380
19,033
Income Tax Expense
1,061
267
1,658
149
Net Income
$
10,056
$
9,466
$
19,722
$
18,884
Century Bancorp, Inc. and Subsidiaries Consolidated Year-to-Date
Average Comparative Statements of Condition (unaudited) (in
thousands)
June 30,
June 30,
Assets
2020
2019
Cash and Due From Banks
$
76,264
$
74,948
Federal Funds Sold and Interest-Bearing Deposits in Other Banks
220,008
189,568
Securities Available-For-Sale (AFS)
282,092
340,664
Securities Held-to-Maturity (HTM)
2,335,136
2,121,043
Total Loans
2,577,120
2,306,165
Less: Allowance for Loan Losses
30,621
28,864
Net Loans
2,546,499
2,277,301
Unrealized (Loss)Gain on Securities AFS and HTM Transfers
(3,248
)
(3,560
)
Bank Premises and Equipment
35,895
24,483
Accrued Interest Receivable
12,653
14,167
Goodwill
2,714
2,714
Other Assets
163,547
134,524
Total Assets
$
5,671,560
$
5,175,852
Liabilities Demand Deposits
$
841,339
$
759,653
Interest Bearing Deposits: Savings and NOW Deposits
1,839,771
1,834,278
Money Market Accounts
1,530,442
1,270,952
Time Deposits
598,669
509,710
Total Interest Bearing Deposits
3,968,882
3,614,940
Total Deposits
4,810,221
4,374,593
Borrowed Funds: Securities Sold Under Agreements to
Repurchase
226,518
181,252
Other Borrowed Funds
169,258
195,318
Total Borrowed Funds
395,776
376,570
Other Liabilities
87,589
79,440
Subordinated Debentures
36,083
36,083
Total Liabilities
5,329,669
4,866,686
Total Stockholders' Equity
341,891
309,166
Total Liabilities & Stockholders' Equity
$
5,671,560
$
5,175,852
Total Average Earning Assets - QTD
$
5,635,101
$
4,965,815
Total Average Earning Assets - YTD
$
5,414,356
$
4,957,440
Century Bancorp, Inc. and Subsidiaries Consolidated Selected Key
Financial Information (unaudited) (in thousands, except share data)
June 30,
June 30,
2020
2019
Performance Measures:
Earnings per average Class A share, diluted, quarter
$
1.81
$
1.70
Earnings per average Class A share, diluted, year-to-date
$
3.54
$
3.39
Return on average assets, year-to-date
0.70
%
0.74
%
Return on average stockholders' equity, year-to-date
11.60
%
12.32
%
Net interest margin (taxable equivalent), quarter
1.97
%
2.06
%
Net interest margin (taxable equivalent), year-to-date
2.04
%
2.09
%
Efficiency ratio, Non-GAAP (1)
55.7
%
59.8
%
Book value per share
$
63.26
$
57.28
Tangible book value per share - Non-GAAP (1)
$
62.77
$
56.79
Capital / assets
5.92
%
6.13
%
Tangible capital / tangible assets - Non-GAAP (1)
5.88
%
6.08
%
Common Share Data: Average Class A shares
outstanding, diluted, quarter and year-to-date
5,567,909
5,567,909
Shares outstanding Class A
3,652,469
3,620,449
Shares outstanding Class B
1,915,440
1,947,460
Total shares outstanding at period end
5,567,909
5,567,909
Asset Quality and Other
Data: Allowance for loan losses / loans
1.16
%
1.26
%
Nonaccrual loans
$
1,538
$
2,899
Nonperforming assets
$
1,538
$
4,999
Loans 90 days past due and still accruing
$
-
$
-
Accruing troubled debt restructures
$
2,271
$
2,520
Net charge-offs (recoveries), quarter
$
(156
)
$
98
Leverage ratio
6.92
%
7.07
%
Common equity tier 1 risk weighted capital ratio
11.66
%
11.79
%
Tier 1 risk weighted capital ratio
12.76
%
13.03
%
Total risk weighted capital ratio
13.77
%
14.06
%
Total risk weighted assets
$
3,196,338
$
2,813,302
(1) Non-GAAP Financial Measures are reconciled in
the following tables: Calculation of Efficiency
ratio: Total operating expenses(numerator)
$
35,215
$
36,296
Net interest income
$
51,019
$
46,688
Total other operating income
8,351
9,424
Tax equivalent adjustment
3,904
4,576
Total income(denominator)
$
63,274
$
60,688
Efficiency ratio - Non-GAAP
55.7
%
59.8
%
Calculation of tangible book value per share:
Total stockholders' equity
$
352,202
$
318,937
Less: goodwill
2,714
2,714
Tangible stockholders' equity(numerator)
$
349,488
$
316,223
Total shares outstanding at period end(denominator)
5,567,909
5,567,909
Tangible book value per share - Non-GAAP
$
62.77
$
56.79
Book value per share - GAAP
$
63.26
$
57.28
Calculation of tangible capital / tangible assets:
Total stockholders' equity
$
352,202
$
318,937
Less: goodwill
2,714
2,714
Tangible stockholders' equity(numerator)
$
349,488
$
316,223
Total assets
$
5,946,994
$
5,200,501
Less: goodwill
2,714
2,714
Tangible assets(denominator)
$
5,944,280
$
5,197,787
Tangible capital / tangible assets - Non-GAAP
5.88
%
6.08
%
Capital / assets - GAAP
5.92
%
6.13
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200714005976/en/
William P. Hornby, CPA whornby@centurybank.com Phone:
781-393-4630 Fax: 781-393-4071
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