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Press release content from Business Wire. The AP news staff was not involved in its creation.
PRESS RELEASE: Paid content from Business Wire
Press release content from Business Wire. The AP news staff was not involved in its creation.

Century Bancorp, Inc. Announces Record Earnings for Q3 2021, Up 7.8%

October 12, 2021 GMT

MEDFORD, Mass.--(BUSINESS WIRE)--Oct 12, 2021--

Century Bancorp, Inc. (NASDAQ:CNBKA)( www.centurybank.com ) (“the Company”) today announced net income of $33,325,000 for the nine months ended September 30, 2021, or $5.99 per Class A share diluted, an increase of 8.9% compared to net income of $30,609,000, or $5.50 per Class A share diluted, for the same period a year ago. Total assets increased 12.1% from $6.36 billion at December 31, 2020 to $7.13 billion at September 30, 2021. For the quarter ended September 30, 2021, net income totaled $11,732,000, or $2.11 per Class A share diluted, an increase of 7.8% compared to net income of $10,887,000, or $1.96 per Class A share diluted, for the same period a year ago. This is the Company’s final reporting period prior to its anticipated merger with Eastern Bankshares, Inc., as discussed below.

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As previously announced on September 14, 2021, the Company’s Board of Directors voted a regular quarterly dividend of 18.00 cents ($0.18) per share on the Company’s Class A common stock, and 9.00 cents ($0.09) per share on the Company’s Class B common stock. The dividends were declared payable October 15, 2021, to shareholders of record on October 1, 2021.

Net interest income totaled $88.9 million for the nine months ended September 30, 2021, compared to $78.4 million for the same period in 2020. The 13.5% increase in net interest income for the period is primarily due to a decrease in interest expense as a result of falling interest rates. The net interest margin decreased from 2.01% on a fully tax-equivalent basis for the first nine months of 2020 compared to 1.81% for the same period in 2021. This was primarily the result of increased margin pressure as a result of decreases in interest rates across the yield curve in 2020. The average balances of interest-earning assets increased for 2021 compared to the same period last year, by $1.36 billion, or 24.4%, combined with an average yield decrease of 0.68%, resulting in a decrease in interest income of $6.0 million. The average balance of interest-bearing liabilities increased for 2021 compared to the same period last year, by $1.04 billion, or 23.2%, combined with an average interest-bearing liabilities interest cost decrease of 0.59%, resulting in a decrease in interest expense of $16.5 million.

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The provision for loan losses decreased by $4.4 million from $3.7 million for the nine months ended September 30, 2020, compared to a credit of $750,000 for the same period in 2021. The provision for the first nine months of 2020 was primarily a result of provisions related to the onset of the COVID-19 pandemic. The credit provision for the first nine months of 2021 was primarily attributable to a reduction in specific allocations to the allowance for loan losses and a reduction in the historical experience reserve allocation.

Total operating expenses totaled $62.6 million for the first nine months of 2021 compared to $53.4 million for the same period last year, an increase of $9.2 million or 17.3%. The increase was primarily attributable to a $3.4 million increase in salaries and employee benefits and a $5.3 million increase in other expenses.

Salaries and employee benefits increased for the first nine months of 2021 mainly as a result of merit increases, lower bonus accruals during the same period in 2020 as a result of uncertainties from the COVID-19 pandemic, decreased deferred origination cost credits, and increased employee benefits including health insurance costs. Other expenses increased for the first nine months of 2021 mainly as a result of merger related expenses, increased FDIC insurance expense as a result of increased deposits and assessment rates, and increased COVID-19 related expenses.

The Company’s effective tax rate increased from 9.5% for the nine months ended September 30, 2020, to 15.7% for the same period in 2021. The increase in the effective tax rate was primarily the result of an increase in taxable income relative to total income and nondeductible merger related expenses.

At September 30, 2021, total stockholders’ equity was $403.0 million compared to $370.4 million at December 31, 2020. Total stockholders’ equity increased primarily as a result of an increase in earnings and a decrease in total accumulated other comprehensive loss, offset somewhat by dividends declared.

The Company’s leverage ratio stood at 6.31% at September 30, 2021, compared to 6.64% at December 31, 2020. The decrease in the leverage ratio was due to an increase in quarterly average assets, offset somewhat by an increase in total stockholders’ equity. Book value per share as of September 30, 2021, was $72.37 compared to $66.53 at December 31, 2020.

The Company’s allowance for loan losses was $34.8 million or 1.19% of loans outstanding at September 30, 2021, compared to $35.5 million or 1.18% of loans outstanding at December 31, 2020, and $33.4 million or 1.12% of loans outstanding at September 30, 2020. The ratio of the allowance for loan losses to loans outstanding has remained relatively stable for the time periods presented. Nonperforming assets totaled $1.3 million at September 30, 2021, compared to $4.0 million at December 31, 2020, and $1.4 million at September 30, 2020.

As of September 30, 2021, the Company had COVID-19 modifications of 2 loans aggregating $16.3 million, primarily consisting of short-term payment deferrals. Of these modifications, $16.3 million, or 100%, were performing in accordance with their modified terms.

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) 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 elected to delay FASB ASU 2016-13. This ASU was 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. On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 was signed into law. The law changed the delayed implementation date to the earlier of the first day of the Company’s fiscal year that begins after the date on which the national emergency terminates or January 1, 2022.

Transaction with Eastern Bankshares, Inc.

On April 7, 2021, the Company and Eastern Bankshares, Inc. (“Eastern” ) (NASDAQ: EBC) entered into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant to which, through a series of transactions, Eastern will acquire the Company in a cash transaction for total consideration valued at approximately $642 million. Under the terms of the Merger Agreement, (i) each holder of Class A common stock will receive a cash payment of $115.28 per share of Class A common stock and (ii) each holder of Class B common stock will receive a cash payment of $115.28 per share of Class B common stock. The transaction is expected to close in the fourth quarter of 2021 and is subject to customary closing conditions. The Company’s shareholders approved the Merger Agreement at the Special Meeting of the Shareholders held on July 7, 2021. The Company received the required regulatory approvals for the transaction during the third quarter of 2021.

Additional information about the transaction can be found in the joint press release issued on April 7, 2021, which is available on the Investor Relations section of the Company’s website at www.centurybank.com.

About Century Bancorp, Inc.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-eight full-service branches in the Greater Boston area and Southern New Hampshire, 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.

Cautionary Note Regarding Forward-Looking Statements

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, which includes among other things, the ability of the Company and Eastern to satisfy the conditions set forth in the Merger Agreement, (as discussed above) and disruptions to the Company’s business during the pendency of the anticipated merger (as discussed above). Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, which are included in more detail in the Annual Report on Form 10-K, as updated by Quarterly Reports on Form 10-Q and other filings submitted to the SEC. 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,

Assets

2021

 

2020

Cash and Due From Banks

$

97,743

 

$

136,735

Federal Funds Sold and Interest-bearing Deposits In Other Banks

 

492,243

 

 

237,265

  
Securities Available-for-Sale (AFS)

 

205,861

 

 

284,116

  
Securities Held-to-Maturity

 

3,211,978

 

 

2,509,088

  
Federal Home Loan Bank of Boston stock, at cost

 

11,594

 

 

13,361

  
Loans: 
Commercial & Industrial

 

1,321,907

 

 

1,314,245

Municipal

 

138,945

 

 

137,607

Construction & Land Development

 

6,358

 

 

10,909

Commercial Real Estate

 

729,384

 

 

789,836

Residential Real Estate

 

466,109

 

 

448,436

Consumer and Other

 

19,549

 

 

20,439

Home Equity

 

243,225

 

 

274,357

  
Total Loans

 

2,925,477

 

 

2,995,829

Less: Allowance for Loan Losses

 

34,764

 

 

35,486

  
Net Loans

 

2,890,713

 

 

2,960,343

  
Bank Premises and Equipment, net

 

42,222

 

 

39,062

Accrued Interest Receivable

 

13,413

 

 

13,283

Goodwill

 

2,714

 

 

2,714

Other Assets

 

161,081

 

 

162,867

  
Total Assets

$

7,129,562

 

$

6,358,834

  
Liabilities 
Demand Deposits

$

1,203,943

 

$

1,103,878

  
Interest Bearing Deposits: 
Savings and NOW Deposits

 

2,314,472

 

 

1,728,092

Money Market Accounts

 

2,337,665

 

 

2,074,108

Time Deposits

 

348,296

 

 

546,143

  
Total Interest Bearing Deposits

 

5,000,433

 

 

4,348,343

  
Total Deposits

 

6,204,376

 

 

5,452,221

  
Borrowed Funds: 
Securities Sold Under Agreements to Repurchase

 

269,961

 

 

232,090

Other Borrowed Funds

 

118,786

 

 

177,009

  
Total Borrowed Funds

 

388,747

 

 

409,099

  
Other Liabilities

 

97,405

 

 

91,022

Subordinated Debentures

 

36,083

 

 

36,083

  
Total Liabilities

 

6,726,611

 

 

5,988,425

  
Total Stockholders' Equity

 

402,951

 

 

370,409

  
Total Liabilities & Stockholders' Equity

$

7,129,562

 

$

6,358,834

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the quarter and nine months ended September 30, 2021 and 2020
(in thousands)
 

Quarter ended September 30,

 

Nine months ended September 30,

2021

 

2020

 

2021

 

2020

 
Interest Income:
Loans

$

20,926

 

$

21,431

$

63,419

 

$

63,478

Securities Held-to-Maturity

 

13,678

 

 

14,186

 

40,908

 

 

44,701

Securities Available-for-Sale

 

475

 

 

818

 

1,662

 

 

3,493

Federal Funds Sold and Interest-bearing Deposits In Other Banks

 

186

 

 

69

 

477

 

 

747

 
Total Interest Income

 

35,265

 

 

36,504

 

106,466

 

 

112,419

 
Interest Expense:
Savings and NOW Deposits

 

570

 

 

1,726

 

2,441

 

 

7,569

Money Market Accounts

 

2,368

 

 

3,056

 

7,743

 

 

12,090

Time Deposits

 

791

 

 

2,858

 

3,487

 

 

9,141

Securities Sold Under Agreements to Repurchase

 

91

 

 

241

 

330

 

 

1,176

Other Borrowed Funds and Subordinated Debentures

 

1,065

 

 

1,292

 

3,527

 

 

4,093

 
Total Interest Expense

 

4,885

 

 

9,173

 

17,528

 

 

34,069

 
Net Interest Income

 

30,380

 

 

27,331

 

88,938

 

 

78,350

 
Provision(Credit) For Loan Losses

 

(200

)

 

900

 

(750

)

 

3,675

 
Net Interest Income After
Provision for Loan Losses

 

30,580

 

 

26,431

 

89,688

 

 

74,675

 
Other Operating Income:
Service Charges on Deposit Accounts

 

2,243

 

 

2,239

 

6,632

 

 

6,558

Lockbox Fees

 

914

 

 

996

 

2,876

 

 

2,850

Other Income

 

1,015

 

 

934

 

2,973

 

 

3,112

 
Total Other Operating Income

 

4,172

 

 

4,169

 

12,481

 

 

12,520

 
Operating Expenses:
Salaries and Employee Benefits

 

11,907

 

 

11,362

 

36,459

 

 

33,020

Occupancy

 

1,457

 

 

1,477

 

4,750

 

 

4,448

Equipment

 

956

 

 

809

 

2,836

 

 

2,608

Other

 

6,419

 

 

4,519

 

18,577

 

 

13,306

 
Total Operating Expenses

 

20,739

 

 

18,167

 

62,622

 

 

53,382

 
Income Before Income Taxes

 

14,013

 

 

12,433

 

39,547

 

 

33,813

 
Income Tax Expense

 

2,281

 

 

1,546

 

6,222

 

 

3,204

 
Net Income

$

11,732

 

$

10,887

$

33,325

 

$

30,609

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

September 30,

 

September 30,

Assets

2021

 

2020

Cash and Due From Banks

$

121,234

 

$

80,686

 

Federal Funds Sold and Interest-Bearing Deposits in Other Banks

 

544,227

 

 

238,525

 

 
Securities Available-For-Sale (AFS)

 

261,908

 

 

293,301

 

Securities Held-to-Maturity (HTM)

 

3,137,556

 

 

2,346,502

 

 
Total Loans

 

2,985,768

 

 

2,693,000

 

Less: Allowance for Loan Losses

 

35,332

 

 

31,359

 

 
Net Loans

 

2,950,436

 

 

2,661,641

 

 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers

 

(250

)

 

(2,861

)

Bank Premises and Equipment

 

40,362

 

 

36,253

 

Accrued Interest Receivable

 

13,678

 

 

12,630

 

Goodwill

 

2,714

 

 

2,714

 

Other Assets

 

172,044

 

 

164,804

 

 
Total Assets

$

7,243,909

 

$

5,834,195

 

 
Liabilities
Demand Deposits

$

1,205,456

 

$

889,237

 

 
Interest Bearing Deposits:
Savings and NOW Deposits

 

2,342,016

 

 

1,881,897

 

Money Market Accounts

 

2,332,307

 

 

1,603,367

 

Time Deposits

 

460,474

 

 

597,589

 

Total Interest Bearing Deposits

 

5,134,797

 

 

4,082,853

 

 
Total Deposits

 

6,340,253

 

 

4,972,090

 

 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase

 

247,665

 

 

220,796

 

Other Borrowed Funds

 

135,556

 

 

169,972

 

 
Total Borrowed Funds

 

383,221

 

 

390,768

 

 
Other Liabilities

 

96,964

 

 

88,028

 

Subordinated Debentures

 

36,083

 

 

36,083

 

 
Total Liabilities

 

6,856,521

 

 

5,486,969

 

 
Total Stockholders' Equity

 

387,388

 

 

347,226

 

 
Total Liabilities & Stockholders' Equity

$

7,243,909

 

$

5,834,195

 

 
Total Average Earning Assets - QTD

$

6,975,666

 

$

5,881,860

 

 
Total Average Earning Assets - YTD

$

6,929,459

 

$

5,571,328

 

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

September 30,

 

September 30,

2021

 

2020

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

$

2.11

 

 

$

1.96

 

Earnings per average Class A share, diluted, year-to-date

$

5.99

 

 

$

5.50

 

Return on average assets, year-to-date

 

0.62

%

 

 

0.70

%

Return on average stockholders' equity, year-to-date

 

11.50

%

 

 

11.78

%

Net interest margin (taxable equivalent), quarter

 

1.82

%

 

 

1.96

%

Net interest margin (taxable equivalent), year-to-date

 

1.81

%

 

 

2.01

%

Efficiency ratio, Non-GAAP (1)

 

58.9

%

 

 

55.4

%

Book value per share

$

72.37

 

 

$

65.27

 

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

$

71.88

 

 

$

64.79

 

Capital / assets

 

5.65

%

 

 

5.77

%

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

 

5.62

%

 

 

5.73

%

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

 

5,567,909

 

 

 

5,567,909

 

  
Shares outstanding Class A

 

3,672,969

 

 

 

3,655,469

 

Shares outstanding Class B

 

1,894,940

 

 

 

1,912,440

 

Total shares outstanding at period end

 

5,567,909

 

 

 

5,567,909

 

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

 

1.19

%

 

 

1.12

%

Nonaccrual loans

$

1,318

 

 

$

1,419

 

Nonperforming assets

$

1,318

 

 

$

1,419

 

Loans 90 days past due and still accruing

$

-

 

 

$

49

 

Accruing troubled debt restructures

$

2,058

 

 

$

2,240

 

Net recoveries, year-to-date

$

(28

)

 

$

(134

)

  
Leverage ratio

 

6.31

%

 

 

6.79

%

Common equity tier 1 risk weighted capital ratio

 

11.71

%

 

 

11.36

%

Tier 1 risk weighted capital ratio

 

12.68

%

 

 

12.40

%

Total risk weighted capital ratio

 

13.65

%

 

 

13.39

%

Total risk weighted assets

$

3,618,083

 

 

$

3,370,541

 

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

$

62,622

 

 

$

53,382

 

  
Net interest income

$

88,938

 

 

$

78,350

 

Total other operating income

 

12,481

 

 

 

12,520

 

Tax equivalent adjustment

 

4,939

 

 

 

5,558

 

Total income(denominator)

$

106,358

 

 

$

96,428

 

  
Efficiency ratio - Non-GAAP

 

58.9

%

 

 

55.4

%

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

$

402,951

 

 

$

363,434

 

Less: goodwill

 

2,714

 

 

 

2,714

 

Tangible stockholders' equity(numerator)

$

400,237

 

 

$

360,720

 

  
Total shares outstanding at period end(denominator)

 

5,567,909

 

 

 

5,567,909

 

  
Tangible book value per share - Non-GAAP

$

71.88

 

 

$

64.79

 

Book value per share - GAAP

$

72.37

 

 

$

65.27

 

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

$

402,951

 

 

$

363,434

 

Less: goodwill

 

2,714

 

 

 

2,714

 

Tangible stockholders' equity(numerator)

$

400,237

 

 

$

360,720

 

  
Total assets

$

7,129,562

 

 

$

6,295,426

 

Less: goodwill

 

2,714

 

 

 

2,714

 

Tangible assets(denominator)

$

7,126,848

 

 

$

6,292,712

 

  
Tangible capital / tangible assets - Non-GAAP

 

5.62

%

 

 

5.73

%

Capital / assets - GAAP

 

5.65

%

 

 

5.77

%

 

View source version on businesswire.com:https://www.businesswire.com/news/home/20211012006027/en/

CONTACT: William P. Hornby, CPA

whornby@centurybank.com

Phone: 781-393-4630

Fax: 781-393-4071

KEYWORD: MASSACHUSETTS UNITED STATES NORTH AMERICA

INDUSTRY KEYWORD: BANKING PROFESSIONAL SERVICES FINANCE

SOURCE: Century Bancorp, Inc.

Copyright Business Wire 2021.

PUB: 10/12/2021 04:45 PM/DISC: 10/12/2021 04:46 PM

http://www.businesswire.com/news/home/20211012006027/en