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On May 22, 2009, the FDIC announced a special assessment on insured institutions as part of its efforts to rebuild the Deposit Insurance Fund and help maintain public confidence in the banking system. The special assessment was five basis points of each FDIC-insured depository institution's assets minus Tier 1 capital, as of June 30, 2009. The Company recorded a pre-tax charge of approximately $1.0 million in the second quarter of 2009 in connection with the special assessment.
Net interest income totaled $35.4 million for the first nine months of 2009 compared to $32.8 million for 2008. The 7.9% increase in net interest income for the period is mainly due to a 21.2% increase in the average balances of earning assets, combined with a similar increase in deposits. The increased volume was somewhat offset by a decrease of twenty-six basis points in the net interest margin. The net interest margin decreased from 2.94% on a fully taxable equivalent basis in 2008 to 2.68% on the same basis for 2009.
The provision for loan losses increased by $1.2 million from $3.0 million for the nine months ended September 30, 2008 to $4.2 million, for the same period in 2009, as a result of increases in loans on nonaccrual as well as continued deterioration in overall economic conditions such as increased unemployment. The Company capitalized on favorable market conditions and realized $1.1 million of net gains on sales of investments during the first nine months of 2009. Included in operating expenses for the third quarter and first nine months of 2009 are FDIC assessments of $638,000 and $2.8 million, respectively, as compared to $212,000 and $390,000 for the same periods in 2008. FDIC assessments increased primarily as a result of the special assessment charge of approximately $1.0 million recorded in the second quarter of 2009 as well as an increase in the assessment rate beginning the second quarter of 2009.
The Company's effective tax rate declined from 23.7% for the nine months ended September 30, 2008 to 10.7% for the same period in 2009 primarily as a result of an increase in tax-exempt income.
At September 30, 2009, total equity was $131.2 million compared to $120.5 million at December 31, 2008. The Company's equity increased as a result of earnings and a decrease in accumulated other comprehensive loss, net of taxes, offset somewhat by dividends paid. The Company's leverage ratio stood at 8.02% at September 30, 2009, compared to 8.94% at September 30, 2008. Book value as of September 30, 2009 was $23.72 per share compared to $22.08 at September 30, 2008.
The Company's allowance for loan losses was $14.2 million or 1.62% of loans outstanding at September 30, 2009, compared to $11.1 million, or 1.33% of loans outstanding at December 31, 2008 and $10.3 million, or 1.28% of loans outstanding at September 30, 2008. Non-performing assets totaled $17.0 million at September 30, 2009, compared to $3.7 million at December 31, 2008 and $4.5 million at September 30, 2008. Non-performing assets increased primarily as a result of three loan relationships, one primarily commercial real estate and two construction.
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 16, 2009 to stockholders of record on November 2, 2009.
The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-two 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,
Assets 2009 2008
Cash and Due From Banks $ 45,366 $ 61,195
Federal Funds Sold and Interest-bearing Deposits In Other Banks 156,283 94,973
Short-term Investments 69,013 43,814
Securities Available-For-Sale (AFS) 662,437 495,585
Securities Held-to-Maturity 161,475 184,047
Federal Home Loan Bank of Boston stock, at cost 15,531 15,531
Loans:
Commercial & Industrial 133,497 141,373
Construction & Land Development 62,406 59,511
Commercial Real Estate 361,856 332,325
Residential Real Estate 193,590 194,644
Consumer and Other 7,806 9,258
Home Equity 115,884 98,954
Total Loans 875,039 836,065
Less: Allowance for Loan Losses 14,216 11,119
Net Loans 860,823 824,946
Bank Premises and Equipment 20,932 22,054
Accrued Interest Receivable 6,546 6,723
Goodwill 2,714 2,714
Core Deposit Intangible 993 1,283
Other Assets 49,134 48,701
Total Assets $ 2,051,247 $ 1,801,566
Liabilities
Demand Deposits $ 277,667 $ 277,217
Interest Bearing Deposits:
Savings and NOW Deposits 547,770 353,261
Money Market Accounts 402,632 308,177
Time Deposits 304,778 326,872
Total Interest Bearing 1,255,180 988,310
Total Deposits 1,532,847 1,265,527
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 91,210 112,510
Other Borrowed Funds 205,449 238,558
Total Borrowed Funds 296,659 351,068
Other Liabilities 29,505 28,385
Investments Purchased Payable 25,000 -
Subordinated Debentures 36,083 36,083
Total Liabilities 1,920,094 1,681,063
Total Stockholders' Equity 131,153 120,503
Total Liabilities & Stockholders' Equity $ 2,051,247 $ 1,801,566
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Nine Months Ended September 30, 2009 and 2008
(in thousands)
Quarter Ended September 30, Nine Months Ended September 30,
2009 2008 2009 2008
Interest Income:
Loans $ 12,118 $ 12,583 $ 35,933 $ 36,727
Securities Held-to-Maturity 1,927 2,191 6,330 6,190
Securities Available-for-Sale 5,486 5,563 15,740 14,699
Federal Funds Sold and Interest-bearing Deposits In Other Banks 506 554 1,811 2,507
Total Interest Income 20,037 20,891 59,814 60,123
Interest Expense:
Savings and NOW Deposits 1,139 1,524 3,872 4,596
Money Market Accounts 1,266 2,061 4,919 5,480
Time Deposits 2,297 2,155 7,465 7,342
Securities Sold Under Agreements to Repurchase 98 330 423 1,205
Other Borrowed Funds and Subordinated Debentures 2,563 2,862 7,707 8,653
Total Interest Expense 7,363 8,932 24,386 27,276
Net Interest Income 12,674 11,959 35,428 32,847
Provision For Loan Losses 1,250 1,350 4,150 2,975
Net Interest Income After
Provision for Loan Losses 11,424 10,609 31,278 29,872
Other Operating Income
Service Charges on Deposit Accounts 2,032 2,032 6,060 6,041
Lockbox Fees 660 700 2,154 2,299
Net Gain on Sales of Investments 137 147 1,115 249
Write-down of Certain Investments to Fair Value - (76 ) - (76 )
Other Income 570 774 2,280 1,963
Total Other Operating Income 3,399 3,577 11,609 10,476
Operating Expenses
Salaries and Employee Benefits 6,753 6,438 20,182 19,043
Occupancy 931 1,010 3,071 3,153
Equipment 544 727 1,826 2,199
FDIC Assessment 638 212 2,754 390
Other 2,362 2,664 7,128 7,393
Total Operating Expenses 11,228 11,051 34,961 32,178
Income Before Income Taxes 3,595 3,135 7,926 8,170
Income Tax Expense 413 576 851 1,935
Net Income $ 3,182 $ 2,559 $ 7,075 $ 6,235
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of
Condition (unaudited)
(in thousands)
September 30, September 30,
Assets 2009 2008
Cash and Due From Banks $ 58,800 $ 58,007
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 220,625 132,493
Securities Available-For-Sale (AFS) 594,628 452,181
Securities Held-to-Maturity 201,484 195,115
Total Loans 846,895 758,133
Less: Allowance for Loan Losses 12,843 9,729
Net Loans 834,052 748,404
Unrealized Gain on Securities AFS 2,941 510
Bank Premises and Equipment 21,511 22,449
Accrued Interest Receivable 7,167 6,968
Goodwill 2,714 2,714
Core Deposit Intangible 1,143 1,534
Other Assets 49,568 44,807
Total Assets $ 1,994,633 $ 1,665,182
Liabilities
Demand Deposits $ 274,025 $ 263,503
Interest Bearing Deposits:
Savings and NOW Deposits 497,193 366,912
Money Market Accounts 434,330 303,112
Time Deposits 325,255 268,424
Total Interest Bearing 1,256,778 938,448
Total Deposits 1,530,803 1,201,951
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 93,935 95,636
Other Borrowed Funds 178,039 189,023
Total Borrowed Funds 271,974 284,659
Other Liabilities 30,677 21,205
Subordinated Debentures 36,083 36,083
Total Liabilities 1,869,537 1,543,898
Total Stockholders' Equity 125,096 121,284
Total Liabilities & Stockholders' Equity $ 1,994,633 $ 1,665,182
Total Average Earning Assets - QTD $ 1,908,477 $ 1,606,410
Total Average Earning Assets - YTD $ 1,863,632 $ 1,537,922
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data) September 30, September 30,
2009 2008
Performance Measures:
Earnings per average share, basic, quarter $ 0.58 $ 0.46
Earnings per average share, diluted, quarter $ 0.58 $ 0.46
Earnings per average share, basic, year-to-date $ 1.28 $ 1.12
Earnings per average share, diluted, year-to-date $ 1.28 $ 1.12
Return on average assets, year-to-date 0.47 % 0.50 %
Return on average stockholders' equity, year-to-date 7.56 % 6.87 %
Net interest margin (taxable equivalent), quarter 2.81 % 3.14 %
Net interest margin (taxable equivalent), year-to-date 2.68 % 2.94 %
Efficiency ratio, year-to-date 70.7 % 72.0 %
Book value per share $ 23.72 $ 22.08
Tangible book value per share $ 23.05 $ 21.34
Tangible capital / tangible assets 6.22 % 6.79 %
Common Share Data:
Average shares outstanding, basic, quarter 5,530,297 5,541,345
Average shares outstanding, basic, year-to-date 5,532,907 5,542,971
Average shares outstanding, diluted, quarter 5,533,622 5,542,404
Average shares outstanding, diluted, year-to-date 5,534,364 5,545,138
Shares outstanding Class A 3,514,267 3,513,607
Shares outstanding Class B 2,016,030 2,027,100
Total shares outstanding at period end 5,530,297 5,540,707
Assets Quality and Other Data:
Allowance for loan losses / loans 1.62 % 1.28 %
Nonaccrual loans $ 17,001 $ 3,804
Nonperforming assets $ 17,001 $ 4,509
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 511 $ -
Net charge-offs (recoveries), year-to-date $ 1,053 $ 2,354
Leverage ratio 8.02 % 8.94 %
Tier 1 risk weighted capital ratio 14.95 % 15.46 %
Total risk weighted capital ratio 16.19 % 16.48 %
Total risk weighted assets $ 1,088,777 $ 1,002,190
SOURCE: Century Bancorp, Inc.
Century Bancorp, Inc. William P. Hornby, 781-393-4630 CPA whornby@century-bank.com Fax: 781-393-4071
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