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

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8-K - FORM 8-K - CENTURY BANCORP INC	b81665e8vk.htm

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE


Contact:		William P. Hornby, CPA
		whornby@century-bank.com

Phone:		781-393-4630

Fax:		781-393-4071

CENTURY BANCORP, INC. ANNOUNCES 48% EARNINGS GROWTH FOR Q2 2010; 7% ASSET GROWTH TO
$2.4BB; REGULAR DIVIDEND DECLARED

Medford, MA, July 13, 2010—Century Bancorp, Inc. (NASDAQ:CNBKA) (www.century-bank.com) (“the Company”) today announced net income of $2,961,000 for the quarter ended June 30, 2010, or $0.54 per share diluted, an increase of 47.5% as compared to net income of $2,007,000, or $0.36 per share diluted, for the same period a year ago. Total assets increased 7.3% from $2.3 billion at December 31, 2009 to $2.4 billion at June 30, 2010. For the first six months of 2010, net income totaled $6,383,000, or $1.15 per share diluted, an increase of 64.0% when compared to net income of $3,893,000, or $0.70 per share diluted, for the same period a year ago.

Net interest income totaled $25.9 million for the first six months of 2010 compared to $22.8 million for 2009. The 13.7% increase in net interest income for the period is mainly due to a 20.6% increase in the average balances of earning assets, combined with a similar increase in deposits. The increased volume was partially offset by a decrease of five basis points in the net interest margin. The net interest margin decreased from 2.62% on a fully taxable equivalent basis in 2009 to 2.57% on the same basis for 2010.

The provision for loan losses increased by $125,000 from $2.9 million for the six months ended June 30, 2009 to $3.0 million, for the same period in 2010, primarily as a result of increases in loans and additional allocations related to impaired loans. The Company capitalized on favorable market conditions for the second quarter and six months ended June 30, 2010 and realized net gains on sales of investments $649,000 and $1.0 million, respectively, as compared to $0 and $1.0 million for the same periods in 2009. Included in operating expenses for the second quarter and first six months of 2010 are FDIC assessments of $740,000 and $1.4 million, respectively, as compared to $1.6 million and $2.1 million for the same periods in 2009. FDIC assessments decreased primarily as a result of the special assessment charge of approximately $1.0 million during the second quarter of 2009. This was offset, somewhat, by an increase in assessment rate as well as an increase in the deposit base during 2010.

-more-

Also included in operating expenses for the second quarter of 2010 is a charge for payments due Jonathan G. Sloane, former Co-CEO, in accordance with his separation agreement as previously announced. The Company recorded a pre-tax charge of $916,000.

The Company’s effective tax rate declined from 10.1% in 2009 to 9.4% in 2010 primarily as a result of an increase in tax-exempt income.

At June 30, 2010, total equity was $143.0 million compared to $132.7 million at December 31, 2009. 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 7.23% at June 30, 2010, compared to 7.91% at June 30, 2009. This decline in the leverage ratio is due to an increase in assets, offset by an increase in stockholders’ equity. Book value as of June 30, 2010 was $25.86 per share compared to $22.64 at June 30, 2009.

The Company’s allowance for loan losses was $14.4 million or 1.65% of loans outstanding at June 30, 2010, compared to $12.4 million, or 1.41% of loans outstanding at December 31, 2009 and $13.4 million or 1.60% of loans outstanding at June 30, 2009. Non-performing assets totaled $10.8 million at June 30, 2010, compared to $12.3 million at December 31, 2009 and $17.1 million at June 30, 2009.

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 August 16, 2010 to stockholders of record on August 2, 2010.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-three 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	2010		2009
Cash and Due From Banks	$	49,410	$	42,627
Federal Funds Sold and Interest-bearing Deposits In Other Banks		306,859		356,015

Short-term Investments		140,999		18,518

Securities Available-For-Sale (AFS)		778,660		647,796

Securities Held-to-Maturity		178,731		217,643

Federal Home Loan Bank of Boston stock, at cost		15,531		15,531

Loans:
Commercial & Industrial		112,017		141,061
Construction & Land Development		55,992		60,349
Commercial Real Estate		381,671		361,823
Residential Real Estate		193,635		188,096
Consumer and Other		7,546		7,720
Home Equity		117,486		118,076


Total Loans		868,347		877,125
Less: Allowance for Loan Losses		14,350		12,373


Net Loans		853,997		864,752

Bank Premises and Equipment		21,482		21,015
Accrued Interest Receivable		5,776		5,806
Goodwill		2,714		2,714
Core Deposit Intangible		702		896
Other Assets		64,347		60,722


Total Assets	$	2,419,208	$	2,254,035


Liabilities
Demand Deposits	$	308,398	$	279,874

Interest Bearing Deposits:
Savings and NOW Deposits		627,421		575,592
Money Market Accounts		536,067		553,883
Time Deposits		356,550		292,638


Total Interest Bearing		1,520,038		1,422,113


Total Deposits		1,828,436		1,701,987

Borrowed Funds:
Securities Sold Under Agreements to Repurchase		124,080		118,745
Other Borrowed Funds		229,994		234,024


Total Borrowed Funds		354,074		352,769

Other Liabilities		57,581		30,466
Subordinated Debentures		36,083		36,083


Total Liabilities		2,276,174		2,121,305

Total Stockholders’ Equity		143,034		132,730


Total Liabilities & Stockholders’ Equity	$	2,419,208	$	2,254,035

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Six months ended June 30, 2010 and 2009
(in thousands)


	Quarter Ended June 30,				Six months ended June 30,
	2010		2009		2010		2009
Interest Income:
Loans	$	12,068	$	12,026	$	24,180	$	23,815
Securities Held-to-Maturity		1,875		2,180		3,860		4,403
Securities Available-for-Sale		4,979		5,225		10,012		10,254
Federal Funds Sold and Interest-bearing Deposits In Other Banks		403		763		781		1,305


Total Interest Income		19,325		20,194		38,833		39,777

Interest Expense:
Savings and NOW Deposits		1,093		1,337		2,314		2,733
Money Market Accounts		1,089		1,718		2,313		3,653
Time Deposits		1,876		2,561		3,584		5,168
Securities Sold Under Agreements to Repurchase		131		117		350		325
Other Borrowed Funds and Subordinated Debentures		1,994		2,499		4,405		5,144


Total Interest Expense		6,183		8,232		12,966		17,023


Net Interest Income		13,142		11,962		25,867		22,754

Provision For Loan Losses		1,450		1,050		3,025		2,900


Net Interest Income After Provision for Loan Losses		11,692		10,912		22,842		19,854

Other Operating Income
Service Charges on Deposit Accounts		1,952		2,006		3,875		4,028
Lockbox Fees		748		753		1,448		1,494
Net Gain on Sales of Investments		649		—		1,027		978
Other Income		756		781		2,014		1,710


Total Other Operating Income		4,105		3,540		8,364		8,210

Operating Expenses
Salaries and Employee Benefits		7,850		6,541		14,775		13,429
Occupancy		998		995		2,066		2,140
Equipment		533		654		1,083		1,282
FDIC Assessment		740		1,623		1,390		2,116
Other		2,477		2,470		4,850		4,766


Total Operating Expenses		12,598		12,283		24,164		23,733


Income Before Income Taxes		3,199		2,169		7,042		4,331

Income Tax Expense		238		162		659		438


Net Income	$	2,961	$	2,007	$	6,383	$	3,893

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


	June 30,		June 30,
Assets	2010		2009
Cash and Due From Banks	$	51,926	$	60,662
Federal Funds Sold and Interest-Bearing Deposits in Other Banks		376,595		225,121

Securities Available-For-Sale (AFS)		741,425		566,475
Securities Held-to-Maturity		224,320		209,356

Total Loans		876,900		839,887
Less: Allowance for Loan Losses		13,354		12,369


Net Loans		863,546		827,518

Unrealized Gain on Securities AFS		11,900		2,004
Bank Premises and Equipment		21,316		21,697
Accrued Interest Receivable		6,607		7,246
Goodwill		2,714		2,714
Core Deposit Intangible		803		1,194
Other Assets		58,191		49,155


Total Assets	$	2,359,343	$	1,973,142


Liabilities
Demand Deposits	$	283,737	$	272,869

Interest Bearing Deposits:
Savings and NOW Deposits		669,164		472,471
Money Market Accounts		552,640		437,400
Time Deposits		330,530		329,881

Total Interest Bearing		1,552,334		1,239,752


Total Deposits		1,836,071		1,512,621

Borrowed Funds:
Securities Sold Under Agreements to Repurchase		146,515		96,154
Other Borrowed Funds		171,175		174,401


Total Borrowed Funds		317,690		270,555

Other Liabilities		30,605		30,434
Subordinated Debentures		36,083		36,083


Total Liabilities		2,220,449		1,849,693

Total Stockholders’ Equity		138,894		123,449


Total Liabilities & Stockholders’ Equity	$	2,359,343	$	1,973,142


Total Average Earning Assets — QTD	$	2,237,469	$	1,901,684


Total Average Earning Assets — YTD	$	2,219,240	$	1,840,839

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


	June 30,			June 30,
	2010			2009
Performance Measures:

Earnings per average share, basic, quarter	$	0.54		$	0.36
Earnings per average share, diluted, quarter	$	0.54		$	0.36
Earnings per average share, basic, year-to-date	$	1.15		$	0.70
Earnings per average share, diluted, year-to-date	$	1.15		$	0.70
Return on average assets, year-to-date		0.55	%		0.40	%
Return on average stockholders’ equity, year-to-date		9.27	%		6.36	%
Net interest margin (taxable equivalent), quarter		2.58	%		2.64	%
Net interest margin (taxable equivalent), year-to-date		2.57	%		2.62	%
Efficiency ratio, year-to-date		66.0	%		73.4	%
Book value per share	$	25.86		$	22.64
Tangible book value per share	$	25.25		$	21.96
Tangible capital / tangible assets		5.78	%		5.97	%

Common Share Data:
Average shares outstanding, basic, quarter		5,530,297			5,530,724
Average shares outstanding, diluted, quarter		5,532,980			5,531,329
Average shares outstanding, basic, year-to-date		5,530,297			5,534,233
Average shares outstanding, diluted, year-to-date		5,533,025			5,534,345

Shares outstanding Class A		3,518,917			3,503,467
Shares outstanding Class B		2,011,380			2,026,830

Total shares outstanding at period end		5,530,297			5,530,297


Asset Quality and Other Data

Allowance for loan losses / loans		1.65	%		1.60	%
Nonaccrual loans	$	10,679		$	17,097
Nonperforming assets	$	10,758		$	17,097
Loans 90 days past due and still accruing	$	7		$	—
Accruing troubled debt restructures	$	1,220		$	—
Net charge-offs, year-to-date	$	1,048		$	656

Leverage ratio		7.23	%		7.91	%
Tier 1 risk weighted capital ratio		14.47	%		15.08	%
Total risk weighted capital ratio		15.68	%		16.33	%
Total risk weighted assets	$	1,182,496		$	1,061,287

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