Century Bancorp, Inc. Announces Record Earnings for the Third Quarter of 2018, up 19.4%; Asset Growth To $4.9 BB; Regular Dividend Declared
MEDFORD, Mass.--(BUSINESS WIRE)--Oct 9, 2018--Century Bancorp, Inc. (NASDAQ:CNBKA) ( www.centurybank.com ) (“the Company”) today announced net income of $26,288,000 for the nine months ended September 30, 2018, or $4.72 per Class A share diluted, an increase of 18.0% compared to net income of $22,276,000, or $4.00 per Class A share diluted, for the same period a year ago. Total assets increased 1.8% from $4.79 billion at December 31, 2017 to $4.87 billion at September 30, 2018. For the quarter ended September 30, 2018, net income totaled $9,581,000 or $1.72 per Class A share diluted, an increase of 19.4% compared to net income of $8,023,000, or $1.44 per Class A share diluted, for the same period a year ago.
Net interest income totaled $68.9 million for the nine months ended September 30, 2018 compared to $63.9 million for the same period in 2017. The 7.8% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.24% on a fully taxable equivalent basis in 2017 to 2.19% 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 prepayment penalties collected during the second quarter of 2017. 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 3.8% combined with an average yield increase of 0.24%, resulting in an increase in interest income of $15.6 million. The average balance of interest bearing liabilities increased 2.7% combined with an average yield increase of 0.36%, resulting in an increase in interest expense of $10.7 million.
The provision for loan losses decreased by $440,000 from $1,340,000 for the nine months ended September 30, 2017 to $900,000 for the same period in 2018, primarily as a result of net recoveries of $1.4 million offset by changes in qualitative factors.
The Company’s effective tax rate decreased from 5.6% for the first nine months of 2017 to 4.6% for the same period in 2018. This was primarily the result of a decrease in the federal tax rate from 34% to 21% as a result of the Tax Cuts and Jobs Act, offset somewhat by an increase in taxable income.
At September 30, 2018, total equity was $286.9 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 7.03% at September 30, 2018, compared to 6.70% 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 September 30, 2018 was $51.52 per share compared to $46.75 at December 31, 2017.
The Company’s allowance for loan losses was $28.5 million or 1.26% of loans outstanding at September 30, 2018, compared to $26.3 million or 1.21% of loans outstanding at December 31, 2017, and $25.7 million or 1.22% of loans outstanding at September 30, 2017. The ratio of the allowance for loan losses to loans outstanding has increased, during the third quarter of 2018, primarily as a result of changes in qualitative factors related to general economic factors pertaining to certain industries. Non-performing assets totaled $3.7 million at September 30, 2018, compared to $1.7 million at December 31, 2017 and $1.6 million at September 30, 2017. Nonperforming loans increased mainly as a result of one residential real estate loan.
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 15, 2018 to stockholders of record on November 1, 2018.
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.
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