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Century Bancorp, Inc. Announces Record Earnings for Q3, Up 24%; Asset Growth to $3.0 BB; Regular Dividend Declared

MEDFORD, Mass.--(BUSINESS WIRE)-- Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $14,261,000 for the nine months ended September 30, 2012, or $2.57 per Class A share diluted, an increase of 14.1% compared to net income of $12,504,000, or $2.26 per Class A share diluted, for the same period a year ago. Total assets increased 8.1% from $2.7 billion at December 31, 2011 to $3.0 billion at September 30, 2012. For the quarter ended September 30, 2012, net income totaled $5,682,000, or $1.02 per Class A share diluted, an increase of 24.0% compared to net income of $4,582,000, or $0.83 per Class A share diluted, for the same period a year ago.

Net interest income totaled $47.0 million for the first nine months of 2012 compared to $41.3 million for the same period in 2011. The 13.9% increase in net interest income for the period is due to a 10.5% increase in the average balances of earning assets, combined with a similar increase in average deposits. The net interest margin increased from 2.49% on a fully taxable equivalent basis in 2011 to 2.58% on the same basis for 2012. This was primarily the result of prepayment penalties that were collected during the third quarter. Also, interest expense decreased primarily as a result of the continued decline in market rates.

The provision for loan losses decreased by $350,000 from $3.6 million for the nine months ended September 30, 2011 to $3.3 million, for the nine months ended September 30, 2012, primarily as a result of changes in the composition of the loan portfolio. The Company capitalized on favorable market conditions for the first nine months ended September 30, 2012 and realized net gains on sales of investments of $1.1 million, compared to $1.2 million, for the same period in 2011. FDIC assessments decreased for the first nine months of 2012, primarily as a result of a decrease in the assessment rate, offset somewhat by an increase in the assessment base. The Company’s effective tax rate increased slightly from 7.5% in 2011 to 8.1% in 2012. The Company’s income tax rate has remained low primarily as a result of tax-exempt income.

At September 30, 2012, total equity was $178.1 million compared to $160.6 million at December 31, 2011. The Company’s equity increased primarily as a result of earnings and other comprehensive income, net of taxes, offset somewhat by dividends paid. The Company’s leverage ratio stood at 6.95% at September 30, 2012, compared to 7.02% at September 30, 2011. This decline in the leverage ratio is due to an increase in assets, offset by an increase in stockholders’ equity. Book value as of September 30, 2012 was $32.10 per share compared to $29.43 at September 30, 2011.

The Company’s allowance for loan losses was $18.7 million or 1.75% of loans outstanding at September 30, 2012, compared to $16.6 million or 1.68% of loans outstanding at December 31, 2011 and $16.0 million, or 1.68% of loans outstanding at September 30, 2011. Non-performing assets totaled $5.9 million at September 30, 2012, compared to $7.0 million at December 31, 2011 and $7.4 million at September 30, 2011.

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, 2012 to stockholders of record on November 1, 2012.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-four 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

2012 2011
Cash and Due From Banks $ 44,198 $ 50,187
Federal Funds Sold and Interest-bearing Deposits In Other Banks 217,424 157,579
Short-term Investments 31,364 18,351
Securities Available-For-Sale (AFS) 1,229,099 1,258,676
Securities Held-to-Maturity 284,490 179,368
Federal Home Loan Bank of Boston stock, at cost 15,146 15,531
Loans:
Commercial & Industrial 78,567 82,404
Construction & Land Development 38,318 56,819
Commercial Real Estate 562,252 487,495
Residential Real Estate 262,426 239,307
Consumer and Other 6,661 7,681
Home Equity 116,699 110,786
Total Loans 1,064,923 984,492
Less: Allowance for Loan Losses 18,658 16,574
Net Loans 1,046,265 967,918
Bank Premises and Equipment 23,416 21,757
Accrued Interest Receivable 5,866 6,022
Goodwill 2,714 2,714
Other Assets 65,835 65,122
Total Assets $ 2,965,817 $ 2,743,225

Liabilities

Demand Deposits $ 406,681 $ 365,854
Interest Bearing Deposits:
Savings and NOW Deposits 832,525 708,988
Money Market Accounts 672,447 616,241
Time Deposits 431,630 433,501
Total Interest Bearing Deposits 1,936,602 1,758,730
Total Deposits 2,343,283 2,124,584
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 176,060 143,320
Other Borrowed Funds 184,144 244,143
Total Borrowed Funds 360,204 387,463
Other Liabilities 48,135 34,446
Subordinated Debentures 36,083 36,083
Total Liabilities 2,787,705 2,582,576
Total Stockholders' Equity 178,112 160,649
Total Liabilities & Stockholders' Equity $ 2,965,817 $ 2,743,225
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Nine months ended September 30, 2012 and 2011
(in thousands)
Quarter ended September 30, Nine months ended September 30,
2012 2011 2012 2011
Interest Income:
Loans $ 14,494 $ 12,030 $ 39,114 $ 36,147
Securities Held-to-Maturity 1,744 1,304 5,131 4,595
Securities Available-for-Sale 5,671 6,042 17,054 17,104
Federal Funds Sold and Interest-bearing Deposits In Other Banks 170 262 457 967
Total Interest Income 22,079 19,638 61,756 58,813
Interest Expense:
Savings and NOW Deposits 584 592 1,671 2,023
Money Market Accounts 581 627 1,811 2,109
Time Deposits 1,493 2,512 4,774 7,285
Securities Sold Under Agreements to Repurchase 94 82 274 290
Other Borrowed Funds and Subordinated Debentures 2,107 1,987 6,215 5,826
Total Interest Expense 4,859 5,800 14,745 17,533
Net Interest Income 17,220 13,838 47,011 41,280
Provision For Loan Losses 1,250 1,200 3,250 3,600

Net Interest Income After Provision for Loan Losses

15,970 12,638 43,761 37,680
Other Operating Income
Service Charges on Deposit Accounts 1,977 2,031 5,887 5,854
Lockbox Fees 745 658 2,225 2,129
Net Gain on Sales of Investments 529 883 1,119 1,245
Other Income 854 931 2,481 2,651
Total Other Operating Income 4,105 4,503 11,712 11,879
Operating Expenses
Salaries and Employee Benefits 8,400 7,357 24,732 21,948
Occupancy 1,161 1,059 3,459 3,285
Equipment 627 608 1,754 1,700
FDIC Assessment 450 413 1,302 1,612
Other 3,070 2,618 8,712 7,495
Total Operating Expenses 13,708 12,055 39,959 36,040
Income Before Income Taxes 6,367 5,086 15,514 13,519
Income Tax Expense 685 504 1,253 1,015
Net Income $ 5,682 $ 4,582 $ 14,261 $ 12,504
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
September 30, September 30,

Assets

2012 2011
Cash and Due From Banks $ 53,085 $ 52,444
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 212,417 305,717
Securities Available-For-Sale (AFS) 1,240,943 1,038,455
Securities Held-to-Maturity 266,686 189,100
Total Loans 1,019,609 946,905
Less: Allowance for Loan Losses 17,748 15,517
Net Loans 1,001,861 931,388
Unrealized Gain on Securities AFS 17,631 9,710
Bank Premises and Equipment 22,490 21,416
Accrued Interest Receivable 6,124 6,806
Goodwill 2,714 2,714
Other Assets 68,339 63,971
Total Assets $ 2,892,290 $ 2,621,721

Liabilities

Demand Deposits $ 385,440 $ 321,340
Interest Bearing Deposits:
Savings and NOW Deposits 845,057 728,238
Money Market Accounts 657,614 575,785
Time Deposits 413,124 489,808
Total Interest Bearing Deposits 1,915,795 1,793,831
Total Deposits 2,301,235 2,115,171
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 166,941 121,750
Other Borrowed Funds 181,620 166,637
Total Borrowed Funds 348,561 288,387
Other Liabilities 37,066 29,160
Subordinated Debentures 36,083 36,083
Total Liabilities 2,722,945 2,468,801
Total Stockholders' Equity 169,345 152,920
Total Liabilities & Stockholders' Equity $ 2,892,290 $ 2,621,721
Total Average Earning Assets - QTD $ 2,813,626 $ 2,554,158
Total Average Earning Assets - YTD $ 2,739,655 $ 2,480,177
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data) September 30, September 30,
2012 2011

Performance Measures:

Earnings per average Class A share, diluted, quarter $ 1.02 $ 0.83
Earnings per average Class A share, diluted, year-to-date $ 2.57 $ 2.26
Return on average assets, year-to-date 0.66% 0.64%
Return on average stockholders' equity, year-to-date 11.25% 10.93%
Net interest margin (taxable equivalent), quarter 2.73% 2.42%
Net interest margin (taxable equivalent), year-to-date 2.58% 2.49%
Efficiency ratio, year-to-date 61.8% 62.0%
Book value per share $ 32.10 $ 29.43
Tangible book value per share $ 31.61 $ 28.90
Tangible capital / tangible assets 5.92% 6.02%
Common Share Data:
Average Class A shares outstanding, diluted, quarter 5,549,810 5,541,646
Average Class A shares outstanding, diluted, year-to-date 5,548,133 5,541,711
Shares outstanding Class A 3,561,804 3,546,217
Shares outstanding Class B 1,986,880 1,994,380
Total shares outstanding at period end 5,548,684 5,540,597

Asset Quality and Other Data:

Allowance for loan losses / loans 1.75% 1.68%
Nonaccrual loans $ 5,458 $ 6,103
Nonperforming assets $ 5,858 $ 7,403
Loans 90 days past due and still accruing $ - $ 38
Accruing troubled debt restructures $ 2,227 $ 3,909
Net charge-offs, year-to-date $ 1,166 $ 1,652
Leverage ratio 6.95% 7.02%
Tier 1 risk weighted capital ratio 14.44% 14.82%
Total risk weighted capital ratio 15.69% 16.07%
Total risk weighted assets $ 1,421,173 $ 1,273,134

Century Bancorp, Inc.
William P. Hornby, CPA, 781-393-4630
whornby@centurybank.com
Fax: 781-393-4071

Source: Century Bancorp, Inc.