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Section 1: 8-K (FORM 8-K)

Form 8-K

 

 

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Date of Report: April 10, 2018

 

 

Century Bancorp, Inc.

(Exact name of registrant as specified in its charter)

 

 

 

Massachusetts   0-15752   04-2498617

(State or other jurisdiction

of incorporation)

 

(Commission

File No.)

 

(IRS Employer

Identification No.)

400 Mystic Avenue

Medford, MA

    02155
(Address of principal executive offices)     (Zip Code)

(781) 391-4000

(Registrant’s telephone number, including area code)

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02 Results of Operations and Financial Condition

The following information is furnished under Item 2.02 — “Results of Operations and Financial Condition” and such information, including the exhibits attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On April 10, 2018, Century Bancorp, Inc. issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference, announcing its earnings for the first quarter ended March 31, 2018 and the declaration of a regular quarterly dividend on Century Bancorp Inc.’s Class A and Class B common stock.

 

Item 9.01 Financial Statements and Exhibits

(d)    Exhibits

99.1        Century Bancorp, Inc. press release dated April  10, 2018.


SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

CENTURY BANCORP, INC.
/s/ William P. Hornby

William P. Hornby, CPA

Chief Financial Officer and Treasurer

Dated:    April 11, 2018

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Section 2: EX-99.1 (EX-99.1)

EX-99.1

Exhibit 99.1

 

LOGO

NEWS RELEASE

 

 

FOR IMMEDIATE RELEASE

 

Contact: William P. Hornby, CPA
  [email protected]

Phone:     781-393-4630

Fax:     781-393-4071

CENTURY BANCORP, INC. ANNOUNCES INCREASED EARNINGS FOR Q1 2018, UP

SIGNIFICANTLY, 26.5%; ASSETS AT $4.8 BB; REGULAR DIVIDEND DECLARED

Medford, MA, April 10, 2018 — Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $7,709,000 for the quarter ended March 31, 2018, or $1.38 per Class A share diluted, an increase of 26.5% compared to net income of $6,096,000, or $1.09 per Class A share diluted, for the same period a year ago. Total assets decreased 0.2% from $4.79 billion at December 31, 2017 to $4.78 billion at March 31, 2018.

Net interest income totaled $22.5 million for the quarter ended March 31, 2018 compared to $20.5 million for the same period in 2017. The 9.8% increase in net interest income for the period is primarily due to an increase in average earning assets and an increase in the net interest margin. The net interest margin increased from 2.16% on a fully taxable equivalent basis in 2017 to 2.19% for the same period in 2018. This was primarily the result of an increase in rates on earning assets. The average balances of earning assets increased by 1.8% combined with a similar increase in average deposits. Also, interest expense increased 44.9% primarily as a result of an increase in rates on deposit balances.

The Company’s effective tax rate increased from 2.3% for the first quarter of 2017 to 6.1% for the same period in 2018, primarily as a result of an increase in taxable income offset, somewhat, by a decrease in the federal tax rate from 34% to 21% as a result of the Tax Cuts and Jobs Act.

At March 31, 2018, total equity was $268.2 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 6.77% at March 31, 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 March 31, 2018 was $48.17 per share compared to $46.75 at December 31, 2017.


The Company’s allowance for loan losses was $26.7 million or 1.22% of loans outstanding at March 31, 2018, compared to $26.3 million or 1.21% of loans outstanding at December 31, 2017, and $24.8 million or 1.22% of loans outstanding at March 31, 2017. The ratio of the allowance for loan losses to loans outstanding has remained relatively stable. Non-performing assets totaled $1.4 million at March 31, 2018, compared to $1.7 million at December 31, 2017 and $810,000 at March 31, 2017.

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 May 15, 2018 to stockholders of record on May 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.


Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Condition (unaudited)

(in thousands)

 

Assets

   March 31,
2018
     December 31,
2017
 

Cash and Due From Banks

   $ 64,544      $ 77,199  

Federal Funds Sold and Interest-bearing Deposits In Other Banks

     186,125        279,231  

Securities Available-for-Sale (AFS)

     372,601        397,475  

Securities Held-to-Maturity

     1,817,633        1,701,233  

Federal Home Loan Bank of Boston stock, at cost

     20,050        21,779  

Loans:

     

Commercial & Industrial

     758,621        763,807  

Municipal

     104,044        106,599  

Construction & Land Development

     17,583        18,931  

Commercial Real Estate

     726,440        732,491  

Residential Real Estate

     300,941        287,731  

Consumer and Other

     19,339        19,040  

Home Equity

     260,179        247,345  
  

 

 

    

 

 

 

Total Loans

     2,187,147        2,175,944  

Less: Allowance for Loan Losses

     26,695        26,255  
  

 

 

    

 

 

 

Net Loans

     2,160,452        2,149,689  

Bank Premises and Equipment, net

     23,220        23,527  

Accrued Interest Receivable

     10,844        11,179  

Goodwill

     2,714        2,714  

Other Assets

     118,499        121,546  
  

 

 

    

 

 

 

Total Assets

   $ 4,776,682      $ 4,785,572  
  

 

 

    

 

 

 

Liabilities

     

Demand Deposits

   $ 715,032      $ 736,020  

Interest Bearing Deposits:

     

Savings and NOW Deposits

     1,409,157        1,367,358  

Money Market Accounts

     1,195,785        1,188,228  

Time Deposits

     615,822        625,361  
  

 

 

    

 

 

 

Total Interest Bearing Deposits

     3,220,764        3,180,947  
  

 

 

    

 

 

 

Total Deposits

     3,935,796        3,916,967  

Borrowed Funds:

     

Securities Sold Under Agreements to Repurchase

     141,560        158,990  

Other Borrowed Funds

     317,054        347,778  
  

 

 

    

 

 

 

Total Borrowed Funds

     458,614        506,768  

Other Liabilities

     77,989        65,457  

Subordinated Debentures

     36,083        36,083  
  

 

 

    

 

 

 

Total Liabilities

     4,508,482        4,525,275  

Total Stockholders’ Equity

     268,200        260,297  
  

 

 

    

 

 

 

Total Liabilities & Stockholders’ Equity

   $ 4,776,682      $ 4,785,572  
  

 

 

    

 

 

 

 


Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Income (unaudited)

For the Quarter ended March 31, 2018 and 2017

(in thousands)

 

     Quarter ended March 31,  
           2018                  2017        

Interest Income:

     

Loans

   $ 18,267      $ 15,100  

Securities Held-to-Maturity

     10,288        9,535  

Securities Available-for-Sale

     1,992        1,611  

Federal Funds Sold and Interest-bearing Deposits In Other Banks

     883        393  
  

 

 

    

 

 

 

Total Interest Income

     31,430        26,639  

Interest Expense:

     

Savings and NOW Deposits

     2,223        1,227  

Money Market Accounts

     2,453        1,274  

Time Deposits

     2,363        1,651  

Securities Sold Under Agreements to Repurchase

     181        103  

Other Borrowed Funds and Subordinated Debentures

     1,742        1,928  
  

 

 

    

 

 

 

Total Interest Expense

     8,962        6,183  
  

 

 

    

 

 

 

Net Interest Income

     22,468        20,456  

Provision For Loan Losses

     450        400  
  

 

 

    

 

 

 

Net Interest Income After

     

Provision for Loan Losses

     22,018        20,056  

Other Operating Income

     

Service Charges on Deposit Accounts

     2,067        2,016  

Lockbox Fees

     791        771  

Net Gain on Sales of Loans

     —          101  

Net Gain on Sales of Securities

     197        —    

Other Income

     1,138        1,021  
  

 

 

    

 

 

 

Total Other Operating Income

     4,193        3,909  

Operating Expenses

     

Salaries and Employee Benefits

     11,225        10,865  

Occupancy

     1,637        1,741  

Equipment

     794        706  

FDIC Assessment

     383        438  

Other

     3,962        3,975  
  

 

 

    

 

 

 

Total Operating Expenses

     18,001        17,725  
  

 

 

    

 

 

 

Income Before Income Taxes

     8,210        6,240  

Income Tax Expense

     501        144  
  

 

 

    

 

 

 

Net Income

   $ 7,709      $ 6,096  
  

 

 

    

 

 

 


Century Bancorp, Inc. and Subsidiaries

Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)

(in thousands)

 

Assets

   March 31,
2018
    March 31,
2017
 

Cash and Due From Banks

   $ 72,612     $ 75,497  

Federal Funds Sold and Interest-Bearing Deposits in Other Banks

     230,194       204,527  

Securities Available-For-Sale (AFS)

     406,087       533,486  

Securities Held-to-Maturity (HTM)

     1,741,492       1,751,435  

Total Loans

     2,175,170       1,984,700  

Less: Allowance for Loan Losses

     26,546       24,580  
  

 

 

   

 

 

 

Net Loans

     2,148,624       1,960,120  

Unrealized (Loss) Gain on Securities AFS and HTM Transfers

     (4,586     (7,751

Bank Premises and Equipment

     23,430       23,569  

Accrued Interest Receivable

     10,731       10,015  

Goodwill

     2,714       2,714  

Other Assets

     123,550       116,347  
  

 

 

   

 

 

 

Total Assets

   $ 4,754,848     $ 4,669,959  
  

 

 

   

 

 

 

Liabilities

    

Demand Deposits

   $ 706,959     $ 675,941  

Interest Bearing Deposits:

    

Savings and NOW Deposits

     1,494,919       1,453,299  

Money Market Accounts

     1,180,436       1,216,690  

Time Deposits

     604,814       501,857  
  

 

 

   

 

 

 

Total Interest Bearing Deposits

     3,280,169       3,171,846  
  

 

 

   

 

 

 

Total Deposits

     3,987,128       3,847,787  

Borrowed Funds:

    

Securities Sold Under Agreements to Repurchase

     160,223       200,457  

Other Borrowed Funds

     238,260       283,650  
  

 

 

   

 

 

 

Total Borrowed Funds

     398,483       484,107  

Other Liabilities

     69,218       58,663  

Subordinated Debentures

     36,083       36,083  
  

 

 

   

 

 

 

Total Liabilities

     4,490,912       4,426,640  

Total Stockholders’ Equity

     263,936       243,319  
  

 

 

   

 

 

 

Total Liabilities & Stockholders’ Equity

   $ 4,754,848     $ 4,669,959  
  

 

 

   

 

 

 

Total Average Earning Assets—YTD

   $ 4,552,943     $ 4,474,148  
  

 

 

   

 

 

 


Century Bancorp, Inc. and Subsidiaries

\Consolidated Selected Key Financial Information (unaudited)

(in thousands, except share data)

 

     March 31,
2018
    March 31,
2017
 

Performance Measures:

    

Earnings per average Class A share, diluted, quarter

   $ 1.38     $ 1.09  

Return on average assets, quarter

     0.66     0.53

Return on average stockholders’ equity, quarter

     11.85     10.16

Net interest margin (taxable equivalent), quarter

     2.19     2.16

Efficiency ratio, quarter — Non-GAAP (1)

     62.6     64.0

Book value per share

   $ 48.17     $ 44.24  

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

   $ 47.68     $ 43.75  

Capital / assets

     5.61     5.38

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

     5.56     5.33

Common Share Data:

    

Average Class A shares outstanding, diluted, quarter

     5,567,909       5,567,909  

Shares outstanding Class A

     3,608,029       3,600,729  

Shares outstanding Class B

     1,959,880       1,967,180  
  

 

 

   

 

 

 

Total shares outstanding at period end

     5,567,909       5,567,909  
  

 

 

   

 

 

 

Asset Quality and Other Data

    

Allowance for loan losses / loans

     1.22     1.22

Nonaccrual loans

   $ 1,386     $ 810  

Nonperforming assets

   $ 1,386     $ 810  

Loans 90 days past due and still accruing

   $ —       $ —    

Accruing troubled debt restructures

   $ 5,415     $ 3,492  

Net charge-offs (recoveries), quarter

   $ 10     $ (21

Leverage ratio

     6.77     6.12

Common equity tier 1 risk weighted capital ratio

     10.79     10.06

Tier 1 risk weighted capital ratio

     12.10     11.27

Total risk weighted capital ratio

     13.10     12.25

Total risk weighted assets

   $ 2,660,535     $ 2,532,933  

(1) Non-GAAP Financial Measures are reconciled in the following tables:

 

Calculation of Efficiency ratio

    

Total operating expenses (numerator)

   $ 18,001     $ 17,725  
  

 

 

   

 

 

 

Net interest income

   $ 22,468     $ 20,456  

Total other operating income

     4,193       3,909  

Tax equivalent adjustment

     2,077       3,336  
  

 

 

   

 

 

 

Total income (denominator)

   $ 28,738     $ 27,701  
  

 

 

   

 

 

 

Efficiency ratio, year — Non-GAAP

     62.6     64.0

Calculation of tangible book value per share

    

Total stockholders’ equity

   $ 268,200     $ 246,328  

Less: goodwill

     2,714       2,714  
  

 

 

   

 

 

 

Tangible stockholders’ equity (numerator)

   $ 265,486     $ 243,614  
  

 

 

   

 

 

 

Total shares outstanding at period end (denominator)

     5,567,909       5,567,909  

Tangible book value per share — Non-GAAP

   $ 47.68     $ 43.75  

Book value per share — GAAP

   $ 48.17     $ 44.24  

Calculation of tangible capital / tangible assets

    

Total stockholders’ equity

   $ 268,200     $ 246,328  

Less: goodwill

     2,714       2,714  
  

 

 

   

 

 

 

Tangible stockholders’ equity (numerator)

   $ 265,486     $ 243,614  
  

 

 

   

 

 

 

Total assets

   $ 4,776,682     $ 4,577,385  

Less: goodwill

     2,714       2,714  
  

 

 

   

 

 

 

Tangible assets (denominator)

   $ 4,773,968     $ 4,574,671  
  

 

 

   

 

 

 

Tangible capital / tangible assets — Non-GAAP

     5.56     5.33

Capital / assets — GAAP

     5.61     5.38
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