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Section 1: 8-K (8-K)

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 9, 2019

 

 

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 9, 2019, 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, 2019 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 9, 2019.


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 10, 2019

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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 2019 UP 22.2%; ASSET GROWTH TO RECORD $5.3 BB; REGULAR DIVIDEND DECLARED

Medford, MA, April 9, 2019—Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $9.4 million for the quarter ended March 31, 2019, or $1.69 per Class A share diluted, an increase of 22.2% compared to net income of $7.7 million, or $1.38 per Class A share diluted, for the same period a year ago. Total assets increased 2.8% from $5.16 billion at December 31, 2018 to $5.31 billion at March 31, 2019.

Net interest income totaled $23.4 million for the quarter ended March 31, 2019 compared to $22.5 million for the same period in 2018. The 4.3% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.19% on a fully taxable equivalent basis in 2018 to 2.11% for the same period in 2019. This was primarily the result of increased rates paid on deposits. The average balances of earning assets increased by 8.7% combined with an average yield increase of 0.40%, resulting in an increase in interest income of $7.6 million. The average balance of interest bearing liabilities increased 7.7% combined with an average cost of funds increase of 0.61%, resulting in an increase in interest expense of $6.7 million.

The Company’s effective tax rate decreased from 6.1% for the quarter ended March 31, 2018 to (1.3%) for the same period in 2019. This was primarily as a result of a reduction in tax accruals related to sequestration of the refundable portion of our alternative minimum tax (AMT) credit carryforward. On January 14, 2019, the IRS updated its announcement “Effect of Sequestration on the Alternative Minimum Tax Credit for Corporations” to clarify that refundable AMT credits under Section 53(e) of the Internal Revenue Code are not subject to sequestration for taxable years beginning after December 31, 2017. Therefore, the full amount of the AMT credit carryover will be refunded to the Company.

-more-


At March 31, 2019, total equity was $309.3 million compared to $300.4 million at December 31, 2018. The Company’s equity increased primarily as a result of earnings, offset somewhat by dividends paid.

The Company’s leverage ratio stood at 6.92% at March 31, 2019, compared to 6.91% at December 31, 2018. 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, 2019 was $55.55 per share compared to $53.96 at December 31, 2018.

The Company’s allowance for loan losses was $28.8 million or 1.25% of loans outstanding at March 31, 2019 compared to $28.5 million or 1.25% of loans outstanding at December 31, 2018, and $26.7 million or 1.22% of loans outstanding at March 31, 2018. The ratio of the allowance for loan losses to loans outstanding has increased from the same period last year, 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 March 31, 2019, compared to $3.5 million at December 31, 2018, and $1.4 million at March 31, 2018. Nonperforming assets increased from the same period last year, mainly as a result of one residential real estate property classified as other real estate owned.

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, 2019 to stockholders of record on May 1, 2019.

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)

 

     March 31,      December 31,  

Assets

   2019      2018  

Cash and Due From Banks

   $ 77,121      $ 89,540  

Federal Funds Sold and Interest-bearing Deposits In Other Banks

     301,240        252,963  

Securities Available-for-Sale (AFS)

     346,707        338,327  

Securities Held-to-Maturity

     2,110,555        2,046,647  

Federal Home Loan Bank of Boston stock, at cost

     14,244        17,974  

Loans:

     

Commercial & Industrial

     767,455        761,775  

Municipal

     105,269        97,140  

Construction & Land Development

     13,305        13,628  

Commercial Real Estate

     746,703        750,362  

Residential Real Estate

     349,966        348,250  

Consumer and Other

     22,123        22,083  

Home Equity

     305,839        292,340  
  

 

 

    

 

 

 

Total Loans

     2,310,660        2,285,578  

Less: Allowance for Loan Losses

     28,848        28,543  
  

 

 

    

 

 

 

Net Loans

     2,281,812        2,257,035  

Bank Premises and Equipment, net

     24,494        23,921  

Accrued Interest Receivable

     14,464        14,406  

Goodwill

     2,714        2,714  

Other Assets

     132,715        120,408  
  

 

 

    

 

 

 

Total Assets

   $ 5,306,066      $ 5,163,935  
  

 

 

    

 

 

 

Liabilities

     

Demand Deposits

   $ 764,545      $ 813,478  

Interest Bearing Deposits:

     

Savings and NOW Deposits

     1,783,987        1,707,019  

Money Market Accounts

     1,359,016        1,325,888  

Time Deposits

     542,079        560,579  
  

 

 

    

 

 

 

Total Interest Bearing Deposits

     3,685,082        3,593,486  
  

 

 

    

 

 

 

Total Deposits

     4,449,627        4,406,964  

Borrowed Funds:

     

Securities Sold Under Agreements to Repurchase

     164,500        154,240  

Other Borrowed Funds

     257,148        202,378  
  

 

 

    

 

 

 

Total Borrowed Funds

     421,648        356,618  

Other Liabilities

     89,384        63,831  

Subordinated Debentures

     36,083        36,083  
  

 

 

    

 

 

 

Total Liabilities

     4,996,742        4,863,496  

Total Stockholders’ Equity

     309,324        300,439  
  

 

 

    

 

 

 

Total Liabilities & Stockholders’ Equity

   $ 5,306,066      $ 5,163,935  
  

 

 

    

 

 

 


Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Income (unaudited)

For the Quarter ended March 31, 2019 and 2018

(in thousands)

 

     Quarter ended March 31,  
     2019     2018  

Interest Income:

    

Loans

   $ 21,309     $ 18,267  

Securities Held-to-Maturity

     13,788       10,288  

Securities Available-for-Sale

     2,631       1,992  

Federal Funds Sold and Interest-bearing Deposits In Other Banks

     1,349       883  
  

 

 

   

 

 

 

Total Interest Income

     39,077       31,430  

Interest Expense:

    

Savings and NOW Deposits

     5,466       2,223  

Money Market Accounts

     5,343       2,453  

Time Deposits

     2,793       2,363  

Securities Sold Under Agreements to Repurchase

     385       181  

Other Borrowed Funds and Subordinated Debentures

     1,652       1,742  
  

 

 

   

 

 

 

Total Interest Expense

     15,639       8,962  
  

 

 

   

 

 

 

Net Interest Income

     23,438       22,468  

Provision For Loan Losses

     375       450  
  

 

 

   

 

 

 

Net Interest Income After

    

Provision for Loan Losses

     23,063       22,018  

Other Operating Income

    

Service Charges on Deposit Accounts

     2,209       2,067  

Lockbox Fees

     1,089       791  

Net Gain on Sales of Loans

     15       —    

Net Gain on Sales of Securities

     —         197  

Other Income

     1,114       1,138  
  

 

 

   

 

 

 

Total Other Operating Income

     4,427       4,193  

Operating Expenses

    

Salaries and Employee Benefits

     11,035       11,225  

Occupancy

     1,701       1,637  

Equipment

     783       794  

FDIC Assessment

     373       383  

Other

     4,298       3,962  
  

 

 

   

 

 

 

Total Operating Expenses

     18,190       18,001  
  

 

 

   

 

 

 

Income Before Income Taxes

     9,300       8,210  

Income Tax (Benefit) Expense

     (118     501  
  

 

 

   

 

 

 

Net Income

   $ 9,418     $ 7,709  
  

 

 

   

 

 

 


Century Bancorp, Inc. and Subsidiaries    

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

(in thousands)    

 

     March 31,     March 31,  
     2019     2018  

Assets

    

Cash and Due From Banks

   $ 74,836     $ 72,612  

Federal Funds Sold and Interest-Bearing Deposits in Other Banks

     225,870       230,194  

Securities Available-For-Sale (AFS)

     351,869       406,087  

Securities Held-to-Maturity (HTM)

     2,078,626       1,741,492  

Total Loans

     2,292,606       2,175,170  

Less: Allowance for Loan Losses

     28,708       26,546  
  

 

 

   

 

 

 

Net Loans

     2,263,898       2,148,624  

Unrealized (Loss)Gain on Securities AFS and HTM Transfers

     (3,562     (4,586

Bank Premises and Equipment

     24,164       23,430  

Accrued Interest Receivable

     14,147       10,731  

Goodwill

     2,714       2,714  

Other Assets

     134,962       123,550  
  

 

 

   

 

 

 

Total Assets

   $ 5,167,524     $ 4,754,848  
  

 

 

   

 

 

 

Liabilities

    

Demand Deposits

   $ 782,794     $ 706,959  

Interest Bearing Deposits:

    

Savings and NOW Deposits

     1,812,119       1,494,919  

Money Market Accounts

     1,271,707       1,180,436  

Time Deposits

     516,781       604,814  
  

 

 

   

 

 

 

Total Interest Bearing Deposits

     3,600,607       3,280,169  
  

 

 

   

 

 

 

Total Deposits

     4,383,401       3,987,128  

Borrowed Funds:

    

Securities Sold Under Agreements to Repurchase

     168,447       160,223  

Other Borrowed Funds

     195,837       238,260  
  

 

 

   

 

 

 

Total Borrowed Funds

     364,284       398,483  

Other Liabilities

     79,156       69,218  

Subordinated Debentures

     36,083       36,083  
  

 

 

   

 

 

 

Total Liabilities

     4,862,924       4,490,912  

Total Stockholders’ Equity

     304,600       263,936  
  

 

 

   

 

 

 

Total Liabilities & Stockholders’ Equity

   $ 5,167,524     $ 4,754,848  
  

 

 

   

 

 

 

Total Average Earning Assets - QTD

   $ 4,948,971     $ 4,552,943  
  

 

 

   

 

 

 


Century Bancorp, Inc. and Subsidiaries    

Consolidated Selected Key Financial Information (unaudited)

(in thousands, except share data)    

 

     March 31,     March 31,  
     2019     2018  

Performance Measures:

    

Earnings per average Class A share, diluted, quarter

   $ 1.69     $ 1.38  

Return on average assets, quarter

     0.74     0.66

Return on average stockholders’ equity, quarter

     12.54     11.85

Net interest margin (taxable equivalent), quarter

     2.11     2.19

Efficiency ratio, quarter- Non-GAAP (1)

     60.3     62.6

Book value per share

   $ 55.55     $ 48.17  

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

   $ 55.07     $ 47.68  

Capital / assets

     5.83     5.61

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

     5.78     5.56

Common Share Data:

    

Average Class A shares outstanding, diluted, quarter

     5,567,909       5,567,909  

Shares outstanding Class A

     3,610,329       3,608,029  

Shares outstanding Class B

     1,957,580       1,959,880  
  

 

 

   

 

 

 

Total shares outstanding at period end

     5,567,909       5,567,909  
  

 

 

   

 

 

 

Asset Quality and Other Data:

    

Allowance for loan losses / loans

     1.25     1.22

Nonaccrual loans

   $ 1,502     $ 1,386  

Nonperforming assets

   $ 3,727     $ 1,386  

Loans 90 days past due and still accruing

   $ —       $ —    

Accruing troubled debt restructures

   $ 2,542     $ 5,415  

Net charge-offs(recoveries), quarter

   $ 70     $ 10  

Leverage ratio

     6.92     6.77

Common equity tier 1 risk weighted capital ratio

     11.49     10.79

Tier 1 risk weighted capital ratio

     12.74     12.10

Total risk weighted capital ratio

     13.76     13.10

Total risk weighted assets

   $ 2,808,321     $ 2,660,535  

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

 

 

Calculation of Efficiency ratio:

    

Total operating expenses(numerator)

   $ 18,190     $ 18,001  
  

 

 

   

 

 

 

Net interest income

   $ 23,438     $ 22,468  

Total other operating income

     4,427       4,193  

Tax equivalent adjustment

     2,294       2,077  
  

 

 

   

 

 

 

Total income(denominator)

   $ 30,159     $ 28,738  
  

 

 

   

 

 

 

Efficiency ratio, quarter - Non-GAAP

     60.3     62.6

Calculation of tangible book value per share:

    

Total stockholders’ equity

   $ 309,324     $ 268,200  

Less: goodwill

     2,714       2,714  
  

 

 

   

 

 

 

Tangible stockholders’ equity(numerator)

   $ 306,610     $ 265,486  
  

 

 

   

 

 

 

Total shares outstanding at period end(denominator)

     5,567,909       5,567,909  

Tangible book value per share - Non-GAAP

   $ 55.07     $ 47.68  
  

 

 

   

 

 

 

Book value per share - GAAP

   $ 55.55     $ 48.17  
  

 

 

   

 

 

 

Calculation of tangible capital / tangible assets:

    

Total stockholders’ equity

   $ 309,324     $ 268,200  

Less: goodwill

     2,714       2,714  
  

 

 

   

 

 

 

Tangible stockholders’ equity(numerator)

   $ 306,610     $ 265,486  
  

 

 

   

 

 

 

Total assets

   $ 5,306,066     $ 4,776,682  

Less: goodwill

     2,714       2,714  
  

 

 

   

 

 

 

Tangible assets(denominator)

   $ 5,303,352     $ 4,773,968  
  

 

 

   

 

 

 

Tangible capital / tangible assets - Non-GAAP

     5.78     5.56
  

 

 

   

 

 

 

Capital / assets - GAAP

     5.83     5.61
  

 

 

   

 

 

 
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