Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the
Company”) today announced net income of $10,770,000 for the quarter
ended March 31, 2021, or $1.93 per Class A share diluted, an
increase of 11.4% compared to net income of $9,666,000, or $1.74
per Class A share diluted, for the same period a year ago. Total
assets increased 14.6% from $6.36 billion at December 31, 2020 to
$7.29 billion at March 31, 2021.
The Company's Board of Directors voted a regular quarterly
dividend of 18.00 cents ($0.18) per share on the Company's Class A
common stock, and 9.00 cents ($0.09) per share on the Company's
Class B common stock. The dividends were declared payable May 17,
2021 to shareholders of record on May 3, 2021.
Net interest income totaled $28.6 million for the quarter ended
March 31, 2021 compared to $25.2 million for the same period in
2020. The 13.4% increase in net interest income for the period is
primarily due to a decrease in interest expense as a result of
falling interest rates. The net interest margin decreased from
2.11% on a fully tax-equivalent basis for the first quarter of 2020
to 1.80% for the same period in 2021. This was primarily the result
of increased margin pressure during the recent decrease in interest
rates across the yield curve. The average balances of earning
assets increased for 2021 compared to the same period last year, by
$1.61 billion or 31.0%, combined with an average yield decrease of
1.03%, resulting in a decrease in interest income of $4.3 million.
The average balance of interest-bearing liabilities increased for
2021 compared to the same period last year, by $1.19 billion or
27.9%, combined with an average interest-bearing liabilities
interest cost decrease of 0.86%, resulting in a decrease in
interest expense of $7.6 million.
The provision for loan losses decreased by $1,625,000 from
$1,075,000 for the quarter ended March 31, 2020 compared to a
credit of $550,000 for the same period in 2021. The provision for
the first quarter of 2020 was primarily as a result of provisions
related to the onset of the COVID-19 pandemic. The credit provision
for the first quarter of 2021 was primarily attributable to a
decline in loan balances exclusive of Payroll Protection Program
(PPP) loans and a reduction in specific allocations to the
allowance for loan losses.
The Company’s effective tax rate increased from 5.8% for the
quarter ended March 31, 2020 to 13.5% for the same period in 2021.
This was primarily as a result of an increase in taxable income
relative to total income.
At March 31, 2021, total equity was $381.3 million compared to
$370.4 million at December 31, 2020. The Company’s equity increased
primarily as a result of earnings and a decrease in total
accumulated other comprehensive loss, offset somewhat by dividends
paid.
The Company’s leverage ratio stood at 6.16% at March 31, 2021,
compared to 6.64% at December 31, 2020. The decrease in the
leverage ratio was due to an increase in quarterly average assets,
offset somewhat by an increase in stockholders’ equity. Book value
as of March 31, 2021 was $68.00 per share compared to $66.53 at
December 31, 2020.
The Company’s allowance for loan losses was $35.0 million or
1.17% of loans outstanding at March 31, 2021, compared to $35.5
million or 1.18% of loans outstanding at December 31, 2020, and
$30.8 million or 1.23% of loans outstanding at March 31, 2020. The
ratio of the allowance for loan losses to loans outstanding has
decreased from March 31, 2020, primarily from approximately $213
million of qualifying PPP loans that are guaranteed by the U.S.
Small Business Administration (SBA), which require no allowance for
loan losses. Nonperforming assets totaled $942,000 at March 31,
2021, compared to $4.0 million at December 31, 2020, and $1.7
million at March 31, 2020.
As of March 31, 2021, the Company had COVID-19 modifications of
8 loans aggregating $36,152,000, primarily consisting of short-term
payment deferrals. Of these modifications, $36,152,000, or 100%,
were performing in accordance with their modified terms.
The Coronavirus Aid, Relief and Economic Security Act (CARES
Act) allows companies to delay Financial Accounting Standards Board
(FASB) Accounting Standards Update (ASU) 2016-13, Measurement of
Credit Losses on Financial Instruments (CECL), including the
current expected credit losses methodology for estimating
allowances for credit losses. The Company elected to delay FASB ASU
2016-13. This ASU was delayed until the earlier of the date on
which the national emergency concerning the COVID–19 outbreak
declared by the President on March 15, 2020 terminates or December
31, 2020, with an effective retrospective implementation date of
January 1, 2020. On December 27, 2020, the Coronavirus Response and
Relief Supplemental Appropriations Act of 2021 was signed into law.
The law changed the delayed implementation date to the earlier of
the first day of the Company’s fiscal year that begins after the
date on which the national emergency terminates or January 1,
2022.
Proposed Transaction with Eastern Bankshares, Inc.
On April 7, 2021, the Company and Eastern Bankshares, Inc.
(“Eastern” ) (NASDAQ: EBC) entered into an Agreement and Plan of
Merger pursuant to which, through a series of transactions, Eastern
will acquire the Company in a cash transaction for total
consideration valued at approximately $642 million. Under the terms
of the Agreement and Plan of Merger, (i) each holder of Class A
common stock will receive a cash payment of $115.28 per share of
Class A common stock and (ii) each holder of Class B common stock
will receive a cash payment of $115.28 per share of Class B common
stock. The transaction is expected to close in the fourth quarter
of 2021 and is subject to customary closing conditions, including
approval by the shareholders of the Company and required regulatory
approvals.
Additional information about the transaction can be found in the
joint press release issued on April 7, 2021, which is available on
the Investor Relations section of the Company’s website at
www.centurybank.com.
Additional Information and Where to Find It
In connection with the proposed merger, the Company will provide
its shareholders with a proxy statement and other relevant
documents concerning the proposed transaction. Eastern will also
file relevant materials in connection with its proposed acquisition
of the Company. Shareholders of the Company are urged to read the
proxy statement and other relevant documents and any amendments or
supplements to those documents, because they will contain important
information which should be considered before making any decision
regarding the transaction. A free copy of the proxy statement, as
well as other filings containing information about the Company and
Eastern, when they become available, may be obtained at the SEC’s
Internet site (http://www.sec.gov). Copies of the proxy statement
may also be obtained, free of charge, from the Company’s website at
https://investors.centurybank.com/, or by contacting Century’s
Investor Relations at 400 Mystic Avenue, Medford, MA, Attention:
William P. Hornby, Telephone: (781) 393-4630.
Certain Information Regarding Participants
The Company and Eastern and their respective directors,
executive officers and other members of management and employees
may be deemed to be participants in the solicitation of proxies of
the Company’s shareholders in connection with the proposed
transaction. You can find information about the Company’s executive
officers and directors in the materials filed by the Company with
the SEC. Additional information regarding the interests of those
participants and other persons who may be deemed participants in
the transaction and a description of their direct and indirect
interests, by security holdings or otherwise, may be obtained, with
respect to the Company, by reading the Annual Report on Form 10-K
filed by the Company with the SEC on March 10, 2021 and other
relevant documents regarding the proposed merger to be filed with
the SEC and, with respect to Eastern, by reading Eastern’s April 1,
2021 proxy statement for its 2021 annual meeting of shareholders
filed by Eastern with the SEC on April 1, 2021 and other relevant
documents regarding the proposed merger to be filed with the SEC.
Free copies of these documents may be obtained as described in the
preceding paragraph.
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.
Cautionary Note Regarding Forward-Looking Statements
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, which includes among other things, the ability of the
Company and Eastern to satisfy the conditions set forth in the
Agreement and Plan of Merger (as discussed above) and disruptions
to the Company’s business during the pendency of the proposed
merger (as discussed above). Actual performance and results of
operations may differ materially from those projected or suggested
in the forward-looking statements due to certain risks and
uncertainties, which are included in more detail in the Annual
Report on Form 10-K, as updated by Quarterly Reports on Form 10-Q
and other filings submitted to the SEC. 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
2021
2020
Cash and Due From Banks
$
116,242
$
136,735
Federal Funds Sold and Interest-bearing Deposits In Other Banks
500,521
237,265
Securities Available-for-Sale (AFS)
265,620
284,116
Securities Held-to-Maturity
3,217,176
2,509,088
Federal Home Loan Bank of Boston stock, at cost
13,361
13,361
Loans: Commercial & Industrial
1,315,295
1,314,245
Municipal
137,073
137,607
Construction & Land Development
7,854
10,909
Commercial Real Estate
796,660
789,836
Residential Real Estate
460,123
448,436
Consumer and Other
19,987
20,439
Home Equity
255,770
274,357
Total Loans
2,992,762
2,995,829
Less: Allowance for Loan Losses
34,952
35,486
Net Loans
2,957,810
2,960,343
Bank Premises and Equipment, net
39,750
39,062
Accrued Interest Receivable
13,981
13,283
Goodwill
2,714
2,714
Other Assets
162,149
162,867
Total Assets
$
7,289,324
$
6,358,834
Liabilities Demand Deposits
$
1,321,084
$
1,103,878
Interest Bearing Deposits: Savings and NOW Deposits
2,269,617
1,728,092
Money Market Accounts
2,324,557
2,074,108
Time Deposits
480,784
546,143
Total Interest Bearing Deposits
5,074,958
4,348,343
Total Deposits
6,396,042
5,452,221
Borrowed Funds: Securities Sold Under Agreements to
Repurchase
228,755
232,090
Other Borrowed Funds
151,769
177,009
Total Borrowed Funds
380,524
409,099
Other Liabilities
95,343
91,022
Subordinated Debentures
36,083
36,083
Total Liabilities
6,907,992
5,988,425
Total Stockholders' Equity
381,332
370,409
Total Liabilities & Stockholders' Equity
$
7,289,324
$
6,358,834
Century Bancorp, Inc. and Subsidiaries Consolidated
Comparative Statements of Income (unaudited) For the quarter ended
March 31, 2021 and 2020 (in thousands)
Quarter ended March 31,
2021
2020
Interest Income: Loans
$
21,605
$
22,199
Securities Held-to-Maturity
13,117
15,293
Securities Available-for-Sale
630
1,693
Federal Funds Sold and Interest-bearing Deposits In Other Banks
179
610
Total Interest Income
35,531
39,795
Interest Expense: Savings and NOW Deposits
1,118
3,725
Money Market Accounts
2,886
5,572
Time Deposits
1,581
3,172
Securities Sold Under Agreements to Repurchase
141
626
Other Borrowed Funds and Subordinated Debentures
1,238
1,499
Total Interest Expense
6,964
14,594
Net Interest Income
28,567
25,201
Provision For Loan Losses
(550
)
1,075
Net Interest Income After Provision for Loan Losses
29,117
24,126
Other Operating Income: Service Charges on Deposit Accounts
2,218
2,296
Lockbox Fees
996
930
Other Income
989
1,084
Total Other Operating Income
4,203
4,310
Operating Expenses: Salaries and Employee Benefits
12,250
11,371
Occupancy
1,702
1,515
Equipment
949
837
Other
5,970
4,450
Total Operating Expenses
20,871
18,173
Income Before Income Taxes
12,449
10,263
Income Tax Expense
1,679
597
Net Income
$
10,770
$
9,666
Century Bancorp, Inc. and Subsidiaries
Consolidated Quarter-to-Date Average Comparative Statements of
Condition (unaudited) (in thousands)
March 31,
March 31,
Assets
2021
2020
Cash and Due From Banks
$
135,050
$
77,723
Federal Funds Sold and Interest-Bearing Deposits in Other Banks
715,155
173,928
Securities Available-For-Sale (AFS)
288,969
271,972
Securities Held-to-Maturity (HTM)
2,816,215
2,299,750
Total Loans
2,981,994
2,447,962
Less: Allowance for Loan Losses
35,734
29,765
Net Loans
2,946,260
2,418,197
Unrealized (Loss)Gain on Securities AFS and HTM Transfers
(1,234
)
(3,152
)
Bank Premises and Equipment
39,639
35,445
Accrued Interest Receivable
14,000
12,639
Goodwill
2,714
2,714
Other Assets
172,748
160,053
Total Assets
$
7,129,516
$
5,449,269
Liabilities Demand Deposits
$
1,195,863
$
758,173
Interest Bearing Deposits: Savings and NOW Deposits
2,227,705
1,732,835
Money Market Accounts
2,296,286
1,480,399
Time Deposits
510,287
589,396
Total Interest Bearing Deposits
5,034,278
3,802,630
Total Deposits
6,230,141
4,560,803
Borrowed Funds: Securities Sold Under Agreements to
Repurchase
234,810
246,272
Other Borrowed Funds
152,686
181,756
Total Borrowed Funds
387,496
428,028
Other Liabilities
99,787
87,423
Subordinated Debentures
36,083
36,083
Total Liabilities
6,753,507
5,112,337
Total Stockholders' Equity
376,009
336,932
Total Liabilities & Stockholders' Equity
$
7,129,516
$
5,449,269
Total Average Earning Assets - QTD
$
6,802,333
$
5,193,612
Century Bancorp, Inc. and Subsidiaries Consolidated
Selected Key Financial Information (unaudited) (in thousands,
except share data)
March 31,
March 31,
2021
2020
Performance Measures:
Earnings per average Class A share, diluted, quarter
$
1.93
$
1.74
Return on average assets, quarter
0.61
%
0.71
%
Return on average stockholders' equity, quarter
11.62
%
11.54
%
Net interest margin (taxable equivalent), quarter
1.80
%
2.11
%
Efficiency ratio, Non-GAAP (1)
60.7
%
57.5
%
Book value per share
$
68.49
$
61.19
Tangible book value per share - Non-GAAP (1)
$
68.00
$
60.70
Capital / assets
5.23
%
6.12
%
Tangible capital / tangible assets - Non-GAAP (1)
5.20
%
6.08
%
Common Share Data: Average Class A shares
outstanding, diluted, quarter
5,567,909
5,567,909
Shares outstanding Class A
3,656,469
3,652,349
Shares outstanding Class B
1,911,440
1,915,560
Total shares outstanding at period end
5,567,909
5,567,909
Asset Quality and Other
Data: Allowance for loan losses / loans
1.17
%
1.23
%
Nonaccrual loans
$
942
$
1,701
Nonperforming assets
$
942
$
1,701
Loans 90 days past due and still accruing
$
-
$
-
Accruing troubled debt restructures
$
2,099
$
2,337
Net charge-offs (recoveries), quarter
$
(16
)
$
(144
)
Leverage ratio
6.16
%
7.26
%
Common equity tier 1 risk weighted capital ratio
11.24
%
11.87
%
Tier 1 risk weighted capital ratio
12.22
%
13.02
%
Total risk weighted capital ratio
13.19
%
14.04
%
Total risk weighted assets
$
3,591,013
$
3,036,664
(1) Non-GAAP Financial Measures are reconciled in
the following tables: Calculation of Efficiency
ratio: Total adjusted operating expenses(numerator)
$
20,871
$
18,173
Net interest income
$
28,567
$
25,201
Total other operating income
4,203
4,310
Tax equivalent adjustment
1,632
2,098
Total income(denominator)
$
34,402
$
31,609
Efficiency ratio - Non-GAAP
60.7
%
57.5
%
Calculation of tangible book value per share:
Total stockholders' equity
$
381,332
$
340,687
Less: goodwill
2,714
2,714
Tangible stockholders' equity(numerator)
$
378,618
$
337,973
Total shares outstanding at period end(denominator)
5,567,909
5,567,909
Tangible book value per share - Non-GAAP
$
68.00
$
60.70
Book value per share - GAAP
$
68.49
$
61.19
Calculation of tangible capital / tangible assets:
Total stockholders' equity
$
381,332
$
340,687
Less: goodwill
2,714
2,714
Tangible stockholders' equity(numerator)
$
378,618
$
337,973
Total assets
$
7,289,324
$
5,562,286
Less: goodwill
2,714
2,714
Tangible assets(denominator)
$
7,286,610
$
5,559,572
Tangible capital / tangible assets - Non-GAAP
5.20
%
6.08
%
Capital / assets - GAAP
5.23
%
6.12
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210413006083/en/
William P. Hornby, CPA whornby@centurybank.com Phone:
781-393-4630 Fax: 781-393-4071
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