Century Bancorp, Inc. Announces 3rd Consecutive Year of Record Earnings for 2012, up 14%; Asset Grow

Century Bancorp, Inc. Announces 3rd Consecutive Year of Record Earnings for 2012, up 14%; Asset Growth to Record Size of $3.1 BB; Regular Dividend Declared

MEDFORD, Mass.--(BUSINESS WIRE)-- Century Bancorp, Inc. (NAS: CNBKA) (www.centurybank.com) ("the Company") today announced record net income of $19,039,000 for the year ended December 31, 2012, or $3.43 per Class A share diluted, an increase of 14.1% compared to net income of $16,693,000, or $3.01 per Class A share diluted, for the same period a year ago. Total assets increased 12.5% from $2.7 billion at December 31, 2011 to $3.1 billion at December 31, 2012. For the quarter ended December 31, 2012, net income totaled $4,778,000, or $0.86 per Class A share diluted, an increase of 14.1% compared to net income of $4,189,000, or $0.76 per Class A share diluted, for the same period a year ago.

Net interest income totaled $62.0 million for the year ended December 31, 2012 compared to $55.3 million for 2011. The 12.0% increase in net interest income for the period is due to an 11.5% increase in the average balances of earning assets, combined with a similar increase in average deposits. The net interest margin increased from 2.48% on a fully taxable equivalent basis in 2011 to 2.51% on the same basis for 2012. This was primarily the result of prepayment penalties that were collected during 2012. Also, interest expense decreased primarily as a result of the continued decline in market rates.


The provision for loan losses decreased by $400,000 from $4.6 million for the year ended December 31, 2011 to $4.2 million, for the year ended December 31, 2012, primarily as a result of changes in the composition of the loan portfolio. The Company capitalized on favorable market conditions for the fourth quarter and year ended December 31, 2012 and realized net gains on sales of investments of $724,000 and $1.8 million, respectively, as compared to $695,000 and $1.9 million, respectively, for the same periods in 2011. FDIC assessments decreased from $2.0 million for the year ended December 31, 2011 to $1.7 million, for the year ended December 31, 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 decreased from 8.5% in 2011 to 6.8% in 2012 primarily as a result of an increase in tax-exempt income.

At December 31, 2012, total equity was $180.0 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 6.80% at December 31, 2012, compared to 7.12% at December 31, 2011. This decline in the leverage ratio is due to an increase in assets, offset somewhat, by an increase in stockholders' equity. Book value as of December 31, 2012 was $32.40 per share compared to $28.98 at December 31, 2011.

The Company's allowance for loan losses was $19.2 million or 1.73% of loans outstanding at December 31, 2012, compared to $16.6 million or 1.68% of loans outstanding at December 31, 2011. The allowance for loan losses increased despite a decrease in the provision for loan losses due to a lower level of charge-off activity combined with changes in the portfolio composition. Non-performing assets totaled $4.5 million at December 31, 2012, compared to $7.0 million at December 31, 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 February 15, 2013 to stockholders of record on February 1, 2013.

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

December 31,

December 31,

Assets

2012

2011

Cash and Due From Banks

$

53,646

$

50,187

Federal Funds Sold and Interest-bearing Deposits In Other Banks

98,637

157,579

Short-term Investments

17,367

18,351

Securities Available-For-Sale (AFS)

1,434,801

1,258,676

Securities Held-to-Maturity

275,507

179,368

Federal Home Loan Bank of Boston stock, at cost

15,146

15,531

Loans:

Commercial & Industrial

88,475

82,404

Construction & Land Development

38,618

56,819

Commercial Real Estate

576,465

487,495

Residential Real Estate

281,857

239,307

Consumer and Other

7,450

7,681

Home Equity

118,923

110,786

Total Loans

1,111,788

984,492

Less: Allowance for Loan Losses

19,197

16,574

Net Loans

1,092,591

967,918

Bank Premises and Equipment

23,899

21,757

Accrued Interest Receivable

5,811

6,022

Goodwill

2,714

2,714

Other Assets

66,090

65,122

Total Assets

$

3,086,209

$

2,743,225

Liabilities

Demand Deposits

$

438,429

$

365,854

Interest Bearing Deposits:

Savings and NOW Deposits

933,316

708,988

Money Market Accounts

653,345

616,241

Time Deposits

419,983

433,501

Total Interest Bearing Deposits

2,006,644

1,758,730

Total Deposits

2,445,073

2,124,584

Borrowed Funds:

Securities Sold Under Agreements to Repurchase

191,390

143,320

Other Borrowed Funds

195,144

244,143

Total Borrowed Funds

386,534

387,463

Other Liabilities

38,529

34,446

Subordinated Debentures

36,083

36,083

Total Liabilities

2,906,219

2,582,576

Total Stockholders' Equity

179,990

160,649

Total Liabilities & Stockholders' Equity

$

3,086,209

$

2,743,225

Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Income (unaudited)

For the Quarter and Year ended December 31, 2012 and 2011

(in thousands)

Quarter ended December 31,

Year ended December 31,

2012

2011

2012

2011

Interest Income:

Loans

$

12,301

$

11,949

$

51,415

$

48,096

Securities Held-to-Maturity

1,615

1,221

6,746

5,816

Securities Available-for-Sale

5,649

5,935

22,703

23,039

Federal Funds Sold and Interest-bearing Deposits In Other Banks

173

147

630

1,114

Total Interest Income

19,738

19,252

81,494

78,065

Interest Expense:

Savings and NOW Deposits

601

525

2,250

2,539

Money Market Accounts

540

588

2,373

2,706

Time Deposits

1,476

2,071

6,250

9,356

Securities Sold Under Agreements to Repurchase

93

89

367

379

Other Borrowed Funds and Subordinated Debentures

2,085

1,960

8,300

7,786

Total Interest Expense

4,795

5,233

19,540

22,766

Net Interest Income

14,943

14,019

61,954

55,299

Provision For Loan Losses

900

950

4,150

4,550

Net Interest Income After

Provision for Loan Losses

14,043

13,069

57,804

50,749

Other Operating Income

Service Charges on Deposit Accounts

1,993

2,031

7,880

7,885

Lockbox Fees

705

641

2,930

2,770

Net Gain on Sales of Investments

724

695

1,843

1,940

Other Income

731

994

3,212

3,645

Total Other Operating Income

4,153

4,361

15,865

16,240

Operating Expenses

Salaries and Employee Benefits

8,211

7,682

32,943

29,630

Occupancy

1,236

1,126

4,695

4,411

Equipment

501

535

2,255

2,235

FDIC Assessment

435

413

1,737

2,025

Other

2,896

2,946

11,608

10,441

Total Operating Expenses

13,279

12,702

53,238

48,742

Income Before Income Taxes

4,917

4,728

20,431

18,247

Income Tax Expense

139

539

1,392

1,554

Net Income

$

4,778

$

4,189

$

19,039

$

16,693

Century Bancorp, Inc. and Subsidiaries

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

(in thousands)

December 31,

December 31,

Assets

2012

2011

Cash and Due From Banks

$

54,572

$

51,963

Federal Funds Sold and Interest-Bearing Deposits in Other Banks

219,540

276,413

Securities Available-For-Sale (AFS)

1,263,375

1,099,099

Securities Held-to-Maturity

270,525

178,659

Total Loans

1,036,296

948,883

Less: Allowance for Loan Losses

18,039

15,767

Net Loans

1,018,257

933,116

Unrealized Gain on Securities AFS

18,362

11,004

Bank Premises and Equipment

22,804

21,537

Accrued Interest Receivable

6,091

6,658

Goodwill

2,714

2,714

Other Assets

68,205

64,421

Total Assets

$

2,944,445

$

2,645,584

Liabilities

Demand Deposits

$

386,863

$

326,102

Interest Bearing Deposits:

Savings and NOW Deposits

870,046

735,022

Money Market Accounts

666,949

584,059

Time Deposits

418,789

484,142

Total Interest Bearing Deposits

1,955,784

1,803,223

Total Deposits

2,342,647

2,129,325

Borrowed Funds:

Securities Sold Under Agreements to Repurchase

174,624

129,137

Other Borrowed Funds

181,459

166,126

Total Borrowed Funds

356,083

295,263

Other Liabilities

37,497

29,253

Subordinated Debentures

36,083