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: January 20, 2015
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
(Registrants telephone number, including area code)
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)) |
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 January 20, 2015, 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 fourth quarter ended December 31, 2014 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 January 20, 2015. |
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: January 21, 2015
Exhibit 99.1
NEWS RELEASE
FOR IMMEDIATE RELEASE
Contact: | William P. Hornby, CPA | |
whornby@centurybank.com | ||
Phone: | 781-393-4630 | |
Fax: | 781-393-4071 |
CENTURY BANCORP, INC. ANNOUNCES 5TH CONSECUTIVE YEAR OF RECORD EARNINGS FOR 2014, UP 9%; ASSET GROWTH TO RECORD SIZE OF $3.6 BB; REGULAR DIVIDEND DECLARED
Medford, MA, January 20, 2015Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (the Company) today announced net income of $21,860,000 for the year ended December 31, 2014, or $3.93 per Class A share diluted, an increase of 9.0% compared to net income of $20,046,000, or $3.61 per Class A share diluted, for the same period a year ago. Total assets increased 5.6% from $3.4 billion at December 31, 2013 to $3.6 billion at December 31, 2014. For the quarter ended December 31, 2014, net income totaled $5,623,000 or $1.01 per Class A share diluted, an increase of 11.9% compared to net income of $5,025,000, or $0.90 per Class A share diluted, for the same period a year ago.
Net interest income totaled $66.2 million for the year ended December 31, 2014 compared to $61.0 million for the same period in 2013. The 8.7% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin increased from 2.21% on a fully taxable equivalent basis in 2013 to 2.22% on the same basis for 2014. This was primarily the result of a decrease in rates paid on deposits and borrowed funds. Also, interest expense increased slightly as a result of an increase in deposit balances and there was a 8.5% increase in the average balances of earning assets, combined with a similar increase in average deposits.
The provision for loan losses decreased by $660,000 from $2.7 million for the year ended December 31, 2013 to $2.1 million for the same period in 2014, primarily as a result of changes in the portfolio composition and changes in qualitative economic factors. The Company capitalized on favorable market conditions for the year ended December 31, 2014 and realized net gains on sales of investments of $450,000, as compared to $3.0 million for the same period in 2013. The Companys effective tax rate decreased from 4.8% in 2013 to 3.8% in 2014 primarily as a result of an increase in tax-exempt income.
-more-
At December 31, 2014, total equity was $192.5 million compared to $176.5 million at December 31, 2013. The Companys equity increased primarily as a result of earnings, offset somewhat by an increase in other comprehensive loss, net of taxes, and dividends paid. Other comprehensive loss, net of taxes, increased as a result of an increase in the additional pension liability. The pension liability increased as a result of an increase in the discount rate utilized and the impact of recently updated mortality tables. This was offset somewhat by a decrease in unrealized losses on securities available-for-sale and securities transferred from available-for-sale to held-to-maturity. During the third quarter of 2013, $987.0 million of securities available-for-sale with unrealized losses of $25.3 million were transferred to securities held-to-maturity. This was done in response to rising interest rates.
The Companys leverage ratio stood at 6.91% at December 31, 2014, compared to 6.50% at December 31, 2013. 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 December 31, 2014 was $34.57 per share compared to $31.76 at December 31, 2013.
The Companys allowance for loan losses was $22.3 million or 1.68% of loans outstanding at December 31, 2014, compared to $20.9 million or 1.66% of loans outstanding at December 31, 2013. The increase in the allowance for loan losses was due to the increase in the size of the loan portfolio. Non-performing assets totaled $4.1 million at December 31, 2014, compared to $2.5 million at December 31, 2013.
The Companys Board of Directors voted a regular quarterly dividend of 12.00 cents ($0.12) per share on the Companys Class A common stock, and 6.00 cents ($0.06) per share on the Companys Class B common stock. The dividends were declared payable February 17, 2015 to stockholders of record on February 2, 2015.
The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-six 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, | |||||||
2014 | 2013 | |||||||
Assets |
||||||||
Cash and Due From Banks |
$ | 43,367 | $ | 59,956 | ||||
Federal Funds Sold and Interest-bearing Deposits In Other Banks |
261,991 | 34,722 | ||||||
Short-term Investments |
2,131 | 4,617 | ||||||
Securities Available-For-Sale (AFS) |
448,390 | 464,245 | ||||||
Securities Held-to-Maturity |
1,406,792 | 1,487,884 | ||||||
Federal Home Loan Bank of Boston stock, at cost |
24,916 | 18,072 | ||||||
Loans: |
||||||||
Commercial & Industrial |
149,732 | 76,675 | ||||||
Municipal |
41,850 | 32,737 | ||||||
Construction & Land Development |
22,744 | 33,058 | ||||||
Commercial Real Estate |
696,272 | 696,317 | ||||||
Residential Real Estate |
257,305 | 286,041 | ||||||
Consumer and Other |
12,188 | 9,658 | ||||||
Home Equity |
151,275 | 130,277 | ||||||
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|
|
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Total Loans |
1,331,366 | 1,264,763 | ||||||
Less: Allowance for Loan Losses |
22,318 | 20,941 | ||||||
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|
|
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Net Loans |
1,309,048 | 1,243,822 | ||||||
Bank Premises and Equipment, net |
24,182 | 23,400 | ||||||
Accrued Interest Receivable |
6,241 | 6,539 | ||||||
Goodwill |
2,714 | 2,714 | ||||||
Other Assets |
94,264 | 85,183 | ||||||
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Total Assets |
$ | 3,624,036 | $ | 3,431,154 | ||||
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Liabilities |
||||||||
Demand Deposits |
$ | 484,928 | $ | 475,862 | ||||
Interest Bearing Deposits: |
||||||||
Savings and NOW Deposits |
978,619 | 992,796 | ||||||
Money Market Accounts |
890,899 | 864,957 | ||||||
Time Deposits |
383,145 | 382,224 | ||||||
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|||||
Total Interest Bearing Deposits |
2,252,663 | 2,239,977 | ||||||
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|
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Total Deposits |
2,737,591 | 2,715,839 | ||||||
Borrowed Funds: |
||||||||
Securities Sold Under Agreements to Repurchase |
212,360 | 214,440 | ||||||
Other Borrowed Funds |
395,500 | 255,144 | ||||||
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|
|
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Total Borrowed Funds |
607,860 | 469,584 | ||||||
Other Liabilities |
50,002 | 33,176 | ||||||
Subordinated Debentures |
36,083 | 36,083 | ||||||
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|
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Total Liabilities |
3,431,536 | 3,254,682 | ||||||
Total Stockholders Equity |
192,500 | 176,472 | ||||||
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Total Liabilities & Stockholders Equity |
$ | 3,624,036 | $ | 3,431,154 | ||||
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Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Year ended December 31, 2014 and 2013
(in thousands)
Quarter ended December 31, | Year ended December 31, | |||||||||||||||
2014 | 2013 | 2014 | 2013 | |||||||||||||
Interest Income: |
||||||||||||||||
Loans |
$ | 12,340 | $ | 12,562 | $ | 50,108 | $ | 49,296 | ||||||||
Securities Held-to-Maturity |
7,841 | 7,495 | 31,745 | 16,615 | ||||||||||||
Securities Available-for-Sale |
800 | 789 | 3,166 | 13,369 | ||||||||||||
Federal Funds Sold and Interest-bearing Deposits In Other Banks |
81 | 101 | 352 | 485 | ||||||||||||
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Total Interest Income |
21,062 | 20,947 | 85,371 | 79,765 | ||||||||||||
Interest Expense: |
||||||||||||||||
Savings and NOW Deposits |
628 | 652 | 2,539 | 2,585 | ||||||||||||
Money Market Accounts |
682 | 677 | 2,715 | 2,472 | ||||||||||||
Time Deposits |
1,106 | 1,120 | 4,421 | 4,777 | ||||||||||||
Securities Sold Under Agreements to Repurchase |
107 | 93 | 391 | 361 | ||||||||||||
Other Borrowed Funds and Subordinated Debentures |
2,317 | 2,300 | 9,070 | 8,610 | ||||||||||||
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Total Interest Expense |
4,840 | 4,842 | 19,136 | 18,805 | ||||||||||||
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Net Interest Income |
16,222 | 16,105 | 66,235 | 60,960 | ||||||||||||
Provision For Loan Losses |
400 | 460 | 2,050 | 2,710 | ||||||||||||
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Net Interest Income After |
||||||||||||||||
Provision for Loan Losses |
15,822 | 15,645 | 64,185 | 58,250 | ||||||||||||
Other Operating Income |
||||||||||||||||
Service Charges on Deposit Accounts |
1,995 | 2,073 | 8,063 | 8,113 | ||||||||||||
Lockbox Fees |
754 | 733 | 3,099 | 3,079 | ||||||||||||
Net Gain on Sales of Investments |
450 | 354 | 450 | 3,019 | ||||||||||||
Net Gain on Sales of Loans |
536 | 326 | 757 | 1,564 | ||||||||||||
Other Income |
693 | 700 | 2,902 | 2,840 | ||||||||||||
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Total Other Operating Income |
4,428 | 4,186 | 15,271 | 18,615 | ||||||||||||
Operating Expenses |
||||||||||||||||
Salaries and Employee Benefits |
8,764 | 9,386 | 35,096 | 35,244 | ||||||||||||
Occupancy |
1,398 | 1,285 | 5,503 | 5,000 | ||||||||||||
Equipment |
620 | 552 | 2,329 | 2,298 | ||||||||||||
FDIC Assessment |
494 | 478 | 1,970 | 1,790 | ||||||||||||
Other |
3,230 | 2,989 | 11,832 | 11,480 | ||||||||||||
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Total Operating Expenses |
14,506 | 14,690 | 56,730 | 55,812 | ||||||||||||
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Income Before Income Taxes |
5,744 | 5,141 | 22,726 | 21,053 | ||||||||||||
Income Tax Expense |
121 | 116 | 866 | 1,007 | ||||||||||||
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Net Income |
$ | 5,623 | $ | 5,025 | $ | 21,860 | $ | 20,046 | ||||||||
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Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
December 31, | December 31, | |||||||
2014 | 2013 | |||||||
Assets |
||||||||
Cash and Due From Banks |
$ | 65,599 | $ | 59,603 | ||||
Federal Funds Sold and Interest-Bearing Deposits in Other Banks |
129,472 | 174,264 | ||||||
Securities Available-For-Sale (AFS) |
500,928 | 997,983 | ||||||
Securities Held-to-Maturity (HTM) |
1,499,995 | 812,448 | ||||||
Total Loans |
1,307,888 | 1,184,912 | ||||||
Less: Allowance for Loan Losses |
21,876 | 20,452 | ||||||
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Net Loans |
1,286,012 | 1,164,460 | ||||||
Unrealized (Loss) Gain on Securities AFS and HTM Transfers |
(20,172 | ) | (6,236 | ) | ||||
Bank Premises and Equipment |
23,516 | 23,551 | ||||||
Accrued Interest Receivable |
7,095 | 6,247 | ||||||
Goodwill |
2,714 | 2,714 | ||||||
Other Assets |
88,040 | 81,121 | ||||||
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Total Assets |
$ | 3,583,199 | $ | 3,316,155 | ||||
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Liabilities |
||||||||
Demand Deposits |
$ | 481,035 | $ | 441,193 | ||||
Interest Bearing Deposits: |
||||||||
Savings and NOW Deposits |
1,096,303 | 1,037,320 | ||||||
Money Market Accounts |
920,485 | 800,052 | ||||||
Time Deposits |
372,699 | 387,514 | ||||||
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Total Interest Bearing Deposits |
2,389,487 | 2,224,886 | ||||||
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Total Deposits |
2,870,522 | 2,666,079 | ||||||
Borrowed Funds: |
||||||||
Securities Sold Under Agreements to Repurchase |
216,937 | 203,888 | ||||||
Other Borrowed Funds |
235,627 | 194,949 | ||||||
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Total Borrowed Funds |
452,564 | 398,837 | ||||||
Other Liabilities |
35,033 | 42,017 | ||||||
Subordinated Debentures |
36,083 | 36,083 | ||||||
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Total Liabilities |
3,394,202 | 3,143,016 | ||||||
Total Stockholders Equity |
188,997 | 173,139 | ||||||
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Total Liabilities & Stockholders Equity |
$ | 3,583,199 | $ | 3,316,155 | ||||
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Total Average Earning Assets - QTD |
$ | 3,416,046 | $ | 3,342,186 | ||||
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Total Average Earning Assets - YTD |
$ | 3,438,283 | $ | 3,169,607 | ||||
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Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)
December 31, 2014 |
December 31, 2013 |
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Performance Measures: |
||||||||
Earnings per average Class A share, diluted, quarter |
$ | 1.01 | $ | 0.90 | ||||
Earnings per average Class A share, diluted, year-to-date |
$ | 3.93 | $ | 3.61 | ||||
Return on average assets, year-to-date |
0.61 | % | 0.60 | % | ||||
Return on average stockholders equity, year-to-date |
11.57 | % | 11.58 | % | ||||
Net interest margin (taxable equivalent), quarter |
2.18 | % | 2.20 | % | ||||
Net interest margin (taxable equivalent), year-to-date |
2.22 | % | 2.21 | % | ||||
Efficiency ratio, year-to-date |
62.0 | % | 63.0 | % | ||||
Book value per share |
$ | 34.57 | $ | 31.76 | ||||
Tangible book value per share |
$ | 34.09 | $ | 31.27 | ||||
Tangible capital / tangible assets |
5.24 | % | 5.07 | % | ||||
Common Share Data: |
||||||||
Average Class A shares outstanding, diluted, quarter |
5,567,855 | 5,557,419 | ||||||
Average Class A shares outstanding, diluted, year-to-date |
5,562,209 | 5,557,693 | ||||||
Shares outstanding Class A |
3,600,729 | 3,580,404 | ||||||
Shares outstanding Class B |
1,967,180 | 1,976,180 | ||||||
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Total shares outstanding at period end |
5,567,909 | 5,556,584 | ||||||
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Asset Quality and Other Data: |
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Allowance for loan losses / loans |
1.68 | % | 1.66 | % | ||||
Nonaccrual loans |
$ | 4,146 | $ | 2,549 | ||||
Nonperforming assets |
$ | 4,146 | $ | 2,549 | ||||
Loans 90 days past due and still accruing |
$ | | $ | | ||||
Accruing troubled debt restructures |
$ | 3,296 | $ | 5,969 | ||||
Net charge-offs, year-to-date |
$ | 673 | $ | 966 | ||||
Leverage ratio |
6.91 | % | 6.50 | % | ||||
Tier 1 risk weighted capital ratio |
13.87 | % | 13.67 | % | ||||
Total risk weighted capital ratio |
15.12 | % | 14.92 | % | ||||
Total risk weighted assets |
$ | 1,779,573 | $ | 1,660,881 |