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: January 17, 2017

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)

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 17, 2017, 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, 2016 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 17, 2017.

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 18, 2017

EX-99.1

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 7^th CONSECUTIVE YEAR OF RECORD EARNINGS FOR

2016, UP 6.6%; ASSET GROWTH TO RECORD SIZE OF $4.5 BB; REGULAR DIVIDEND DECLARED

Medford, MA, January 17, 2017—Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $24,534,000 for the year ended December 31, 2016, or $4.41 per Class A share diluted, an increase of 6.6% compared to net income of $23,021,000, or $4.13 per Class A share diluted, for the same period a year ago. Total assets increased 13.1% from $3.9 billion at December 31, 2015 to $4.5 billion at December 31, 2016. For the quarter ended December 31, 2016, net income totaled a record $6,500,000 or $1.17 per Class A share diluted, an increase of 8.9% compared to net income of $5,971,000, or $1.07 per Class A share diluted, for the same period a year ago.

Net interest income totaled $74.1 million for the year ended December 31, 2016 compared to $70.0 million for the same period in 2015. The 5.9% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin decreased from 2.18% on a fully taxable equivalent basis in 2015 to 2.12% for the same period in 2016. This was primarily the result of a decrease in rates on earning assets. The average balances of earning assets increased by 10.3% combined with a similar increase in average deposits. Also, interest expense increased 12.3% as a result of an increase in deposit balances.

The provision for loan losses increased by $1,175,000 from $200,000 for the year ended December 31, 2015 to $1,375,000 for the same period in 2016, primarily as a result of an increase in loan balances. The Company’s effective tax rate decreased from 2.3% in 2015 to (1.5%) in 2016 primarily as a result of an increase in tax-exempt income.

-more-

At December 31, 2016, total equity was $240.0 million compared to $214.5 million at December 31, 2015. The Company’s equity increased primarily as a result of earnings and a decrease in other comprehensive loss, net of taxes, offset somewhat by dividends paid. Other comprehensive loss, net of taxes, decreased primarily as a result of a decrease in unrealized losses on securities transferred from available-for-sale to held-to-maturity and amortization of the pension liability. This was offset, somewhat, by an increase in unrealized losses on securities available-for-sale.

The Company’s leverage ratio stood at 6.28% at December 31, 2016, compared to 6.79% at December 31, 2015. 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 December 31, 2016 was $43.11 per share compared to $38.53 at December 31, 2015.

The Company’s allowance for loan losses was $24.4 million or 1.27% of loans outstanding at December 31, 2016, compared to $23.1 million or 1.33% of loans outstanding at December 31, 2015. The change in the ratio of the allowance for loan losses to loans outstanding, when compared to December 31, 2015, was primarily due to changes in portfolio composition and lower historical loss rates. Non-performing assets totaled $1.1 million at December 31, 2016, compared to $2.3 million at December 31, 2015.

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, 2017 to stockholders of record on February 1, 2017.

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)

	December 31, 2016		December 31, 2015
Assets
Cash and Due From Banks	$	62,400	$	52,877
Federal Funds Sold and Interest-bearing Deposits In Other Banks		173,751		167,847
Short-term Investments		3,183		3,233
Securities Available-for-Sale (AFS)		499,297		404,623
Securities Held-to-Maturity		1,653,986		1,438,903
Federal Home Loan Bank of Boston stock, at cost		21,042		28,807
Loans:
Commercial & Industrial		612,503		452,235
Municipal		135,418		85,685
Construction & Land Development		14,928		27,421
Commercial Real Estate		696,173		721,506
Residential Real Estate		241,357		255,346
Consumer and Other		11,697		11,323
Home Equity		211,857		178,020
Total Loans		1,923,933		1,731,536
Less: Allowance for Loan Losses		24,406		23,075
Net Loans		1,899,527		1,708,461
Bank Premises and Equipment, net		23,417		24,106
Accrued Interest Receivable		9,645		8,002
Goodwill		2,714		2,714
Other Assets		113,646		107,868
Total Assets	$	4,462,608	$	3,947,441
Liabilities
Demand Deposits	$	689,286	$	541,955
Interest Bearing Deposits:
Savings and NOW Deposits		1,304,394		1,070,585
Money Market Accounts		1,181,179		989,094
Time Deposits		478,359		473,426
Total Interest Bearing Deposits		2,963,932		2,533,105
Total Deposits		3,653,218		3,075,060
Borrowed Funds:
Securities Sold Under Agreements to Repurchase		182,280		197,850
Other Borrowed Funds		293,000		368,000
Total Borrowed Funds		475,280		565,850
Other Liabilities		57,986		55,904
Subordinated Debentures		36,083		36,083
Total Liabilities		4,222,567		3,732,897
Total Stockholders’ Equity		240,041		214,544
Total Liabilities & Stockholders’ Equity	$	4,462,608	$	3,947,441

Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Income (unaudited)

For the Quarter and Year ended December 31, 2016 and 2015

(in thousands)

	Quarter ended December 31,						Year ended December 31,
	2016			2015			2016			2015
Interest Income:
Loans	$	14,384		$	13,531		$	57,764		$	52,128
Securities Held-to-Maturity		8,501			8,015			32,679			34,388
Securities Available-for-Sale		1,474			842			5,020			3,141
Federal Funds Sold and Interest-bearing Deposits In Other Banks		330			108			1,236			436
Total Interest Income		24,689			22,496			96,699			90,093
Interest Expense:
Savings and NOW Deposits		1,161			768			4,020			2,817
Money Market Accounts		1,057			762			3,542			3,038
Time Deposits		1,490			1,293			5,706			4,887
Securities Sold Under Agreements to Repurchase		109			116			472			487
Other Borrowed Funds and Subordinated Debentures		2,110			2,335			8,877			8,905
Total Interest Expense		5,927			5,274			22,617			20,134
Net Interest Income		18,762			17,222			74,082			69,959
Provision For Loan Losses		200			—			1,375			200
Net Interest Income After
Provision for Loan Losses		18,562			17,222			72,707			69,759
Other Operating Income
Service Charges on Deposit Accounts		2,025			1,944			7,907			7,732
Lockbox Fees		733			753			3,164			3,211
Net Gain on Sales of Investments		—			424			64			594
Net Gain on Sales of Loans		—			292			1,331			1,034
Other Income		942			1,035			3,756			3,422
Total Other Operating Income		3,700			4,448			16,222			15,993
Operating Expenses
Salaries and Employee Benefits		9,688			9,895			40,048			38,596
Occupancy		1,508			1,495			6,147			6,116
Equipment		758			677			2,845			2,626
FDIC Assessment		399			550			1,902			2,152
Other		3,803			3,177			13,815			12,708
Total Operating Expenses		16,156			15,794			64,757			62,198
Income Before Income Taxes		6,106			5,876			24,172			23,554
Income Tax (Benefit) Expense		(394	)		(95	)		(362	)		533
Net Income	$	6,500		$	5,971		$	24,534		$	23,021

Century Bancorp, Inc. and Subsidiaries

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

(in thousands)

	December 31, 2016			December 31, 2015
Assets
Cash and Due From Banks	$	71,023		$	67,700
Federal Funds Sold and Interest-Bearing Deposits in Other Banks		235,339			157,765
Securities Available-For-Sale (AFS)		498,654			454,638
Securities Held-to-Maturity (HTM)		1,533,032			1,603,530
Total Loans		1,838,136			1,507,546
Less: Allowance for Loan Losses		23,872			22,559
Net Loans		1,814,264			1,484,987
Unrealized (Loss)Gain on Securities AFS and HTM Transfers		(9,504	)		(14,430	)
Bank Premises and Equipment		23,656			24,261
Accrued Interest Receivable		8,390			7,537
Goodwill		2,714			2,714
Other Assets		113,924			103,918
Total Assets	$	4,291,492		$	3,892,620
Liabilities
Demand Deposits	$	609,159		$	518,161
Interest Bearing Deposits:
Savings and NOW Deposits		1,322,714			1,139,449
Money Market Accounts		1,041,404			951,197
Time Deposits		452,562			408,711
Total Interest Bearing Deposits		2,816,680			2,499,357
Total Deposits		3,425,839			3,017,518
Borrowed Funds:
Securities Sold Under Agreements to Repurchase		222,956			245,276
Other Borrowed Funds		321,891			338,025
Total Borrowed Funds		544,847			583,301
Other Liabilities		57,602			51,247
Subordinated Debentures		36,083			36,083
Total Liabilities		4,064,371			3,688,149
Total Stockholders’ Equity		227,121			204,471
Total Liabilities & Stockholders’ Equity	$	4,291,492		$	3,892,620
Total Average Earning Assets—QTD	$	4,287,001		$	3,771,711
Total Average Earning Assets—YTD	$	4,105,161		$	3,723,479

Century Bancorp, Inc. and Subsidiaries

Consolidated Selected Key Financial Information (unaudited)

(in thousands, except share data)

	December 31, 2016			December 31, 2015
Performance Measures:
Earnings per average Class A share, diluted, quarter	$	1.17		$	1.07
Earnings per average Class A share, diluted, year	$	4.41		$	4.13
Return on average assets, year		0.57	%		0.59	%
Return on average stockholders’ equity, year		10.80	%		11.26	%
Net interest margin (taxable equivalent), quarter		2.04	%		2.12	%
Net interest margin (taxable equivalent), year		2.12	%		2.18	%
Efficiency ratio, year—Non-GAAP (1)		62.7	%		64.1	%
Book value per share	$	43.11		$	38.53
Tangible book value per share—Non-GAAP (1)	$	42.62		$	38.04
Capital / assets		5.38	%		5.44	%
Tangible capital / tangible assets—Non-GAAP (1)		5.32	%		5.37	%
Common Share Data:
Average Class A shares outstanding, diluted, quarter & year		5,567,909			5,567,909
Shares outstanding Class A		3,600,729			3,600,729
Shares outstanding Class B		1,967,180			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		1.27	%		1.33	%
Nonaccrual loans	$	1,084		$	2,336
Nonperforming assets	$	1,084		$	2,336
Loans 90 days past due and still accruing	$	—		$	—
Accruing troubled debt restructures	$	3,526		$	2,893
Net (recoveries)charge-offs, year-to-date	$	(45	)	$	(557	)
Leverage ratio		6.28	%*		6.79	%*
Common equity tier 1 risk weighted capital ratio		10.41	%*		10.04	%*
Tier 1 risk weighted capital ratio		11.70	%*		11.55	%*
Total risk weighted capital ratio		12.72	%*		12.54	%*
Total risk weighted assets	$	2,398,796	*	$	2,325,258	*
*  computed utilizing Basel III regulatory capital framework.
(1) Non-GAAP Financial Measures are reconciled in the following tables:
Calculation of Efficiency ratio:
Total operating expenses(numerator)	$	64,757		$	62,198
Net interest income	$	74,082		$	69,959
Total other operating income		16,222			15,993
Tax equivalent adjustment		12,917			11,140
Total income(denominator)	$	103,221		$	97,092
Efficiency ratio, year—Non-GAAP		62.7	%		64.1	%
Calculation of tangible book value per share:
Total stockholders’ equity	$	240,041		$	214,544
Less: goodwill		2,714			2,714
Tangible stockholders’ equity(numerator)	$	237,327		$	211,830
Total shares outstanding at period end(denominator)		5,567,909			5,567,909
Tangible book value per share—Non-GAAP	$	42.62		$	38.04
Book value per share—GAAP	$	43.11		$	38.53
Calculation of tangible capital / tangible assets:
Total stockholders’ equity	$	240,041		$	214,544
Less: goodwill		2,714			2,714
Tangible stockholders’ equity(numerator)	$	237,327		$	211,830
Total assets	$	4,462,608		$	3,947,441
Less: goodwill		2,714			2,714
Tangible assets(denominator)	$	4,459,894		$	3,944,727
Tangible capital / tangible assets—Non-GAAP		5.32	%		5.37	%
Capital / assets—GAAP		5.38	%		5.44	%