Century Bancorp, Inc. Announces 24% Earnings Growth for Q3 2009; Assets at $2.1 BB; Regular Dividend Declared

Century Bancorp, Inc. (NASDAQ:CNBKA) (www.century-bank.com) (“the Company”) today announced net income of $3,182,000, or $0.58 per share diluted, for the quarter ended September 30, 2009, an increase of 24.3% as compared to net income of $2,559,000, or $0.46 per share diluted, for the quarter ended September 30, 2008. Total assets increased 13.9% from $1.8 billion at December 31, 2008 to $2.1 billion at September 30, 2009. For the first nine months of 2009, net income totaled $7,075,000, or $1.28 per share diluted, an increase of 13.5% when compared to net income of $6,235,000, or $1.12 per share diluted, for the same period a year ago.

On May 22, 2009, the FDIC announced a special assessment on insured institutions as part of its efforts to rebuild the Deposit Insurance Fund and help maintain public confidence in the banking system. The special assessment was five basis points of each FDIC-insured depository institution’s assets minus Tier 1 capital, as of June 30, 2009. The Company recorded a pre-tax charge of approximately $1.0 million in the second quarter of 2009 in connection with the special assessment.

Net interest income totaled $35.4 million for the first nine months of 2009 compared to $32.8 million for 2008. The 7.9% increase in net interest income for the period is mainly due to a 21.2% increase in the average balances of earning assets, combined with a similar increase in deposits. The increased volume was somewhat offset by a decrease of twenty-six basis points in the net interest margin. The net interest margin decreased from 2.94% on a fully taxable equivalent basis in 2008 to 2.68% on the same basis for 2009.

The provision for loan losses increased by $1.2 million from $3.0 million for the nine months ended September 30, 2008 to $4.2 million, for the same period in 2009, as a result of increases in loans on nonaccrual as well as continued deterioration in overall economic conditions such as increased unemployment. The Company capitalized on favorable market conditions and realized $1.1 million of net gains on sales of investments during the first nine months of 2009. Included in operating expenses for the third quarter and first nine months of 2009 are FDIC assessments of $638,000 and $2.8 million, respectively, as compared to $212,000 and $390,000 for the same periods in 2008. FDIC assessments increased primarily as a result of the special assessment charge of approximately $1.0 million recorded in the second quarter of 2009 as well as an increase in the assessment rate beginning the second quarter of 2009.

The Company’s effective tax rate declined from 23.7% for the nine months ended September 30, 2008 to 10.7% for the same period in 2009 primarily as a result of an increase in tax-exempt income.

At September 30, 2009, total equity was $131.2 million compared to $120.5 million at December 31, 2008. The Company’s equity increased as a result of earnings and a decrease in accumulated other comprehensive loss, net of taxes, offset somewhat by dividends paid. The Company’s leverage ratio stood at 8.02% at September 30, 2009, compared to 8.94% at September 30, 2008. Book value as of September 30, 2009 was $23.72 per share compared to $22.08 at September 30, 2008.

The Company’s allowance for loan losses was $14.2 million or 1.62% of loans outstanding at September 30, 2009, compared to $11.1 million, or 1.33% of loans outstanding at December 31, 2008 and $10.3 million, or 1.28% of loans outstanding at September 30, 2008. Non-performing assets totaled $17.0 million at September 30, 2009, compared to $3.7 million at December 31, 2008 and $4.5 million at September 30, 2008. Non-performing assets increased primarily as a result of three loan relationships, one primarily commercial real estate and two construction.

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 November 16, 2009 to stockholders of record on November 2, 2009.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-two 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)
			September 30,			December 31,
Assets			2009			2008
Cash and Due From Banks			$	45,366		$	61,195
Federal Funds Sold and Interest-bearing Deposits In Other Banks				156,283			94,973
Short-term Investments				69,013			43,814
Securities Available-For-Sale (AFS)				662,437			495,585
Securities Held-to-Maturity				161,475			184,047
Federal Home Loan Bank of Boston stock, at cost				15,531			15,531
Loans:
Commercial & Industrial				133,497			141,373
Construction & Land Development				62,406			59,511
Commercial Real Estate				361,856			332,325
Residential Real Estate				193,590			194,644
Consumer and Other				7,806			9,258
Home Equity				115,884			98,954
Total Loans				875,039			836,065
Less: Allowance for Loan Losses				14,216			11,119
Net Loans				860,823			824,946
Bank Premises and Equipment				20,932			22,054
Accrued Interest Receivable				6,546			6,723
Goodwill				2,714			2,714
Core Deposit Intangible				993			1,283
Other Assets				49,134			48,701
Total Assets			$	2,051,247		$	1,801,566
Liabilities
Demand Deposits			$	277,667		$	277,217
Interest Bearing Deposits:
Savings and NOW Deposits				547,770			353,261
Money Market Accounts				402,632			308,177
Time Deposits				304,778			326,872
Total Interest Bearing				1,255,180			988,310
Total Deposits				1,532,847			1,265,527
Borrowed Funds:
Securities Sold Under Agreements to Repurchase				91,210			112,510
Other Borrowed Funds				205,449			238,558
Total Borrowed Funds				296,659			351,068
Other Liabilities				29,505			28,385
Investments Purchased Payable				25,000			-
Subordinated Debentures				36,083			36,083
Total Liabilities				1,920,094			1,681,063
Total Stockholders' Equity				131,153			120,503
Total Liabilities & Stockholders' Equity			$	2,051,247		$	1,801,566

Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Nine Months Ended September 30, 2009 and 2008
(in thousands)
		Quarter Ended September 30,							Nine Months Ended September 30,
		2009			2008				2009			2008
Interest Income:
Loans		$	12,118		$	12,583			$	35,933		$	36,727
Securities Held-to-Maturity			1,927			2,191				6,330			6,190
Securities Available-for-Sale			5,486			5,563				15,740			14,699
Federal Funds Sold and Interest-bearing Deposits In Other Banks			506			554				1,811			2,507
Total Interest Income			20,037			20,891				59,814			60,123
Interest Expense:
Savings and NOW Deposits			1,139			1,524				3,872			4,596
Money Market Accounts			1,266			2,061				4,919			5,480
Time Deposits			2,297			2,155				7,465			7,342
Securities Sold Under Agreements to Repurchase			98			330				423			1,205
Other Borrowed Funds and Subordinated Debentures			2,563			2,862				7,707			8,653
Total Interest Expense			7,363			8,932				24,386			27,276
Net Interest Income			12,674			11,959				35,428			32,847
Provision For Loan Losses			1,250			1,350				4,150			2,975
Net Interest Income After
Provision for Loan Losses			11,424			10,609				31,278			29,872
Other Operating Income
Service Charges on Deposit Accounts			2,032			2,032				6,060			6,041
Lockbox Fees			660			700				2,154			2,299
Net Gain on Sales of Investments			137			147				1,115			249
Write-down of Certain Investments to Fair Value			-			(76	)			-			(76	)
Other Income			570			774				2,280			1,963
Total Other Operating Income			3,399			3,577				11,609			10,476
Operating Expenses
Salaries and Employee Benefits			6,753			6,438				20,182			19,043
Occupancy			931			1,010				3,071			3,153
Equipment			544			727				1,826			2,199
FDIC Assessment			638			212				2,754			390
Other			2,362			2,664				7,128			7,393
Total Operating Expenses			11,228			11,051				34,961			32,178
Income Before Income Taxes			3,595			3,135				7,926			8,170
Income Tax Expense			413			576				851			1,935
Net Income		$	3,182		$	2,559			$	7,075		$	6,235

Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
		September 30,			September 30,
Assets		2009			2008
Cash and Due From Banks		$	58,800		$	58,007
Federal Funds Sold and Interest-Bearing Deposits in Other Banks			220,625			132,493
Securities Available-For-Sale (AFS)			594,628			452,181
Securities Held-to-Maturity			201,484			195,115
Total Loans			846,895			758,133
Less: Allowance for Loan Losses			12,843			9,729
Net Loans			834,052			748,404
Unrealized Gain on Securities AFS			2,941			510
Bank Premises and Equipment			21,511			22,449
Accrued Interest Receivable			7,167			6,968
Goodwill			2,714			2,714
Core Deposit Intangible			1,143			1,534
Other Assets			49,568			44,807
Total Assets		$	1,994,633		$	1,665,182
Liabilities
Demand Deposits		$	274,025		$	263,503
Interest Bearing Deposits:
Savings and NOW Deposits			497,193			366,912
Money Market Accounts			434,330			303,112
Time Deposits			325,255			268,424
Total Interest Bearing			1,256,778			938,448
Total Deposits			1,530,803			1,201,951
Borrowed Funds:
Securities Sold Under Agreements to Repurchase			93,935			95,636
Other Borrowed Funds			178,039			189,023
Total Borrowed Funds			271,974			284,659
Other Liabilities			30,677			21,205
Subordinated Debentures			36,083			36,083
Total Liabilities			1,869,537			1,543,898
Total Stockholders' Equity			125,096			121,284
Total Liabilities & Stockholders' Equity		$	1,994,633		$	1,665,182
Total Average Earning Assets - QTD		$	1,908,477		$	1,606,410
Total Average Earning Assets - YTD		$	1,863,632		$	1,537,922

Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)		September 30,				September 30,
		2009				2008
Performance Measures:
Earnings per average share, basic, quarter		$	0.58			$	0.46
Earnings per average share, diluted, quarter		$	0.58			$	0.46
Earnings per average share, basic, year-to-date		$	1.28			$	1.12
Earnings per average share, diluted, year-to-date		$	1.28			$	1.12
Return on average assets, year-to-date			0.47	%			0.50	%
Return on average stockholders' equity, year-to-date			7.56	%			6.87	%
Net interest margin (taxable equivalent), quarter			2.81	%			3.14	%
Net interest margin (taxable equivalent), year-to-date			2.68	%			2.94	%
Efficiency ratio, year-to-date			70.7	%			72.0	%
Book value per share		$	23.72			$	22.08
Tangible book value per share		$	23.05			$	21.34
Tangible capital / tangible assets			6.22	%			6.79	%
Common Share Data:
Average shares outstanding, basic, quarter			5,530,297				5,541,345
Average shares outstanding, basic, year-to-date			5,532,907				5,542,971
Average shares outstanding, diluted, quarter			5,533,622				5,542,404
Average shares outstanding, diluted, year-to-date			5,534,364				5,545,138
Shares outstanding Class A			3,514,267				3,513,607
Shares outstanding Class B			2,016,030				2,027,100
Total shares outstanding at period end			5,530,297				5,540,707
Assets Quality and Other Data:
Allowance for loan losses / loans			1.62	%			1.28	%
Nonaccrual loans		$	17,001			$	3,804
Nonperforming assets		$	17,001			$	4,509
Loans 90 days past due and still accruing		$	-			$	-
Accruing troubled debt restructures		$	511			$	-
Net charge-offs (recoveries), year-to-date		$	1,053			$	2,354
Leverage ratio			8.02	%			8.94	%
Tier 1 risk weighted capital ratio			14.95	%			15.46	%
Total risk weighted capital ratio			16.19	%			16.48	%
Total risk weighted assets		$	1,088,777			$	1,002,190