Century Bancorp posted a 5.8 percent increase in its net income during this year’s second quarter, no doubt boosted by an increase in loan volume.
The Medford-based parent of Century Bank and Trust Co. recorded net income totaling $5.9 million for the three-month period ended June 30, compared with $5.6 million for the same period last year. For the six months ended June 30, the company recorded net income of $10.9 million, a 3.4 percent increase from the $10.5 million it posted in the same period in 2014.
During that six-month period, an increase in average earning assets pushed up net interest income by 2.6 percent to $34.1 million from $33.3 million a year ago. The net interest margin decreased from 2.23 percent to 2.16 percent on a fully taxable equivalent basis.
Total assets increased about 7.5 percent to $3.9 billion at June 30 from $3.6 billion at the same time last year. Since the year-end 2014, Century Bancorp increased its total loans to $1.5 billion from $1.3 billion, representing an increase of about 16 percent. In particular, commercial and industrial loans almost doubled to $291 million from $149.7 million and municipal loans more than doubled, from $41.9 million to $87.2 million.
Changes in the portfolio composition lead the company to decrease its provision for loan losses from $1.06 million for this six-month period last year to $200,000 for that same period this year. The company’s effective tax rate also decreased from 4.7 percent last year to 4 percent this year, largely a result of an increase in tax-exempt income.
The company’s allowance for loan losses totaled $22.2 million or 1.44 percent of loans outstanding at June 30, compared with $22.3 million or 1.68 percent of loans outstanding at year-end 2014 and $21.7 million or 1.65 percent of loans outstanding at June 30, 2014. The change in the allowance for loan losses was primarily due to changes in portfolio composition. Non-performing assets totaled $4.1 million at June 30, compared with $4.1 million at Dec. 31, 2014 and $2.8 million at June 30, 2014.
The company’s board of directors voted a regular quarterly dividend of 12 cents per share on its Class A common stock, and 6 cents per share on its Class B common stock. The dividends were declared payable Aug. 17 to stockholders of record on Aug. 3.
