Century Bancorp, the holding company for Medford-based Century Bank and Trust Co., today announced a 5.3 percent increase in its net income for the nine months ended Sept. 30, along with an 8.9 percent increase in total assets, despite a drop in its net interest income and net interest margin.
At the end of September, the company’s net income stood at $15 million, compared with $14.3 million for the same period a year ago. Assets increased to $3.4 billion from $3.1 billion over the same period.
Net interest income dropped 4.5 percent to $44.9 million, compared with $47 million for the same time frame in 2012. The company attributed the 4.6 percent drop to $3 million of prepayment penalties collected during the first nine months of 2012, compared with $424,000 for the first nine months of this year.
Provision for loan losses decreased $1 million to $2.3 million for the nine months ended Sept. 30, mainly the result of a lower level of charge-off activity and changes in portfolio composition. The company also capitalized on favorable market conditions for that period and realized net gains on sales of investments of $2.7 million, compared with $1.1 million for the same period last year. The company’s effective tax rate decreased to 5.6 percent in 2013 from 8.1 percent in 2012 mainly because of an increase in tax-exempt income.
The net interest margin decreased to 2.21 percent on a fully taxable equivalent basis in 2013 from 2.58 percent on the same basis last year, primarily the result of a decrease in asset yields, the company said in a statement.
Interest expense also decreased primarily because of the continued decline in market rates, and the average balances of earning assets increased 13.6 percent, along with a similar increase in average deposits.
The company’s allowance for loan losses was $21.3 million or 1.73 percent of loans outstanding at the end of September, compared with $19.2 million, or 1.73 percent of loans outstanding, at the end of 2012 and $18.7 million or 1.75 percent of loans outstanding at Sept. 30, 2012. The increase in the allowance for loan losses was due to the increase in the size and composition of the loan portfolio as well as qualitative factors. Non-performing assets totaled $3.7 million at Sept. 30, compared with $4.5 million at Dec. 31, 2012 and $5.9 million at Sept. 30, 2012.
The board of directors voted a regular quarterly dividend of 12 cents per share on the company’s Class A common stock, and 6 cents per share on the its Class B common stock. The dividends were declared payable Nov. 15 to stockholders of record on Nov. 1.
