A bump net interest income attributed to higher overall outstanding loan balances helped Medford-based Century Bancorp record a 30 percent year-over-year jump in net income in the first nine months, to $12.5 million from $9.65 million last year.

For the quarter ended Sept. 30, net income totaled $4.58 million, an increase of 40.3 percent compared to net income of $3.27 million for the third quarter of 2010, according to a statement. Total assets increased 9.1 percent in the first nine months, to $2.7 billion as of Sept. 30 from $2.4 billion at Dec. 31, 2010.

Net interest income totaled $41.3 million for the first nine months of 2011, compared to $38.5 million for the same period in 2010. The 7.3 percent increase in net interest income for the period was credited to a 10.3 percent increase in the average balances of earning assets, combined with a similar increase in average deposits.

The provision for loan losses fell $625,000 to $3.6 million for the first nine months, from $4.2 million for the nine months ended Sept. 30, 2010, primarily as a result of decreased provisions related to non-accrual loans, the company said. For the quarter and nine-month period ended Sept. 30, Century realized net gains on sales of investments of $883,000 and $1.2 million, respectively, compared to $0 and $1 million for the same periods in 2010.

The company said its effective tax rate fell to 7.5 percent in 2011 from 8.3 in 2010 primarily as a result of an increase in tax-exempt income.

Based on its most recent earnings, the company’s 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 its Class B common stock. The dividends were declared payable Nov.15  to stockholders of record on Nov. 1.

Century Bancorp is the parent company of Century Bank & Trust Co., which operates 24 branches in Eastern Massachusetts.