Century Bank has increased its shareholder dividend for the first time since 2003, according to its second-quarter earnings statement.
The board of directors for the bank’s holding company, Century Bancorp, voted to increase its regular quarterly dividend from $0.12 per share to $0.14 per share on Class A common stock and from $0.06 per share to $0.07 per share on Class B common stock.
The bank saw second quarter net income increase 6.2 percent to $10.06 million, or $1.81 per Class A share diluted, compared to $9.466 million, or $1.70 per Class A share diluted, during the second quarter of 2019.
Year to date through June 30, Century Bank had net income of $19.72 million compared to $18.88 million for the first six months of 2019. Total assets have increased 8.3 percent since the end of 2019, from $5.49 billion to $5.95 billion on June 30.
The bank saw an increase in net interest income, though its net interest margin has gone down. Net interest income for the six months ending June 30 was $51 million compared to $46.7 million for the same six months in 2019. The bank said the 9.3 percent increase was primarily due to decreasing interest expenses as a result of falling interest rates.
Declining interest rates also continued to increase margin pressure, as the net interest margin decreased to 2.04 percent on June 30 compared to 2.09 percent for the first six months of 2019.
Economic uncertainties from the coronavirus pandemic and higher loan balances led Century Bank to increase its provision for loan losses from $625,000 for the six months ending June 30, 2019, to $2.77 million for the first six months of 2020.
While the bank’s allowance for loan losses has increased this year, the ratio to outstanding loans went down, thanks in part to the Paycheck Protection Program. Century’s allowance for loan losses was $32.5 million or 1.16 percent of loans outstanding on June 30, compared to $29.6 million or 1.22 percent of loans outstanding on Dec. 31, 2019, and $29.1 million or 1.26 percent of loans outstanding on June 30, 2019.
Century said it had approximately $230 million in PPP loans, which are guaranteed by the U.S. Small Business Administration and do not require any allowance for loan losses. The bank said it did still increase allocations for economic factors associated with the COVID-19 pandemic.
