In the quarter that ended just before announcing its sale to Eastern Bank, Century Bank saw its earnings increase by more than 11 percent compared to the same quarter last year.
Century Bank had net income of $10.77 million, or $1.93 per Class A share diluted, in the first quarter compared to about $9.67 million, or $1.74 per Class A share diluted, for the same quarter in 2020 at the start of the pandemic. The bank had net income of $11.6 million in the fourth quarter of 2020.
After increasing its quarterly dividend three times in 2020, the company will keep the same dividend amount as last quarter: $0.18 per share on Class A common stock and $0.09 per share on Class B common stock.
With falling interest rates helping to lower the cost of deposits over the past 12 months, Century Bank saw its net interest income increase to $28.6 million in the first quarter compared to $25.2 million in the first quarter of 2020, a 13.4 percent increase. The increase in net interest income was primarily due to a decrease in interest expense as a result of falling interest rates, the bank said in a statement announcing its first quarter earnings.
Lower interest rates still affected Century’s net interest margin, which declined from 2.11 percent in the first quarter of 2020 to 1.80 percent in the first quarter of 2021. The bank said the decline over that 12-month period primarily resulted from increased margin pressure as interest rates decreased across the yield curve.
A decline in loan balances, not including Paycheck Protection Program loans, in part led to the bank making a credit to its provision for loan losses of $550,000 in the first quarter. In the first quarter last year, Century had a $1.075 million provision for loan losses, and its total provision for loan losses was $5.8 million in 2020.
The allowance for loan losses was $35 million or 1.17 percent of loans outstanding in the first quarter compared to $35.5 million or 1.18 percent of loans outstanding at the end of 2020 and $30.8 million or 1.23 percent of loans outstanding in the first quarter of 2020. The ratio is lower compared to March 31 of last year mainly because Paycheck Protection Program loans are guaranteed by the U.S. Small Business Administration, and no allowance for loan losses is required. Century Bank has approximately $213 million of PPP loans.
Century has eight loans totaling $36.15 million receiving COVID-19 modifications, down from 20 at the end of 2020. All of these loans were performing according to their modified terms, the bank said.
The bank had about $3 billion in total loans, down just slightly compared to the end of 2020.
Total assets were $7.29 billion in the first quarter, up 14.6 percent since the end of 2020 when the bank had $6.36 billion in total assets. Total deposits in the first quarter reached nearly $6.4 billion, up from $5.45 billion as the end of December. The bank said it had records for assets and deposits in the first quarter.
Century Bank announced last week that it would be acquired by Eastern Bank for $642 million in an all-cash deal expected to close in the fourth quarter.
