Century Bancorp (CNBKA) 8-K Century Bancorp, Inc. Announces Record Earnings for Q3, Up 24%; Asset

Exhibit 99.1

NEWS RELEASE

FOR IMMEDIATE RELEASE

Contact:	William P. Hornby, CPA
	whornby@centurybank.com
Phone:	781-393-4630
Fax:	781-393-4071

CENTURY BANCORP, INC. ANNOUNCES RECORD EARNINGS FOR Q3, UP 24%; ASSET

GROWTH TO $3.0 BB; REGULAR DIVIDEND DECLARED

Medford, MA, October 9, 2012—Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $14,261,000 for the nine months ended September 30, 2012, or $2.57 per Class A share diluted, an increase of 14.1% compared to net income of $12,504,000, or $2.26 per Class A share diluted, for the same period a year ago. Total assets increased 8.1% from $2.7 billion at December 31, 2011 to $3.0 billion at September 30, 2012. For the quarter ended September 30, 2012, net income totaled $5,682,000, or $1.02 per Class A share diluted, an increase of 24.0% compared to net income of $4,582,000, or $0.83 per Class A share diluted, for the same period a year ago.

Net interest income totaled $47.0 million for the first nine months of 2012 compared to $41.3 million for the same period in 2011. The 13.9% increase in net interest income for the period is due to a 10.5% increase in the average balances of earning assets, combined with a similar increase in average deposits. The net interest margin increased from 2.49% on a fully taxable equivalent basis in 2011 to 2.58% on the same basis for 2012. This was primarily the result of prepayment penalties that were collected during the third quarter. Also, interest expense decreased primarily as a result of the continued decline in market rates.

The provision for loan losses decreased by $350,000 from $3.6 million for the nine months ended September 30, 2011 to $3.3 million, for the nine months ended September 30, 2012, primarily as a result of changes in the composition of the loan portfolio. The Company capitalized on favorable market conditions for the first nine months ended September 30, 2012 and realized net gains on sales of investments of $1.1 million, compared to $1.2 million, for the same period in 2011. FDIC assessments decreased for the first nine months of 2012, primarily as a result of a decrease in the assessment rate, offset somewhat by an increase in the assessment base. The Company’s effective tax rate increased slightly from 7.5% in 2011 to 8.1% in 2012. The Company’s income tax rate has remained low primarily as a result of tax-exempt income.

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At September 30, 2012, total equity was $178.1 million compared to $160.6 million at December 31, 2011. The Company’s equity increased primarily as a result of earnings and other comprehensive income, net of taxes, offset somewhat by dividends paid. The Company’s leverage ratio stood at 6.95% at September 30, 2012, compared to 7.02% at September 30, 2011. This decline in the leverage ratio is due to an increase in assets, offset by an increase in stockholders’ equity. Book value as of September 30, 2012 was $32.10 per share compared to $29.43 at September 30, 2011.

The Company’s allowance for loan losses was $18.7 million or 1.75% of loans outstanding at September 30, 2012, compared to $16.6 million or 1.68% of loans outstanding at December 31, 2011 and $16.0 million, or 1.68% of loans outstanding at September 30, 2011. Non-performing assets totaled $5.9 million at September 30, 2012, compared to $7.0 million at December 31, 2011 and $7.4 million at September 30, 2011.

The Company’s Board of Directors voted a regular quarterly dividend of 12.00 cents ($0.12) per share on the Company’s Class A common stock, and 6.00 cents ($0.06) per share on the Company’s Class B common stock. The dividends were declared payable November 15, 2012 to stockholders of record on November 1, 2012.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-four full-service branches in the Greater Boston area, offers a full range of Business, Personal and Institutional Services.

Century Bank and Trust Company is a member of the FDIC and is an Equal Housing Lender.

This press release contains certain “forward-looking statements” with respect to the financial condition, results of operations and business of the Company. Actual results may differ from those contemplated by these statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements. The Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise.

Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Condition (unaudited)

(in thousands)

	September 30, 2012		December 31, 2011
Assets
Cash and Due From Banks	$	44,198	$	50,187
Federal Funds Sold and Interest-bearing Deposits In Other Banks		217,424		157,579
Short-term Investments		31,364		18,351
Securities Available-For-Sale (AFS)		1,229,099		1,258,676
Securities Held-to-Maturity		284,490		179,368
Federal Home Loan Bank of Boston stock, at cost		15,146		15,531
Loans:
Commercial & Industrial		78,567		82,404
Construction & Land Development		38,318		56,819
Commercial Real Estate		562,252		487,495
Residential Real Estate		262,426		239,307
Consumer and Other		6,661		7,681
Home Equity		116,699		110,786
Total Loans		1,064,923		984,492
Less: Allowance for Loan Losses		18,658		16,574
Net Loans		1,046,265		967,918
Bank Premises and Equipment		23,416		21,757
Accrued Interest Receivable		5,866		6,022
Goodwill		2,714		2,714
Other Assets		65,835		65,122
Total Assets	$	2,965,817	$	2,743,225
Liabilities
Demand Deposits	$	406,681	$	365,854
Interest Bearing Deposits:
Savings and NOW Deposits		832,525		708,988
Money Market Accounts		672,447		616,241
Time Deposits		431,630		433,501
Total Interest Bearing Deposits		1,936,602		1,758,730
Total Deposits		2,343,283		2,124,584
Borrowed Funds:
Securities Sold Under Agreements to Repurchase		176,060		143,320
Other Borrowed Funds		184,144		244,143
Total Borrowed Funds		360,204		387,463
Other Liabilities		48,135		34,446
Subordinated Debentures		36,083		36,083
Total Liabilities		2,787,705		2,582,576
Total Stockholders’ Equity		178,112		160,649
Total Liabilities & Stockholders’ Equity	$	2,965,817	$	2,743,225

Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Income (unaudited)

For the Quarter and Nine months ended September 30, 2012 and 2011

(in thousands)

	Quarter ended September 30,				Nine months ended September 30,
	2012		2011		2012		2011
Interest Income:
Loans	$	14,494	$	12,030	$	39,114	$	36,147
Securities Held-to-Maturity		1,744		1,304		5,131		4,595
Securities Available-for-Sale		5,671		6,042		17,054		17,104
Federal Funds Sold and Interest-bearing Deposits In Other Banks		170		262		457		967
Total Interest Income		22,079		19,638		61,756		58,813
Interest Expense:
Savings and NOW Deposits		584		592		1,671		2,023
Money Market Accounts		581		627		1,811		2,109
Time Deposits		1,493		2,512		4,774		7,285
Securities Sold Under Agreements to Repurchase		94		82		274		290
Other Borrowed Funds and Subordinated Debentures		2,107		1,987		6,215		5,826
Total Interest Expense		4,859		5,800		14,745		17,533
Net Interest Income		17,220		13,838		47,011		41,280
Provision For Loan Losses		1,250		1,200		3,250		3,600
Net Interest Income After Provision for Loan Losses		15,970		12,638		43,761		37,680
Other Operating Income
Service Charges on Deposit Accounts		1,977		2,031		5,887		5,854
Lockbox Fees		745		658		2,225		2,129
Net Gain on Sales of Investments		529		883		1,119		1,245
Other Income		854		931		2,481		2,651
Total Other Operating Income		4,105		4,503		11,712		11,879
Operating Expenses
Salaries and Employee Benefits		8,400		7,357		24,732		21,948
Occupancy		1,161		1,059		3,459		3,285
Equipment		627		608		1,754		1,700
FDIC Assessment		450		413		1,302		1,612
Other		3,070		2,618		8,712		7,495
Total Operating Expenses		13,708		12,055		39,959		36,040
Income Before Income Taxes		6,367		5,086		15,514		13,519
Income Tax Expense		685		504		1,253		1,015
Net Income	$	5,682	$	4,582	$	14,261	$	12,504

Century Bancorp, Inc. and Subsidiaries

Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)

(in thousands)

	September 30, 2012		September 30, 2011
Assets
Cash and Due From Banks	$	53,085	$	52,444
Federal Funds Sold and Interest-Bearing Deposits in Other Banks		212,417		305,717
Securities Available-For-Sale (AFS)		1,240,943		1,038,455
Securities Held-to-Maturity		266,686		189,100
Total Loans		1,019,609		946,905
Less: Allowance for Loan Losses		17,748		15,517
Net Loans		1,001,861		931,388
Unrealized Gain on Securities AFS		17,631		9,710
Bank Premises and Equipment		22,490		21,416
Accrued Interest Receivable		6,124		6,806
Goodwill		2,714		2,714
Other Assets		68,339		63,971
Total Assets	$	2,892,290	$	2,621,721
Liabilities
Demand Deposits	$	385,440	$	321,340
Interest Bearing Deposits:
Savings and NOW Deposits		845,057		728,238
Money Market Accounts		657,614		575,785
Time Deposits		413,124		489,808
Total Interest Bearing Deposits		1,915,795		1,793,831
Total Deposits		2,301,235		2,115,171
Borrowed Funds:
Securities Sold Under Agreements to Repurchase		166,941		121,750
Other Borrowed Funds		181,620		166,637
Total Borrowed Funds		348,561		288,387
Other Liabilities		37,066		29,160
Subordinated Debentures		36,083		36,083
Total Liabilities		2,722,945		2,468,801
Total Stockholders’ Equity		169,345		152,920
Total Liabilities & Stockholders’ Equity	$	2,892,290	$	2,621,721
Total Average Earning Assets - QTD	$	2,813,626	$	2,554,158
Total Average Earning Assets - YTD	$	2,739,655	$	2,480,177

Century Bancorp, Inc. and Subsidiaries

Consolidated Selected Key Financial Information (unaudited)

(in thousands, except share data)

	September 30, 2012			September 30, 2011
Performance Measures:
Earnings per average Class A share, diluted, quarter	$	1.02		$	0.83
Earnings per average Class A share, diluted, year-to-date	$	2.57		$	2.26
Return on average assets, year-to-date		0.66	%		0.64	%
Return on average stockholders’ equity, year-to-date		11.25	%		10.93	%
Net interest margin (taxable equivalent), quarter		2.73	%		2.42	%
Net interest margin (taxable equivalent), year-to-date		2.58	%		2.49	%
Efficiency ratio, year-to-date		61.8	%		62.0	%
Book value per share	$	32.10		$	29.43
Tangible book value per share	$	31.61		$	28.90
Tangible capital / tangible assets		5.92	%		6.02	%
Common Share Data:
Average Class A shares outstanding, diluted, quarter		5,549,810			5,541,646
Average Class A shares outstanding, diluted, year-to-date		5,548,133			5,541,711
Shares outstanding Class A		3,561,804			3,546,217
Shares outstanding Class B		1,986,880			1,994,380
Total shares outstanding at period end		5,548,684			5,540,597
Asset Quality and Other Data:
Allowance for loan losses / loans		1.75	%		1.68	%
Nonaccrual loans	$	5,458		$	6,103
Nonperforming assets	$	5,858		$	7,403
Loans 90 days past due and still accruing	$	—		$	38
Accruing troubled debt restructures	$	2,227		$	3,909
Net charge-offs, year-to-date	$	1,166		$	1,652
Leverage ratio		6.95	%		7.02	%
Tier 1 risk weighted capital ratio		14.44	%		14.82	%
Total risk weighted capital ratio		15.69	%		16.07	%
Total risk weighted assets	$	1,421,173		$	1,273,134