8-K

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report: April 13, 2021

Century Bancorp, Inc.

(Exact name of registrant as specified in its charter)

Massachusetts	0-15752	04-2498617
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer Identification No.)
400 Mystic Avenue Medford, MA		02155
(Address of principal executive offices)		(Zip Code)
	(781) 391-4000
	(Registrant’s telephone number, including area code)

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, $1.00 par value	CNBKA	Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933(§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition

The following information is furnished under Item 2.02 - “Results of Operations and Financial Condition” and such information, including the exhibits attached hereto, shall not be deemed “filed” for any purpose, including for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section. The information in this Current Report on Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing.

On April 13, 2021, Century Bancorp, Inc. issued a press release, a copy of which is attached hereto as Exhibit 99.1 and incorporated herein by reference, announcing its earnings for the first quarter ended March 31, 2021 and the declaration of a regular quarterly dividend on Century Bancorp Inc.’s Class A and Class B common stock.

Item 9.01 Financial Statements and Exhibits

(d) Exhibits

99.1	Century Bancorp, Inc. press release dated April 13, 2021.
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

CENTURY BANCORP, INC.

/s/ William P. Hornby

William P. Hornby, CPA

Chief Financial Officer and Treasurer

Dated: April 14, 2021

EX-99.1

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 EARNINGS FOR Q1 2021, UP 11.4%; RECORD ASSETS AND DEPOSITS; QUARTERLY DIVIDEND DECLARED

Medford, MA, April 13, 2021—Century Bancorp, Inc. (NASDAQ:CNBKA) (www.centurybank.com) (“the Company”) today announced net income of $10,770,000 for the quarter ended March 31, 2021, or $1.93 per Class A share diluted, an increase of 11.4% compared to net income of $9,666,000, or $1.74 per Class A share diluted, for the same period a year ago. Total assets increased 14.6% from $6.36 billion at December 31, 2020 to $7.29 billion at March 31, 2021.

The Company’s Board of Directors voted a regular quarterly dividend of 18.00 cents ($0.18) per share on the Company’s Class A common stock, and 9.00 cents ($0.09) per share on the Company’s Class B common stock. The dividends were declared payable May 17, 2021 to shareholders of record on May 3, 2021.

Net interest income totaled $28.6 million for the quarter ended March 31, 2021 compared to $25.2 million for the same period in 2020. The 13.4% increase in net interest income for the period is primarily due to a decrease in interest expense as a result of falling interest rates. The net interest margin decreased from 2.11% on a fully tax-equivalent basis for the first quarter of 2020 to 1.80% for the same period in 2021. This was primarily the result of increased margin pressure during the recent decrease in interest rates across the yield curve. The average balances of earning assets increased for 2021 compared to the same period last year, by $1.61 billion or 31.0%, combined with an average yield decrease of 1.03%, resulting in a decrease in interest income of $4.3 million. The average balance of interest-bearing liabilities increased for 2021 compared to the same period last year, by $1.19 billion or 27.9%, combined with an average interest-bearing liabilities interest cost decrease of 0.86%, resulting in a decrease in interest expense of $7.6 million.

The provision for loan losses decreased by $1,625,000 from $1,075,000 for the quarter ended March 31, 2020 compared to a credit of $550,000 for the same period in 2021. The provision for the first quarter of 2020 was primarily as a result of provisions related to the onset of the COVID-19 pandemic. The credit provision for the first quarter of 2021 was primarily attributable to a decline in loan balances exclusive of Payroll Protection Program (PPP) loans and a reduction in specific allocations to the allowance for loan losses.

1

The Company’s effective tax rate increased from 5.8% for the quarter ended March 31, 2020 to 13.5% for the same period in 2021. This was primarily as a result of an increase in taxable income relative to total income.

At March 31, 2021, total equity was $381.3 million compared to $370.4 million at December 31, 2020. The Company’s equity increased primarily as a result of earnings and a decrease in total accumulated other comprehensive loss, offset somewhat by dividends paid.

The Company’s leverage ratio stood at 6.16% at March 31, 2021, compared to 6.64% at December 31, 2020. The decrease in the leverage ratio was due to an increase in quarterly average assets, offset somewhat by an increase in stockholders’ equity. Book value as of March 31, 2021 was $68.00 per share compared to $66.53 at December 31, 2020.

The Company’s allowance for loan losses was $35.0 million or 1.17% of loans outstanding at March 31, 2021, compared to $35.5 million or 1.18% of loans outstanding at December 31, 2020, and $30.8 million or 1.23% of loans outstanding at March 31, 2020. The ratio of the allowance for loan losses to loans outstanding has decreased from March 31, 2020, primarily from approximately $213 million of qualifying PPP loans that are guaranteed by the U.S. Small Business Administration (SBA), which require no allowance for loan losses. Nonperforming assets totaled $942,000 at March 31, 2021, compared to $4.0 million at December 31, 2020, and $1.7 million at March 31, 2020.

As of March 31, 2021, the Company had COVID-19 modifications of 8 loans aggregating $36,152,000, primarily consisting of short-term payment deferrals. Of these modifications, $36,152,000, or 100%, were performing in accordance with their modified terms.

The Coronavirus Aid, Relief and Economic Security Act (CARES Act) allows companies to delay Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-13, Measurement of Credit Losses on Financial Instruments (CECL), including the current expected credit losses methodology for estimating allowances for credit losses. The Company elected to delay FASB ASU 2016-13. This ASU was delayed until the earlier of the date on which the national emergency concerning the COVID–19 outbreak declared by the President on March 15, 2020 terminates or December 31, 2020, with an effective retrospective implementation date of January 1, 2020. On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 was signed into law. The law changed the delayed implementation date to the earlier of the first day of the Company’s fiscal year that begins after the date on which the national emergency terminates or January 1, 2022.

Proposed Transaction with Eastern Bankshares, Inc.

On April 7, 2021, the Company and Eastern Bankshares, Inc. (“Eastern” ) (NASDAQ: EBC) entered into an Agreement and Plan of Merger pursuant to which, through a series of transactions, Eastern will acquire the Company in a cash transaction for total consideration valued at approximately $642 million. Under the terms of the Agreement and Plan of Merger, (i) each holder of Class A common stock will receive a cash payment of $115.28 per share of Class A common stock and (ii) each holder of Class B common stock will receive a cash payment of $115.28 per share of Class B common stock. The transaction is expected to close in the fourth quarter of 2021 and is subject to customary closing conditions, including approval by the shareholders of the Company and required regulatory approvals.

2

Additional information about the transaction can be found in the joint press release issued on April 7, 2021, which is available on the Investor Relations section of the Company’s website at www.centurybank.com.

Additional Information and Where to Find It

In connection with the proposed merger, the Company will provide its shareholders with a proxy statement and other relevant documents concerning the proposed transaction. Eastern will also file relevant materials in connection with its proposed acquisition of the Company. Shareholders of the Company are urged to read the proxy statement and other relevant documents and any amendments or supplements to those documents, because they will contain important information which should be considered before making any decision regarding the transaction. A free copy of the proxy statement, as well as other filings containing information about the Company and Eastern, when they become available, may be obtained at the SEC’s Internet site (http://www.sec.gov). Copies of the proxy statement may also be obtained, free of charge, from the Company’s website at https://investors.centurybank.com/, or by contacting Century’s Investor Relations at 400 Mystic Avenue, Medford, MA, Attention: William P. Hornby, Telephone: (781) 393-4630.

Certain Information Regarding Participants

The Company and Eastern and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies of the Company’s shareholders in connection with the proposed transaction. You can find information about the Company’s executive officers and directors in the materials filed by the Company with the SEC. Additional information regarding the interests of those participants and other persons who may be deemed participants in the transaction and a description of their direct and indirect interests, by security holdings or otherwise, may be obtained, with respect to the Company, by reading the Annual Report on Form 10-K filed by the Company with the SEC on March 10, 2021 and other relevant documents regarding the proposed merger to be filed with the SEC and, with respect to Eastern, by reading Eastern’s April 1, 2021 proxy statement for its 2021 annual meeting of shareholders filed by Eastern with the SEC on April 1, 2021 and other relevant documents regarding the proposed merger to be filed with the SEC. Free copies of these documents may be obtained as described in the preceding paragraph.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-seven 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.

Cautionary Note Regarding Forward-Looking Statements

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, which includes among other things, the ability of the Company and Eastern to satisfy the conditions set forth in the Agreement and Plan of Merger (as discussed above) and disruptions to the Company’s business during the pendency of the proposed merger (as discussed above). Actual performance and results of operations may differ materially from those projected or suggested in the forward-looking statements due to certain risks and uncertainties, which are included in more detail in the Annual Report on Form 10-K, as updated by Quarterly Reports on Form 10-Q and other filings submitted to the SEC. 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.

3

Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Condition (unaudited)

(in thousands)

Assets	March 31, 2021		December 31, 2020
Cash and Due From Banks	$	116,242	$	136,735
Federal Funds Sold and Interest-bearing Deposits In Other Banks		500,521		237,265
Securities Available-for-Sale (AFS)		265,620		284,116
Securities Held-to-Maturity		3,217,176		2,509,088
Federal Home Loan Bank of Boston stock, at cost		13,361		13,361
Loans:
Commercial & Industrial		1,315,295		1,314,245
Municipal		137,073		137,607
Construction & Land Development		7,854		10,909
Commercial Real Estate		796,660		789,836
Residential Real Estate		460,123		448,436
Consumer and Other		19,987		20,439
Home Equity		255,770		274,357
Total Loans		2,992,762		2,995,829
Less: Allowance for Loan Losses		34,952		35,486
Net Loans		2,957,810		2,960,343
Bank Premises and Equipment, net		39,750		39,062
Accrued Interest Receivable		13,981		13,283
Goodwill		2,714		2,714
Other Assets		162,149		162,867
Total Assets	$	7,289,324	$	6,358,834
Liabilities
Demand Deposits	$	1,321,084	$	1,103,878
Interest Bearing Deposits:
Savings and NOW Deposits		2,269,617		1,728,092
Money Market Accounts		2,324,557		2,074,108
Time Deposits		480,784		546,143
Total Interest Bearing Deposits		5,074,958		4,348,343
Total Deposits		6,396,042		5,452,221
Borrowed Funds:
Securities Sold Under Agreements to Repurchase		228,755		232,090
Other Borrowed Funds		151,769		177,009
Total Borrowed Funds		380,524		409,099
Other Liabilities		95,343		91,022
Subordinated Debentures		36,083		36,083
Total Liabilities		6,907,992		5,988,425
Total Stockholders’ Equity		381,332		370,409
Total Liabilities & Stockholders’ Equity	$	7,289,324	$	6,358,834

4

Century Bancorp, Inc. and Subsidiaries

Consolidated Comparative Statements of Income (unaudited)

For the quarter ended March 31, 2021 and 2020

(in thousands)

	Quarter ended March 31,
	2021			2020
Interest Income:
Loans	$	21,605		$	22,199
Securities Held-to-Maturity		13,117			15,293
Securities Available-for-Sale		630			1,693
Federal Funds Sold and Interest-bearing Deposits In Other Banks		179			610
Total Interest Income		35,531			39,795
Interest Expense:
Savings and NOW Deposits		1,118			3,725
Money Market Accounts		2,886			5,572
Time Deposits		1,581			3,172
Securities Sold Under Agreements to Repurchase		141			626
Other Borrowed Funds and Subordinated Debentures		1,238			1,499
Total Interest Expense		6,964			14,594
Net Interest Income		28,567			25,201
Provision For Loan Losses		(550	)		1,075
Net Interest Income After
Provision for Loan Losses		29,117			24,126
Other Operating Income:
Service Charges on Deposit Accounts		2,218			2,296
Lockbox Fees		996			930
Other Income		989			1,084
Total Other Operating Income		4,203			4,310
Operating Expenses:
Salaries and Employee Benefits		12,250			11,371
Occupancy		1,702			1,515
Equipment		949			837
Other		5,970			4,450
Total Operating Expenses		20,871			18,173
Income Before Income Taxes		12,449			10,263
Income Tax Expense		1,679			597
Net Income	$	10,770		$	9,666

5

Century Bancorp, Inc. and Subsidiaries

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

(in thousands)

	March 31, 2021			March 31, 2020
Assets
Cash and Due From Banks	$	135,050		$	77,723
Federal Funds Sold and Interest-Bearing Deposits in Other Banks		715,155			173,928
Securities Available-For-Sale (AFS)		288,969			271,972
Securities Held-to-Maturity (HTM)		2,816,215			2,299,750
Total Loans		2,981,994			2,447,962
Less: Allowance for Loan Losses		35,734			29,765
Net Loans		2,946,260			2,418,197
Unrealized (Loss)Gain on Securities AFS and HTM Transfers		(1,234	)		(3,152	)
Bank Premises and Equipment		39,639			35,445
Accrued Interest Receivable		14,000			12,639
Goodwill		2,714			2,714
Other Assets		172,748			160,053
Total Assets	$	7,129,516		$	5,449,269
Liabilities
Demand Deposits	$	1,195,863		$	758,173
Interest Bearing Deposits:
Savings and NOW Deposits		2,227,705			1,732,835
Money Market Accounts		2,296,286			1,480,399
Time Deposits		510,287			589,396
Total Interest Bearing Deposits		5,034,278			3,802,630
Total Deposits		6,230,141			4,560,803
Borrowed Funds:
Securities Sold Under Agreements to Repurchase		234,810			246,272
Other Borrowed Funds		152,686			181,756
Total Borrowed Funds		387,496			428,028
Other Liabilities		99,787			87,423
Subordinated Debentures		36,083			36,083
Total Liabilities		6,753,507			5,112,337
Total Stockholders’ Equity		376,009			336,932
Total Liabilities & Stockholders’ Equity	$	7,129,516		$	5,449,269
Total Average Earning Assets - QTD	$	6,802,333		$	5,193,612

6

Century Bancorp, Inc. and Subsidiaries

Consolidated Selected Key Financial Information (unaudited)

(in thousands, except share data)

	March 31, 2021			March 31, 2020
Performance Measures:
Earnings per average Class A share, diluted, quarter	$	1.93		$	1.74
Return on average assets, quarter		0.61	%		0.71	%
Return on average stockholders’ equity, quarter		11.62	%		11.54	%
Net interest margin (taxable equivalent), quarter		1.80	%		2.11	%
Efficiency ratio, Non-GAAP (1)		60.7	%		57.5	%
Book value per share	$	68.49		$	61.19
Tangible book value per share - Non-GAAP (1)	$	68.00		$	60.70
Capital / assets		5.23	%		6.12	%
Tangible capital / tangible assets - Non-GAAP (1)		5.20	%		6.08	%
Common Share Data:
Average Class A shares outstanding, diluted, quarter		5,567,909			5,567,909
Shares outstanding Class A		3,656,469			3,652,349
Shares outstanding Class B		1,911,440			1,915,560
Total shares outstanding at period end		5,567,909			5,567,909
Asset Quality and Other Data:
Allowance for loan losses / loans		1.17	%		1.23	%
Nonaccrual loans	$	942		$	1,701
Nonperforming assets	$	942		$	1,701
Loans 90 days past due and still accruing	$	—		$	—
Accruing troubled debt restructures	$	2,099		$	2,337
Net charge-offs (recoveries), quarter	$	(16	)	$	(144	)
Leverage ratio		6.16	%		7.26	%
Common equity tier 1 risk weighted capital ratio		11.24	%		11.87	%
Tier 1 risk weighted capital ratio		12.22	%		13.02	%
Total risk weighted capital ratio		13.19	%		14.04	%
Total risk weighted assets	$	3,591,013		$	3,036,664
(1) Non-GAAP Financial Measures are reconciled in the following tables:
Calculation of Efficiency ratio:
Total adjusted operating expenses(numerator)	$	20,871		$	18,173
Net interest income	$	28,567		$	25,201
Total other operating income		4,203			4,310
Tax equivalent adjustment		1,632			2,098
Total income(denominator)	$	34,402		$	31,609
Efficiency ratio - Non-GAAP		60.7	%		57.5	%
Calculation of tangible book value per share:
Total stockholders’ equity	$	381,332		$	340,687
Less: goodwill		2,714			2,714
Tangible stockholders’ equity(numerator)	$	378,618		$	337,973
Total shares outstanding at period end(denominator)		5,567,909			5,567,909
Tangible book value per share - Non-GAAP	$	68.00		$	60.70
Book value per share - GAAP	$	68.49		$	61.19
Calculation of tangible capital / tangible assets:
Total stockholders’ equity	$	381,332		$	340,687
Less: goodwill		2,714			2,714
Tangible stockholders’ equity(numerator)	$	378,618		$	337,973
Total assets	$	7,289,324		$	5,562,286
Less: goodwill		2,714			2,714
Tangible assets(denominator)	$	7,286,610		$	5,559,572
Tangible capital / tangible assets - Non-GAAP		5.20	%		6.08	%
Capital / assets - GAAP		5.23	%		6.12	%

7

XML

Document and Entity Information	Apr. 13, 2021
Cover [Abstract]
Entity Registrant Name	CENTURY BANCORP INC
Amendment Flag	false
Entity Central Index Key	0000812348
Document Type	8-K
Document Period End Date	Apr. 13, 2021
Entity Incorporation State Country Code	MA
Entity File Number	0-15752
Entity Tax Identification Number	04-2498617
Entity Address, Address Line One	400 Mystic Avenue
Entity Address, City or Town	Medford
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02155
City Area Code	(781)
Local Phone Number	391-4000
Written Communications	false
Soliciting Material	false
Pre Commencement Tender Offer	false
Pre Commencement Issuer Tender Offer	false
Security 12b Title	Class A Common Stock, $1.00 par value
Trading Symbol	CNBKA
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false