After announcing its sale to Eastern Bank in early April, Century Bank saw earnings increase year-over-year by more than 7 percent in the second quarter.
Century Bank had second quarter net income of $10.82 million, or $1.94 per class A share diluted, up 7.6 percent from the second quarter of 2020, when net income was about $10.06 million, or $1.81 per class A share diluted.
Net income for the first six months of 2021 was $21.59 million, or $3.88 per class A share diluted, up 9.5 percent compared to the same period last year, which saw net income of $19.72 million, or $3.54 per class A share diluted.
The bank’s total assets have increased 14.2 percent since the end of 2020, from $6.36 billion to $7.26 billion on June 30.
With falling interest rates helping to lower the cost of deposits, Century Bank saw its net interest income increase to $58.6 million in the first six months of 2021 compared to $51 million for the same time period last year, a 14.8 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.
Century’s net interest margin did fall compared to last year. The net interest margin decreased from 2.04 percent in the first six months of 2020 to 1.81 percent for the same period this year. The bank said the decline was primarily the result of increased margin pressure during as interest rates decrease across the yield curve.
Expenses related to Century’s proposed merger with Eastern Bank have had an effect on the bank’s performance. Operating expenses totaled $41.9 million for the first six months of 2021, up 19 percent compared to the same period in 2020, when operating expenses were $35.2 million.
The increase in expenses during the first six months of the year included $3.4 billion which the bank primarily attributed to merger-related expenses, increased FDIC insurance expense as a result of increased deposits and assessment rates, and increased COVID-19 related expenses.
The bank also attributed higher operating expenses to a $2.9 million increase in salaries and employee benefits.
“Salaries and employee benefits increased for the first six months of 2021 mainly as a result of merit increases, lower bonus accruals during the same period in 2020 as a result of uncertainties from the COVID-19 pandemic, decreased deferred origination cost credits, and increased employee benefits including health insurance costs,” the bank said.
After making a $2.8 million provision for loan losses during the first six months of 2020 at the start of the COVID-19 pandemic, Century Bank had a $550,000 credit during the first six months of 2021.
Century as of June 30 had only four loans with COVID-19 modifications for a total of $16.5 million. The bank in the first quarter had eight loans receiving modifications. The bank said most of the remaining loans with modifications had short-term payment deferrals, and all of them were performing according to their modified terms.
The bank had about $3 billion in total loans on June 30, up just slightly compared to the end of 2020. Total deposits on June 30 were $6.37 billion, up from $5.45 billion at the end of December.
After increasing its quarterly dividend three times in 2020, the company has kept the same dividend amount for three straight quarters: $0.18 per share on Class A common stock and $0.09 per share on Class B common stock.
The third quarter could be the bank’s final full quarter before completing its sale. Eastern Bank Chairman and CEO Bob Rivers said this week that the deal could be completed in mid-November.
