In the last full quarter before its upcoming merger with Eastern Bank, Medford-based Century Bank had record third quarter earnings.
Century Bank had third quarter net income of $11.73 million, or $2.11 per class A share diluted, an increase of 7.8 percent compared to net income of $10.88 million, or $1.96 per class A share diluted, in the third quarter of 2020.
The bank’s year-to-date net income through Sept. 30 was $33.3 million, or $5.99 per class A share diluted, an increase of 8.9 percent compared to the same time period last year, when net income was $30.6 million, or $5.50 per class A share diluted.
Year-to-date net interest income totaled $88.9 million compared to $78.4 million for the same period in 2020. Century Bank said in a statement that the 13.5 percent increase was primarily due to a decrease in interest expense as a result of falling interest rates. The net interest margin did fall from 2.01 percent in the first nine months of 2020 to 1.81 percent for the same period in 2021. The bank attributed the decrease primarily to increased margin pressure as a result of decreases in interest rates across the yield curve in 2020.
After making a $3.7 million provision for loan losses in the first nine months of 2020, Century had a credit of $750,000 for the same period in 2021.
Total operating expenses were $62.6 million for the first nine months of 2021, an increase of 17.3 percent compared to the same period last year, when operating expense were $53.4 million. Century said the increase was primarily attributable to a $3.4 million increase in salaries and employee benefits, as well as a $5.3 million increase in other expenses.
Century attributed the increase of $5.3 million in other expenses primarily to merger-related expenses, increased FDIC insurance expense because of increased deposits and assessment rates, and increased COVID-19 related expenses.
The bank said the increase in salaries and employee benefits resulted primarily from 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.
Century’s total assets as of Sept. 30 were $7.13 billion, a 12.1 percent increase since the end of 2020. The bank had about $2.92 billion in total loans on Sept. 30, down about 2 percent compared to the end of 2020. Total deposits at the end of the third quarter were $6.2 billion, up from $5.45 billion as the end of December.
Century has two loans totaling $16.3 million with COVID-19 modifications. Both loans were performing according to the modified terms. The bank had four loans receiving COVID modifications on June 30.
The company’s quarterly shareholder dividend has remained the same since the fourth quarter of 2020: $0.18 per share on class A common stock and $0.09 per share on class B common stock.
Eastern Bank’s acquisition of Century is expected to close in the fourth quarter.
