The holding company of Medford-based Century Bank reported net income of just $25,000 for the fourth quarter of 2017, a 99.6 percent decrease from the same period a year ago when the bank reported $6.5 million net income.

Century Bancorp reported net income of $22.3 million for 2017, or $4.01 per class A share diluted, a decrease of 9.1 percent compared to net income in for the year 2016 of $24.5 million, or $4.41 per Class A share diluted.

The sharp drop and reversal from the third quarter of 2017, when Century reported huge profits, can be attributed to the new tax reform law and the way banks account for their deferred tax assets and liabilities.

Under generally accepted accounting principles, many financial institutions determine the value of their DTAs based on the current enacted federal and state tax rates. So, by the very nature of the federal corporate rate going down, so too will the value of the deferred tax assets.

According to its earnings release, Century took an $8.4 million charge as a result of recalculating its deferred tax assets.

If not for the write-down, the bank would have had a very strong year.

Net interest income for the year was $85.6 million, up 15.6 percent from 2016. The net interest margin increased from 2.12 percent in 2016 to 2.25 percent in 2017.

Total assets increased 7.2 percent from $4.46 billion to $4.79 billion at the end of 2017. Total loans at the end of the year were roughly $2.5 billion, up from about $1.9 billion at the end of 2016. The loan growth was led by increases in commercial and industrial, commercial real estate and residential real estate.

Year over year, the provision for loan losses increased $415,000 to about $1.8 million.