Century Bancorp Inc.'s second-quarter earnings rose 7%, as a lower tax rate and higher net interest income helped offset an increase in loan trouble and a larger assessment for deposit insurance.
The $2 billion-asset Medford, Mass., company said after the market closed Tuesday that it had net income of $2 million, or 36 cents a share, for the second quarter, up from $1.88 million, or 34 cents a share, a year earlier.
Century increased its provision for loan losses by 14%, to $1.1 million, citing continued economic deterioration and increased unemployment. Nonperforming loans jumped by 420%, to $17.1 million, primarily because of two construction loans and one commercial real estate loan.
Though the net interest margin declined 23 basis points, to 2.62%, net interest income climbed 12%, to $11.96 million, as deposits and earning assets rose.
The company's contribution to the deposit insurance fund shot up to $1.6 million for the quarter, including a $1 million special assessment. Century had paid $145,000 the year earlier. But its tax rate declined to 10% for the first half, from 27%.
Century declared a common stock dividend of 12 cents on Class A shares and 6 cents on Class B shares. It also reauthorized a stock repurchase program for 300,000 Class A shares, or just under 9% of the 3.5 million shares outstanding.