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UNITED STATES
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-KSB
ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
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Commission file number 000-21881
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CENTURY BANCORP, INC.
(Name of small business issuer in its charter)
North Carolina 56-1981518
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
22 Winston Street
Thomasville, North Carolina 27360
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(Address of principal executive offices) (Zip Code)
(336) 475-4663
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(Issuer's telephone number)
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Common Stock, no par value Nasdaq SmallCap Market
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(Title of class) (Name of each exchange on which registered)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No ____
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Check if there is no disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]
State issuer's revenues for its most recent fiscal year $6,948,352
State the aggregate market value of the voting stock held by non-affiliates
computed by reference to the price at which the stock was sold, or the average
bid and asked prices of such stock, as of a specified date within the past 60
days.
Common Stock, no par value -- $11,921,834 (based on the price at which the stock
was sold on September 15, 2000).
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Common Stock, no par value 1,105,019
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(Class) (Outstanding at September 15, 2000)
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Report to Stockholders for the year ended June 30, 2000
(the "2000 Annual Report"), are incorporated by reference into Part I and Part
II.
Portions of the Proxy Statement for the Annual Meeting of Stockholders to be
held on November 21, 2000 (the "Proxy Statement"), are incorporated by reference
into Part III.
Transitional Small Business Disclosure Format (Check one): Yes ____ No X
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
General
Prior to December 20, 1996, Home Savings, Inc., SSB ("Home Savings")
operated as a mutual North Carolina-chartered savings bank. On December 20,
1996, Home Savings converted from a North Carolina-chartered mutual savings bank
to a North Carolina-chartered stock savings bank (the "Conversion"). In
connection with the Conversion, all of the issued and outstanding capital stock
of Home Savings was acquired by Century Bancorp, Inc., a North Carolina
corporation ("Century Bancorp") which was organized to become the Home Savings'
holding company. At that time, Century Bancorp had an initial public offering of
its common stock, no par value (the "Common Stock").
Century Bancorp is a bank holding company registered with the Board of
Governors of the Federal Reserve System (the "Federal Reserve") under the Bank
Holding Company Act of 1956, as amended (the "BHCA") and the savings bank
holding company laws of North Carolina. Century Bancorp's and Home Savings'
principal office is located at 22 Winston Street, Thomasville, North Carolina.
Century Bancorp's primary activities consist holding certain indebtedness
outstanding from Home Savings' Employee Stock Ownership Plan (the "ESOP") and
owning Home Savings. Century Bancorp's principal sources of income are interest
payments received on the indebtedness from the ESOP, and dividends paid by Home
Savings to Century Bancorp, if any.
Home Savings was organized in 1915, and has been a member of the
Federal Home Loan Bank (the "FHLB") system and its deposits have been federally
insured since the late 1950's. Home Savings' deposits are insured by the Savings
Association Insurance Fund (the "SAIF") of the Federal Deposit Insurance
Corporation (the "FDIC") to the maximum amount permitted by law.
Home Savings conducts business through its full service office in
Thomasville, North Carolina. Home Savings' primary market area encompasses the
communities within a 10-mile radius of its office, which includes portions of
Davidson, Randolph and Guilford counties in North Carolina. At June 30, 2000,
Century Bancorp had total assets of $100.5 million, net loans of $87.3 million,
deposits of $73.8 million, investment securities of $10.8 million and
stockholders' equity of $17.9 million.
At June 30, 2000, Century Bancorp and Home Savings had 10 full-time
employees and 1 part-time employee.
Century Bancorp has no operations and conducts no significant business
of its own other than owning Home Savings and lending funds to the ESOP.
Accordingly, the discussion of the business which follows in this Form 10-KSB
concerns the business conducted by Home Savings, unless indicated otherwise.
Lending Activities
Home Savings is engaged primarily in the business of attracting
deposits from the general public and using those deposits to make mortgage loans
secured by real estate. Home Savings' primary source of revenue is interest and
fee income from its lending activities, consisting primarily of mortgage loans
for the purchase or refinancing of one-to-four family residential real property
located in its primary market area. Home Savings also makes loans secured by
multi-family and commercial properties, construction loans, home equity loans,
savings account loans and various types of consumer loans. Approximately 2.3% of
Home Savings' loan portfolio, before net items, is not secured by real estate.
On June 30, 2000, Home Savings' largest single outstanding loan had a balance of
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approximately $713,000. In addition to interest earned on loans, Home Savings
receives fees in connection with loan originations, loan servicing, loan
modifications, late payments, loan assumptions and other miscellaneous services.
Home Savings generally does not sell its loans; both fixed and adjustable rate
loans are originated with the intention that they will be held in Home Savings'
loan portfolio.
Home Savings' net loan portfolio totaled approximately $87.3 million at
June 30, 2000 representing approximately 86.8% of Home Savings' total assets at
such date. At June 30, 2000, 81.2% of Home Savings' loan portfolio, before net
items, was composed of one-to four-family residential mortgage loans.
Multi-family residential and commercial real estate loans represented 10.2% of
Home Savings' loan portfolio, before net items, on such date. Construction loans
and home equity loans represented 4.7% and 1.6%, respectively, of Home Savings'
loan portfolio, before net items, on such date. As of June 30, 2000, 11.7% of
the loans in Home Savings' loan portfolio had adjustable interest rates. Loans
maturing or repricing on or after June 30, 2001, consist of fixed rate real
estate loans of $65.7 million, adjustable rate real estate loans of $2.2 million
and other loans of $736,000; Home Savings has no other adjustable rate loans.
See Note C to the Financial Statements contained in the 2000 Annual Report.
Investment Securities
Interest and dividend income from investment securities generally
provides Home Savings' second largest source of income after interest on loans.
In addition, Home Savings receives interest income from deposits in other
financial institutions. At June 30, 2000, Century Bancorp's and Home Savings'
investment portfolio totaled approximately $10.8 million and consisted primarily
of U.S. government and agency securities, mortgage-backed securities, municipal
bonds, interest-earning deposits in other financial institutions, and stock of
the Federal Home Loan Mortgage Corporation and the FHLB of Atlanta.
Investments in mortgage-backed securities involve a risk that, because
of changes in the interest rate environment, actual prepayments will be greater
than estimated prepayments over the life of the security, which may require
adjustments to the amortization of any premium or accretion of any discount
relating to such instruments, thereby reducing the net yield on such securities.
There is also reinvestment risk associated with the cash flows from such
securities. In addition, the market value of such securities may be adversely
affected by changes in interest rates. See Note B to the Financial Statements
Contained in the 2000 Annual Report.
As a member of the FHLB of Atlanta, Home Savings is required to
maintain an investment in stock of the FHLB of Atlanta equal to the greater of
1% of Home Savings' outstanding home loans or 5% of its outstanding advances
from the FHLB of Atlanta. No ready market exists for such stock, which is
carried at cost. As of June 30, 2000, Home Savings' investment in stock of the
FHLB of Atlanta was $734,000.
North Carolina regulations require Home Savings to maintain a minimum
amount of liquid assets which may be invested in specified short-term
securities. See "-- Regulation of Home Savings - Liquidity."
Deposits and Borrowings
Deposits. Deposits are the primary source of Home Savings' funds for
lending and other investment purposes. Home Savings attracts both short-term and
long-term deposits from the general public by offering a variety of accounts and
rates. Home Savings offers passbook savings accounts, statement savings
accounts, negotiable order of withdrawal accounts, money market demand accounts,
non-interest-bearing checking accounts, and fixed interest rate certificates
with varying maturities. At June 30, 2000, 71.8% of Home Savings' deposits
consisted of certificate accounts, 7.2% consisted of passbook and statement
savings accounts, 20.6% consisted of interest-bearing transaction accounts and
0.4% consisted of noninterest-bearing transaction accounts. Deposit flows are
greatly influenced by economic conditions, the general level of interest rates,
competition, and other factors, including the restructuring of the thrift
industry. Home Savings' savings deposits traditionally have been obtained
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primarily from its primary market area. Home Savings utilizes traditional
marketing methods to attract new customers and savings deposits, including
television advertising, print media advertising and direct mailings. Home
Savings does not advertise for deposits outside of its local market area or use
the services of deposit brokers. See Note G to the Financial Statements
contained in the 2000 Annual Report.
In addition to deposits, Home Savings derives funds from loan principal
repayments, interest payments, investment income and principal repayments,
interest from its own interest-earning deposits, interest income and repayments
from mortgage-backed securities and otherwise from its operations. Loan
repayments are a relatively stable source of funds while deposit inflows and
outflows may be significantly influenced by general interest rates and money
market conditions.
Borrowings. Home Savings may use borrowings on a short-term basis to
compensate for reductions in the availability of funds from other sources.
Borrowings may also be used on a longer term basis for general business
purposes. Home Savings has a line of credit which it may use to obtain advances
from the FHLB of Atlanta to supplement its liquidity needs. The FHLB system
functions in a reserve credit capacity for savings institutions. As a member,
Home Savings is required to own capital stock in the FHLB of Atlanta and is
authorized to apply for advances from the FHLB of Atlanta on the security of
that stock and a floating lien on certain of its real estate secured loans and
other assets. Each credit program has its own interest rate and range of
maturities. Depending on the program, limitations on the amount of advances are
based either on a fixed percentage of an institution's net worth or on the FHLB
of Atlanta's assessment of the institution's creditworthiness. At June 30, 2000,
Home Savings had $8.0 million in outstanding borrowings. This advance is due to
be repaid on October 6, 2000 and bears interest at 7.4% per annum.
Results of Operations
Home Savings' results of operations are dependent primarily on net
interest income, which is the difference between the income earned on its
interest-earning assets, such as loans and investments, and the cost of its
interest-bearing liabilities, consisting of deposits and borrowings. Home
Savings' operations are affected to a much lesser degree by non-interest income,
such as transaction and other service fee income. Home Savings' net income is
also affected by, among other things, provisions for loan losses and operating
expenses. Home Savings' principal operating expenses, aside from interest
expense, are compensation and employee benefits, office occupancy costs, data
processing expenses and federal deposit insurance premiums. Home Savings'
results of operations are also significantly affected by general economic and
competitive conditions, particularly changes in market interest rates,
government legislation and policies concerning monetary and fiscal affairs,
housing and financial institutions and the attendant actions of regulatory
authorities.
Market Area
Home Savings' primary market area consists of the communities in a
10-mile radius around its office in Thomasville, North Carolina. This area
includes portions of Davidson, Randolph and Guilford counties in North Carolina.
Employment in Home Savings' primary market area is diversified among
manufacturing, agricultural, retail and wholesale trade, government, services
and utilities. The High Point-Thomasville area of North Carolina is considered
to be the furniture capital of the world, so the economy of Home Savings'
primary market area is greatly affected by the furniture and home furnishings
industry. Thomasville Furniture Industries, Inc. is the largest employer in
Thomasville. Other major employers include Community General Hospital and
Parkdale Mills.
Subsidiaries
Home Savings is the only subsidiary of Century Bancorp. As a North
Carolina chartered savings bank, Home Savings is able to invest up to 10% of its
total assets in subsidiary service corporations. However, any investment in a
service corporation which would cause Home Savings to exceed an investment of 3%
of assets must receive prior approval of the FDIC. Home Savings does not have
any active subsidiary.
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Competition
Home Savings faces strong competition both in attracting deposits and
making real estate and other loans. Its most direct competition for deposits has
historically come from other savings institutions, credit unions and commercial
banks located in its primary market area, including large financial institutions
which have greater financial and marketing resources available to them. As of
June 30, 2000, there were 8 depository institutions with 14 offices in
Thomasville, North Carolina. Based upon 1999 comparative data, Home Savings had
16.9% of the deposits in Thomasville, and 5.4% of the deposits in Davidson
County. Home Savings has also faced significant competition for investors' funds
from short-term money market securities and other corporate and government
securities. The ability of Home Savings to attract and retain savings deposits
depends on its ability to generally provide a rate of return, liquidity and risk
comparable to that offered by competing investment opportunities.
Home Savings experiences strong competition for real estate loans from
other savings institutions, commercial banks, credit unions and mortgage banking
companies. It competes for loans primarily through the interest rates and loan
fees it charges, the efficiency and quality of services it provides borrowers,
and its more flexible underwriting standards. Competition may increase as a
result of recent reductions in restrictions on the interstate operations of
financial institutions.
Supervision and Regulation
Bank holding companies and state savings banks are extensively
regulated under both federal and state law. The following is a brief summary of
certain statutes and rules and regulations that affect or will affect Century
Bancorp and Home Savings. This summary is qualified in its entirety by reference
to the particular statutory and regulatory provisions referred to below and is
not intended to be an exhaustive description of the statutes or regulations
applicable to the business of Century Bancorp and Home Savings. Supervision,
regulation and examination of Century Bancorp and Home Savings by the regulatory
agencies are intended primarily for the protection of depositors rather than
shareholders of Century Bancorp.
Regulation of Century Bancorp
General. Century Bancorp was organized for the purpose of acquiring and
holding all of the capital stock of Home Savings. As a savings bank holding
company subject to the BHCA, Century Bancorp is subject to certain regulations
of the Federal Reserve. Under the BHCA, Century Bancorp's activities and those
of its subsidiaries are limited to banking, managing or controlling banks,
furnishing services to or performing services for its subsidiaries or engaging
in any other activity which the Federal Reserve determines to be so closely
related to banking or managing or controlling banks as to be a proper incident
thereto. The BHCA prohibits Century Bancorp from acquiring direct or indirect
control of more than 5% of the outstanding voting stock or substantially all of
the assets of any bank or savings bank or merging or consolidating with another
bank holding company or savings bank holding company without prior approval of
the Federal Reserve.
Additionally, the BHCA prohibits Century Bancorp from engaging in, or
acquiring ownership or control of, more than 5% of the outstanding voting stock
of any company engaged in a nonbanking business unless such business is
determined by the Federal Reserve to be so closely related to banking as to be
properly incident thereto.
Similarly, Federal Reserve approval (or, in certain cases,
non-disapproval) must be obtained prior to any person acquiring control of
Century Bancorp. Control is conclusively presumed to exist if, among other
things, a person acquires more than 25% of any class of voting stock of the
holding company or controls in any manner the election of a majority of the
directors of the holding company. Control is presumed to exist if a person
acquires more than 10% of any class of voting stock and the stock is registered
under Section 12 of the Securities Exchange Act of 1934 (the "Exchange Act") or
the acquiror will be the largest shareholder after the acquisition.
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There are a number of obligations and restrictions imposed on bank
holding companies and their depository institution subsidiaries by law and
regulatory policy that are designed to minimize potential loss to depositors and
the FDIC insurance funds in the event the depository institution becomes in
danger of default or in default. For example, to avoid receivership of an
insured depository institution subsidiary, a bank holding company is required to
guarantee the compliance of any insured depository institution subsidiary that
may become "undercapitalized" with the terms of any capital restoration plan
filed by the subsidiary with its appropriate federal banking agency up to the
lesser of (i) an amount equal to 5% of the institution's total assets at the
time the institution became undercapitalized or (ii) the amount which is
necessary (or would have been necessary) to bring the institution into
compliance with all acceptable capital standards as of the time the institution
fails to comply with the capital restoration plan. Under a policy of the Federal
Reserve, a bank holding company is required to serve as a source of financial
strength to its subsidiary depository institutions and to commit resources to
support such institutions in circumstances where it might not do so absent that
policy. The Federal Reserve under the BHCA also has the authority to require a
bank holding company to terminate any activity or to relinquish control of a
nonbank subsidiary (other than a nonbank subsidiary of a bank) upon the Federal
Reserve's determination that such activity or control constitutes a serious risk
to the financial soundness and stability of any bank subsidiary of the bank
holding company.
In addition, insured depository institutions under common control are
required to reimburse the FDIC for any loss suffered by either the SAIF or Bank
Insurance Fund (the "BIF") as a result of the default of a commonly controlled
insured depository institution or for any assistance provided by the FDIC to a
commonly controlled insured depository institution in danger of default. The
FDIC may decline to enforce the cross-guarantee provisions if it determines that
a waiver is in the best interest of the SAIF or the BIF or both. The FDIC's
claim for damages is superior to claims of stockholders of the insured
depository institution or its holding company but is subordinate to claims of
depositors, secured creditors and holders of subordinated debt (other than
affiliates) of the commonly controlled insured depository institutions.
As a result of Century Bancorp's ownership of Home Savings, Century
Bancorp is registered under the savings bank holding company laws of North
Carolina. Accordingly, Century Bancorp is also subject to regulation and
supervision by the Administrator, Savings Institutions Division, North Carolina
Department of Commerce (the "Administrator").
Capital Adequacy Guidelines for Holding Companies. The Federal Reserve
has adopted capital adequacy guidelines for bank holding companies and banks
that are members of the Federal Reserve system and have consolidated assets of
$150 million or more. For Century Bancorp and other bank holding companies with
less than $150 million in consolidated assets, the guidelines are applied on a
bank-only basis unless the parent bank holding company (i) is engaged in nonbank
activity involving significant leverage or (ii) has a significant amount of
outstanding debt that is held by the general public.
Bank holding companies subject to the capital adequacy of guidelines
are required to comply with the Federal Reserve's risk-based capital guidelines.
Under these regulations, the minimum ratio of total capital to risk-weighted
assets (including certain off-balance sheet activities, such as standby letters
of credit) is 8%. At least half of the total capital is required to be "Tier I
capital," principally consisting of common stockholders' equity, noncumulative
perpetual preferred stock, and a limited amount of cumulative perpetual
preferred stock, less certain goodwill items. The remainder ("Tier II capital")
may consist of a limited amount of subordinated debt, certain hybrid capital
instruments and other debt securities, perpetual preferred stock, and a limited
amount of the general loan loss allowance. In addition to the risk-based capital
guidelines, the Federal Reserve has adopted a minimum Tier I capital (leverage)
ratio, under which a bank holding company must maintain a minimum level of Tier
I capital to average total consolidated assets of at least 3% in the case of a
bank holding company which has the highest regulatory examination rating and is
not contemplating significant growth or expansion. All other bank holding
companies are expected to maintain a Tier I capital (leverage) ratio of at least
1% to 2% above the stated minimum.
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Repurchase Limitations. Century Bancorp must obtain Federal Reserve
approval in order to use more than 10% of its net worth to make stock
repurchases during any 12 month period unless Century Bancorp (i) both before
and after the redemption satisfies capital requirements for "well capitalized"
state member banks; (ii) received a one or two rating in its last examination;
and (iii) is not the subject of any unresolved supervisory issues.
Capital Maintenance Agreement. In connection with the Administrator's
approval of Century Bancorp's application to acquire control of Home Savings,
Century Bancorp was required to execute a capital maintenance agreement whereby
it has agreed to maintain Home Savings' capital in an amount sufficient to
enable Home Savings to satisfy all regulatory capital requirements.
Federal Securities Law. Century Bancorp has registered its Common Stock
with the SEC pursuant to Section 12(g) of the Exchange Act. As a result of such
registration, the proxy and tender offer rules, insider trading reporting
requirements, annual and periodic reporting and other requirements of the
Exchange Act are applicable to the company.
Regulation of Home Savings
General. Federal and state legislation and regulation significantly
affect the operations of federally insured savings institutions and other
federally regulated financial institutions. The operations of regulated
depository institutions, including Home Savings, are subject to changes in
applicable statutes and regulations from time to time. Changes may or may not be
favorable to Home Savings.
Home Savings is a North Carolina-chartered savings bank, is a member of
the FHLB system, and its deposits are insured by the FDIC through the SAIF. It
is subject to examination and regulation by the FDIC and the Administrator and
to regulations governing such matters as capital standards, mergers,
establishment of branch offices, subsidiary investments and activities, and
general investment authority. Generally, North Carolina state chartered savings
banks whose deposits are issued by the SAIF are subject to restrictions with
respect to activities and investments, transactions with affiliates and
loans-to-one borrower similar to those applicable to state and
federally-chartered SAIF insured savings associations. This examination and
regulation is intended primarily for the protection of depositors and the
federal deposit insurance funds.
Home Savings is subject to various regulations promulgated by the
Federal Reserve including, without limitation, Regulation B (Equal Credit
Opportunity), Regulation D (Reserves), Regulation E (Electronic Fund Transfers),
Regulation O (Loans to Executive Officers, Directors and Principal
Shareholders), Regulation Z (Truth in Lending), Regulation CC (Availability of
Funds) and Regulation DD (Truth in Savings). As holders of loans secured by real
property and as owners of real property, financial institutions, including Home
Savings, may be subject to potential liability under various statutes and
regulations applicable to property owners generally, including statutes and
regulations relating to the environmental condition of real property.
The FDIC has extensive enforcement authority over North
Carolina-chartered savings banks, including Home Savings. This enforcement
authority includes, among other things, the ability to assess civil money
penalties, to issue cease and desist or removal orders and to initiate
injunctive actions. In general, these enforcement actions may be initiated in
response to violations of laws and regulations and unsafe or unsound practices.
The grounds for appointment of a conservator or receiver for a North
Carolina savings bank on the basis of an institution's financial condition
include: (i) insolvency, in that the assets of the savings bank are less than
its liabilities to depositors and others; (ii) substantial dissipation of assets
or earnings through violations of law or unsafe or unsound practices; (iii)
existence of an unsafe or unsound condition to transact business; (iv)
likelihood that the savings bank will be unable to meet the demands of its
depositors or to pay its obligations in the normal course of business; and (v)
insufficient capital or the incurring or likely incurring of losses that will
deplete substantially all of the institution's capital with no reasonable
prospect of replenishment of capital without federal assistance.
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Transactions with Affiliates. Under current federal law, transactions
between Home Savings and any affiliate are governed by Sections 23A and 23B of
the Federal Reserve Act. An affiliate of Home Savings is any company or entity
that controls, is controlled by or is under common control with the savings
bank. Century Bancorp is an affiliate of Home Savings. Generally, Sections 23A
and 23B (i) limit the extent to which Home Savings or its subsidiaries may
engage in "covered transactions" with any one affiliate to an amount equal to
10% of such Home Savings' capital stock and surplus, and contain an aggregate
limit on all such transactions with all affiliates to an amount equal to 20% of
such capital stock and surplus and (ii) require that all such transactions be on
terms substantially the same, or at least as favorable, to Home Savings or the
subsidiary as those provided to a nonaffiliate. The term "covered transaction"
includes the making of loans or other extensions of credit to an affiliate, the
purchase of assets from an affiliate, the purchase of, or an investment in, the
securities of an affiliate, the acceptance of securities of an affiliate as
collateral for a loan or extension of credit to any person, or issuance of a
guarantee, acceptance or letter of credit on behalf of an affiliate.
Further, current federal law has extended to savings banks the
restrictions contained in Section 22(h) of the Federal Reserve Act and its
implementing regulations with respect to loans to directors, executive officers
and principal stockholders. Under Section 22(h), loans to directors, executive
officers and stockholders who own more than 10% of a savings bank, and certain
affiliated entities of any of the foregoing, may not exceed, together with all
other outstanding loans to such person and affiliated entities, the savings
bank's loans-to-one borrower limit as established by federal law, and all loans
to such persons may not exceed the institution's unimpaired capital and
unimpaired surplus. Section 22(h) also prohibits loans above amounts prescribed
by the appropriate federal banking agency to directors, executive officers and
stockholders who own more than 10% of a savings bank, and their respective
affiliates, unless approved in advance by a majority of the disinterested
directors of the board of directors of the savings bank and Century Bancorp. Any
"interested" director may not participate in the voting. The Federal Reserve has
prescribed the loan amount (which includes all other outstanding loans to such
person), as to which such prior board of director approval is required, as being
the greater of $25,000 or 5% of unimpaired capital and unimpaired surplus (up to
$500,000). Further, pursuant to Section 22(h) the Federal Reserve requires that
loans to directors, executive officers, and principal stockholders be made on
terms substantially the same as offered in comparable transactions to other
persons and not involve more than the normal risk of repayment or present other
unfavorable features. Section 22(h) also generally prohibits a depository
institution from paying the overdrafts of any of its executive officers or
directors.
Insurance of Deposit Accounts. The FDIC administers two separate
deposit insurance funds. The SAIF maintains a fund to insure the deposits of
most savings institutions and the Bank Insurance Fund ("BIF") maintains a fund
to insure the deposits of most commercial banks. Home Savings is a member of the
SAIF of the FDIC.
Home Savings is required to pay assessments to the FDIC based on a
percentage of its insured deposits. Under the FDIC's risk-based deposit
insurance assessment system, the assessment rate for an insured depository
institution depends on the assessment risk classification assigned to the
institution by the FDIC, which is determined by the institution's capital level
and supervisory evaluations.
Under current law, the insurance assessment to be paid by the SAIF
members such as Home Savings shall be as specified in a schedule required to be
issued by the FDIC. Effective January 1, 1997, the FDIC equalized the assessment
rates for BIF members as well as those institutions with deposits insured by the
SAIF. Thus, for the semi-annual period beginning January 1, 1997, the
assessments imposed on all FDIC deposits for deposit insurance have an effective
rate ranging from 0 to 27 basis points per $100 of insured deposits, depending
on the institution's capital position and other supervisory factors. However,
because legislation enacted in 1996 requires that both SAIF-insured and
BIF-insured deposits pay a pro rata portion of the interest due on the
obligations issued by the Financing Corporation, for the quarters ended or
ending December 31, 1999, March 31, 2000, and June 30, 2000, the FDIC is
assessing BIF-insured deposits an additional 1.184, 2.120 and 2.08 basis points
per $100 of deposits respectively, and SAIF-insured deposits an additional
5.920, 2.120, and 2.08 basis points per $100 of deposits, respectively, to cover
those obligations.
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Community Reinvestment Act. Home Savings, like other financial
institutions, is subject to the Community Reinvestment Act ("CRA"). A purpose of
the CRA is to encourage financial institutions to help meet the credit needs of
its entire community, including the needs of low-and moderate-income
neighborhoods. Financial institutions' compliance with the CRA is regularly
evaluated by their regulatory agencies.
Under recently adopted regulations, institutions are first evaluated
and rated under three categories: a lending test, an investment test and a
service test. For each of these three tests, the institution is given a rating
of either "outstanding," "high satisfactory," "low satisfactory," "needs to
improve" or "substantial non-compliance." A set of criteria for each rating has
been developed and is included in the regulation. If an institution disagrees
with a particular rating, the institution has the burden of rebutting the
presumption by clearly establishing the that the quantitative measures do not
accurately present its actual performance, or that demographics, competitive
conditions or economic or legal limitations peculiar to its service area should
be considered. The ratings received under the three tests are used to determine
the overall composite CRA rating. The composite ratings are "outstanding,"
"satisfactory," "needs to improve" or "substantial non-compliance."
During Home Savings' last compliance examination, Home Savings received
a "satisfactory" rating with respect to CRA compliance. Home Savings' rating
with respect to CRA compliance would be a factor to be considered by the Federal
Reserve and FDIC in considering applications submitted by Home Savings to
acquire branches or to acquire or combine with other financial institutions and
take other actions and, if such rating was less than "satisfactory," could
result in the denial of such applications.
Capital Requirements Applicable To Home Savings. The FDIC requires Home
Savings to have a minimum leverage ratio of Tier I capital (principally
consisting of common stockholders' equity, noncumulative perpetual preferred
stock and minority interests in consolidated subsidiaries, less certain
intangible items, goodwill items, identified losses and investments in
securities subsidiaries) to total assets of at least 3%; provided, however that
all institutions, other than those (i) receiving the highest rating during the
examination process and (ii) not anticipating or experiencing any significant
growth, are required to maintain a ratio of 1% or 2% above the stated minimum,
with an absolute minimum leverage ratio of not less than 4%. The FDIC also
requires Home Savings to have a ratio of total capital to risk-weighted assets,
including certain off-balance sheet activities, such as standby letters of
credit, of at least 8%. At least half of the total capital is required to be
Tier I capital. The remainder ("Tier II capital") may consist of a limited
amount of subordinated debt, certain hybrid capital instruments, other debt
securities, certain types of preferred stock and a limited amount of loan loss
allowance.
An institution which fails to meet minimum capital requirements may be
subject to a capital directive which is enforceable in the same manner and to
the same extent as a final cease and desist order, and must submit a capital
plan within 60 days to the FDIC. If the leverage ratio falls to 2% or less, the
institution may be deemed to be operating in an unsafe or unsound condition,
allowing the FDIC to take various enforcement actions, including possible
termination of insurance or placement of the institution in receivership. At
June 30, 2000, Home Savings had a leverage ratio of 17%.
The Administrator requires that net worth equal at least 5% of total
assets. Intangible assets must be deducted from net worth and assets when
computing compliance with this requirement.
At June 30, 2000, Home Savings complied with each of the capital
requirements of the FDIC and the Administrator.
Each federal banking agency is required to establish risk-based capital
standards that take adequate account of interest rate risk, concentration of
credit risk, and the risk of nontraditional activities, as well as reflect the
actual performance and expected risk of loss on multifamily mortgages.
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On August 2, 1995, the federal banking agencies issued a joint notice
of adoption of final risk-based capital rules to take account of interest rate
risk. The final regulation required an assessment of the need for additional
capital on a case-by-case basis, considering both the level of measured exposure
and qualitative risk factors. The final rule also stated an intent to, in the
future, establish an explicit minimum capital charge for interest rate risk
based on the level of a bank's measured interest rate risk exposure.
Effective June 26, 1996, the federal banking agencies issued a joint
policy statement announcing the agencies' election not to adopt a standardized
measure and explicit capital charge for interest rate risk at that time. Rather,
the policy statement (i) identifies the main elements of sound interest rate
risk management, (ii) describes prudent principles and practices for each of
those elements, and (iii) describes the critical factors affecting the agencies'
evaluation of a bank's interest rate risk when making a determination of capital
adequacy.
Loans to One Borrower. Home Savings is subject to the Administrator's
loans-to-one borrower limits. Under these limits, no loans and extensions of
credit to any borrower outstanding at one time and not fully secured by readily
marketable collateral shall exceed 15% of the net worth of the savings bank.
Loans and extensions of credit fully secured by readily marketable collateral
may comprise an additional 10% of net worth. Notwithstanding the limits just
described, savings institutions may make loans to one borrower, for any purpose,
in an amount of up to $500,000. A savings institution also is authorized to make
loans to one borrower to develop domestic residential housing units, not to
exceed the lesser of $30 million, or 30% of the savings institution's net worth,
provided that
. the purchase price of each single-family dwelling in the development
does not exceed $500,000;
. the savings institution is in compliance with its fully phased-in
capital requirements;
. the loans comply with applicable loan-to-value requirements;
. the aggregate amount of loans made under this authority does not
exceed 150% of net worth; and
. the institution's regulator issues an order permitting the savings
institution to use this higher limit.
These limits also authorize a savings bank to make loans-to-one borrower to
finance the sale of real property acquired in satisfaction of debts in an amount
up to 50% of net worth.
As of June 30, 2000, the largest aggregate amount of loans which Home
Savings had to any one borrower was $1.6 million; these loans were performing in
accordance with their original terms on that date. Home Savings had no loans
outstanding which management believes violate applicable loans-to-one borrower
limits.
Federal Home Loan Bank System. The FHLB system provides a central
credit facility for member institutions. As a member of the FHLB of Atlanta,
Home Savings is required to own capital stock in the FHLB of Atlanta in an
amount at least equal to the greater of 1% of the aggregate principal amount of
its unpaid residential mortgage loans, home purchase contracts and similar
obligations at the end of each calendar year, or 5% of its outstanding advances
(borrowings) from the FHLB of Atlanta. On June 30, 2000, Home Savings was in
compliance with this requirement with an investment in FHLB of Atlanta stock of
$734,000.
Federal Reserve System. Federal Reserve regulations require savings
banks, not otherwise exempt from the regulations, to maintain reserves against
their transaction accounts (primarily negotiable order of withdrawal accounts)
and certain nonpersonal time deposits. The reserve requirements are subject to
adjustment by the Federal Reserve. As of June 30, 2000, Home Savings was in
compliance with the applicable reserve requirements of the Federal Reserve.
Restrictions on Acquisitions. Federal law generally provides that no
"person," acting directly or indirectly or through or in concert with one or
more other persons, may acquire "control," as that term is defined in
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<PAGE>
FDIC regulations, of an insured institution, such as Home Savings, without
giving at least 60 days' written notice to the FDIC and providing the FDIC an
opportunity to disapprove the proposed acquisition. Pursuant to regulations
governing acquisitions of control, control of an insured institution is
conclusively deemed to have been acquired, among other things, upon the
acquisition of more than 25% of any class of voting stock. In addition, control
is generally presumed to have been acquired, subject to rebuttal, upon the
acquisition of more than 10% of any class of voting stock. Such acquisitions of
control may be disapproved if it is determined, among other things, that
. the acquisition would substantially lessen competition;
. the financial condition of the acquiring person might jeopardize the
financial stability of the savings bank or prejudice the interests
of its depositors; or
. the competency, experience or integrity of the acquiring person or
the proposed management personnel indicates that it would not be in
the interest of the depositors or the public to permit the
acquisition of control by such person.
Liquidity. Home Savings is subject to the Administrator's requirement
that the ratio of liquid assets to total assets equal at least 10%. The
computation of liquidity under North Carolina regulation allows the inclusion of
mortgage-backed securities and investments which, in the judgment of the
Administrator, have a readily marketable value, including investments with
maturities in excess of five years. On June 30, 2000, Home Savings' liquidity
ratio, calculated in accordance with North Carolina regulations, was
approximately 11.1%.
Additional Limitations on Activities. Recent FDIC law and regulations
generally provide that Home Savings may not engage as principal in any type of
activity, or in any activity in an amount, not permitted for national banks, or
directly acquire or retain any equity investment of a type or in an amount not
permitted for national banks. The FDIC has authority to grant exceptions from
these prohibitions (other than with respect to non-service corporation equity
investments) if it determines no significant risk to the insurance fund is posed
by the amount of the investment or the activity to be engaged in and if Home
Savings is and continues to be in compliance with fully phased-in capital
standards. National banks are generally not permitted to hold equity investments
other than shares of service corporations and certain federal agency securities.
Moreover, the activities in which service corporations are permitted to engage
are limited to those of service corporations for national banks.
Savings banks are also generally prohibited from directly or indirectly
acquiring or retaining any corporate debt security that is not of investment
grade (generally referred to as "junk bonds"). State savings banks are also
required to notify the FDIC at least 30 days prior to the establishment or
acquisition of any subsidiary, or at least 30 days prior to conducting any such
new activity. Any such activities must be conducted in accordance with the
regulations and orders of the FDIC and the Administrator.
Prompt Corrective Regulatory Action. The Federal Deposit Insurance
Corporation Improvement Act of 1991 provided the federal banking agencies with
broad powers to take corrective action to resolve problems of insured depository
institutions. The extent of these powers depends upon whether the institutions
in question are "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," or "critically
undercapitalized." Under the FDIC regulations applicable to Home Savings, an
institution is considered "well capitalized" if it has
. a total risk-based capital ratio of 10% or greater,
. a Tier I risk-based capital ratio of 6% or greater,
. a leverage ratio of 5% or greater, and
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<PAGE>
. is not subject to any order or written directive to meet and
maintain a specific capital level for any capital measure.
An "adequately capitalized" institution is defined as one that has
. a total risk-based capital ratio of 8% or greater,
. a Tier I risk-based capital ratio of 4% or greater, and
. a leverage ratio of 4% or greater (or 3% or greater in the case of
an institution with the highest examination rating that is not
experiencing or anticipating significant growth).
An institution is considered "undercapitalized" if it has
. a total risk-based capital ratio of less than 8%,
. a Tier I risk-based capital ratio of less than 4%, or
. a leverage ratio of less than 4% (or 3% in the case of an
institution with the highest examination rating that is not
experiencing or anticipating significant growth).
An institution is considered "significantly undercapitalized" if the institution
has
. a total risk-based capital ratio of less than 6%, or
. a Tier I risk-based capital ratio of less than 3% or
. a leverage ratio of less than 3%.
An institution is considered "critically undercapitalized" if the institution
has a ratio of tangible equity to total assets equal to or less than 2%. Home
Savings is considered to be "well capitalized" under the rules set forth above.
Interstate Banking. The Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Banking Act"), effective September 29,
1995, permits adequately capitalized bank and savings bank holding companies to
acquire control of banks and savings banks in any state.
Such interstate acquisitions are subject to certain restrictions.
States may require the bank or savings bank being acquired to have been in
existence for a certain length of time but not in excess of five years. In
addition, no bank or saving bank may acquire more than 10% of the insured
deposits in the United States or more than 30% of the insured deposits in any
one state, unless the state has specifically legislated a higher deposit cap.
States are free to legislate stricter deposit caps.
The Interstate Banking Act also provided for interstate branching,
effective June 1, 1997, allowing interstate branching in all states, provided
that a particular state has not specifically denied interstate branching by
legislation prior to such time. Unlike interstate acquisitions, a state could
deny interstate branching if it specifically elected to do so by June 1, 1997.
North Carolina has enacted legislation permitting interstate branching
transactions.
Restrictions on Dividends and Other Capital Distributions. A North
Carolina-chartered stock savings bank may not declare or pay a cash dividend on,
or repurchase any of, its capital stock if the effect of such transaction would
be to reduce the net worth of the institution to an amount which is less than
the minimum amount required by applicable federal and state regulations. In
addition, a North Carolina-chartered stock savings bank, for
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<PAGE>
a period of five years after its conversion from mutual to stock form, must
obtain the written approval from the Administrator before declaring or paying a
cash dividend on its capital stock in an amount in excess of one-half of the
greater of (i) the institution's net income for the most recent fiscal year end,
or (ii) the average of the institution's net income after dividends for the most
recent fiscal year end and not more than two of the immediately preceding fiscal
year ends, if applicable. Under FDIC regulations, stock repurchases may be made
by the savings bank only upon receipt of FDIC approval.
Also, without the prior written approval of the Administrator, a North
Carolina-chartered stock savings bank, for a period of five years after its
conversion from mutual to stock form, may not repurchase any of its capital
stock. The Administrator will give approval to repurchase only upon a showing
that the proposed repurchase will not adversely affect the safety and soundness
of the institution.
In addition, Home Savings is not permitted to declare or pay a cash
dividend on or repurchase any of its capital stock if the effect thereof would
be to cause its net worth to be reduced below the amount required for the
liquidation account established in connection with Home Savings' conversion from
mutual to stock ownership.
Other North Carolina Regulations. As a North Carolina-chartered savings
bank, Home Savings derives its authority from, and is regulated by, the
Administrator. The Administrator has the right to promulgate rules and
regulations necessary for the supervision and regulation of North Carolina
savings banks under his jurisdiction and for the protection of the public
investing in such institutions. The regulatory authority of the Administrator
includes, but is not limited to, the establishment of reserve requirements; the
regulation of the payment of dividends; the regulation of stock repurchases, the
regulation of incorporators, stockholders, directors, officers and employees;
the establishment of permitted types of withdrawable accounts and types of
contracts for savings programs, loans and investments; and the regulation of the
conduct and management of savings banks, chartering and branching of
institutions, mergers, conversions and conflicts of interest. North Carolina law
requires that Home Savings maintain federal deposit insurance as a condition of
doing business.
The Administrator conducts regular examinations of North
Carolina-chartered savings banks. The purpose of such examinations is to assure
that institutions are being operated in compliance with applicable North
Carolina law and regulations and in a safe and sound manner. These examinations
are usually conducted on a joint basis with the FDIC. In addition, the
Administrator is required to conduct an examination of any institution when he
has good reason to believe that the standing and responsibility of the
institution is of doubtful character or when he otherwise deems it prudent. The
Administrator is empowered to order the revocation of the license of an
institution if he finds that it has violated or is in violation of any North
Carolina law or regulation and that revocation is necessary in order to preserve
the assets of the institution and protect the interests of its depositors. The
Administrator has the power to issue cease and desist orders if any person or
institution is engaging in, or has engaged in, any unsafe or unsound practice or
unfair and discriminatory practice in the conduct of its business or in
violation of any other law, rule or regulation.
A North Carolina-chartered savings bank must maintain net worth,
computed in accordance with the Administrator's requirements, of 5% of total
assets and liquidity of 10% of total assets, as discussed above. Additionally, a
North Carolina-chartered savings bank is required to maintain general valuation
allowances and specific loss reserves in the same amounts as required by the
FDIC.
Subject to limitation by the Administrator, North Carolina-chartered
savings banks may make any loan or investment or engage in any activity which is
permitted to federally chartered institutions. However, a North
Carolina-chartered savings bank cannot invest more than 15% of its total assets
in business, commercial, corporate and agricultural loans. In addition to such
lending authority, North Carolina-chartered savings banks are authorized to
invest funds, in excess of loan demand, in certain statutorily permitted
investments, including but not limited to (i) obligations of the United States,
or those guaranteed by it; (ii) obligations of the State of North Carolina;
(iii)
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bank demand or time deposits; (iv) stock or obligations of the federal deposit
insurance fund or a FHLB; (v) savings accounts of any savings institution as
approved by the board of directors; and (vi) stock or obligations of any agency
of the State of North Carolina or of the United States or of any corporation
doing business in North Carolina whose principal business is to make education
loans.
North Carolina law provides a procedure by which savings institutions
may consolidate or merge, subject to approval of the Administrator. The approval
is conditioned upon findings by the Administrator that, among other things, such
merger or consolidation will promote the best interests of the members or
stockholders of the merging institutions. North Carolina law also provides for
simultaneous mergers and conversions and for supervisory mergers conducted by
the Administrator.
Gramm - Leach - Bliley Act. On November 12, 1999, the President signed
into law the Gramm - Leach - Bliley Act. This statute contains several
provisions that may affect how Century Bancorp and Home Savings do business or
the nature of the competition that they face. The act permits banks, insurance
companies, and securities firms to affiliate within a single corporate
structure, now known as a financial holding company. Using the financial holding
company structure, insurance companies and securities firms may acquire bank
holding companies, such as Century Bancorp, and bank holding companies may
acquire insurance companies and securities firms. A bank holding company that
wishes to become a financial holding company must satisfy a number of
conditions, including that all of the insured depository institution
subsidiaries of the bank holding company have at least a "satisfactory"
Community Reinvestment Act rating. In addition, a financial holding company may
not commence a new financial activity or acquire control of a company engaged in
such activities without satisfying this Community Reinvestment Act requirement.
As a result of this new act, Century Bancorp may face increased competition from
more and larger financial institutions. The act allows increased activity in the
insurance and securities underwriting businesses, to be conducted through a
subsidiary of a financial holding company and would involve both additional risk
and regulatory burdens.
The act also contains several provisions respecting customer privacy.
The extent of Home Saving's obligations in this regard will not be known until
the Federal Reserve and the other federal banking agencies issue rules
applicable to financial institutions. However, Home Savings will be required to
disclose a privacy policy to its customers on an annual basis. In addition, if
Home Savings provides nonpublic personal information about customers to third
parties for use in the marketing of third party products, it must first disclose
this fact to its customers and provide them an opportunity to opt out of the
arrangement.
Future Requirements. Statutes and regulations are regularly introduced
which contain wide-ranging proposals for altering the structures, regulations
and competitive relationships of financial institutions. It cannot be predicted
whether or what form any proposed statute or regulation will be adopted or the
extent to which the business of Century Bancorp and Home Savings may be affected
by such statute or regulation.
ITEM 2. DESCRIPTION OF PROPERTY
The following table sets forth the location of Home Savings'
headquarters office in Thomasville, North Carolina, as well as certain other
information relating to this office as of June 30, 2000:
Net Book
Value of
Property and Owned or
Improvements Leased
------------ --------
22 Winston Street
Thomasville, North Carolina 27360 $558,000 Owned
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Home Savings' headquarters is the only real property owned by Century
Bancorp that is used in its operations. Century Bancorp's management considers
the property to be in good condition and is of the opinion that it is adequately
covered by insurance. The total net book value of Home Savings' furniture,
fixtures and equipment at June 30, 2000 was $62,000. Any property acquired as a
result of foreclosure or by deed in lieu of foreclosure is classified as real
estate owned until such time as it is sold or otherwise disposed of by Home
Savings in an effort to recover its investment. On June 30, 2000 Home Savings
recorded no real estate acquired in settlement of loans.
ITEM 3. LEGAL PROCEEDINGS
In the opinion of management, neither Century Bancorp nor Home Savings
is involved in any pending legal proceedings other than routine litigation that
is incidental to their business.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of Century Bancorp's stockholders
during the quarter ended June 30, 2000.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
See the information under the section captioned "Common Stock
Information" on page 42 of Century Bancorp's 2000 Annual Report, which section
is incorporated herein by reference. See "ITEM 1. DESCRIPTION OF BUSINESS --
Regulation of Home Savings -- Restrictions on Dividends and Other Capital
Distributions" above for regulatory restrictions which limit the ability of Home
Savings to pay dividends to Century Bancorp.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
See the information set forth under ITEM 1 above and the information
set forth under the section captioned "Management's Discussion and Analysis" on
pages 3 through 11 in Century Bancorp's 2000 Annual Report, which section is
incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS
The consolidated financial statements of Century Bancorp set forth on
pages 13 through 40 in Century Bancorp's 2000 Annual Report are incorporated
herein by reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
N/A.
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PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH 16(a) OF THE EXCHANGE ACT
The information required by this Item regarding directors and executive
officers of Century Bancorp is set forth under the sections captioned "Proposal
1 - Election of Directors" on page 6 of the Proxy Statement for the 2000 Annual
Meeting of Stockholders (the "Proxy Statement") and "Executive Officers" on
pages 7 and 8 of the Proxy Statement, which sections are incorporated herein by
reference.
The information required by this Item regarding compliance with Section
16(a) of the Securities Exchange Act of 1934 is set forth under the section
captioned "Section 16(a) Beneficial Ownership Reporting Compliance" set forth on
page 5 of the Proxy Statement, which is incorporated herein by reference.
ITEM 10. EXECUTIVE COMPENSATION
The information required by this Item is set forth under the sections
captioned "Proposal 1 - Election of Directors - Director Compensation" on page 7
and "- Management Compensation" on pages 8 through 14 of the Proxy Statement,
which sections are incorporated herein by reference.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information required by this Item is incorporated by reference from
the section captioned "Security Ownership of Certain Beneficial Owners" on pages
2 through 5 of the Proxy Statement.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See the section captioned "Certain Indebtedness and Transactions of
Management" on page 14 of the Proxy Statement, which section is incorporated
herein by reference.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits
(3)(i) Certificate of Incorporation, incorporated herein by reference
to Exhibit 3.1 to the Registration Statement on Form S-1,
Registration No. 333-8625, dated July 23, 1996 and amended on
October 8, 1996 and November 7, 1996.
(3)(ii) Bylaws, as amended on August 17, 1999.
(4) Specimen Stock Certificate incorporated herein by reference to
Exhibit 4.1 to the Registration Statement on Form S-1,
Registration No. 333-8625, dated July 23, 1996 and amended on
October 8, 1996 and November 7, 1996.
10(a) Employment Agreement with James G. Hudson, Jr. incorporated
herein by reference to Exhibit 10(a) of Century Bancorp's Annual
Report on From 10-KSB for the fiscal year ended June 30, 1997
filed September 25, 1997.
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10(b) Special Termination Agreements with John E. Todd and Drema A.
Michael incorporated herein by reference to Exhibit 10(b) of
Century Bancorp's Annual Report on From 10-KSB for the fiscal
year ended June 30, 1997 filed September 25, 1997.
10(c) Supplemental Income Agreements with James G. Hudson, Jr.
incorporated herein by reference to Exhibit 10(c) of Century
Bancorp's Annual Report on From 10-KSB for the fiscal year ended
June 30, 1997 filed September 25, 1997.
10(d) Century Bancorp, Inc. Stock Option Plan incorporated herein by
reference to Appendix A to Century Bancorp's Proxy Statement for
the Special Meeting of Stockholders held on February 17, 1998
and filed January 9, 1998.
10(e) Home Savings, Inc., SSB Management Recognition Plan and Trust
Agreement incorporated herein by reference to Appendix A to
Century Bancorp's Proxy Statement for the Special Meeting of
Stockholders held on February 17, 1998 and filed January 9,
1998.
(11) Statement Regarding Computation of Per Share Earnings
(13) Portions of 2000 Annual Report to Stockholders
(21) See ITEM 1. - "DESCRIPTION OF BUSINESS --Subsidiaries." for
discussion of subsidiaries
(27) Financial Data Schedule
Reports on Form 8-K
Century Bancorp filed no reports on Form 8-K during the quarter ended
June 30, 2000.
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SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this amended report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CENTURY BANCORP, INC.
Date: September 25, 2000 By: /s/ James G. Hudson, Jr.
---------------------------------
James G. Hudson, Jr.
President, Treasurer, and Chief
Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ James G. Hudson, Jr. President, Chief Executive Officer, September 25, 2000
----------------------------- Treasurer and Director
James G. Hudson, Jr.
/s/ John E. Todd Vice-President September 25, 2000
-----------------------------
John E. Todd
/s/ Drema A. Michael Assistant Treasurer and September 25, 2000
----------------------------- Secretary
Drema A. Michael
/s/ Henry H. Darr Director September 25, 2000
-----------------------------
Henry H. Darr
/s/ John R. Hunnicutt Director September 25, 2000
-----------------------------
John R. Hunnicutt
/s/ F. Stuart Kennedy Director September 25, 2000
-----------------------------
F. Stuart Kennedy
/s/ Milton T. Riley, Jr. Director September 25, 2000
-----------------------------
Milton T. Riley, Jr.
</TABLE>
17
