SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 11-K

þ		ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1998

o		TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

Century Bancorp 401(k) Plan
(Full Title of the Plan)

CENTURY BANCORP, INC.

(Issuer of the securities held pursuant to the Plan)

400 Mystic Avenue
Medford, MA 02155
(Address of principal executive offices)

 

 

Century Bancorp 401(k) Plan

Table of Contents

		Page
Report of Independent Registered Public Accounting Firm			1
Statements of Net Assets Available for Plan Benefits			2 - 3
Statement of Changes Net Assets Available for Plan Benefits			4 - 5
Notes to Financial Statements			6 - 8
Supplemental Schedule
Schedule 1 — Schedule of Assets Held for Investment Purposes			9
Schedule 2 — Schedule of Reportable Transactions			10
Signatures			11
Ex-23.1 Consent of Independent Registered Public Accounting Firm

Report of Independent Registered Public Accounting Firm

The Board of Directors
Century Bancorp, Inc. 401(k) Plan:

We have audited the accompanying statements of net assets available for plan benefits of Century Bancorp, Inc. 401(k) Plan (the Plan) as of December 31, 1998 and 1997, and the related statements of changes in net assets available for plan benefits for the years then ended. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1998 and 1997, and the changes in net assets available for plan benefits for the years then ended in conformity with U.S. generally accepted accounting principles.

Our audits were performed for the purpose of forming an opinion on the basic financial statements, taken as a whole. The supplemental schedules of assets held for investment purposes and reportable transactions are presented for purposes of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statements of net assets available for plan benefits and the statements of changes in net assets available is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules are the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

Boston, Massachusetts

April 14, 1999

CENTURY BANCORP, INC.
401(k) Plan

Statement of Net Assets Available for Plan Benefits

December 31, 1998

		1784
		U.S. Treasury				1784				MFS				Advisor				Putnam				Century
		Money				Short-term				Emerging				Growth				Fund for				Bancorp
		Market				Income				Growth				Opportunities				Growth &				Stock
		Fund				Fund				Fund				Fund				Income				Fund				Total
Assets
Investments, at fair value (note 3)		$	57,885				29,710				333,922				271,668				333,564				70,092				1,096,841
Participants’ contributions receivable			2,686				1,384				10,417				9,094				10,575				2,694				36,850
Total assets			60,571				31,094				344,339				280,762				344,139				72,786				1,133,691
Net assets available for plan benefits		$	60,571				31,094				344,339				280,762				344,139				72,786				1,133,691

See accompanying notes to financial statements.

CENTURY BANCORP, INC.
401(k) Plan

Statement of Net Assets Available for Plan Benefits

December 31, 1997

		1784
		U.S. Treasury				1784				MFS				Advisor								Century
		Money				Short-term				Emerging				Growth				Putnam Fund for				Bancorp
		Market				Income				Growth				Opportunities				Growth &				Stock
		Fund				Fund				Fund				Fund				Income				Fund				Total
Assets
Investments, at fair value (note 3)		$	25,677				11,663				151,326				122,753				157,580				33,856				502,855
Participants’ contributions receivable			1,684				731				9,226				6,509				8,242				1,503				27,895
Total assets			27,361				12,394				160,552				129,262				165,822				35,359				530,750
Net assets available for plan benefits		$	27,361				12,394				160,552				129,262				165,822				35,359				530,750

See accompanying notes to financial statements.

CENTURY BANCORP, INC.
401(k) Plan

Statement of Changes in Net Assets Available for Plan Benefits

Year ended December 31, 1998

		1784
		U.S. Treasury				1784				MFS				Advisor
		Money				Short-term				Emerging				Growth				Putnam Fund for
		Market				Income				Growth				Opportunities				Growth&				Century Bancorp
		Fund				Fund				Fund				Fund				Income				Stock Fund				Total
Additions:
Investment income		$	2,924				1,217				3,012				11,040				27,617				—				45,810
Net appreciation (depreciation) in fair value of investments			—				166				52,422				34,013				5,962				(410	)			92,153
Contributions from employees			28,909				12,495				128,753				104,358				139,765				31,933				446,213
Contributions from employer			4,601				1,793				19,004				15,447				21,253				4,996				67,094
Total additions			36,434				15,671				203,191				164,858				194,597				36,519				651,270
Deduction:
Benefits paid to participants			(3,186	)			(813	)			(6,026	)			(7,371	)			(29,678	)			(1,255	)			(48,329	)
Total deduction			(3,186	)			(813	)			(6,026	)			(7,371	)			(29,678	)			(1.255	)			(48,329	)
Transfers			(38	)			3,842				(13,378	)			(5,987	)			13,398				2,163				—
Net increase			33,210				18,700				183,787				151,500				178,317				37,427				602,941
Net assets available for plan benefits:
Beginning of year			27,361				12,394				160,552				129,262				165,822				35,359				530,750
End of year		$	60,571				31,094				344,339				280,762				344,139				72,786				1,133,691

See accompanying notes to financial statements.

CENTURY BANCORP, INC.
401(k) Plan

Statement of Changes in Net Assets Available for Plan Benefits

Year ended December 31, 1997

		1784
		U.S. Treasury				1784				MFS				Advisor								Century
		Money				Short-term				Emerging				Growth				Putnam Fund for				Bancorp
		Market				Income				Growth				Opportunities				Growth &				Stock
		Fund				Fund				Fund				Fund				Income				Fund				Total
Additions:
Investment income		$	1,230				434				1,419				7,736				19,371				—				30,190
Net appreciation (depreciation) in fair value of investments			—				184				11,679				8,869				(2,108	)			5,976				24,600
Contributions from employees			22,533				10,723				124,314				94,244				125,126				24,020				400,960
Total additions			23,763				11,341				137,412				110,849				142,389				29,996				455,750
Deduction:
Benefits paid to participants			(90	)			(1,107	)			(3,607	)			(1,672	)			(2,690	)			(191	)			(9,357	)
Total deduction			(90	)			(1,107	)			(3,607	)			(1,672	)			(2,690	)			(191	)			(9,357	)
Transfers			(1,590	)			(111	)			1,185				(81	)			89				508				—
Net increase			22,083				10,123				134,990				109,096				139,788				30,313				446,393
Net assets available for plan benefits:
Beginning of year			5,278				2,271				25,562				20,166				26,034				5,046				84,357
End of year		$	27,361				12,394				160,552				129,262				165,822				35,359				530,750

See accompanying notes to financial statements.

CENTURY BANCORP, INC.
401(k) Plan

Notes to Financial Statements

December 31, 1998 and 1997

(1)

Description of Plan

The following description of the Century Bancorp, Inc. 401(k) Plan (the Plan) is provided for general information purposes. Participants should refer to the Plan document for more detailed information.

(a)

General

The Century Bancorp, Inc. 401(k) Plan was established on October 1, 1996 for the purpose of providing a medium for eligible employees to supplement their retirement income through salary reduction arrangements on a tax-deferred basis, and is established for the exclusive benefit of the employees and their beneficiaries. The Plan is a defined contribution savings plan for all employees of Century Bancorp, Inc. who have attained age twenty-one and completed one year of service. Century Bancorp, Inc. pays all general administrative expenses of the Plan. The Plan is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA).

(b)

Contributions

Each participant of the Plan may enter into an enrollment agreement under which participants agree to reduce their compensation by a specified percent. The percentage shall not be less than 2% nor more than 15% of the participant’s annual compensation, subject to IRS limitations. Beginning in 1998, the employer pays a matching contribution on behalf of each member who has made a salary reduction contribution during such Plan year in an amount equal to $.25 on each dollar contributed up to 4% of compensation.

(c)

Vesting

Participants are fully vested in all benefits.

(d)

Payment of Benefits

Under the terms of the Plan, participants retiring at or after age 59 1/2 are eligible to receive the entire balances in all of the accounts maintained for such participants in a lump sum payment. Participants terminating employment prior to retirement receive their entire account balance as a lump sum payment, with applicable taxes withheld, or as a rollover into another qualified plan. In the event of death, the full value of the participant’s account is payable to the designated beneficiary in a lump sum.

(e)

Participants’ Loans

Participant loans may be granted by the Plan Administrator on a uniform and nondiscriminatory basis, upon written request by a participant. The minimum loan amount is $1,000. The maximum loan amount cannot exceed the lesser of 50% of the participant’s account balance or $50,000. Loans are repaid through a payroll deduction and generally within 5 years. As of December 31, 1998, no participants had requested a loan from the Plan.

(Continued)

CENTURY BANCORP, INC.
401(k) Plan

Notes to Financial Statements

December 31, 1998 and 1997

(2)

Summary of Significant Accounting Policies

(a)

Basis of Presentation

The accompanying financial statements of the Plan have been prepared on the accrual basis of accounting and present the net assets available for plan benefits and changes in those net assets.

(b)

Investment Valuation and Income Recognition

Marketable investments are stated at fair value. The fair value of marketable investments is based on quoted market prices. Money market fund investments are stated at cost, which approximates fair value.

Securities transactions are recognized on the trade date (the date the order to buy or sell is executed). Dividend income is recorded on the ex-dividend date. Realized gains and losses are determined on the average cost method.

(c)

Management Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

(3)

Investments

The Plan’s investment options include six funds: (a) a money market fund (1784 U.S. Treasury Money Market) which seeks to preserve principal value and maintain a high degree of liquidity while providing current income; (b) a bond fund (1784 Short-term Income Fund) which invests in high quality, short-term bonds and seeks to achieve price stability; (c) an aggressive growth fund (MFS Emerging Growth Fund) which seeks to provide long-term growth of capital by investing in common stocks of small and medium-size companies showing earnings growth over time; (d) a growth fund (Fidelity Advisor Growth Opportunities Fund) which invests in a broad range of companies, industries and securities for diversification, while seeking growth opportunities in small, medium and large companies; (e) a growth & income fund (Putnam Fund for Growth & Income) which seeks to provide capital growth and current income investing primarily in common stocks that pay dividends and/or bonds; or (f) a company stock fund (Century Bancorp Stock Fund) in which amounts invested are used to purchase shares of Class A Common Stock of Century Bancorp, Inc.

(Continued)

CENTURY BANCORP, INC.
401(k) Plan

Notes to Financial Statements

December 31, 1998 and 1997

The following is a listing of individual investments that represent 5% or more of net assets available for plan benefits at December 31:

		1998				1997
1784 U.S. Treasury Money Market Fund		$	57,885				N/A
MFS Emerging Growth Fund			333,922				151,326
Fidelity Growth Opportunities Fund			271,668				122,753
Putnam Fund for Growth & Income			333,564				157,580
Century Bancorp Stock Fund			70,092				33,856

(4)

Distribution on Termination of the Plan

Although it has not expressed any intent to do so, Century Bancorp, Inc. has the right under the Plan to terminate the Plan subject to the provisions of ERISA. In the event of termination of the Plan, the rights of all members to amounts credited to their accounts shall be fully vested and nonforfeitable.

(5)

Income Taxes

The Plan is qualified as a defined contribution plan under Section 401(k) of the Internal Revenue Code. The Internal Revenue Service has not yet issued a determination letter. The Plan continues to operate within the terms of the Plan and believes that it is qualified under the applicable provisions of the Internal Revenue Code.

CENTURY BANCORP, INC.
401(k) Plan

Item 27a — Schedule of Assets Held for Investment Purposes

December 31, 1998

		(b) Identity of issuer, borrower,		(c) Description						(e) Current
(a)		lessor or similar party		of investment		(d) Cost				value
		1784 U.S. Treasury Money Market		Mutual Fund		$	57,885				57,885
		1784 Short-term Income Fund		Mutual Fund			29,406				29,710
		MFS Emerging Growth Fund		Mutual Fund			272,839				333,922
		Fidelity Advisory Growth Opportunities Fund		Mutual Fund			231,722				271,668
		Putnam Fund for Growth & Income		Mutual Fund			331,467				333,564
*		Century Bancorp Stock Fund		Common Stock Fund			64,884				70,092
						$	988,203				1,096,841

Schedule 2

CENTURY BANCORP, INC.
401(k) Plan

Item 27d—Schedule of Reportable Transactions

Year ended December 31, 1998

																		(h) Current value
						(c)												of asset on
(a) Identity of		(b) Description				Purchase				(d) Selling				(g) Cost of				transaction				(i) Net
party involved		of asset				price				price				asset				date				gain
1784 U.S. Treasury		Mutual Fund				$	35,403				—				—				35,403				—
Money Market							—				3,223				3,223				3,223				—
MFS Emerging		Mutual Fund					150,126				—				—				150,126				—
Growth Fund							—				19,952				19,045				19,952				907
Fidelity Advisory		Mutual Fund
Growth Opportunities							130,938				—				—				130,938				—
Fund							—				16,036				14,637				16,036				1,399
Putnam Fund for		Mutual Fund					203,372				—				—				203,372				—
Growth & Income							—				33,351				32,374				33,351				977
*Century Bancorp		Common					48,402				—				—				48,402				—
Stock Fund		Stock Fund					—				1,255				1,312				1,255				(57	)

The Plan is subject to the Employee Retirement Income Security Act of 1974 (ERISA). Therefore, in lieu of the requirements of Items 1-3 of Form 11-K, the financial statements and supplemental schedules of the Plan for the two fiscal years ended December 31, 1998 and 1997, have been prepared in accordance with the financial reporting requirements of ERISA, are attached hereto.

Signatures

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Plan has duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

Exhibit Index

Number		Title
23.1		Consent of KPMG LLP, Independent Registered Public Accounting Firm