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Cambridge Bancorp Announces Record Earnings For Full Year 2013

Cambridge Bancorp (OTCBB: CATC) today announced unaudited net income of $14,140,000 for the year ended December 31, 2013, representing an increase of $737,000, or 5.5%, compared to net income of $13,403,000 for the year ended December 31, 2012. Diluted earnings per share (EPS) were $3.62, a 4.9% increase over diluted earnings per share for the prior year.

“We are pleased to report the Bank delivered another record financial performance for the year of 2013,” noted Joseph V. Roller II, president and CEO. “The Bank continued to grow across all business lines with robust contributions from wealth management and loan growth.”

The Bank experienced a historic year for loan growth with an overall increase of $200.2 million, or 27.0%, for the year. Both residential and commercial mortgages showed exceptional growth for the year, with increases of $110.3 million (31.7%) and $86.9 million (31.4%), respectively. Home equity loans were down by $3.9 million for the year ending December 31, 2013 as many consumers continued to refinance second mortgages into first mortgages due to favorable interest rates.

Deposit growth achieved similar success with an overall increase of $127.7 million, or 10.0%, as consumers and businesses continued to place their liquid funds with sound financial institutions.

For the year ended December 31, 2013, net interest income decreased slightly by $408,000, or 0.9%, to $45.5 million compared to $45.9 million for 2012. The prolonged low interest rate environment intensified margin pressures, which have been unfavorable for the industry for some time. The Bank’s net interest margin decreased 23 basis points to 3.35% for the year compared to 3.58% for the year ended December 31, 2012.

The Bank’s record loan growth outpaced deposit growth for the year. The Bank elected to strategically deploy cash flows emanating from the investment portfolio to meet the shortfall between loan funding needs and deposit growth. The Bank’s total investment securities portfolio decreased to $448.0 million from $573.5 million at year-end 2012. The shift in the Bank’s earning asset mix coupled with the lower interest rate environment resulted in a decrease of $3.1 million in interest income on investment securities for the year. This decrease was partially offset by $1.7 million in higher interest on loans and a slight reduction in deposit costs. The higher relative yields attributed to loans over investment securities will benefit the Bank’s net interest income over time.

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