Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $4,678,000 for the second quarter of 2010 compared to $2,479,000 for the same quarter in 2009. Diluted earnings per share were $1.24 for the second quarter of 2010 versus $0.67 for the same quarter in 2009. Key factors driving the $2,199,000 or 89% increase in net income were the sale of the Bank’s Merchant Services portfolio and continued growth in net interest income.

During the quarter, the Bank sold its Merchant Services portfolio to Elavon, Inc., a wholly owned subsidiary of U.S. Bancorp. The after tax impact on earnings of that sale was $1,591,000 or $0.42 per diluted share.

For the first six months ended June 30, 2010, unaudited net income was $7,424,000 compared to $4,485,000 for the first half of 2009. Diluted earnings per share were $1.97 for the first six months of 2010 versus $1.21 for the same period in 2009.

“Our second quarter results are evidence that we continue to build on the momentum of our customer relationship strategy. We are encouraged that as the economy begins to gain traction, we will capitalize on opportunities for growth and remain focused on executing the Bank’s business strategies across all business lines,” notes Joseph V. Roller II, president and CEO.

The Bank continued to experience strong growth in net interest income. The solid increase of $1,024,000 or 10.8% in net interest income for the second quarter of 2010 versus the same quarter in 2009 was a function of growth in loans to consumers and businesses funded by lower cost deposits. Since year-end 2009, total deposits have grown $49.8 million or 5.7% as consumers and businesses sought stable, service-oriented banks for their checking and savings accounts and certificates of deposit. Together these factors produced a net interest margin for the second quarter of 2010 of 4.30%; a slight improvement compared to the 4.26% margin for the quarter ended June 30, 2009.

For the second quarter of 2010, non-interest expense increased $194,000 compared to the same quarter in 2009. The Bank’s FDIC insurance premium was $491,000 lower for the second quarter of 2010 compared to the same quarter in 2009, which partially offset increases in salaries and benefits of $479,000 and professional fees of $181,000 for the current quarter.

Since year-end 2009, total loans outstanding have increased $21.5 million or 4.0%. The Bank’s loan growth came primarily from residential mortgage loans with low interest rates providing an attractive environment for both new homebuyers and homeowners seeking to refinance existing mortgage loans. The demand for commercial working capital loans remains sluggish, resulting in a decrease in commercial loans outstanding due to amortization and repayments since year-end 2009. Meanwhile, there was a modest increase in commercial mortgage loans outstanding in the first half of 2010.

Non-performing loans as a percentage of total loans stood at 0.18% at June 30, 2010, a slight decline from 0.20% at December 31, 2009. Loan quality remains sound and the Allowance for Loan Losses stood at $9.1 million or 1.63% of total loans outstanding at June 30, 2010. At December 31, 2009, the Allowance for Loan Losses was $8.7 million or 1.62% of total loans outstanding. In response to continued loan growth, the provision for loan losses was $150,000 for the current quarter.

Total assets at period end were $1.1 billion versus $979 million one year ago and $1.0 billion at the end of 2009.

Cambridge Bancorp and its subsidiary, Cambridge Trust Company, are based in Cambridge, Massachusetts, in the heart of Harvard Square. Cambridge Trust Company is a 120-year-old Massachusetts chartered commercial bank with $1.1 billion in total assets and ten Massachusetts locations in Cambridge, Beacon Hill, Belmont, Concord, Lincoln and Weston. Cambridge Trust Company is one of New England’s leaders in wealth management with $1.3 billion in client assets under management. In addition, Cambridge Trust Company of New Hampshire offers wealth management services at two New Hampshire locations, Concord and Exeter.

Financial Highlights:

 
CAMBRIDGE BANCORP
QUARTERLY UNAUDITED RESULTS
June 30, 2010
Dollar amounts in thousands (except share data)
       
 
Quarter Ended Year To Date Ended
June 30, June 30,
2010 2009 2010 2009
 
Interest Income $ 11,711 $ 11,345 $ 23,395 $ 22,472
Interest Expense   1,211     1,869     2,522     3,978  
Net Interest Income 10,500 9,476 20,873 18,494
Provision for Loan Losses 150 300 450 600
Non-Interest Income 6,798 4,242 10,918 7,885
Non-Interest Expense   10,165     9,971     20,255     19,533  
Income Before Taxes 6,983 3,447 11,086 6,246
Income Taxes   2,305     968     3,662     1,761  
Net Income $ 4,678   $ 2,479   $ 7,424   $ 4,485  
 
Data Per Common Share:
 
Basic Earnings Per Share $ 1.25 $ 0.67 $ 1.99 $ 1.21
Diluted Earnings Per Share $ 1.24 $ 0.67 $ 1.97 $ 1.21
Dividends Declared Per Share $ 0.35 $ 0.33 $ 0.70 $ 0.66
 
Avg. Common Shares Outstanding:
Basic 3,754,213 3,715,491 3,739,366 3,716,022
Diluted 3,784,913 3,718,452 3,759,234 3,718,066
 
Selected Operating Ratios:
 
Net Interest Margin 4.30 % 4.26 % 4.31 % 4.23 %
Return on Average Assets, after taxes 1.80 % 1.03 % 1.45 % 0.95 %
Return on Average Equity, after taxes 21.84 % 12.79 % 17.38 % 11.74 %
 
 
June 30, December 31, June 30,
2010 2009 2009
 
Total Assets $ 1,059,240 $ 1,018,949 $ 979,354
Total Loans 559,462 537,933 490,225
Non-Performing Loans 1,017 1,092 1,432
Allowance for Loan Losses 9,118 8,729 8,248
Allowance to Non-Performing Loans 896.44 % 799.72 % 575.86 %
Allowance to Total Loans 1.63 % 1.62 % 1.68 %
Total Deposits 922,580 872,767 847,601
Total Stockholders' Equity 90,720 81,708 77,194
 
Book Value Per Share $ 24.13 $ 21.95 $ 20.65
Tangible Book Value Per Share $ 23.92 $ 21.69 $ 20.35
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED BALANCE SHEETS
   
June 30, December 31,
2010 2009
(In thousands)
ASSETS
 
Cash and due from banks $ 14,305 $ 12,762
Overnight investments 42   13,412  
Total cash and cash equivalents 14,347 26,174
Investment securities:
Available for sale, at fair value 372,562 339,833
Held-to-maturity, at amortized cost 84,602   84,073  
Total investment securities 457,164 423,906
Loans:
Residential mortgage 268,730 241,564
Commercial mortgage 170,566 162,002
Home equity 66,736 69,212
Commercial 39,804 48,291
Consumer 13,626   16,864  
Total loans 559,462 537,933
Allowance for loan losses (9,118 ) (8,729 )
Net loans 550,344 529,204
 
Stock in FHLB of Boston, at cost 4,806 4,806
Bank owned life insurance 11,836 11,672
Banking premises and equipment, net 5,364 5,562
Other real estate owned 462 696
Accrued interest receivable 4,539 4,470
Other assets 10,378   12,459  
Total assets $ 1,059,240   $ 1,018,949  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Deposits:
Demand $ 216,651 $ 204,335
Interest bearing checking 245,340 238,152
Money market 64,113 53,099
Savings 251,495 224,360
Certificates of deposit 144,981   152,821  
Total deposits 922,580 872,767
 
Short-term borrowings 389 11,441
Long-term borrowings 30,000 38,000
Other liabilities 15,551   15,033  
Total liabilities 968,520   937,241  
Stockholders' equity:
Common stock, par value $1.00; Authorized
5,000,000 shares; Outstanding: 3,760,117 and
3,722,726 shares, respectively 3,760 3,723
Additional paid-in capital 21,325 20,431
Retained earnings 58,481 53,676
Accumulated other comprehensive income 7,154   3,878  
Total stockholders’ equity 90,720   81,708  
Total liabilities and stockholders’ equity $ 1,059,240   $ 1,018,949  
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
         
Quarter Ended June 30,
2010 2009
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 7,543 $ 6,701
Interest on taxable investment securities 3,692 4,224
Interest on tax exempt investment securities 458 399
Interest on overnight investments 18   21
Total interest income 11,711   11,345
 
Interest expense:
Interest on deposits 918 1,477
Interest on borrowed funds 293   392
Total interest expense 1,211   1,869
 
Net interest income 10,500 9,476
 
Provision for loan losses 150   300
 
Net interest income after provision for loan losses 10,350   9,176
 
Noninterest income:
Wealth management income 2,855 2,693
Deposit account fees 518 627
ATM/Debit card income 246 215
Merchant card services 129 181
Bank owned life insurance income 77 90
Gain on disposition of investment securities 8 232
Loss on disposition of other real estate owned (43 )
Gain on disposition of merchant services portfolio 2,842
Other income 166   204
Total noninterest income 6,798   4,242
 
Noninterest expense:
Salaries and employee benefits 5,802 5,323
Occupancy and equipment 1,627 1,673
Data processing 799 791
Professional services 535 354
Marketing 375 350
FDIC Insurance 318 809
Other expenses 709   671
Total noninterest expense 10,165   9,971
 
Income before income taxes 6,983 3,447
 
Income tax expense 2,305 968
     
Net income $ 4,678   $ 2,479
 
Per share data:
 
Basic earnings per common share $ 1.25 $ 0.67
Diluted earnings per common share $ 1.24 $ 0.67
 
Average shares outstanding - basic 3,754,213 3,715,491
Average shares outstanding - diluted 3,784,913 3,718,452
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
       
Year To Date Ended June 30,
2010 2009
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 14,910 $ 13,263
Interest on taxable investment securities 7,557 8,384
Interest on tax exempt investment securities 905 795
Interest on overnight investments 23   30
Total interest income 23,395   22,472
 
Interest expense:
Interest on deposits 1,874 3,065
Interest on borrowed funds 648   913
Total interest expense 2,522   3,978
 
Net interest income 20,873 18,494
 
Provision for loan losses 450   600
 
Net interest income after provision for loan losses 20,423   17,894
 
Noninterest income:
Wealth management income 5,732 5,161
Deposit account fees 1,020 1,224
ATM/Debit card income 464 405
Merchant card services 267 292
Bank owned life insurance income 164 197
Gain on disposition of investment securities 146 234
Loss on disposition of other real estate owned (43 )
Gain on disposition of merchant services portfolio 2,842
Other income 326   372
Total noninterest income 10,918   7,885
 
Noninterest expense:
Salaries and employee benefits 11,620 10,763
Occupancy and equipment 3,270 3,342
Data processing 1,611 1,592
Professional services 919 659
Marketing 750 700
FDIC Insurance 610 1,121
Other expenses 1,475   1,356
Total noninterest expense 20,255   19,533
 
Income before income taxes 11,086 6,246
 
Income tax expense 3,662 1,761
     
Net income $ 7,424   $ 4,485
 
Per share data:
 
Basic earnings per common share $ 1.99 $ 1.21
Diluted earnings per common share $ 1.97 $ 1.21
 
Average shares outstanding - basic 3,739,366 3,716,022
Average shares outstanding - diluted 3,759,234 3,718,066
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
         
Six Months Ended June 30,
2010 2009
(In thousands)
Cash flows provided by operating activities:
Net income $ 7,424 $ 4,485
Adjustments to arrive at net cash provided by operating activities:
Provision for loan losses 450 600
Amortization of deferred charges/(income), net 237 43
Depreciation and amortization 714 687
Bank owned life insurance income (164 ) (197 )
Gain on disposition of investment securities (146 ) (234 )
Loss on disposition of other real estate owned 43
Gain on disposition of merchant services portfolio (2,842 )
Compensation expense from stock option
and restricted stock grants 344 153
Change in accrued interest receivable, deferred
taxes, other assets and other liabilities 526 7
Other, net (17 ) 30  
Net cash provided by operating activities 6,569   5,574  
Cash flows used by investing activities:
Origination of loans (74,047 ) (65,436 )
Purchase of:
Investment securities - AFS (119,481 ) (114,845 )
Investment securities - HTM (3,576 ) (2,029 )
Maturities, calls and principal payments of:
Loans 52,201 46,792
Investment securities - AFS 63,153 52,420
Investment securities - HTM 2,982 14,081
Proceeds from sale of investment securities - AFS 29,002 6,357
Proceeds from sale of other real estate owned 315
Proceeds from sale of merchant services portfolio 2,842
Purchase of banking premises and equipment (516 ) (539 )
Net cash used by investing activities (47,125 ) (63,199 )
Cash flows provided by financing activities:
Net increase in deposits 49,813 79,947
Net increase/(decrease) in short-term borrowings (11,052 ) (2,366 )
Repayment of long-term borrowings (8,000 ) (17,000 )
Proceeds from issuance of common stock 587 617
Repurchase of common stock (819 )
Cash dividends paid on common stock (2,619 ) (2,460 )
Net cash provided by financing activities 28,729   57,919  
Net increase (decrease) in cash and cash equivalents (11,827 ) 294
Cash and cash equivalents at beginning of period 26,174   39,651  
Cash and cash equivalents at end of period $ 14,347   $ 39,945  
 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 2,545 $ 4,023
Cash paid for income taxes 3,315 1,911
Non-cash transactions:

Change in accumulated other comprehensive income, net of taxes
3,276 (827 )

Copyright Business Wire 2010

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