Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $3,176,000 for the third quarter compared to $3,161,000 for the same quarter in 2009. Diluted earnings per share (EPS) remained unchanged at $0.84 for the third quarter of 2010 versus the same quarter in 2009. For the nine months ending September 30, 2010, unaudited net income was $10,600,000 versus $7,646,000 for the same period in 2009 – an increase of 38.6%. Key factors driving the $2,954,000 increase in net income were the sale of the Bank’s Merchant Services portfolio last quarter and continued growth in net interest income.

“Although there have been some timid signs of improvement in the economy, the current interest rate environment has had a negative impact on the Bank’s net interest margin. We have been able to offset some of the recent margin pressure through modest growth in the loan portfolio,” notes Joseph V. Roller II, the Bank’s president and CEO. “In addition, non-interest expense trended higher during the third quarter as the Bank opened a new branch in Lexington and made additional investments in marketing. These important investments helped to position the Bank well for continued long term growth.”

Net interest income continued to experience growth despite the Bank’s net interest margin having decreased by 15 basis points versus the third quarter last year which is mainly attributed to lower yields earned on the Bank’s investment securities. The increase of $518,000 (5.2%) in net interest income for the third quarter of 2010 versus the same quarter in 2009 was primarily a function of growth in the mortgage loan portfolio and reduced costs for deposits. For the nine months ending September 30, 2010, net interest income of $31.4 million was $2.9 million (10.2%) higher than the same period in 2009.

Non-interest income of $4.6 million for the September 2010 quarter was down slightly compared to the same quarter in 2009. While the Bank’s Wealth Management income increased by $145,000 for the third quarter of 2010, it was offset by lower deposit account fees and merchant card services income. There were no gains on the disposition of investment securities during the third quarter of 2010 which accounted for a $148,000 decrease in non-interest income versus the same quarter last year.

Total loans outstanding as of September 30, 2010 were $548 million compared to $538 million at the end of last year and $514 million at September 30, 2009. Since the beginning of 2010, total loans outstanding have increased a modest $10.0 million. Residential and commercial mortgages loan growth has been strong ($29.5 million) but the increasing demand for working capital loans has not materialized resulting in a $14.4 million decrease in commercial loans outstanding due to decreased usage and loan payoffs.

Non-performing loans as a percentage of total loans stood at 18 basis points at September 30, 2010, a slight decrease from year-end 2009. Loan quality remains solid and the Allowance for Loan Losses stood at $9.2 million or 1.67% of total loans outstanding at September 30, 2010. At December 31, 2009, the Allowance for Loan Losses was $8.7 million or 1.62% of total loans outstanding. The lower provision for loan losses for the nine month period ($500,000 in 2010 versus $900,000 in 2009) is in response to the favorable delinquency experience and slower growth of the loan portfolio.

Total deposits stood at $954 million at period-end compared to $873 million at December 31, 2009, an increase of 9.3%. Total assets at period-end were $1.1 billion compared to $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 eleven Massachusetts locations in Cambridge, Beacon Hill, Belmont, Concord, Lexington, Lincoln and Weston. Cambridge Trust Company is one of New England’s leaders in wealth management with $1.4 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.

The accompanying unaudited condensed interim consolidated financial information should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Cambridge Bancorp 2009 Annual Report, which is posted in the investor relations section of our website at www.cambridgetrust.com. We will also post supplemental financial information for the third quarter of 2010 at the same site later this month. Interim results are not necessarily reflective of the results for the entire year.

Financial Highlights:
CAMBRIDGE BANCORP
QUARTERLY UNAUDITED RESULTS
September 30, 2010
Dollar amounts in thousands (except share data)
       
 
Quarter Ended Nine Months Ended
September 30, September 30,
2010 2009 2010 2009
 
Interest Income $ 11,632 $ 11,604 $ 35,027 $ 34,076
Interest Expense   1,151     1,641     3,673     5,619  
Net Interest Income 10,481 9,963 31,354 28,457
Provision for Loan Losses 50 300 500 900
Non-Interest Income 4,554 4,635 15,472 12,520
Non-Interest Expense   10,386     9,704     30,641     29,237  
Income Before Taxes 4,599 4,594 15,685 10,840
Income Taxes   1,423     1,433     5,085     3,194  
Net Income $ 3,176   $ 3,161   $ 10,600   $ 7,646  
 

Data Per Common Share:
 
Basic Earnings Per Share $ 0.84 $ 0.85 $ 2.83 $ 2.05
Diluted Earnings Per Share $ 0.84 $ 0.84 $ 2.81 $ 2.04
Dividends Declared Per Share $ 0.35 $ 0.33 $ 1.05 $ 0.99
 
Avg. Common Shares Outstanding:
Basic 3,761,286 3,740,168 3,746,753 3,737,586
Diluted 3,791,682 3,743,814 3,770,596 3,739,819
 

Selected Operating Ratios:
 
Net Interest Margin 4.12 % 4.27 % 4.24 % 4.24 %
Return on Average Assets, after taxes 1.19 % 1.28 % 1.36 % 1.07 %
Return on Average Equity, after taxes 13.93 % 16.07 % 16.18 % 13.21 %
 
 
September 30, December 31, September 30,
2010 2009 2009
 
Total Assets $ 1,090,610 $ 1,018,949 $ 997,853
Total Loans 547,938 537,933 514,002
Non-Performing Loans 975 1,092 1,479
Allowance for Loan Losses 9,175 8,729 8,502
Allowance to Non-Performing Loans 940.62 % 799.72 % 574.84 %
Allowance to Total Loans 1.67 % 1.62 % 1.65 %
Total Deposits 953,609 872,767 846,923
Total Stockholders' Equity 91,328 81,708 81,802
 
Book Value Per Share $ 24.29 $ 21.95 $ 21.87
Tangible Book Value Per Share $ 24.11 $ 21.69 $ 21.59
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED BALANCE SHEETS
   
September 30, December 31,
2010 2009
(In thousands)
ASSETS
 
Cash and due from banks $ 31,675 $ 12,762
Overnight investments   13,412  
Total cash and cash equivalents 31,675 26,174
Investment securities:
Available for sale, at fair value 403,539 339,833
Held-to-maturity, at amortized cost 79,452   84,073  
Total investment securities 482,991 423,906
Loans:
Residential mortgage 265,589 241,564
Commercial mortgage 167,514 162,002
Home equity 68,740 69,212
Commercial 33,895 48,291
Consumer 12,200   16,864  
Total loans 547,938 537,933
Allowance for loan losses (9,175 ) (8,729 )
Net loans 538,763 529,204
 
Stock in FHLB of Boston, at cost 4,806 4,806
Bank owned life insurance 11,924 11,672
Banking premises and equipment, net 5,785 5,562
Other real estate owned 696
Accrued interest receivable 4,170 4,470
Other assets 10,496   12,459  
Total assets $ 1,090,610   $ 1,018,949  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Deposits:
Demand $ 226,922 $ 204,335
Interest bearing checking 242,392 238,152
Money market 69,209 53,099
Savings 272,380 224,360
Certificates of deposit 142,706   152,821  
Total deposits 953,609 872,767
 
Short-term borrowings 238 11,441
Long-term borrowings 30,000 38,000
Other liabilities 15,435   15,033  
Total liabilities 999,282   937,241  
Stockholders' equity:

Common stock, par value $1.00; Authorized 5,000,000 shares; Outstanding: 3,759,891 and 3,722,726 shares, respectively
3,760 3,723
Additional paid-in capital 21,360 20,431
Retained earnings 60,038 53,676
Accumulated other comprehensive income 6,170   3,878  
Total stockholders’ equity 91,328   81,708  
Total liabilities and stockholders’ equity $ 1,090,610   $ 1,018,949  
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
 
Quarter Ended September 30,
2010 2009
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 7,549 $ 6,978
Interest on taxable investment securities 3,614 4,205
Interest on tax exempt investment securities 461 401
Interest on overnight investments 8 20
Total interest income 11,632 11,604
 
Interest expense:
Interest on deposits 853 1,244
Interest on borrowed funds 298 397
Total interest expense 1,151 1,641
 
Net interest income 10,481 9,963
 
Provision for loan losses 50 300
 
Net interest income after provision for loan losses 10,431 9,663
 
Noninterest income:
Wealth management income 3,421 3,276
Deposit account fees 546 570
ATM/Debit card income 244 229
Merchant card services 173
Bank owned life insurance income 88 83
Gain on disposition of investment securities 148
Gain on disposition of other real estate owned 33
Other income 222 156
Total noninterest income 4,554 4,635
 
Noninterest expense:
Salaries and employee benefits 5,992 5,630
Occupancy and equipment 1,648 1,627
Data processing 789 787
Professional services 435 361
Marketing 514 350
FDIC Insurance 320 293
Other expenses 688 656
Total noninterest expense 10,386 9,704
 
Income before income taxes 4,599 4,594
 
Income tax expense 1,423 1,433
   
Net income $ 3,176 $ 3,161
 
Per share data:
 
Basic earnings per common share $ 0.84 $ 0.85
Diluted earnings per common share $ 0.84 $ 0.84
 
Average shares outstanding - basic 3,761,286 3,740,168
Average shares outstanding - diluted 3,791,682 3,743,814
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
   
Nine Months Ended September 30,
2010 2009
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 22,459 $ 20,241
Interest on taxable investment securities 11,171 12,589
Interest on tax exempt investment securities 1,366 1,196
Interest on overnight investments 31   50
Total interest income 35,027   34,076
 
Interest expense:
Interest on deposits 2,727 4,309
Interest on borrowed funds 946   1,310
Total interest expense 3,673   5,619
 
Net interest income 31,354 28,457
 
Provision for loan losses 500   900
 
Net interest income after provision for loan losses 30,854   27,557
 
Noninterest income:
Wealth management income 9,153 8,437
Deposit account fees 1,566 1,794
ATM/Debit card income 708 634
Merchant card services 267 465
Bank owned life insurance income 252 280
Gain on disposition of investment securities 146 382
Loss on disposition of other real estate owned (10 )
Gain on disposition of merchant services portfolio 2,842
Other income 548   528
Total noninterest income 15,472   12,520
 
Noninterest expense:
Salaries and employee benefits 17,612 16,393
Occupancy and equipment 4,918 4,969
Data processing 2,400 2,379
Professional services 1,354 1,020
Marketing 1,264 1,050
FDIC Insurance 930 1,414
Other expenses 2,163   2,012
Total noninterest expense 30,641   29,237
 
Income before income taxes 15,685 10,840
 
Income tax expense 5,085 3,194
   
Net income $ 10,600   $ 7,646
 
Per share data:
 
Basic earnings per common share $ 2.83 $ 2.05
Diluted earnings per common share $ 2.81 $ 2.04
 
Average shares outstanding - basic 3,746,753 3,737,586
Average shares outstanding - diluted 3,770,596 3,739,819
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
   
Nine Months Ended September 30,
2010 2009
(In thousands)
Cash flows provided by operating activities:
Net income $ 10,600 $ 7,646
Adjustments to arrive at net cash provided by operating activities:
Provision for loan losses 500 900
Amortization of deferred charges/(income), net 450 213
Depreciation and amortization 1,086 1,044
Bank owned life insurance income (252 ) (279 )
Gain on disposition of investment securities (146 ) (382 )
Loss on disposition of other real estate owned 10
Gain on disposition of merchant services portfolio (2,842 )

Compensation expense from stock option and restricted stock grants
257 227

Change in accrued interest receivable, deferred taxes, other assets and other liabilities
1,183 903
Other, net (4 ) 39  
Net cash provided by operating activities 10,842   10,311  
Cash flows used by investing activities:
Origination of loans (97,568 ) (117,434 )
Purchase of:
Investment securities - AFS (194,770 ) (169,650 )
Investment securities - HTM (5,441 ) (3,626 )
Maturities, calls and principal payments of:
Loans 87,165 74,891
Investment securities - AFS 105,852 73,790
Investment securities - HTM 9,966 26,465
Proceeds from sale of investment securities - AFS 29,002 10,452
Proceeds from sale of other real estate owned 810
Proceeds from sale of merchant services portfolio 2,842
Purchase of banking premises and equipment (1,309 ) (720 )
Net cash used by investing activities (63,451 ) (105,832 )
Cash flows provided by financing activities:
Net increase in deposits 80,842 79,269
Net increase/(decrease) in short-term borrowings (11,203 ) 11,779
Repayment of long-term borrowings (8,000 ) (17,000 )
Proceeds from issuance of common stock 788 680
Repurchase of common stock (380 ) (819 )
Cash dividends paid on common stock (3,937 ) (3,694 )
Net cash provided by financing activities 58,110   70,215  
Net increase (decrease) in cash and cash equivalents 5,501 (25,306 )
Cash and cash equivalents at beginning of period 26,174   39,651  
Cash and cash equivalents at end of period $ 31,675   $ 14,345  
 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 3,706 $ 5,703
Cash paid for income taxes 5,760 2,087
Non-cash transactions:
Change in accumulated other comprehensive income, net of taxes 2,292 1,718

Copyright Business Wire 2010

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