Cambridge Bancorp Announces Steady Earnings For Full-Year 2011

Cambridge Bancorp (OTCBB: CATC) today announced unaudited net income of $12,477,000 for the year ended December 31, 2011, compared to net income of $13,254,000 for the year ended December 31, 2010. It should be noted the Bank sold its Merchant Services portfolio during the second quarter of 2010. The after tax impact of that sale was $1,591,000 or $0.42 per diluted share. Excluding that sale, unaudited net income of $12,477,000 for the year ended December 31, 2011 compared favorably by 7.0% to $11,663,000 for the year ended December 31, 2010.

Diluted earnings per share (EPS) were $3.25 for the year ended December 31, 2011 compared to $3.51 diluted earnings per share for the prior year. Excluding the Merchant Services portfolio sale, diluted earnings per share for the year ended December 31, 2010 were $3.09.

“We are pleased to report continued core earnings growth for the full year of 2011,” noted Joseph V. Roller II, president and CEO. “Our 2011 results are evidence that we continue to execute our business plans and remain focused on providing exceptional service to our customers.”

“The Bank experienced another historic year for deposit growth with an increase of $131.8 million (13.3%) as consumers and businesses gravitated to more community-oriented institutions. Loan growth achieved similar success with a $58.0 million (21.3%) increase in residential mortgages and a $53.7 million (30.2%) increase in commercial mortgage loans. While we expect the industry will continue to face the challenges of modest economic growth, a low interest rate environment, and increasing regulatory burden in 2012, we are confident in our ability to execute on our strategies to be the compelling choice for consumers and businesses in our markets,” added Mr. Roller.

For the year ended December 31, 2011 net interest income increased $1,982,000, or 4.7%, to $43.7 million compared to $41.8 million for 2010. The increase in net interest income for the year was driven primarily by sustained deposit and loan growth, as well as a reduction in interest paid on deposits. Lower yields earned on investment securities was the principal cause for the decrease in the Bank’s net interest margin of 25 basis points to 3.90% for the year compared to 4.15% for the year ended December 31, 2010.

Noninterest income totaled $18.1 million for the year 2011 compared to $19.9 million for 2010. The strategic exit from the Merchant Services business was the primary contributor to the Bank’s decrease in noninterest income and earnings, which generated $267,000 in fee income and a $2.8 million gain on the disposition of the portfolio in 2010. Excluding that sale, noninterest income of $18.1 million for the year ended December 31, 2011 compared favorably by 8.2% to $16.8 million for the year ended December 31, 2010. The noninterest income improvement for 2011 was driven by wealth management fee income, which increased by $788,000. Other contributors to the noninterest income increase were higher gains on disposition of investment securities of $318,000 and higher bank-owned life insurance income of $152,000 for the year.

Noninterest expense increased by $1.2 million, or 3.0%, to $42.7 million for the year ended December 31, 2011. The increase is primarily the result of additional investments in salaries and benefits of $1.2 million, and occupancy and equipment of $631,000. These increases were partially offset by a FDIC premium decrease of $544,000.

Total loans outstanding at year-end 2011 were $673 million compared to $569 million at year-end 2010, an increase of $104.7 million or 18.4%. Loan quality remained sound across consumer and corporate customer bases with non-performing loans totaling $1.2 million at December 31, 2011, a slight increase compared to the year-end 2010. The Allowance for Loan Losses was $10.2 million or 1.51% of total loans outstanding at year-end 2011. At December 31, 2010, the Allowance for Loan Losses was $8.9 million or 1.56% of total loans outstanding. The provision for loan losses of $1.0 million during 2011 was $450,000 higher than the prior year’s provision. This increase was primarily in response to the continued growth in the loan portfolio in conjunction with the stable levels of non-performers.

In the fourth quarter of 2011, unaudited net income was $2,910,000, compared to $2,654,000 for the same quarter in 2010.

“Results for the fourth quarter reflect the cumulative growth the Bank has achieved over the year,” said Mr. Roller. “The solid earnings increase of $256,000 (9.6%) for the fourth quarter of 2011 as compared to the fourth quarter of 2010 was attributable to a healthy increase in net interest income of $826,000 and a decrease in our FDIC premium of $212,000. These were partially offset by higher salaries and benefits of $633,000 and an increase in the provision for loan losses of $200,000.”

Total deposits at year-end 2011 were $1.1 billion compared to $994 million at year-end 2010.

Total assets at year-end 2011 were $1.3 billion versus $1.1 billion year-end 2010.

About Cambridge Bancorp

Cambridge Bancorp and its subsidiary, Cambridge Trust Company, are based in Cambridge, Massachusetts, in the heart of Harvard Square. Cambridge Trust Company is a 122-year-old Massachusetts chartered commercial bank with $1.3 billion in total assets and 11 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 $1.5 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 Portsmouth.

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 2010 Annual Report, which is posted in the investor relations section of our website at www.cambridgetrust.com. We will also post the Cambridge Bancorp 2011 Annual Report at the same site later this quarter.

Financial Highlights:
CAMBRIDGE BANCORP
QUARTERLY UNAUDITED RESULTS
December 31, 2011
Dollar amounts in thousands (except share data)
       
 
Quarter Ended Year Ended
December 31, December 31,
  2011     2010     2011     2010  
 
Interest Income $ 12,191 $ 11,529 $ 47,663 $ 46,556
Interest Expense   969     1,133     3,931     4,806  
Net Interest Income 11,222 10,396 43,732 41,750
Provision for Loan Losses 250 50 1,000 550
Non-Interest Income 4,318 4,405 18,147 19,877
Non-Interest Expense   11,157     10,803     42,685     41,444  
Income Before Taxes 4,133 3,948 18,194 19,633
Income Taxes   1,223     1,294     5,717     6,379  
Net Income $ 2,910   $ 2,654   $ 12,477   $ 13,254  
 

Data Per Common Share:
 
Basic Earnings Per Share $ 0.77 $ 0.71 $ 3.29 $ 3.53
Diluted Earnings Per Share $ 0.76 $ 0.70 $ 3.25 $ 3.51
Dividends Declared Per Share $ 0.37 $ 0.35 $ 1.42 $ 1.40
 
Avg. Common Shares Outstanding:
Basic 3,799,977 3,759,891 3,791,167 3,750,065
Diluted 3,836,814 3,794,988 3,834,569 3,776,787
 

Selected Operating Ratios:
 
Net Interest Margin 3.79 % 3.91 % 3.90 % 4.15 %
Return on Average Assets, after taxes 0.93 % 0.95 % 1.06 % 1.25 %
Return on Average Equity, after taxes 11.86 % 11.56 % 13.26 % 14.98 %
 
 
December 31, December 31,
  2011     2010  
 
Total Assets $ 1,275,860 $ 1,130,988
Total Loans 673,265 568,568
Non-Performing Loans 1,204 1,147
Allowance for Loan Losses 10,159 8,885
Allowance to Non-Performing Loans 844.09 % 774.31 %
Allowance to Total Loans 1.51 % 1.56 %
Total Deposits 1,125,654 993,808
Total Stockholders' Equity 96,633 89,218
 
Book Value Per Share $ 25.39 $ 23.73
Tangible Book Value Per Share $ 25.28 $ 23.58
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED BALANCE SHEETS
       
December 31,
2011 2010
(In thousands)
ASSETS
 
Cash and due from banks $ 22,512 $ 15,756
Overnight investments    
Total cash and cash equivalents 22,512 15,756
Investment securities:
Available for sale, at fair value 470,232 434,829
Held-to-maturity, at amortized cost 74,256   81,272  
Total investment securities 544,488 516,101
Loans:
Residential mortgage 330,933 272,928
Commercial mortgage 231,595 177,944
Home equity 61,307 66,169
Commercial 38,260 38,258
Consumer 11,170   13,269  
Total loans 673,265 568,568
Allowance for loan losses (10,159 ) (8,885 )
Net loans 663,106 559,683
 
Stock in FHLB of Boston, at cost 4,806 4,806
Bank owned life insurance 17,331 11,811
Banking premises and equipment, net 6,216 6,043
Accrued interest receivable 4,423 4,478
Other assets 12,978   12,310  
Total assets $ 1,275,860   $ 1,130,988  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Deposits:
Demand $ 285,724 $ 233,199
Interest bearing checking 316,454 280,060
Money market 58,532 55,026
Savings 328,771 287,784
Certificates of deposit 136,173   137,739  
Total deposits 1,125,654 993,808
 
Short-term borrowings 2,500 1,902
Long-term borrowings 30,000 30,000
Other liabilities 21,073   16,060  
Total liabilities 1,179,227   1,041,770  
Stockholders' equity:
Common stock, par value $1.00; Authorized
5,000,000 shares; Outstanding: 3,805,748 and
3,759,891 shares, respectively 3,806 3,760
Additional paid-in capital 23,001 21,456
Retained earnings 68,232 61,375
Accumulated other comprehensive income 1,594   2,627  
Total stockholders’ equity 96,633   89,218  
Total liabilities and stockholders’ equity $ 1,275,860   $ 1,130,988  
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
       
Quarter Ended December 31,
2011 2010
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 8,330 $ 7,466
Interest on taxable investment securities 3,338 3,571
Interest on tax exempt investment securities 502 477
Dividends on FHLB of Boston stock 4
Interest on overnight investments 17 15
Total interest income 12,191 11,529
 
Interest expense:
Interest on deposits 673 837
Interest on borrowed funds 296 296
Total interest expense 969 1,133
 
Net interest income 11,222 10,396
 
Provision for loan losses 250 50
 
Net interest income after provision for loan losses 10,972 10,346
 
Noninterest income:
Wealth management income 3,122 3,211
Deposit account fees 575 544
ATM/Debit card income 251 250
Bank owned life insurance income 128 115
Gain on disposition of investment securities 87 88
Gain on disposition of other real estate owned
Other income 155 197
Total noninterest income 4,318 4,405
 
Noninterest expense:
Salaries and employee benefits 6,916 6,283
Occupancy and equipment 1,876 1,774
Data processing 888 793
Professional services 276 363
Marketing 373 480
FDIC Insurance 155 367
Other expenses 673 743
Total noninterest expense 11,157 10,803
 
Income before income taxes 4,133 3,948
 
Income tax expense 1,223 1,294
   
Net income $ 2,910 $ 2,654
 
Per share data:
 
Basic earnings per common share $ 0.77 $ 0.71
Diluted earnings per common share $ 0.76 $ 0.70
 
Average shares outstanding - basic 3,799,977 3,759,891
Average shares outstanding - diluted 3,836,814 3,794,988
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
         
Year Ended December 31,
2011 2010
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 32,401 $ 29,926
Interest on taxable investment securities 13,219 14,742
Interest on tax exempt investment securities 1,987 1,842
Dividends on FHLB of Boston stock 14
Interest on overnight investments 42 46  
Total interest income 47,663 46,556  
 
Interest expense:
Interest on deposits 2,745 3,564
Interest on borrowed funds 1,186 1,242  
Total interest expense 3,931 4,806  
 
Net interest income 43,732 41,750
 
Provision for loan losses 1,000 550  
 
Net interest income after provision for loan losses 42,732 41,200  
 
Noninterest income:
Wealth management income 13,152 12,364
Deposit account fees 2,179 2,110
ATM/Debit card income 981 958
Merchant card services 267
Bank owned life insurance income 519 367
Gain on disposition of investment securities 552 234
Loss on disposition of other real estate owned (10 )
Gain on disposition of merchant services portfolio 2,842
Other income 764 745  
Total noninterest income 18,147 19,877  
 
Noninterest expense:
Salaries and employee benefits 25,116 23,895
Occupancy and equipment 7,323 6,692
Data processing 3,594 3,194
Professional services 1,588 1,717
Marketing 1,703 1,744
FDIC Insurance 752 1,296
Other expenses 2,609 2,906  
Total noninterest expense 42,685 41,444  
 
Income before income taxes 18,194 19,633
 
Income tax expense 5,717 6,379
   
Net income $ 12,477 $ 13,254  
 
Per share data:
 
Basic earnings per common share $ 3.29 $ 3.53
Diluted earnings per common share $ 3.25 $ 3.51
 
Average shares outstanding - basic 3,791,167 3,750,065
Average shares outstanding - diluted 3,834,569 3,776,787
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
   
Year Ended December 31,
2011 2010
(In thousands)
Cash flows provided by operating activities:
Net income $ 12,477 $ 13,254
Adjustments to arrive at net cash provided by operating activities:
Provision for loan losses 1,000 550
Amortization of deferred charges/(income), net 561 622
Depreciation and amortization 1,441 1,454
Bank owned life insurance income (519) (367)
Gain on disposition of investment securities (552) (234)
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
401 352

Change in accrued interest receivable, deferred taxes, other assets and other liabilities
359 958
Other, net 481 18
Net cash provided by operating activities 15,649 13,775
Cash flows used by investing activities:
Origination of loans (211,667) (142,107)
Purchase of:
Investment securities - AFS (235,502) (279,656)
Investment securities - HTM (2,531) (8,958)
Maturities, calls and principal payments of:
Loans 106,443 110,631
Investment securities - AFS 164,920 149,789
Investment securities - HTM 9,526 11,651
Proceeds from sale of investment securities - AFS 38,540 34,083
Proceeds from sale of other real estate owned 810
Proceeds from sale of merchant services portfolio 2,842
Purchase of bank owned life insurance (5,001)
Purchase of banking premises and equipment (1,614) (1,935)
Net cash used by investing activities (136,886) (122,850)
Cash flows provided by financing activities:
Net increase in deposits 131,846 121,041
Net increase/(decrease) in short-term borrowings 598 (9,539)
Repayment of long-term borrowings (8,000)
Proceeds from issuance of common stock 1,224 788
Repurchase of common stock (287) (380)
Cash dividends paid on common stock (5,388) (5,253)
Net cash provided by financing activities 127,993 98,657
Net increase (decrease) in cash and cash equivalents 6,756 (10,418)
Cash and cash equivalents at beginning of period 15,756 26,174
Cash and cash equivalents at end of period $ 22,512 $ 15,756
 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 3,946 $ 4,828
Cash paid for income taxes 6,475 7,205
Non-cash transactions:
Change in accumulated other comprehensive income, net of taxes (1,033) (1,251)
Transfer of loans to other real estate owned 124

Copyright Business Wire 2010

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