Cambridge Bancorp Reports Continued Solid Earnings Performance

Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $3,451,000 for the second quarter of 2012 compared to $3,176,000 for the same quarter in 2011. The $275,000 (8.7%) increase in earnings was primarily attributable to growth in both net interest income and noninterest income. Diluted earnings per share were $0.89 for the second quarter of 2012 versus $0.83 for the same quarter in 2011. For the six months ended June 30, 2012, unaudited net income was $6,736,000 compared to $6,281,000 for the first half of 2011. Diluted earnings per share were $1.74 for the first six months of 2012 versus $1.64 for the same period in 2011.

“We are pleased to report continued solid earnings through the second quarter of 2012. A sustained increase in deposits and loans drove core earnings, complemented by an upswing in Wealth Management’s assets under management, which has grown by $238 million to $1.7 billion since year-end 2011. While the ongoing low interest rate environment presents challenges, the Bank is prepared to compete in this environment and is positioned to capitalize on new business opportunities. We are also pleased to announce that the Bank received approval to open a branch in Boston’s South End,” notes Joseph V. Roller II, president and CEO.

Net interest income of $11.5 million for the second quarter of 2012 was $545,000 (5.0%) higher than the same quarter in 2011. For the six months ended June 30, 2012, net interest income of $23.1 million was $1.5 million (7.0%) higher than the same period in 2011.

Noninterest income for the second quarter of 2012 was $4.8 million compared to $4.5 million for the same quarter in 2011. The Bank continued to build momentum by generating an additional $77,000 (9.7%) in activity fee income and increasing wealth management income by $56,000 (1.7%) between the comparable periods. Gains on loans sold resulted in $76,000 of noninterest income for the quarter ended June 30, 2012. This is the first quarter the Bank sold 30-year conforming loans to the secondary market. The Bank maintains servicing rights on these loans. Additionally, the second quarter of 2012 contained $172,000 of gains on disposition of investment securities, an increase of $79,000 as compared to the same quarter in 2011.

The extended low interest environment continues to negatively impact the Bank’s net interest margin. The Bank’s net interest margin decreased by 43 basis points to 3.59% for the second quarter of 2012 compared to the same quarter in 2011; and by 30 basis points for the comparable six month period. Deposit growth has accelerated, with total deposits increasing by $77.3 million (6.9%) since year-end 2011.

For the second quarter of 2012, noninterest expense totaled $11.1 million, an increase of $525,000 (5.0%) compared to the same quarter in 2011. The primary factors attributed to the increase in noninterest expense were higher salaries and benefits of $512,000 (8.4%), occupancy and equipment of $79,000 (4.5%), and FDIC insurance of $42,000. These expenses were slightly offset by a decrease in professional services of $85,000 (17.3%) during the second quarter of 2012.

Since year-end 2011, total loans outstanding have increased $29.3 million (4.3%) to $702.5 million. The increase came primarily from commercial mortgage loan growth of $26.7 million (11.5%) as low interest rates provide an attractive environment for qualified businesses looking to purchase or refinance properties.

Non-performing loans as a percentage of total loans stood at 0.16% at June 30, 2012, a slight decrease from 0.18% at December 31, 2011. Loan quality remains sound and the Allowance for Loan Losses stood at $10.8 million or 1.54% of total loans outstanding at June 30, 2012. At December 31, 2011, the Allowance for Loan Losses was $10.2 million or 1.51% of total loans outstanding. Primarily in response to continued loan growth, the provision for loan losses was $250,000 for the current quarter.

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 $1.4 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 $1.7 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 2011 Annual Report, which is posted in the investor relations section of our website at www.cambridgetrust.com/annualreport. We will also post supplemental financial information for second quarter of 2012 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
June 30, 2012
Dollar amounts in thousands (except share data)
       
 
Three Months Ended Six Months Ended
June 30, June 30,
2012 2011 2012 2011
 
Interest Income $ 12,409 $ 11,948 $ 24,813 $ 23,549
Interest Expense   876     960     1,743     1,998  
Net Interest Income 11,533 10,988 23,070 21,551
Provision for Loan Losses 250 250 550 500
Non-Interest Income 4,834 4,528 9,639 9,170
Non-Interest Expense   11,073     10,548     22,336     20,962  
Income Before Taxes 5,044 4,718 9,823 9,259
Income Taxes   1,593     1,542     3,087     2,978  
Net Income $ 3,451   $ 3,176   $ 6,736   $ 6,281  
 

Data Per Common Share:
 
Basic Earnings Per Share $ 0.90 $ 0.84 $ 1.76 $ 1.66
Diluted Earnings Per Share $ 0.89 $ 0.83 $ 1.74 $ 1.64
Dividends Declared Per Share $ 0.37 $ 0.35 $ 0.74 $ 0.70
 
Avg. Common Shares Outstanding:
Basic 3,842,976 3,797,457 3,830,199 3,781,031
Diluted 3,879,498 3,844,931 3,866,397 3,827,097
 

Selected Operating Ratios:
 
Net Interest Margin 3.59 % 4.02 % 3.65 % 3.95 %
Return on Average Assets, after taxes 1.02 % 1.10 % 1.02 % 1.10 %
Return on Average Equity, after taxes 13.95 % 13.76 % 13.77 % 13.83 %
 
 
June 30, December 31, June 30,
2012 2011 2011
 
Total Assets $ 1,353,344 $ 1,275,860 $ 1,156,726
Total Loans 702,533 673,265 641,568
Non-Performing Loans 1,131 1,204 871
Allowance for Loan Losses 10,790 10,159 9,787
Allowance to Non-Performing Loans 953.85 % 844.09 % 1124.28 %
Allowance to Total Loans 1.54 % 1.51 % 1.53 %
Total Deposits 1,202,950 1,125,654 1,005,943
Total Stockholders' Equity 100,319 96,633 94,664
 
Book Value Per Share $ 26.08 $ 25.39 $ 24.89
Tangible Book Value Per Share $ 25.98 $ 25.28 $ 24.76
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED BALANCE SHEETS
       
June 30, December 31,
2012 2011
(In thousands)
ASSETS
 
Cash and due from banks $ 42,029 $ 22,512
Overnight investments    
Total cash and cash equivalents 42,029 22,512
Investment securities:
Available for sale, at fair value 495,220 470,232
Held-to-maturity, at amortized cost 72,683   74,256  
Total investment securities 567,903 544,488
 
Loans held for sale 253
 
Loans:
Residential mortgage 333,127 330,933
Commercial mortgage 258,340 231,595
Home equity 56,454 61,307
Commercial 39,126 38,260
Consumer 15,486   11,170  
Total loans 702,533 673,265
Allowance for loan losses (10,790 ) (10,159 )
Net loans 691,743 663,106
 
Stock in FHLB of Boston, at cost 5,010 4,806
Bank owned life insurance 22,673 17,331
Banking premises and equipment, net 5,812 6,216
Accrued interest receivable 4,364 4,423
Other assets 13,557   12,978  
Total assets $ 1,353,344   $ 1,275,860  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Deposits:
Demand $ 319,792 $ 285,724
Interest bearing checking 307,308 316,454
Money market 65,464 58,532
Savings 367,028 328,771
Certificates of deposit 143,358   136,173  
Total deposits 1,202,950 1,125,654
 
Short-term borrowings 2,500
Long-term borrowings 30,000 30,000
Other liabilities 20,075   21,073  
Total liabilities 1,253,025   1,179,227  
Stockholders' equity:
Common stock, par value $1.00; Authorized
5,000,000 shares; Outstanding: 3,846,046 and
3,805,748 shares, respectively 3,846 3,806
Additional paid-in capital 23,808 23,001
Retained earnings 72,129 68,232
Accumulated other comprehensive income 536   1,594  
Total stockholders’ equity 100,319   96,633  
Total liabilities and stockholders’ equity $ 1,353,344   $ 1,275,860  
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
           
Three Months Ended June 30,
2012 2011
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 8,359 $ 8,114
Interest on taxable investment securities 3,528 3,324
Interest on tax exempt investment securities 508 495
Dividends on FHLB of Boston stock 6 4
Interest on overnight investments 8 11
Total interest income 12,409 11,948
 
Interest expense:
Interest on deposits 561 662
Interest on borrowed funds 315 298
Total interest expense 876 960
 
Net interest income 11,533 10,988
 
Provision for loan losses 250 250
 
Net interest income after provision for loan losses 11,283 10,738
 
Noninterest income:
Wealth management income 3,366 3,310
Deposit account fees 606 539
ATM/Debit card income 265 255
Bank owned life insurance income 161 136
Gain on disposition of investment securities 172 93
Gain on loans held for sale 76
Other income 188 195
Total noninterest income 4,834 4,528
 
Noninterest expense:
Salaries and employee benefits 6,635 6,123
Occupancy and equipment 1,847 1,768
Data processing 904 886
Professional services 407 492
Marketing 437 437
FDIC Insurance 175 133
Other expenses 668 709
Total noninterest expense 11,073 10,548
 
Income before income taxes 5,044 4,718
 
Income tax expense 1,593 1,542
   
Net income $ 3,451 $ 3,176
 
Per share data:
 
Basic earnings per common share $ 0.90 $ 0.84
Diluted earnings per common share $ 0.89 $ 0.83
 
Average shares outstanding - basic 3,842,976 3,797,457
Average shares outstanding - diluted 3,879,498 3,844,931
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
             
Three Months Ended June 30,
2012 2011
(In thousands)
 
 
Net income $ 3,451 $ 3,176
 
Other comprehensive income/(loss), net of tax:
Defined benefit retirement plans:
Change in unfunded retirement liability (96 ) (39 )
Unrealized gains/(losses) on Available for
Sale securities:
Unrealized holding gains/(losses) arising
during the period (51 ) 2,013
Less: reclassification adjustment for gains
recognized in net income (111 ) (57 )
   
Other comprehensive income/(loss) (258 ) 1,917
   
Comprehensive income/(loss) $ 3,193   $ 5,093  
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
           
Six Months Ended June 30,
2012 2011
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 16,687 $ 15,723
Interest on taxable investment securities 7,089 6,819
Interest on tax exempt investment securities 1,016 986
Dividends on FHLB of Boston stock 12 7
Interest on overnight investments 9 14
Total interest income 24,813 23,549
 
Interest expense:
Interest on deposits 1,113 1,405
Interest on borrowed funds 630 593
Total interest expense 1,743 1,998
 
Net interest income 23,070 21,551
 
Provision for loan losses 550 500
 
Net interest income after provision for loan losses 22,520 21,051
 
Noninterest income:
Wealth management income 6,709 6,570
Deposit account fees 1,198 1,077
ATM/Debit card income 504 483
Bank owned life insurance income 342 250
Gain on disposition of investment securities 429 361
Gain on loans held for sale 76
Other income 381 429
Total noninterest income 9,639 9,170
 
Noninterest expense:
Salaries and employee benefits 13,339 12,025
Occupancy and equipment 3,791 3,595
Data processing 1,791 1,781
Professional services 867 936
Marketing 875 875
FDIC Insurance 347 445
Other expenses 1,326 1,305
Total noninterest expense 22,336 20,962
 
Income before income taxes 9,823 9,259
 
Income tax expense 3,087 2,978
   
Net income $ 6,736 $ 6,281
 
Per share data:
 
Basic earnings per common share $ 1.76 $ 1.66
Diluted earnings per common share $ 1.74 $ 1.64
 
Average shares outstanding - basic 3,830,199 3,781,031
Average shares outstanding - diluted 3,866,397 3,827,097
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
             
Six Months Ended June 30,
2012 2011
(In thousands)
 
 
Net income $ 6,736 $ 6,281
 
Other comprehensive income/(loss), net of tax:
Defined benefit retirement plans:
Change in unfunded retirement liability (191 ) (55 )
Unrealized gains/(losses) on Available for
Sale securities:
Unrealized holding gains/(losses) arising
during the period (590 ) 1,014
Less: reclassification adjustment for gains
recognized in net income (277 ) (231 )
   
Other comprehensive income/(loss) (1,058 ) 728
   
Comprehensive income/(loss) $ 5,678   $ 7,009  
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
           
Six Months Ended June 30,
2012 2011
(In thousands)
Cash flows provided by operating activities:
Net income $ 6,736 $ 6,281
Adjustments to arrive at net cash provided by operating activities:
Provision for loan losses 550 500
Amortization of deferred charges/(income), net 432 71
Depreciation and amortization 715 726
Bank owned life insurance income (342 ) (250 )
Gain on disposition of investment securities (429 ) (361 )
Compensation expense from stock option
and restricted stock grants 228 196
Change in loans held for sale (253 )
Change in accrued interest receivable, deferred taxes,
other assets and other liabilities (1,235 ) (506 )
Other, net 90   413  
Net cash provided by operating activities 6,492   7,070  
Cash flows used by investing activities:
Origination of loans (96,734 ) (126,365 )
Purchase of:
Investment securities - AFS (105,858 ) (59,448 )
Investment securities - HTM (823 ) (492 )
Maturities, calls and principal payments of:
Loans 67,257 53,198
Investment securities - AFS 56,986 73,767
Investment securities - HTM 2,388 7,327
Proceeds from sale of investment securities - AFS 22,748 35,351
Purchase of bank owned life insurance (5,000 ) (5,001 )
Net increase in FHLB of Boston stock (204 )
Purchase of banking premises and equipment (311 ) (500 )
Net cash used by investing activities (59,551 ) (22,163 )
Cash flows provided by financing activities:
Net increase in deposits 77,296 12,135
Net (decrease)/increase in short-term borrowings (2,500 ) 8,823
Proceeds from issuance of common stock 619 999
Repurchase of common stock (3 ) (109 )
Cash dividends paid on common stock (2,836 ) (2,650 )
Net cash provided by financing activities 72,576   19,198  
Net increase in cash and cash equivalents 19,517 4,105
Cash and cash equivalents at beginning of period 22,512   15,756  
Cash and cash equivalents at end of period $ 42,029   $ 19,861  
 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 1,752 $ 2,016
Cash paid for income taxes 2,705 3,515
Non-cash transactions:
Change in accumulated other comprehensive income, net of taxes (1,058 ) 728

Copyright Business Wire 2010

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