Cambridge Bancorp Announces Record Earnings for Full-Year 2012

Cambridge Bancorp Announces Record Earnings for Full-Year 2012

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Cambridge Bancorp (OTCBB: CATC) today announced unaudited net income of $13,403,000 for the year ended December 31, 2012, representing an increase of $926,000, or 7.4%, compared to net income of $12,477,000 for the year ended December 31, 2011. Diluted earnings per share (EPS) were $3.45, a 6.2% increase over diluted earnings per share for the prior year.

"We are pleased to report solid financial performance for the year of 2012," noted Joseph V. Roller II, president and CEO. "Our across-the-board balance sheet growth and steady increase in noninterest income demonstrate that we continue to achieve our goals throughout the Bank while offering a customer-centric banking experience."

The Bank experienced another historic year for deposit growth with an increase of $155.7 million, or 13.8%, as consumers and businesses continued to place their liquid funds with sound financial institutions. Loan growth achieved similar success with an overall increase of $69.0 million, or 10.2%, for the year. Both residential and commercial mortgages showed solid growth for the year, with increases of $17.0 million (5.1%) and $44.8 million (19.4%), respectively. Home equity loans were down by $10.7 million for the year ending December 31, 2012 as many consumers elected to refinance second mortgages into first mortgages due to favorable interest rates.

For the year ended December 31, 2012 net interest income increased $2,143,000, or 4.9%, to $45.9 million compared to $43.7 million for 2011. The increase in net interest income for the year was driven primarily by loan growth, as well as a reduction in deposit costs.

The sustained low interest rate environment resulted in lower yields earned on investment securities and continued to place further pressure on loan pricing. These were the principal causes for the decrease in the Bank's net interest margin of 32 basis points to 3.58% for the year compared to 3.90% for the year ended December 31, 2011.

Noninterest income totaled $20.5 million for the year 2012 compared to $18.1 million for 2011. The Bank's Wealth Management income accounted for a $958,000, or 40.9%, of the upswing in total noninterest income for the year. In addition, during 2012 the Bank began selling 30-year conforming loans to the secondary market. This new revenue source produced gains on loans sold of $592,000 for the year. Other contributors to the noninterest income increase were higher gains on disposition of investment securities of $330,000, higher deposit account and cash management fees of $219,000, and higher bank-owned life insurance income of $194,000 compared to the prior year.

Noninterest expense increased by $3.2 million, or 7.4%, to $45.8 million for the year ended December 31, 2012. The increase is primarily the result of additional investments in salaries and benefits of $2.7 million, and occupancy and equipment of $337,000. The increase of $139,000 in marketing for the year is primarily the result of promoting the Bank's new South End branch, which opened in November of 2012.

Total loans outstanding at year-end 2012 were $742.2 million compared to $673.3 million at year-end 2011. Loan quality remained sound across consumer and corporate customer bases with non-performing loans totaling $1.6 million at December 31, 2012, an increase of $366,000 compared to the year-end 2011. The Allowance for Loan Losses was $10.9 million, or 1.47%, of total loans outstanding at year-end 2012. At December 31, 2011, the Allowance for Loan Losses was $10.2 million, or 1.51%, of total loans outstanding. The provision for loan losses of $800,000 during 2012 was $200,000 lower than the prior year's provision. This decrease was primarily in response to the strength of the loan portfolio in conjunction with the stable levels of non-performers.

In the fourth quarter of 2012 unaudited net income was $3,003,000, compared to $2,910,000 for the same quarter in 2011.

"Results for the fourth quarter were highlighted by an uptrend in noninterest income," said Mr. Roller. "We continue to see solid growth in Wealth Management income, which increased $431,000 (13.8%) for the fourth quarter of 2012 as compared to the fourth quarter of 2011. Gains on loans sold for the quarter produced revenue of $316,000 for the quarter. Noninterest expense was $1.1 million higher for the quarter compared to the same quarter last year due to increases in salaries and benefits and marketing expenditures. The Bank's net interest margin decreased 24 basis points to 3.55% for the fourth quarter compared to 3.79% for the quarter ended December 31, 2011. While we do not anticipate a change in interest rates for some time, the Bank has momentum and is positioned well to compete in this environment."

Total deposits at year-end 2012 were $1.3 billion compared to $1.1 billion at year-end 2011.

Total assets at year-end 2012 were $1.4 billion versus $1.3 billion year-end 2011.

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 123-year-old Massachusetts chartered commercial bank with $1.4 billion in total assets and 12 Massachusetts locations in Cambridge, Boston, Belmont, Concord, Lexington, Lincoln and Weston. Cambridge Trust Company is one of New England's leaders in wealth management with $1.8 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 We will also post the Cambridge Bancorp 2012 Annual Report at the same site later this quarter.

Financial Highlights:

December 31, 2012
Dollar amounts in thousands (except share data)
Three Months EndedYear Ended
December 31,December 31,
Interest Income$12,327$12,191$49,066$47,663
Interest Expense 711  969  3,191  3,931 
Net Interest Income11,61611,22245,87543,732
Provision for Loan Losses1002508001,000
Non-Interest Income5,2164,31820,48918,147
Non-Interest Expense 12,217  11,157  45,847  42,685 
Income Before Taxes4,5154,13319,71718,194
Income Taxes 1,512  1,223  6,314  5,717 
Net Income$3,003 $2,910 $13,403 $12,477 

Data Per Common Share:

Basic Earnings Per Share$0.78$0.77$3.49$3.29
Diluted Earnings Per Share$0.77$0.76$3.45$3.25
Dividends Declared Per Share$0.39$0.37$1.50$1.42
Avg. Common Shares Outstanding:

Selected Operating Ratios:

Net Interest Margin3.55%3.79%3.58%3.90%
Return on Average Assets, after taxes0.87%0.93%1.00%1.06%
Return on Average Equity, after taxes11.63%11.86%13.39%13.26%
December 31,December 31,
Total Assets$1,417,986$1,275,860
Total Loans742,249673,265
Non-Performing Loans1,5701,204
Allowance for Loan Losses10,94810,159
Allowance to Non-Performing Loans697.25%844.09%
Allowance to Total Loans1.47%1.51%
Total Deposits1,281,3331,125,654
Total Stockholders' Equity104,89196,633
Book Value Per Share$27.21$25.39
Tangible Book Value Per Share$27.05$25.28
December 31,
(In thousands)
Cash and due from banks$59,923$22,512
Overnight investments  
Total cash and cash equivalents59,92322,512
Investment securities:
Available for sale, at fair value502,318470,232
Held-to-maturity, at amortized cost71,133 74,256 
Total investment securities573,451544,488
Loans held for sale, at lower of cost or fair value1,684
Residential mortgage347,908330,933
Commercial mortgage276,428231,595
Home equity50,57461,307
Consumer19,769 11,170 
Total loans742,249673,265
Allowance for loan losses(10,948)(10,159)
Net loans731,301663,106
Stock in FHLB of Boston, at cost5,0104,806
Bank owned life insurance22,90317,331
Banking premises and equipment, net6,2146,216
Accrued interest receivable3,8774,423
Other assets13,623 12,978 
Total assets$1,417,986 $1,275,860 
Interest bearing checking363,575316,454
Money market60,85058,532
Certificates of deposit134,156 136,173 
Total deposits1,281,3331,125,654
Short-term borrowings2,500
Long-term borrowings20,00030,000
Other liabilities11,762 21,073 
Total liabilities1,313,095 1,179,227 
Stockholders' equity:
Common stock, par value $1.00; Authorized
5,000,000 shares; Outstanding: 3,876,930 and
3,805,748 shares, respectively3,8553,806
Additional paid-in capital24,42123,001
Retained earnings75,78768,232
Accumulated other comprehensive income828 1,594 
Total stockholders' equity104,891 96,633 
Total liabilities and stockholders' equity$1,417,986 $1,275,860 
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Three Months Ended December 31,
(In thousands, except per share data)
Interest income:
Interest on loans$8,919$8,330
Interest on taxable investment securities2,8863,338
Interest on tax exempt investment securities506502
Dividends on FHLB of Boston stock74
Interest on overnight investments917
Total interest income12,32712,191
Interest expense:
Interest on deposits542673
Interest on borrowed funds169296