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 www.cambridgetrust.com. We will also post the Cambridge Bancorp 2012 Annual Report at the same site later this quarter.

Financial Highlights:

CAMBRIDGE BANCORP

QUARTERLY UNAUDITED RESULTS

December 31, 2012

Dollar amounts in thousands (except share data)

Three Months Ended

Year Ended

December 31,

December 31,

2012

2011

2012

2011

Interest Income

$

12,327

$

12,191

$

49,066

$

47,663

Interest Expense

711

969

3,191

3,931

Net Interest Income

11,616

11,222

45,875

43,732

Provision for Loan Losses

100

250

800

1,000

Non-Interest Income

5,216

4,318

20,489

18,147

Non-Interest Expense

12,217

11,157

45,847

42,685

Income Before Taxes

4,515

4,133

19,717

18,194

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:

Basic

3,851,439

3,799,977

3,839,681

3,791,167

Diluted

3,900,315

3,836,814

3,879,607

3,834,569

Selected Operating Ratios:

Net Interest Margin

3.55

%

3.79

%

3.58

%

3.90

%

Return on Average Assets, after taxes

0.87

%

0.93

%

1.00

%

1.06

%

Return on Average Equity, after taxes

11.63

%

11.86

%

13.39

%

13.26

%

December 31,

December 31,

2012

2011

Total Assets

$

1,417,986

$

1,275,860

Total Loans

742,249

673,265

Non-Performing Loans

1,570

1,204

Allowance for Loan Losses

10,948

10,159

Allowance to Non-Performing Loans

697.25

%

844.09

%

Allowance to Total Loans

1.47

%

1.51

%

Total Deposits

1,281,333

1,125,654

Total Stockholders' Equity

104,891

96,633

Book Value Per Share

$

27.21

$

25.39

Tangible Book Value Per Share

$

27.05

$

25.28

CAMBRIDGE BANCORP

UNAUDITED CONSOLIDATED BALANCE SHEETS

December 31,

2012

2011

(In thousands)

ASSETS

Cash and due from banks

$

59,923

$

22,512

Overnight investments

Total cash and cash equivalents

59,923

22,512

Investment securities:

Available for sale, at fair value

502,318

470,232

Held-to-maturity, at amortized cost

71,133

74,256

Total investment securities

573,451

544,488

Loans held for sale, at lower of cost or fair value

1,684

Loans:

Residential mortgage

347,908

330,933

Commercial mortgage

276,428

231,595

Home equity

50,574

61,307

Commercial

47,570

38,260

Consumer

19,769

11,170

Total loans

742,249

673,265

Allowance for loan losses

(10,948

)

(10,159

)

Net loans

731,301

663,106

Stock in FHLB of Boston, at cost

5,010

4,806

Bank owned life insurance

22,903

17,331

Banking premises and equipment, net

6,214

6,216

Accrued interest receivable

3,877

4,423

Other assets

13,623

12,978

Total assets

$

1,417,986

$

1,275,860

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Demand

$

329,211

$

285,724

Interest bearing checking

363,575

316,454

Money market

60,850

58,532

Savings

393,541

328,771

Certificates of deposit

134,156

136,173

Total deposits

1,281,333

1,125,654

Short-term borrowings

2,500

Long-term borrowings

20,000

30,000

Other liabilities

11,762

21,073

Total liabilities

1,313,095

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, respectively

3,855

3,806

Additional paid-in capital

24,421

23,001

Retained earnings

75,787

68,232

Accumulated other comprehensive income

828

1,594

Total stockholders' equity

104,891

96,633

Total liabilities and stockholders' equity

$

1,417,986

$

1,275,860

CAMBRIDGE BANCORP

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended December 31,

2012

2011

(In thousands, except per share data)

Interest income:

Interest on loans

$

8,919

$

8,330

Interest on taxable investment securities

2,886

3,338

Interest on tax exempt investment securities

506

502

Dividends on FHLB of Boston stock

7

4

Interest on overnight investments

9

17

Total interest income

12,327

12,191

Interest expense:

Interest on deposits

542

673

Interest on borrowed funds

169

296