Cambridge Bancorp Reports Second Quarter Earnings
Cambridge Bancorp Reports Second Quarter Earnings
CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $3,475,000 for the second quarter of 2013 compared to $3,451,000 for the same quarter in 2012. The slight increase in earnings was primarily attributable to growth in noninterest income, offset by a decrease in net interest income. Diluted earnings per share were $0.89 for the second quarter of 2013, unchanged versus for the same quarter in 2012. For the six months ended June 30, 2013, unaudited net income was $6,806,000 compared to $6,736,000 for the first half of 2012. Diluted earnings per share were $1.75 for the first six months of 2013 versus $1.74 for the same period in 2012.
"Our second quarter results this year were in line with our expectations. Despite solid loan growth, we anticipated lower net interest income compared to last year due to continued pressure on our net interest margin," notes Joseph V. Roller II, president and CEO. "While the low interest rate environment continues to present challenges, the Bank remains focused on executing its growth strategy," said Roller.
Net interest income of $11.1 million for the second quarter of 2013 was $451,000 (3.9%) lower than the same quarter in 2012. For the six months ended June 30, 2013, net interest income of $22.0 million was $1.0 million (4.4%) lower than the same period in 2012.
Noninterest income increased across all categories by a total of $696,000 (14.4%) to $5.5 million for the second quarter of 2013 compared to $4.8 million for the same quarter in 2012. The Bank continued to build momentum generating wealth management income, which increased by $509,000 (15.1%) compared to the same quarter in 2012. Assets under management grew to $2.0 billion at the end of the second quarter 2013 from $1.8 billion at year-end 2012. Other notable contributors to the noninterest income increase for the second quarter of 2013 were income produced from gains on loans sold of $61,000, debit card income of $36,000, and gains from the disposition of investment securities of $33,000 as compared to the same quarter in 2012.
The extended low interest environment continues to negatively impact the Bank's net interest margin. The Bank's net interest margin decreased by 28 basis points to 3.31% for the second quarter of 2013 compared to the same quarter in 2012. There was a decrease of 34 basis points for the comparable six month period.
For the second quarter of 2013, noninterest expense totaled $11.3 million, a modest increase of $186,000 (1.7%) compared to the same quarter in 2012. The primary factors attributed to the increase in noninterest expense were higher occupancy and equipment of $152,000 (8.2%), other expenses of $92,000 (13.8%), and marketing of $28,000 (6.4%). These expenses were partially offset by lower salaries and benefits of $114,000 (1.7%) during the second quarter of 2013.
Since year-end 2012, total loans outstanding have increased by $89.7 million (12.1%) to $831.9 million. The robust increase in loans outstanding is attributable to residential loan growth of $57.9 million (16.6%) and commercial mortgage loan growth of $29.0 million (10.5%) as low interest rates provide an attractive environment for qualified households and businesses looking to purchase or refinance properties.
Non-performing loans as a percentage of total loans stood at 0.17% at June 30, 2013, a slight decrease from 0.21% at December 31, 2012. Loan quality remains sound and the Allowance for Loan Losses stood at $11.4 million or 1.36% of total loans outstanding at June 30, 2013. At December 31, 2012, the Allowance for Loan Losses was $10.9 million or 1.47% of total loans outstanding. Primarily in response to continued loan growth, the provision for loan losses was $200,000 for the current quarter.
Total deposits decreased by $34.4 million (2.7%) since year-end 2012, yet increased by $44.0 million (3.7%) over June 30, 2012.
Total assets at second quarter 2013 end were $1.4 billion, relatively flat since year-end 2012.
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 branch offices in Cambridge, Boston, Belmont, Concord, Lexington, Lincoln, and Weston. Cambridge Trust Company is one of New England's leaders in wealth management with $2.0 billion in client assets under management. The Wealth Management group maintains offices in Boston, Massachusetts, and Concord and Portsmouth, New Hampshire.
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 2012 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 2013 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, 2013 | ||||||||||||
Dollar amounts in thousands (except share data) | ||||||||||||
Three Months Ended | Six Months Ended | |||||||||||
June 30, | June 30, | |||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||
Interest Income | $ | 11,595 | $ | 12,409 | $ | 23,180 | $ | 24,813 | ||||
Interest Expense | 513 | 876 | 1,136 | 1,743 | ||||||||
Net Interest Income | 11,082 | 11,533 | 22,044 | 23,070 | ||||||||
Provision for Loan Losses | 200 | 250 | 400 | 550 | ||||||||
Non-Interest Income | 5,530 | 4,834 | 11,419 | 9,639 | ||||||||
Non-Interest Expense | 11,259 | 11,073 | 22,928 | 22,336 | ||||||||
Income Before Taxes | 5,153 | 5,044 | 10,135 | 9,823 | ||||||||
Income Taxes | 1,678 | 1,593 | 3,329 | 3,087 | ||||||||
Net Income | $ | 3,475 | $ | 3,451 | $ | 6,806 | $ | 6,736 | ||||
Data Per Common Share: | ||||||||||||
Basic Earnings Per Share | $ | 0.90 | $ | 0.90 | $ | 1.76 | $ | 1.76 | ||||
Diluted Earnings Per Share | $ | 0.89 | $ | 0.89 | $ | 1.75 | $ | 1.74 | ||||
Dividends Declared Per Share | $ | 0.39 | $ | 0.37 | $ | 0.78 | $ | 0.74 | ||||
Avg. Common Shares Outstanding: | ||||||||||||
Basic | 3,837,776 | 3,842,976 | 3,826,454 | 3,830,199 | ||||||||
Diluted | 3,907,458 | 3,879,498 | 3,897,744 | 3,866,397 | ||||||||
Selected Operating Ratios: | ||||||||||||
Net Interest Margin | 3.31% | 3.59% | 3.31% | 3.65% | ||||||||
Return on Average Assets, after taxes | 0.99% | 1.02% | 0.98% | 1.02% | ||||||||
Return on Average Equity, after taxes | 13.23% | 13.95% | 13.04% | 13.77% | ||||||||
June 30, | December 31, | June 30, | ||||||||||
2013 | 2012 | 2012 | ||||||||||
Total Assets | $ | 1,425,825 | $ | 1,417,986 | $ | 1,353,344 | ||||||
Total Loans | 831,931 | 742,249 | 702,533 | |||||||||
Non-Performing Loans | 1,441 | 1,570 | 1,131 | |||||||||
Allowance for Loan Losses | 11,353 | 10,948 | 10,790 | |||||||||
Allowance to Non-Performing Loans | 787.76% | 697.25% | 953.85% | |||||||||
Allowance to Total Loans | 1.36% | 1.47% | 1.54% | |||||||||
Total Deposits | 1,246,979 | 1,281,333 | 1,202,950 | |||||||||
Total Stockholders' Equity | 101,563 | 104,891 | 100,319 | |||||||||
Book Value Per Share | $ | 26.17 | $ | 27.21 | $ | 26.08 | ||||||
Tangible Book Value Per Share | $ | 25.96 | $ | 27.05 | $ | 25.98 | ||||||
CAMBRIDGE BANCORP | |||||||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||||||
June 30, | December 31, | ||||||||||
2013 | 2012 | ||||||||||
(In thousands) | |||||||||||
ASSETS | |||||||||||
Cash and due from banks | $ | 22,854 | $ | 59,923 | |||||||
Overnight investments | — | — | |||||||||
Total cash and cash equivalents | 22,854 | 59,923 | |||||||||
Investment securities: | |||||||||||
Available for sale, at fair value | 459,212 | 502,318 | |||||||||
Held to maturity, at amortized cost | 64,913 | 71,133 | |||||||||
Total investment securities | 524,125 | 573,451 | |||||||||
Loans held for sale, at lower of cost or fair value | — | 1,684 | |||||||||
Loans: | |||||||||||
Residential mortgage | 405,788 | 347,908 | |||||||||
Commercial mortgage | 305,455 | 276,428 | |||||||||
Home equity | 45,522 | 50,574 | |||||||||
Commercial | 50,025 | 47,570 | |||||||||
Consumer | 25,141 | 19,769 | |||||||||
Total loans | 831,931 | 742,249 | |||||||||
Allowance for loan losses | (11,353 | ) | (10,948 | ) | |||||||
Net loans | 820,578 | 731,301 | |||||||||
Stock in FHLB of Boston, at cost | 5,406 | 5,010 | |||||||||
Bank owned life insurance | 23,245 | 22,903 | |||||||||
Banking premises and equipment, net | 8,342 | 6,214 | |||||||||
Accrued interest receivable | 4,007 | 3,877 | |||||||||
Other assets | 17,268 | 13,623 | |||||||||
Total assets | $ | 1,425,825 | $ | 1,417,986 | |||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
Deposits: | |||||||||||
Demand | $ | 352,997 | $ | 329,211 | |||||||
Interest bearing checking | 326,990 | 363,575 | |||||||||
Money market | 58,328 | 60,850 | |||||||||
Savings | 376,606 | 393,541 | |||||||||
Certificates of deposit | 132,058 | 134,156 | |||||||||
Total deposits | 1,246,979 | 1,281,333 | |||||||||
Short-term borrowings | 63,000 | — | |||||||||
Long-term borrowings | — | 20,000 | |||||||||
Other liabilities | 14,283 | 11,762 | |||||||||
Total liabilities | 1,324,262 | 1,313,095 | |||||||||
Stockholders' equity: | |||||||||||
Common stock, par value $1.00; Authorized | |||||||||||
10,000,000 shares; Outstanding: 3,880,594 and | |||||||||||
3,854,951 shares, respectively | 3,881 | 3,855 | |||||||||
Additional paid-in capital | 25,530 | 24,421 | |||||||||
Retained earnings | 79,541 | 75,787 | |||||||||
Accumulated other comprehensive income | (7,389 | ) | 828 | ||||||||
Total stockholders' equity | 101,563 | 104,891 | |||||||||
Total liabilities and stockholders' equity | $ | 1,425,825 | $ | 1,417,986 | |||||||
CAMBRIDGE BANCORP | ||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
Three Months Ended June 30, | ||||||||
2013 | 2012 | |||||||
(In thousands, except per share data) | ||||||||
Interest income: | ||||||||
Interest on loans | $ | 8,614 | $ | 8,359 | ||||
Interest on taxable investment securities | 2,466 | 3,528 | ||||||
Interest on tax exempt investment securities | 504 | 508 | ||||||
Dividends on FHLB of Boston stock | 5 | 6 | ||||||
Interest on overnight investments | 6 | 8 | ||||||
Total interest income | 11,595 | 12,409 | ||||||
Interest expense: | ||||||||
Interest on deposits | 481 | 561 | ||||||
Interest on borrowed funds | 32 | 315 | ||||||
Total interest expense | 513 | 876 | ||||||
Net interest income | 11,082 | 11,533 | ||||||
Provision for loan losses | 200 | 250 | ||||||
Net interest income after provision for loan losses | 10,882 | 11,283 | ||||||
Noninterest income: | ||||||||
