Cambridge Bancorp Reports Second Quarter Earnings

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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 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:

June 30, 2013
Dollar amounts in thousands (except share data)
Three Months EndedSix 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 Income11,08211,53322,04423,070
Provision for Loan Losses200250400550
Non-Interest Income5,5304,83411,4199,639
Non-Interest Expense 11,259 11,073 22,928 22,336
Income Before Taxes5,1535,04410,1359,823
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:

Selected Operating Ratios:

Net Interest Margin3.31%3.59%3.31%3.65%
Return on Average Assets, after taxes0.99%1.02%0.98%1.02%
Return on Average Equity, after taxes13.23%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 Loans831,931742,249702,533
Non-Performing Loans1,4411,5701,131
Allowance for Loan Losses11,35310,94810,790
Allowance to Non-Performing Loans787.76%697.25%953.85%
Allowance to Total Loans1.36%1.47%1.54%
Total Deposits1,246,9791,281,3331,202,950
Total Stockholders' Equity101,563104,891100,319
Book Value Per Share$26.17$27.21$26.08
Tangible Book Value Per Share$25.96$27.05$25.98
June 30,December 31,
2013 2012 
(In thousands)
Cash and due from banks$22,854$59,923
Overnight investments  
Total cash and cash equivalents22,85459,923
Investment securities:
Available for sale, at fair value459,212502,318
Held to maturity, at amortized cost64,913 71,133 
Total investment securities524,125573,451
Loans held for sale, at lower of cost or fair value1,684
Residential mortgage405,788347,908
Commercial mortgage305,455276,428
Home equity45,52250,574
Consumer25,141 19,769 
Total loans831,931742,249
Allowance for loan losses(11,353)(10,948)
Net loans820,578731,301
Stock in FHLB of Boston, at cost5,4065,010
Bank owned life insurance23,24522,903
Banking premises and equipment, net8,3426,214
Accrued interest receivable4,0073,877
Other assets17,268 13,623 
Total assets$1,425,825 $1,417,986 
Interest bearing checking326,990363,575
Money market58,32860,850
Certificates of deposit132,058 134,156 
Total deposits1,246,9791,281,333
Short-term borrowings63,000
Long-term borrowings20,000
Other liabilities14,283 11,762 
Total liabilities1,324,262 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, respectively3,8813,855
Additional paid-in capital25,53024,421
Retained earnings79,54175,787
Accumulated other comprehensive income(7,389)828 
Total stockholders' equity101,563 104,891 
Total liabilities and stockholders' equity$1,425,825 $1,417,986 
Three Months Ended June 30,
(In thousands, except per share data)
Interest income:
Interest on loans$8,614$8,359
Interest on taxable investment securities2,4663,528
Interest on tax exempt investment securities504508
Dividends on FHLB of Boston stock56
Interest on overnight investments68
Total interest income11,59512,409
Interest expense:
Interest on deposits481561
Interest on borrowed funds32315
Total interest expense513876
Net interest income11,08211,533
Provision for loan losses200250
Net interest income after provision for loan losses10,88211,283
Noninterest income:
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