Cambridge Bancorp Reports First Quarter Results

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Cambridge Bancorp (OTC QB: CATC) today reported unaudited net income of $3,733,000 for the first quarter of 2015 compared to $3,511,000 for the same quarter in 2014. The earnings increase of $222,000 (6.3%) was attributable to a combination of sustained growth in both net interest income and noninterest income offset by higher noninterest expense for the quarter ended March 31, 2015. Diluted earnings per share were $0.94 for the first quarter of 2015 versus $0.89 for the same period in 2014.

“We are pleased to report another strong quarter,” noted Joseph V. Roller II, president and CEO. “The Bank continues to execute against its business plans as market conditions remained intensely competitive.”

Net interest income for the quarter ended March 31, 2015 was $12.5 million compared to $11.8 million in the first quarter of 2014. The quarter-over-quarter net interest income increase of $681,000 (5.8%) was driven by continued loan growth in both the consumer and commercial sectors. Interest on loans for the first quarter of 2015 was $10.8 million, an increase of $1.1 million (11.5%) compared to the same quarter in 2014. This increase was offset by lower interest on taxable investment securities of $493,000 (24.2%) due to rates and volumes. The Bank’s overall net interest margin decreased by eight basis points to 3.28% for the quarter compared to 3.36% for the quarter ended March 31, 2014.

Noninterest income of $6.4 million for the March 2015 quarter was up $320,000 (5.3%) compared to the same quarter in 2014. The Bank continued to grow Wealth Management income, which increased $403,000 (9.6%) between the comparable periods, from new account growth and market appreciation. Assets under management grew to $2.4 billion at the end of the first quarter 2015 from $2.3 billion at year-end 2014. There was a rebound in gains on loans held for sale, which increased from $25,000 to $120,000 quarter-over-quarter. The increases in noninterest income were offset by a reduction in deposit account fees of $91,000 (14.4%), gains on disposition of investment securities of $70,000 (13.4%) and other income of $31,000 (13.0%) compared to the same period in 2014.

The Bank sustained the trend of growth in loans during the first quarter of 2015. Total loans outstanding increased by $17.1 million to $1.1 billion since year-end 2014 and by $150.7 million (15.9%) in comparison to March 31, 2014.

Non-performing loans as a percentage of total loans stood at 0.12% at March 31, 2015, down from 0.15% at December 31, 2014. Loan quality remains sound and the Allowance for Loan Losses stood at $14.6 million or 1.33% of total loans outstanding at March 31, 2015. At December 31, 2014, the Allowance for Loan Losses was $14.3 million or 1.33% of total loans outstanding. In response to continued loan growth, the provision for loan losses was $325,000 for the current quarter.

Noninterest expense in the first quarter of 2015 totaled $13.0 million, an increase of $741,000 (6.0%) over the first quarter of 2014. The primary factor for the increase in noninterest expense was higher salaries and employee benefits of $679,000 (9.6%) as a result of growth in the workforce and costs of benefits packages as the Bank expands.

Total deposits increased by $14.5 million (1.1%) since year-end 2014, and increased by $80.0 million (6.1%) over March 31, 2014.

Total assets at March 31, 2015 were $1.6 billion, an increase of $37.2 million (2.4%) from year-end 2014.

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 125-year-old Massachusetts chartered commercial bank with $1.6 billion in total assets and 12 Massachusetts locations in Cambridge, Boston, Belmont, Concord, Lexington, Lincoln, and Weston, as well as an Innovation Banking Group office located in the Cambridge Innovation Center. Cambridge Trust Company is one of New England’s leaders in wealth management with $2.4 billion in client assets under management. The Wealth Management group maintains offices in Boston, Massachusetts, and Concord, Manchester, 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 2014 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 first quarter of 2015 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
March 31, 2015
Dollar amounts in thousands (except share data)
								Quarter Ended
								March 31,
								2015					2014
Interest Income								$	13,043				$	12,337
Interest Expense									541					516
Net Interest Income									12,502					11,821
Provision for Loan Losses									325					375
Non-Interest Income									6,365					6,045
Non-Interest Expense									13,008					12,267
Income Before Taxes									5,534					5,224
Income Taxes									1,801					1,713
Net Income								$	3,733				$	3,511
Data Per Common Share:
Basic Earnings Per Share								$	0.94				$	0.90
Diluted Earnings Per Share								$	0.94				$	0.89
Dividends Declared Per Share								$	0.45				$	0.42
Avg. Common Shares Outstanding:
Basic									3,910,304					3,859,424
Diluted									3,970,129					3,939,980
Selected Operating Ratios:
Net Interest Margin									3.28	%				3.36	%
Return on Average Assets									0.94	%				0.94	%
Return on Average Equity									12.69	%				12.59	%
			March 31,					December 31,					March 31,
			2015					2014					2014
Total Assets			$	1,610,097				$	1,573,692				$	1,482,814
Total Loans				1,097,910					1,080,766					947,247
Non-Performing Loans				1,367					1,629					1,702
Allowance for Loan Losses				14,562					14,269					13,086
Allowance to Non-Performing Loans				1065.29	%				875.79	%				768.80	%
Allowance to Total Loans				1.33	%				1.32	%				1.38	%
Total Deposits				1,384,996					1,370,536					1,304,971
Total Stockholders' Equity				119,593					116,258					112,564
Book Value Per Share			$	30.20				$	29.50				$	28.79
Tangible Book Value Per Share			$	30.01				$	29.31				$	28.59

CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED BALANCE SHEETS
				March 31,					December 31,
				2015					2014
				(In thousands)
ASSETS
Cash and cash equivalents			$	23,564				$	17,440
Investment securities:
Available for sale, at fair value				351,359					339,791
Held to maturity, at amortized cost				80,419					79,646
Total investment securities				431,778					419,437
Loans held for sale, at lower of cost or fair value				1,492					284
Loans:
Residential mortgage				513,329					507,216
Commercial mortgage				454,529					441,842
Home equity				58,876					56,579
Commercial				47,090					49,492
Consumer				24,086					25,637
Total loans				1,097,910					1,080,766
Allowance for loan losses				(14,562	)				(14,269	)
Net loans				1,083,348					1,066,497
Stock in FHLB of Boston, at cost				7,955					7,955
Bank owned life insurance				29,403					29,220
Banking premises and equipment, net				8,671					8,367
Accrued interest receivable				4,030					3,925
Other assets				19,856					20,567
Total assets			$	1,610,097				$	1,573,692
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand			$	410,610				$	390,286
Interest bearing checking				339,463					352,661
Money market				85,293					74,654
Savings				424,197					430,040
Certificates of deposit				125,433					122,895
Total deposits				1,384,996					1,370,536
Short-term borrowings				88,000					69,000
Long-term borrowings				—					—
Other liabilities				17,508					17,898
Total liabilities				1,490,504					1,457,434
Stockholders' equity:
Common stock, par value $1.00; Authorized
10,000,000 shares; Outstanding: 3,960,023 and
3,940,536 shares, respectively				3,960					3,941
Additional paid-in capital				28,816					28,264
Retained earnings				92,824					91,098
Accumulated other comprehensive income/(loss)				(6,007	)				(7,045	)
Total stockholders’ equity				119,593					116,258
Total liabilities and stockholders’ equity			$	1,610,097				$	1,573,692

CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
				Quarter Ended March 31,
				2015				2014
				(In thousands, except per share data)
Interest income:
Interest on loans			$	10,773			$	9,666
Interest on taxable investment securities				1,540				2,033
Interest on tax exempt investment securities				689				602
Dividends on FHLB of Boston stock				35				23
Interest on overnight investments				6				13
Total interest income				13,043				12,337
Interest expense:
Interest on deposits				482				495
Interest on borrowed funds				59				21
Total interest expense				541				516
Net interest income				12,502				11,821
Provision for loan losses				325				375
Net interest income after provision for loan losses				12,177				11,446
Noninterest income:
Wealth management income				4,588				4,185
Deposit account fees				542				633
ATM/Debit card income				272				277
Bank owned life insurance income				183				164
Gain on disposition of investment securities				452				522
Gain on loans held for sale				120				25
Other income				208				239
Total noninterest income				6,365				6,045
Noninterest expense:
Salaries and employee benefits				7,772				7,093
Occupancy and equipment				2,139				2,097
Data processing				1,159				1,131
Professional services				427				554
Marketing				588				529
FDIC Insurance				208				194
Other expenses				715				669
Total noninterest expense				13,008				12,267
Income before income taxes				5,534				5,224
Income tax expense				1,801				1,713
Net income			$	3,733			$	3,511
Per share data:
Basic earnings per common share			$	0.94			$	0.90
Diluted earnings per common share			$	0.94			$	0.89
Average shares outstanding - basic				3,910,304				3,859,424
Average shares outstanding - diluted				3,970,129				3,939,980

CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
				Quarter Ended March 31,
				2015					2014
				(In thousands)
Net income			$	3,733				$	3,511
Other comprehensive income/(loss), net of tax:
Defined benefit retirement plans:
Change in unfunded retirement liability				105					(2	)
Unrealized gains/(losses) on Available for
Sale securities:
Unrealized holding gains arising
during the period				1,223					1,326
Less: reclassification adjustment for gains
recognized in net income				(290	)				(335	)
Other comprehensive income/(loss)				1,038					989
Comprehensive income/(loss)			$	4,771				$	4,500

CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
				Quarter Ended March 31,
				2015					2014
				(In thousands)
Cash flows provided by operating activities:
Net income			$	3,733				$	3,511
Adjustments to arrive at net cash provided by operating activities:
Provision for loan losses				325					375
Amortization of deferred charges/(income), net				276					153
Depreciation and amortization				424					461
Bank owned life insurance income				(183	)				(164	)
Gain on disposition of investment securities				(452	)				(522	)
Compensation expense from stock option
and restricted stock grants				135					139
Change in loans held for sale				(1,208	)				(13	)
Change in accrued interest receivable, deferred taxes,
other assets and other liabilities				(195	)				(1,360	)
Other, net				5					11
Net cash provided by operating activities				2,860					2,591
Cash flows used by investing activities:
Origination of loans				(45,659	)				(41,988	)
Purchase of:
Investment securities - AFS				(49,880	)				(16,747	)
Investment securities - HTM				(1,028	)				(17,336	)
Maturities, calls and principal payments of:
Loans				28,388					37,101
Investment securities - AFS				16,528					11,137
Investment securities - HTM				241					1,589
Proceeds from sale of investment securities - AFS				23,513					16,028
Purchase of banking premises and equipment				(728	)				8
Net cash used by investing activities				(28,625	)				(10,208	)
Cash flows provided by financing activities:
Change in deposits				14,460					(104,076	)
Change in short-term borrowings				19,000					50,000
Proceeds from issuance of common stock				486					784
Repurchase of common stock				(275	)				(503	)
Cash dividends paid on common stock				(1,782	)				(1,639	)
Net cash provided by financing activities				31,889					(55,434	)
Net increase/(decrease) in cash and cash equivalents				6,124					(63,051	)
Cash and cash equivalents at beginning of period				17,440					88,107
Cash and cash equivalents at end of period			$	23,564				$	25,056
Supplemental disclosure of cash flow information:
Cash paid for interest			$	541				$	517
Cash paid for income taxes				595					955
Non-cash transactions:
Change in accumulated other comprehensive income, net of taxes				1,038					989

Cambridge Bancorp
Albert R. Rietheimer, 617-441-1516
Chief Financial Officer & Treasurer

Source: Cambridge Bancorp

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