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 | ||||||||
Contacts:
Albert R. Rietheimer, 617-441-1516
Chief
Financial Officer & Treasurer
