Cambridge Bancorp (OTCBB: CATC) today announced unaudited net income of $15,694,000 for the year ended December 31, 2015, representing an increase of $750,000, or 5.0%, compared to net income of $14,944,000 for the year ended December 31, 2014. Diluted earnings per share (EPS) were $3.93, a 4.0% increase over diluted earnings per share for the prior year.
“We are pleased to report the Bank delivered another record earnings year with robust core deposit and loan growth,” noted Denis K. Sheahan, president and CEO. “Cambridge Trust posted strong profitability metrics for the year with return on average assets of 0.95% and return on average stockholders’ equity of 12.91%.”
The Bank recorded strong core deposit growth in 2015. Deposits, excluding brokered certificates of deposit, grew by $130.4 million, or 9.5%, since year-end 2014. The total cost of deposits was 0.17% for 2015. Total deposits at year-end 2015 were $1.6 billion.
The Bank experienced a strong year for loan growth with an overall increase of $111.4 million, or 10.3%, for the year. At year-end 2015, the Bank’s loan portfolio stood at $1.2 billion. Both commercial and residential mortgages showed noteworthy growth for the year, with increases of $69.2 million (15.7%) and $39.0 million (7.7%), respectively. Home equity loans were up $6.9 million (12.3%) for the year ending December 31, 2015.
For the year ended December 31, 2015, net interest income increased by $3.4 million, or 7.0%, to $51.6 million compared to $48.3 million for 2014. Interest on loans increased by $4.9 million, or 12.0%, driven by the impact of strong loan growth in both 2014 and 2015. The prolonged low interest rate environment persisted in impacting margins, which have been unfavorable for the industry for some time. The Bank’s net interest margin decreased six basis points to 3.27% for the year compared to 3.33% for the year ended December 31, 2014.
The Bank’s total investment securities portfolio increased slightly from $419.4 million to $430.2 million at year-end 2015. The continued lower interest rate environment resulted in a decrease of $1.1 million in interest income on investment securities for the year. Short-term borrowings of $69.0 million at year-end 2014 were largely replaced with $56.3 million of brokered certificates of deposit during 2015 to secure term funding as a component of the Bank’s overall interest rate risk management strategy. Long-term borrowings increased by $3.9 million year-over-year.
Noninterest income totaled $25.9 million for the year 2015 compared to $24.5 million for 2014. The Bank’s Wealth Management income accounted for the largest upswing in total noninterest income for the year. Wealth management income increased by $1.3 million, or 7.2%, to $19.2 million compared to $18.0 million for 2014. Wealth Management assets under management (AUM) stood at $2.3 billion at year-end.
As part of overall balance sheet management, the Bank sold more of its long-term residential mortgage production. Income from gains on loans sold ended $439,000 higher for 2015 versus 2014. During the fourth quarter of 2015 the Bank began to offer loan level derivative contracts to manage commercial loan interest rate risk. This activity generated $260,000 in loan related derivative income for the quarter.
Noninterest income increases were offset by lower gains on disposition of investment securities of $383,000, lower deposit account fees of $92,000, lower other income of $58,000, and lower ATM/Debit card fees of $55,000 for the year ended December 31, 2015.
Noninterest expense increased by $4.2 million, or 8.5%, to $53.2 million for the year ended December 31, 2015. The increase in salaries and benefits for the year of $3.0 million is primarily the result of new hires to support business growth, coupled with higher expenses related to our retirement plans. The increase of $514,000 in occupancy and equipment for the year is the result of increased cost of facilities, office closing expense, and amortization of leasehold improvements. The increase of $252,000 in professional services is primarily the result of higher consulting and legal fees. The increase of $240,000 in data processing expense is attributable to increased transaction volumes and new products. Other factors contributing to the increase in noninterest expense were higher marketing expense of $263,000 and higher FDIC insurance of $61,000. Other expenses were lower by $184,000.
Total loans outstanding at year-end 2015 were $1.2 billion compared to $1.1 billion at year-end 2014. Loan quality remained sound across consumer and commercial customer bases with non-performing loans totaling $1.5 million, or 0.12% of total loans outstanding at December 31, 2015, a modest decrease of $148,000 compared to the year-end 2014. The Allowance for Loan Losses was $15.2 million, or 1.27% of total loans outstanding at year-end 2015. At December 31, 2014, the Allowance for Loan Losses was $14.3 million, or 1.32% of total loans outstanding. The provision for loan losses of $1.1 million during 2015 was primarily driven by loan growth and changes in the mix of the portfolio.
In the fourth quarter of 2015 unaudited net income was $3,870,000, flat as compared to $3,866,000 for the same quarter in 2014.
Total assets at year-end 2015 were $1.7 billion versus $1.6 billion 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 126-year-old Massachusetts chartered commercial bank with $1.7 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 $2.3 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 and annual 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. We will also post the Cambridge Bancorp 2015 Annual Report at the same site later this quarter.
Financial Highlights:
| CAMBRIDGE BANCORP | ||||||||||||||||
| QUARTERLY UNAUDITED RESULTS | ||||||||||||||||
| December 31, 2015 | ||||||||||||||||
| Dollar amounts in thousands (except share data) | ||||||||||||||||
| Quarter Ended | Year Ended | |||||||||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||||||
| Interest Income | $ | 14,056 | $ | 13,103 | $ | 54,341 | $ | 50,371 | ||||||||
| Interest Expense | 860 | 535 | 2,694 | 2,098 | ||||||||||||
| Net Interest Income | 13,196 | 12,568 | 51,647 | 48,273 | ||||||||||||
| Provision for Loan Losses | - | 600 | 1,075 | 1,550 | ||||||||||||
| Non-Interest Income | 6,495 | 5,796 | 25,865 | 24,464 | ||||||||||||
| Non-Interest Expense | 13,981 | 12,042 | 53,192 | 49,007 | ||||||||||||
| Income Before Taxes | 5,710 | 5,722 | 23,245 | 22,180 | ||||||||||||
| Income Taxes | 1,840 | 1,856 | 7,551 | 7,236 | ||||||||||||
| Net Income | $ | 3,870 | $ | 3,866 | $ | 15,694 | $ | 14,944 | ||||||||
Data Per Common Share: | ||||||||||||||||
| Basic Earnings Per Share | $ | 0.97 | $ | 0.98 | $ | 3.94 | $ | 3.81 | ||||||||
| Diluted Earnings Per Share | $ | 0.97 | $ | 0.97 | $ | 3.93 | $ | 3.78 | ||||||||
| Dividends Declared Per Share | $ | 0.45 | $ | 0.42 | $ | 1.80 | $ | 1.68 | ||||||||
| Avg. Common Shares Outstanding: | ||||||||||||||||
| Basic | 3,951,736 | 3,899,213 | 3,938,117 | 3,886,692 | ||||||||||||
| Diluted | 4,008,334 | 3,968,821 | 3,993,599 | 3,957,416 | ||||||||||||
Selected Operating Ratios: | ||||||||||||||||
| Net Interest Margin | 3.28 | % | 3.37 | % | 3.27 | % | 3.33 | % | ||||||||
| Return on Average Assets | 0.91 | % | 0.99 | % | 0.95 | % | 0.98 | % | ||||||||
| Return on Average Equity | 12.36 | % | 12.81 | % | 12.91 | % | 12.87 | % | ||||||||
| December 31, | December 31, | |||||||||||||||
| 2015 | 2014 | |||||||||||||||
| Total Assets | $ | 1,706,201 | $ | 1,573,692 | ||||||||||||
| Total Loans | 1,192,214 | 1,080,766 | ||||||||||||||
| Non-Performing Loans | 1,481 | 1,629 | ||||||||||||||
| Allowance for Loan Losses | 15,191 | 14,269 | ||||||||||||||
| Allowance to Non-Performing Loans | 1025.77 | % | 875.79 | % | ||||||||||||
| Allowance to Total Loans | 1.27 | % | 1.32 | % | ||||||||||||
| Total Deposits | 1,557,224 | 1,370,536 | ||||||||||||||
| Total Stockholders' Equity | 125,063 | 116,258 | ||||||||||||||
| Book Value Per Share | $ | 31.26 | $ | 29.50 | ||||||||||||
| Tangible Book Value Per Share | $ | 31.04 | $ | 29.31 | ||||||||||||
| CAMBRIDGE BANCORP | |||||||||||||
| UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||||||||
| December 31, | December 31, | ||||||||||||
| 2015 | 2014 | ||||||||||||
| (In thousands) | |||||||||||||
| ASSETS | |||||||||||||
| Cash and cash equivalents | $ | 24,645 | $ | 17,440 | |||||||||
| Investment securities: | |||||||||||||
| Available for sale, at fair value | 347,173 | 339,791 | |||||||||||
| Held to maturity, at amortized cost | 83,063 | 79,646 | |||||||||||
| Total investment securities | 430,236 | 419,437 | |||||||||||
| Loans held for sale, at lower of cost or fair value | — | 284 | |||||||||||
| Loans: | |||||||||||||
| Residential mortgage | 546,245 | 507,216 | |||||||||||
| Commercial mortgage | 511,071 | 441,842 | |||||||||||
| Home equity | 63,522 | 56,579 | |||||||||||
| Commercial | 42,384 | 49,492 | |||||||||||
| Consumer | 28,992 | 25,637 | |||||||||||
| Total loans | 1,192,214 | 1,080,766 | |||||||||||
| Allowance for loan losses | (15,191 | ) | (14,269 | ) | |||||||||
| Net loans | 1,177,023 | 1,066,497 | |||||||||||
| Stock in FHLB of Boston, at cost | 6,465 | 7,955 | |||||||||||
| Bank owned life insurance | 29,887 | 29,220 | |||||||||||
| Banking premises and equipment, net | 11,371 | 8,367 | |||||||||||
| Accrued interest receivable | 4,222 | 3,925 | |||||||||||
| Other assets | 22,352 | 20,567 | |||||||||||
| Total assets | $ | 1,706,201 | $ | 1,573,692 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| Deposits: | |||||||||||||
| Demand | $ | 436,998 | $ | 390,286 | |||||||||
| Interest bearing checking | 370,400 | 352,661 | |||||||||||
| Money market | 73,911 | 74,654 | |||||||||||
| Savings | 497,525 | 430,040 | |||||||||||
| Certificates of deposit | 178,390 | 122,895 | |||||||||||
| Total deposits | 1,557,224 | 1,370,536 | |||||||||||
| Short-term borrowings | — | 69,000 | |||||||||||
| Long-term borrowings | 3,910 | — | |||||||||||
| Other liabilities | 20,004 | 17,898 | |||||||||||
| Total liabilities | 1,581,138 | 1,457,434 | |||||||||||
| Stockholders' equity: | |||||||||||||
| Common stock, par value $1.00; Authorized | |||||||||||||
| 10,000,000 shares; Outstanding: 4,000,181 and | |||||||||||||
| 3,940,536 shares, respectively | 4,000 | 3,941 | |||||||||||
| Additional paid-in capital | 30,427 | 28,264 | |||||||||||
| Retained earnings | 99,064 | 91,098 | |||||||||||
| Accumulated other comprehensive income/(loss) | (8,428 | ) | (7,045 | ) | |||||||||
| Total stockholders’ equity | 125,063 | 116,258 | |||||||||||
| Total liabilities and stockholders’ equity | $ | 1,706,201 | $ | 1,573,692 | |||||||||
| CAMBRIDGE BANCORP | ||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | ||||||||||||
| Quarter Ended December 31, | ||||||||||||
| 2015 | 2014 | |||||||||||
| (In thousands, except per share data) | ||||||||||||
| Interest income: | ||||||||||||
| Interest on loans | $ | 11,769 | $ | 10,638 | ||||||||
| Interest on taxable investment securities | 1,519 | 1,737 | ||||||||||
| Interest on tax exempt investment securities | 698 | 691 | ||||||||||
| Dividends on FHLB of Boston stock | 56 | 29 | ||||||||||
| Interest on overnight investments | 14 | 8 | ||||||||||
| Total interest income | 14,056 | 13,103 | ||||||||||
| Interest expense: | ||||||||||||
| Interest on deposits | 824 | 493 | ||||||||||
| Interest on borrowed funds | 36 | 42 | ||||||||||
| Total interest expense | 860 | 535 | ||||||||||
| Net interest income | 13,196 | 12,568 | ||||||||||
| Provision for loan losses | — | 600 | ||||||||||
| Net interest income after provision for loan losses | 13,196 | 11,968 | ||||||||||
| Noninterest income: | ||||||||||||
| Wealth management income | 4,855 | 4,460 | ||||||||||
| Deposit account fees | 608 | 566 | ||||||||||
| ATM/Debit card income | 304 | 319 | ||||||||||
| Bank owned life insurance income | 162 | 175 | ||||||||||
| Gain on disposition of investment securities | — | — | ||||||||||
| Gain on loans held for sale | 114 | 77 | ||||||||||
| Loan related derivative income | 260 | — | ||||||||||
| Other income | 192 | 199 | ||||||||||
| Total noninterest income | 6,495 | 5,796 | ||||||||||
| Noninterest expense: | ||||||||||||
| Salaries and employee benefits | 7,711 | 6,660 | ||||||||||
| Occupancy and equipment | 2,549 | 2,112 | ||||||||||
| Data processing | 1,258 | 1,140 | ||||||||||
| Professional services | 778 | 589 | ||||||||||
| Marketing | 618 | 531 | ||||||||||
| FDIC Insurance | 221 | 201 | ||||||||||
| Other expenses | 846 | 809 | ||||||||||
| Total noninterest expense | 13,981 | 12,042 | ||||||||||
| Income before income taxes | 5,710 | 5,722 | ||||||||||
| Income tax expense | 1,840 | 1,856 | ||||||||||
| Net income | $ | 3,870 | $ | 3,866 | ||||||||
| Per share data: | ||||||||||||
| Basic earnings per common share | $ | 0.97 | $ | 0.98 | ||||||||
| Diluted earnings per common share | $ | 0.97 | $ | 0.97 | ||||||||
| Average shares outstanding - basic | 3,951,736 | 3,899,213 | ||||||||||
| Average shares outstanding - diluted | 4,008,334 | 3,968,821 | ||||||||||
| CAMBRIDGE BANCORP | |||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||
| Quarter Ended December 31, | |||||||||||||
| 2015 | 2014 | ||||||||||||
| (In thousands) | |||||||||||||
| Net income | $ | 3,870 | $ | 3,866 | |||||||||
| Other comprehensive income/(loss), net of tax: | |||||||||||||
| Defined benefit retirement plans: | |||||||||||||
| Change in unfunded retirement liability | (275 | ) | (6,216 | ) | |||||||||
| Unrealized gains/(losses) on Available for | |||||||||||||
| Sale securities: | |||||||||||||
| Unrealized holding gains/(losses) arising | |||||||||||||
| during the period | (2,143 | ) | 1,776 | ||||||||||
| Less: reclassification adjustment for gains | |||||||||||||
| recognized in net income | — | — | |||||||||||
| Other comprehensive income/(loss) | (2,418 | ) | (4,440 | ) | |||||||||
| Comprehensive income/(loss) | $ | 1,452 | $ | (574 | ) | ||||||||
| CAMBRIDGE BANCORP | |||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
| Year Ended December 31, | |||||||||||
| 2015 | 2014 | ||||||||||
| (In thousands, except per share data) | |||||||||||
| Interest income: | |||||||||||
| Interest on loans | $ | 45,358 | $ | 40,481 | |||||||
| Interest on taxable investment securities | 5,921 | 7,085 | |||||||||
| Interest on tax exempt investment securities | 2,766 | 2,664 | |||||||||
| Dividends on FHLB of Boston stock | 259 | 101 | |||||||||
| Interest on overnight investments | 37 | 40 | |||||||||
| Total interest income | 54,341 | 50,371 | |||||||||
| Interest expense: | |||||||||||
| Interest on deposits | 2,459 | 1,950 | |||||||||
| Interest on borrowed funds | 235 | 148 | |||||||||
| Total interest expense | 2,694 | 2,098 | |||||||||
| Net interest income | 51,647 | 48,273 | |||||||||
| Provision for loan losses | 1,075 | 1,550 | |||||||||
| Net interest income after provision for loan losses | 50,572 | 46,723 | |||||||||
| Noninterest income: | |||||||||||
| Wealth management income | 19,242 | 17,954 | |||||||||
| Deposit account fees | 2,324 | 2,416 | |||||||||
| ATM/Debit card income | 1,192 | 1,247 | |||||||||
| Bank owned life insurance income | 667 | 665 | |||||||||
| Gain on disposition of investment securities | 690 | 1,073 | |||||||||
| Gain on loans held for sale | 609 | 170 | |||||||||
| Loan related derivative income | 260 | — | |||||||||
| Other income | 881 | 939 | |||||||||
| Total noninterest income | 25,865 | 24,464 | |||||||||
| Noninterest expense: | |||||||||||
| Salaries and employee benefits | 30,838 | 27,799 | |||||||||
| Occupancy and equipment | 9,024 | 8,510 | |||||||||
| Data processing | 4,807 | 4,567 | |||||||||
| Professional services | 2,260 | 2,008 | |||||||||
| Marketing | 2,380 | 2,117 | |||||||||
| FDIC Insurance | 854 | 793 | |||||||||
| Other expenses | 3,029 | 3,213 | |||||||||
| Total noninterest expense | 53,192 | 49,007 | |||||||||
| Income before income taxes | 23,245 | 22,180 | |||||||||
| Income tax expense | 7,551 | 7,236 | |||||||||
| Net income | $ | 15,694 | $ | 14,944 | |||||||
| Per share data: | |||||||||||
| Basic earnings per common share | $ | 3.94 | $ | 3.81 | |||||||
| Diluted earnings per common share | $ | 3.93 | $ | 3.78 | |||||||
| Average shares outstanding - basic | 3,938,117 | 3,886,692 | |||||||||
| Average shares outstanding - diluted | 3,993,599 | 3,957,416 | |||||||||
| CAMBRIDGE BANCORP | |||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||
| Year Ended December 31, | |||||||||||||
| 2015 | 2014 | ||||||||||||
| (In thousands) | |||||||||||||
| Net income | $ | 15,694 | $ | 14,944 | |||||||||
| Other comprehensive income/(loss), net of tax: | |||||||||||||
| Defined benefit retirement plans: | |||||||||||||
| Change in unfunded retirement liability | 40 | (6,222 | ) | ||||||||||
| Unrealized gains/(losses) on Available for | |||||||||||||
| Sale securities: | |||||||||||||
| Unrealized holding gains/(losses) arising | |||||||||||||
| during the period | (980 | ) | 3,973 | ||||||||||
| Less: reclassification adjustment for gains | |||||||||||||
| recognized in net income | (443 | ) | (688 | ) | |||||||||
| Other comprehensive income/(loss) | (1,383 | ) | (2,937 | ) | |||||||||
| Comprehensive income/(loss) | $ | 14,311 | $ | 12,007 | |||||||||
| CAMBRIDGE BANCORP | |||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| Year Ended December 31, | |||||||||||||
| 2015 | 2014 | ||||||||||||
| (In thousands) | |||||||||||||
| Cash flows provided by operating activities: | |||||||||||||
| Net income | $ | 15,694 | $ | 14,944 | |||||||||
| Adjustments to arrive at net cash provided by operating activities: | |||||||||||||
| Provision for loan losses | 1,075 | 1,550 | |||||||||||
| Amortization of deferred charges/(income), net | 1,027 | 1,060 | |||||||||||
| Depreciation and amortization | 1,935 | 1,817 | |||||||||||
| Bank owned life insurance income | (667 | ) | (665 | ) | |||||||||
| Gain on disposition of investment securities | (690 | ) | (1,073 | ) | |||||||||
| Compensation expense from stock option | |||||||||||||
| and restricted stock grants | 498 | 509 | |||||||||||
| Change in loans held for sale | 284 | 119 | |||||||||||
| Change in accrued interest receivable, deferred taxes, | |||||||||||||
| other assets and other liabilities | 835 | (2,216 | ) | ||||||||||
| Other, net | 25 | 56 | |||||||||||
| Net cash provided by operating activities | 20,016 | 16,101 | |||||||||||
| Cash flows used by investing activities: | |||||||||||||
| Origination of loans | (260,020 | ) | (301,863 | ) | |||||||||
| Purchase of: | |||||||||||||
| Investment securities - AFS | (225,912 | ) | (43,741 | ) | |||||||||
| Investment securities - HTM | (9,691 | ) | (24,295 | ) | |||||||||
| Maturities, calls and principal payments of: | |||||||||||||
| Loans | 148,049 | 163,161 | |||||||||||
| Investment securities - AFS | 168,787 | 68,190 | |||||||||||
| Investment securities - HTM | 6,206 | 3,776 | |||||||||||
| Proceeds from sale of investment securities - AFS | 47,625 | 30,013 | |||||||||||
| Purchase of bank owned life insurance | — | (5,000 | ) | ||||||||||
| Change in FHLB of Boston stock | 1,490 | (1,724 | ) | ||||||||||
| Purchase of banking premises and equipment | (4,939 | ) | (233 | ) | |||||||||
| Net cash used by investing activities | (128,405 | ) | (111,716 | ) | |||||||||
| Cash flows provided by financing activities: | |||||||||||||
| Change in deposits | 186,688 | (38,511 | ) | ||||||||||
| Change in short-term borrowings | (69,000 | ) | 69,000 | ||||||||||
| Repayment of long-term borrowings | (40 | ) | — | ||||||||||
| Proceeds from long-term borrowings | 3,950 | — | |||||||||||
| Proceeds from issuance of common stock | 1,841 | 1,925 | |||||||||||
| Repurchase of common stock | (667 | ) | (864 | ) | |||||||||
| Cash dividends paid on common stock | (7,178 | ) | (6,602 | ) | |||||||||
| Net cash provided by financing activities | 115,594 | 24,948 | |||||||||||
| Net increase/(decrease) in cash and cash equivalents | 7,205 | (70,667 | ) | ||||||||||
| Cash and cash equivalents at beginning of period | 17,440 | 88,107 | |||||||||||
| Cash and cash equivalents at end of period | $ | 24,645 | $ | 17,440 | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||||
| Cash paid for interest | $ | 2,644 | $ | 2,094 | |||||||||
| Cash paid for income taxes | 8,220 | 8,490 | |||||||||||
| Non-cash transactions: | |||||||||||||
| Change in accumulated other comprehensive income, net of taxes | (1,383 | ) | (2,937 | ) | |||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160126005177/en/
Contacts:
Albert R. Rietheimer, 617-441-1516
Chief
Financial Officer & Treasurer
