Cambridge Bancorp (OTC QB: CATC) today reported unaudited net income of $4,020,000 for the second quarter of 2016 compared to $3,736,000 for the same quarter in 2015. The increase in earnings of $284,000 (7.6%) was attributable to growth in both lending and noninterest income which benefited from loan related derivative income. Diluted earnings per share were $1.00 for the second quarter of 2016 compared to $0.94 for the same quarter in 2015.
For the six months ended June 30, 2016, unaudited net income was $7,898,000, an increase of $429,000 (5.7%) compared to $7,469,000 for the first half of 2015. Diluted earnings per share were $1.96 for the first six months of 2016 versus $1.88 for the same period in 2015.
“We are pleased to report the Bank continues to perform strongly,” notes Denis K. Sheahan, president and CEO. “The Bank sustained the trend of growth in loans and core deposits and Wealth Management continues to make a significant contribution to noninterest income,” said Sheahan.
Net interest income of $13.1 million for the second quarter of 2016 was $364,000 (2.9%) higher than the same quarter in 2015. For the six months ended June 30, 2016, net interest income of $26.3 million was $998,000 (4.0%) higher than the same period in 2015.
Noninterest income increased by $589,000 (9.0%) to $7.1 million for the second quarter of 2016 compared to $6.5 million for the same quarter in 2015. The Bank continued to build loan-related derivative income, which represented $429,000 of the increase compared to the same quarter in 2015. Deposit account fees increased by $128,000 (21.5%) and gain on loans held for sale increased by $50,000 (28.6%) compared to the same quarter in 2015.
The Bank continues to experience growth in Wealth Management income, although the increase of $147,000 from $4.8 million to $4.9 million in the second quarter of 2016 compared to the same quarter in 2015 was dampened due to market volatility. Assets under management grew to $2.5 billion at the end of the second quarter 2016.
Noninterest income was offset by lower income produced from gains on disposition of investment securities of $128,000, ATM/Debit card income of $20,000, bank owned life insurance of $10,000, and other income of $7,000 in the second quarter of 2016 compared to the same period in 2015.
The Bank’s net interest margin continued to trend lower due to the current interest rate environment. The Bank’s net interest margin stood at 3.13% for the second quarter of 2016 compared to 3.26% for the same quarter in 2015. There was a decrease of ten basis points for the comparable six-month period.
For the second quarter of 2016, noninterest expense totaled $14.0 million, an increase of $913,000 (7.0%) compared to the same quarter in 2015. The primary factors for the increase in noninterest expense was higher salaries and employee benefits of $650,000 (8.4%) as a result of strategic growth in the workforce and costs of benefits packages, higher occupancy and equipment of $250,000 (11.6%); higher professional services of $222,000 (53.0%) due to legal, auditing, and employment agency fees; higher data processing of $49,000 (4.1%); and higher FDIC insurance of $16,000 (7.6%) as the Bank expands. The noninterest expense increase was offset by lower marketing expense of $125,000 (21.3%) and lower other expenses of $149,000 (19.4%) quarter-over-quarter.
Since December 31, 2015, total loans outstanding have increased by $79.1 million (6.6%) to $1.3 billion. The solid increase in loans outstanding is attributable to commercial mortgage loan growth of $62.2 million (12.2%), commercial and industrial loan growth of $13.3 million (31.3%), and home equity loan growth of $9.6 million (15.2%). The steady low interest rates provide an attractive environment for qualified businesses looking to purchase or refinance properties and households to purchase or access home equity.
Non-performing loans as a percentage of total loans stood at 0.12% at June 30, 2016 unchanged from December 31, 2015. Loan quality remains sound and the Allowance for Loan Losses stood at $15.4 million or 1.21% of total loans outstanding at June 30, 2016. At December 31, 2015, the Allowance for Loan Losses was $15.2 million or 1.27% of total loans outstanding. The provision for loan losses was $150,000 for the current quarter.
Total deposits grew modestly by $44.0 million (2.8%) since year-end 2015. Total deposits, excluding brokered certificates, grew by $154.2 million (11.1%) over June 30, 2015.
Total assets at June 30, 2016 were $1.8 billion, an increase of $67.6 million (4.0%) from year-end 2015.
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 $1.8
billion in total assets and 11 Massachusetts locations in Cambridge,
Boston, Belmont, Concord, Lexington, and Weston. Cambridge Trust Company
is one of New England’s leaders in wealth management with $2.5 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 2015 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 2016 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, 2016 | ||||||||||||
| Dollar amounts in thousands (except share data) | ||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2016 | 2015 | 2016 | 2015 | |||||||||
| Interest Income | $ | 13,989 | $ | 13,319 | $ | 28,050 | $ | 26,362 | ||||
| Interest Expense | 872 | 566 | 1,797 | 1,107 | ||||||||
| Net Interest Income | 13,117 | 12,753 | 26,253 | 25,255 | ||||||||
| Provision for Loan Losses | 150 | 625 | 225 | 950 | ||||||||
| Non-Interest Income | 7,100 | 6,511 | 13,768 | 12,876 | ||||||||
| Non-Interest Expense | 14,001 | 13,088 | 27,992 | 26,096 | ||||||||
| Income Before Taxes | 6,066 | 5,551 | 11,804 | 11,085 | ||||||||
| Income Taxes | 2,046 | 1,815 | 3,906 | 3,616 | ||||||||
| Net Income | $ | 4,020 | $ | 3,736 | $ | 7,898 | $ | 7,469 | ||||
Data Per Common Share: | ||||||||||||
| Basic Earnings Per Share | $ | 1.00 | $ | 0.94 | $ | 1.96 | $ | 1.88 | ||||
| Diluted Earnings Per Share | $ | 1.00 | $ | 0.94 | $ | 1.96 | $ | 1.88 | ||||
| Dividends Declared Per Share | $ | 0.46 | $ | 0.45 | $ | 0.92 | $ | 0.90 | ||||
| Avg. Common Shares Outstanding: | ||||||||||||
| Basic | 3,987,696 | 3,936,081 | 3,975,624 | 3,923,902 | ||||||||
| Diluted | 4,037,522 | 3,988,979 | 4,022,005 | 3,980,145 | ||||||||
Selected Operating Ratios: | ||||||||||||
| Net Interest Margin | 3.13% | 3.26% | 3.17% | 3.27% | ||||||||
| Return on Average Assets | 0.91% | 0.91% | 0.90% | 0.92% | ||||||||
| Return on Average Equity | 12.28% | 12.38% | 12.23% | 12.53% | ||||||||
| June 30, | December 31, | June 30, | ||||||||||
| 2016 | 2015 | 2015 | ||||||||||
| Total Assets | $ | 1,773,753 | $ | 1,706,201 | $ | 1,665,223 | ||||||
| Total Loans | 1,271,343 | 1,192,214 | 1,157,274 | |||||||||
| Non-Performing Loans | 1,481 | 1,481 | 1,297 | |||||||||
| Allowance for Loan Losses | 15,411 | 15,191 | 15,156 | |||||||||
| Allowance to Total Loans | 1.21% | 1.27% | 1.31% | |||||||||
| Total Deposits | 1,601,237 | 1,557,224 | 1,390,760 | |||||||||
| Total Stockholders' Equity | 134,049 | 125,063 | 121,400 | |||||||||
| Book Value Per Share | $ | 33.16 | $ | 31.26 | $ | 30.39 | ||||||
| Tangible Book Value Per Share | $ | 32.94 | $ | 31.04 | $ | 30.18 | ||||||
| CAMBRIDGE BANCORP | |||||||||||||
| UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||||||||
| June 30, | December 31, | ||||||||||||
| 2016 | 2015 | ||||||||||||
| (In thousands) | |||||||||||||
| ASSETS | |||||||||||||
| Cash and cash equivalents | $ | 24,358 | $ | 24,645 | |||||||||
| Investment securities: | |||||||||||||
| Available for sale, at fair value | 334,853 | 347,173 | |||||||||||
| Held to maturity, at amortized cost | 83,594 | 83,063 | |||||||||||
| Total investment securities | 418,447 | 430,236 | |||||||||||
| Loans held for sale, at lower of cost or fair value | 1,509 | — | |||||||||||
| Loans: | |||||||||||||
| Residential mortgage | 536,292 | 546,245 | |||||||||||
| Commercial mortgage | 573,256 | 511,071 | |||||||||||
| Home equity | 73,148 | 63,522 | |||||||||||
| Commercial | 55,637 | 42,384 | |||||||||||
| Consumer | 33,010 | 28,992 | |||||||||||
| Total loans | 1,271,343 | 1,192,214 | |||||||||||
| Allowance for loan losses | (15,411 | ) | (15,191 | ) | |||||||||
| Net loans | 1,255,932 | 1,177,023 | |||||||||||
| Stock in FHLB of Boston, at cost | 4,448 | 6,465 | |||||||||||
| Bank owned life insurance | 30,212 | 29,887 | |||||||||||
| Banking premises and equipment, net | 11,380 | 11,371 | |||||||||||
| Accrued interest receivable | 4,308 | 4,222 | |||||||||||
| Other assets | 23,159 | 22,352 | |||||||||||
| Total assets | $ | 1,773,753 | $ | 1,706,201 | |||||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||||
| Deposits: | |||||||||||||
| Demand | $ | 465,351 | $ | 436,998 | |||||||||
| Interest bearing checking | 362,932 | 370,400 | |||||||||||
| Money market | 74,230 | 73,911 | |||||||||||
| Savings | 524,604 | 497,525 | |||||||||||
| Certificates of deposit | 174,120 | 178,390 | |||||||||||
| Total deposits | 1,601,237 | 1,557,224 | |||||||||||
| Short-term borrowings | 13,000 | — | |||||||||||
| Long-term borrowings | 3,828 | 3,910 | |||||||||||
| Other liabilities | 21,639 | 20,004 | |||||||||||
| Total liabilities | 1,639,704 | 1,581,138 | |||||||||||
| Stockholders' equity: | |||||||||||||
| Common stock, par value $1.00; Authorized: | |||||||||||||
| 10,000,000 shares; Outstanding: 4,042,371 and | |||||||||||||
| 4,000,181 shares, respectively | 4,042 | 4,000 | |||||||||||
| Additional paid-in capital | 32,114 | 30,427 | |||||||||||
| Retained earnings | 102,973 | 99,064 | |||||||||||
| Accumulated other comprehensive loss | (5,080 | ) | (8,428 | ) | |||||||||
| Total stockholders’ equity | 134,049 | 125,063 | |||||||||||
| Total liabilities and stockholders’ equity | $ | 1,773,753 | $ | 1,706,201 | |||||||||
| CAMBRIDGE BANCORP | |||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
| Quarter Ended June 30, | |||||||||||
| 2016 | 2015 | ||||||||||
| (In thousands, except per share data) | |||||||||||
| Interest income: | |||||||||||
| Interest on loans | $ | 11,881 | $ | 11,143 | |||||||
| Interest on taxable investment securities | 1,360 | 1,406 | |||||||||
| Interest on tax exempt investment securities | 677 | 691 | |||||||||
| Dividends on FHLB of Boston stock | 30 | 69 | |||||||||
| Interest on overnight investments | 41 | 10 | |||||||||
| Total interest income | 13,989 | 13,319 | |||||||||
| Interest expense: | |||||||||||
| Interest on deposits | 851 | 495 | |||||||||
| Interest on borrowed funds | 21 | 71 | |||||||||
| Total interest expense | 872 | 566 | |||||||||
| Net interest income | 13,117 | 12,753 | |||||||||
| Provision for loan losses | 150 | 625 | |||||||||
| Net interest income after provision for loan losses | 12,967 | 12,128 | |||||||||
| Noninterest income: | |||||||||||
| Wealth management income | 4,943 | 4,796 | |||||||||
| Deposit account fees | 723 | 595 | |||||||||
| ATM/Debit card income | 297 | 317 | |||||||||
| Bank owned life insurance income | 152 | 162 | |||||||||
| Gain on disposition of investment securities | 91 | 219 | |||||||||
| Gain on loans held for sale | 225 | 175 | |||||||||
| Loan related derivative income | 429 | — | |||||||||
| Other income | 240 | 247 | |||||||||
| Total noninterest income | 7,100 | 6,511 | |||||||||
| Noninterest expense: | |||||||||||
| Salaries and employee benefits | 8,418 | 7,768 | |||||||||
| Occupancy and equipment | 2,402 | 2,152 | |||||||||
| Data processing | 1,231 | 1,182 | |||||||||
| Professional services | 641 | 419 | |||||||||
| Marketing | 462 | 587 | |||||||||
| FDIC Insurance | 227 | 211 | |||||||||
| Other expenses | 620 | 769 | |||||||||
| Total noninterest expense | 14,001 | 13,088 | |||||||||
| Income before income taxes | 6,066 | 5,551 | |||||||||
| Income tax expense | 2,046 | 1,815 | |||||||||
| Net income | $ | 4,020 | $ | 3,736 | |||||||
| Per share data: | |||||||||||
| Basic earnings per common share | $ | 1.00 | $ | 0.94 | |||||||
| Diluted earnings per common share | $ | 1.00 | $ | 0.94 | |||||||
| Average shares outstanding - basic | 3,987,696 | 3,936,081 | |||||||||
| Average shares outstanding - diluted | 4,037,522 | 3,988,979 | |||||||||
| CAMBRIDGE BANCORP | |||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||||
| Quarter Ended June 30, | |||||||||||||
| 2016 | 2015 | ||||||||||||
| (In thousands) | |||||||||||||
| Net income | $ | 4,020 | $ | 3,736 | |||||||||
| Other comprehensive income/(loss), net of tax: | |||||||||||||
| Defined benefit retirement plans: | |||||||||||||
| Change in unfunded retirement liability | 117 | 105 | |||||||||||
| Unrealized gains/(losses) on Available for | |||||||||||||
| Sale securities: | |||||||||||||
| Unrealized holding gains/(losses) arising | |||||||||||||
| during the period | 863 | (1,160 | ) | ||||||||||
| Less: reclassification adjustment for gains | |||||||||||||
| recognized in net income | (58 | ) | (140 | ) | |||||||||
| Other comprehensive income/(loss) | 922 | (1,195 | ) | ||||||||||
| Comprehensive income/(loss) | $ | 4,942 | $ | 2,541 | |||||||||
| CAMBRIDGE BANCORP | |||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2016 | 2015 | ||||||||||
| (In thousands, except per share data) | |||||||||||
| Interest income: | |||||||||||
| Interest on loans | $ | 23,651 | $ | 21,916 | |||||||
| Interest on taxable investment securities | 2,864 | 2,946 | |||||||||
| Interest on tax exempt investment securities | 1,383 | 1,380 | |||||||||
| Dividends on FHLB of Boston stock | 80 | 104 | |||||||||
| Interest on overnight investments | 72 | 16 | |||||||||
| Total interest income | 28,050 | 26,362 | |||||||||
| Interest expense: | |||||||||||
| Interest on deposits | 1,757 | 977 | |||||||||
| Interest on borrowed funds | 40 | 130 | |||||||||
| Total interest expense | 1,797 | 1,107 | |||||||||
| Net interest income | 26,253 | 25,255 | |||||||||
| Provision for loan losses | 225 | 950 | |||||||||
| Net interest income after provision for loan losses | 26,028 | 24,305 | |||||||||
| Noninterest income: | |||||||||||
| Wealth management income | 9,545 | 9,384 | |||||||||
| Deposit account fees | 1,368 | 1,137 | |||||||||
| ATM/Debit card income | 567 | 589 | |||||||||
| Bank owned life insurance income | 325 | 345 | |||||||||
| Gain on disposition of investment securities | 435 | 671 | |||||||||
| Gain on loans held for sale | 286 | 295 | |||||||||
| Loan related derivative income | 799 | — | |||||||||
| Other income | 443 | 455 | |||||||||
| Total noninterest income | 13,768 | 12,876 | |||||||||
| Noninterest expense: | |||||||||||
| Salaries and employee benefits | 16,811 | 15,540 | |||||||||
| Occupancy and equipment | 4,751 | 4,291 | |||||||||
| Data processing | 2,465 | 2,341 | |||||||||
| Professional services | 1,203 | 846 | |||||||||
| Marketing | 925 | 1,175 | |||||||||
| FDIC Insurance | 452 | 419 | |||||||||
| Other expenses | 1,385 | 1,484 | |||||||||
| Total noninterest expense | 27,992 | 26,096 | |||||||||
| Income before income taxes | 11,804 | 11,085 | |||||||||
| Income tax expense | 3,906 | 3,616 | |||||||||
| Net income | $ | 7,898 | $ | 7,469 | |||||||
| Per share data: | |||||||||||
| Basic earnings per common share | $ | 1.96 | $ | 1.88 | |||||||
| Diluted earnings per common share | $ | 1.96 | $ | 1.88 | |||||||
| Average shares outstanding - basic | 3,975,624 | 3,923,902 | |||||||||
| Average shares outstanding - diluted | 4,022,005 | 3,980,145 | |||||||||
| CAMBRIDGE BANCORP | |||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||||||||||
| Six Months Ended June 30, | |||||||||||
| 2016 | 2015 | ||||||||||
| (In thousands) | |||||||||||
| Net income | $ | 7,898 | $ | 7,469 | |||||||
| Other comprehensive income/(loss), net of tax: | |||||||||||
| Defined benefit retirement plans: | |||||||||||
| Change in unfunded retirement liability | 234 | 210 | |||||||||
| Unrealized gains/(losses) on Available for | |||||||||||
| Sale securities: | |||||||||||
| Unrealized holding gains/(losses) arising | |||||||||||
| during the period | 3,393 | 63 | |||||||||
| Less: reclassification adjustment for gains | |||||||||||
| recognized in net income | (279 | ) | (430 | ) | |||||||
| Other comprehensive income/(loss) | 3,348 | (157 | ) | ||||||||
| Comprehensive income/(loss) | $ | 11,246 | $ | 7,312 | |||||||
| CAMBRIDGE BANCORP | |||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||||||
| Six Months Ended June 30, | |||||||||||||
| 2016 | 2015 | ||||||||||||
| (In thousands) | |||||||||||||
| Cash flows provided by operating activities: | |||||||||||||
| Net income | $ | 7,898 | $ | 7,469 | |||||||||
| Adjustments to arrive at net cash provided by operating activities: | |||||||||||||
| Provision for loan losses | 225 | 950 | |||||||||||
| Amortization of deferred charges and fees, net | 695 | 636 | |||||||||||
| Depreciation and amortization | 1,033 | 872 | |||||||||||
| Bank owned life insurance income | (325 | ) | (345 | ) | |||||||||
| Gain on disposition of investment securities | (435 | ) | (671 | ) | |||||||||
| Compensation expense from stock option | |||||||||||||
| and restricted stock grants | 425 | 295 | |||||||||||
| Change in loans held for sale | (1,509 | ) | (2,232 | ) | |||||||||
| Change in accrued interest receivable, deferred taxes, | |||||||||||||
| other assets and other liabilities | (738 | ) | (57 | ) | |||||||||
| Other, net | 22 | 13 | |||||||||||
| Net cash provided by operating activities | 7,291 | 6,930 | |||||||||||
| Cash flows used by investing activities: | |||||||||||||
| Origination of loans | (151,860 | ) | (138,634 | ) | |||||||||
| Purchase of: | |||||||||||||
| Investment securities - AFS | (94,485 | ) | (89,880 | ) | |||||||||
| Investment securities - HTM | (8,136 | ) | (4,598 | ) | |||||||||
| Maturities, calls and principal payments of: | |||||||||||||
| Loans | 72,472 | 61,865 | |||||||||||
| Investment securities - AFS | 93,872 | 42,639 | |||||||||||
| Investment securities - HTM | 7,561 | 3,597 | |||||||||||
| Proceeds from sales of investment securities - AFS | 17,817 | 42,462 | |||||||||||
| Change in FHLB of Boston stock | 2,017 | (654 | ) | ||||||||||
| Purchase of banking premises and equipment | (1,042 | ) | (1,106 | ) | |||||||||
| Net cash used by investing activities | (61,784 | ) | (84,309 | ) | |||||||||
| Cash flows provided by financing activities: | |||||||||||||
| Change in deposits | 43,973 | 20,224 | |||||||||||
| Change in short-term borrowings | 13,000 | 66,000 | |||||||||||
| Repayment of long-term borrowings | (82 | ) | — | ||||||||||
| Proceeds from issuance of common stock | 1,367 | 1,454 | |||||||||||
| Repurchase of common stock | (341 | ) | (341 | ) | |||||||||
| Cash dividends paid on common stock | (3,711 | ) | (3,578 | ) | |||||||||
| Net cash provided by financing activities | 54,206 | 83,759 | |||||||||||
| Net increase/(decrease) in cash and cash equivalents | (287 | ) | 6,380 | ||||||||||
| Cash and cash equivalents at beginning of period | 24,645 | 17,440 | |||||||||||
| Cash and cash equivalents at end of period | $ | 24,358 | $ | 23,820 | |||||||||
| Supplemental disclosure of cash flow information: | |||||||||||||
| Cash paid for interest | $ | 1,810 | $ | 1,109 | |||||||||
| Cash paid for income taxes | 3,970 | 2,675 | |||||||||||
| Non-cash transactions: | |||||||||||||
| Change in accumulated other comprehensive | |||||||||||||
| income/(loss), net of taxes | 3,348 | (157 | ) | ||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20160719005276/en/
Contacts:
Albert R. Rietheimer, 617-441-1516
Chief
Financial Officer & Treasurer
