CAMBRIDGE, Mass.--([ BUSINESS WIRE ])--Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $3,176,000 for the third quarter compared to $3,161,000 for the same quarter in 2009. Diluted earnings per share (EPS) remained unchanged at $0.84 for the third quarter of 2010 versus the same quarter in 2009. For the nine months ending September 30, 2010, unaudited net income was $10,600,000 versus $7,646,000 for the same period in 2009 a" an increase of 38.6%. Key factors driving the $2,954,000 increase in net income were the sale of the Banka™s Merchant Services portfolio last quarter and continued growth in net interest income.
"In addition, non-interest expense trended higher during the third quarter as the Bank opened a new branch in Lexington and made additional investments in marketing. These important investments helped to position the Bank well for continued long term growth."
aAlthough there have been some timid signs of improvement in the economy, the current interest rate environment has had a negative impact on the Banka™s net interest margin. We have been able to offset some of the recent margin pressure through modest growth in the loan portfolio,a notes Joseph V. Roller II, the Banka™s president and CEO. aIn addition, non-interest expense trended higher during the third quarter as the Bank opened a new branch in Lexington and made additional investments in marketing. These important investments helped to position the Bank well for continued long term growth.a
Net interest income continued to experience growth despite the Banka™s net interest margin having decreased by 15 basis points versus the third quarter last year which is mainly attributed to lower yields earned on the Banka™s investment securities. The increase of $518,000 (5.2%) in net interest income for the third quarter of 2010 versus the same quarter in 2009 was primarily a function of growth in the mortgage loan portfolio and reduced costs for deposits. For the nine months ending September 30, 2010, net interest income of $31.4 million was $2.9 million (10.2%) higher than the same period in 2009.
Non-interest income of $4.6 million for the September 2010 quarter was down slightly compared to the same quarter in 2009. While the Banka™s Wealth Management income increased by $145,000 for the third quarter of 2010, it was offset by lower deposit account fees and merchant card services income. There were no gains on the disposition of investment securities during the third quarter of 2010 which accounted for a $148,000 decrease in non-interest income versus the same quarter last year.
Total loans outstanding as of September 30, 2010 were $548 million compared to $538 million at the end of last year and $514 million at September 30, 2009. Since the beginning of 2010, total loans outstanding have increased a modest $10.0 million. Residential and commercial mortgages loan growth has been strong ($29.5 million) but the increasing demand for working capital loans has not materialized resulting in a $14.4 million decrease in commercial loans outstanding due to decreased usage and loan payoffs.
Non-performing loans as a percentage of total loans stood at 18 basis points at September 30, 2010, a slight decrease from year-end 2009. Loan quality remains solid and the Allowance for Loan Losses stood at $9.2 million or 1.67% of total loans outstanding at September 30, 2010. At December 31, 2009, the Allowance for Loan Losses was $8.7 million or 1.62% of total loans outstanding. The lower provision for loan losses for the nine month period ($500,000 in 2010 versus $900,000 in 2009) is in response to the favorable delinquency experience and slower growth of the loan portfolio.
Total deposits stood at $954 million at period-end compared to $873 million at December 31, 2009, an increase of 9.3%. Total assets at period-end were $1.1 billion compared to $1.0 billion at the end of 2009.
Cambridge Bancorp and its subsidiary, Cambridge Trust Company, are based in Cambridge, Massachusetts, in the heart of Harvard Square. Cambridge Trust Company is a 120-year-old Massachusetts chartered commercial bank with $1.1 billion in total assets and eleven Massachusetts locations in Cambridge, Beacon Hill, Belmont, Concord, Lexington, Lincoln and Weston. Cambridge Trust Company is one of New Englanda™s leaders in wealth management with $1.4 billion in client assets under management. In addition, Cambridge Trust Company of New Hampshire offers wealth management services at two New Hampshire locations, Concord and Exeter.
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 2009 Annual Report, which is posted in the investor relations section of our website at [ www.cambridgetrust.com ]. We will also post supplemental financial information for the third quarter of 2010 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 | ||||||||||||||||
September 30, 2010 | ||||||||||||||||
Dollar amounts in thousands (except share data) | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
Interest Income | $ | 11,632 | $ | 11,604 | $ | 35,027 | $ | 34,076 | ||||||||
Interest Expense | 1,151 | 1,641 | 3,673 | 5,619 | ||||||||||||
Net Interest Income | 10,481 | 9,963 | 31,354 | 28,457 | ||||||||||||
Provision for Loan Losses | 50 | 300 | 500 | 900 | ||||||||||||
Non-Interest Income | 4,554 | 4,635 | 15,472 | 12,520 | ||||||||||||
Non-Interest Expense | 10,386 | 9,704 | 30,641 | 29,237 | ||||||||||||
Income Before Taxes | 4,599 | 4,594 | 15,685 | 10,840 | ||||||||||||
Income Taxes | 1,423 | 1,433 | 5,085 | 3,194 | ||||||||||||
Net Income | $ | 3,176 | $ | 3,161 | $ | 10,600 | $ | 7,646 | ||||||||
Data Per Common Share: | ||||||||||||||||
Basic Earnings Per Share | $ | 0.84 | $ | 0.85 | $ | 2.83 | $ | 2.05 | ||||||||
Diluted Earnings Per Share | $ | 0.84 | $ | 0.84 | $ | 2.81 | $ | 2.04 | ||||||||
Dividends Declared Per Share | $ | 0.35 | $ | 0.33 | $ | 1.05 | $ | 0.99 | ||||||||
Avg. Common Shares Outstanding: | ||||||||||||||||
Basic | 3,761,286 | 3,740,168 | 3,746,753 | 3,737,586 | ||||||||||||
Diluted | 3,791,682 | 3,743,814 | 3,770,596 | 3,739,819 | ||||||||||||
Selected Operating Ratios: | ||||||||||||||||
Net Interest Margin | 4.12 | % | 4.27 | % | 4.24 | % | 4.24 | % | ||||||||
Return on Average Assets, after taxes | 1.19 | % | 1.28 | % | 1.36 | % | 1.07 | % | ||||||||
Return on Average Equity, after taxes | 13.93 | % | 16.07 | % | 16.18 | % | 13.21 | % | ||||||||
September 30, | December 31, | September 30, | ||||||||||||||
2010 | 2009 | 2009 | ||||||||||||||
Total Assets | $ | 1,090,610 | $ | 1,018,949 | $ | 997,853 | ||||||||||
Total Loans | 547,938 | 537,933 | 514,002 | |||||||||||||
Non-Performing Loans | 975 | 1,092 | 1,479 | |||||||||||||
Allowance for Loan Losses | 9,175 | 8,729 | 8,502 | |||||||||||||
Allowance to Non-Performing Loans | 940.62 | % | 799.72 | % | 574.84 | % | ||||||||||
Allowance to Total Loans | 1.67 | % | 1.62 | % | 1.65 | % | ||||||||||
Total Deposits | 953,609 | 872,767 | 846,923 | |||||||||||||
Total Stockholders' Equity | 91,328 | 81,708 | 81,802 | |||||||||||||
Book Value Per Share | $ | 24.29 | $ | 21.95 | $ | 21.87 | ||||||||||
Tangible Book Value Per Share | $ | 24.11 | $ | 21.69 | $ | 21.59 |
CAMBRIDGE BANCORP | ||||||||
UNAUDITED CONSOLIDATED BALANCE SHEETS | ||||||||
September 30, | December 31, | |||||||
2010 | 2009 | |||||||
(In thousands) | ||||||||
ASSETS | ||||||||
Cash and due from banks | $ | 31,675 | $ | 12,762 | ||||
Overnight investments | a" | 13,412 | ||||||
Total cash and cash equivalents | 31,675 | 26,174 | ||||||
Investment securities: | ||||||||
Available for sale, at fair value | 403,539 | 339,833 | ||||||
Held-to-maturity, at amortized cost | 79,452 | 84,073 | ||||||
Total investment securities | 482,991 | 423,906 | ||||||
Loans: | ||||||||
Residential mortgage | 265,589 | 241,564 | ||||||
Commercial mortgage | 167,514 | 162,002 | ||||||
Home equity | 68,740 | 69,212 | ||||||
Commercial | 33,895 | 48,291 | ||||||
Consumer | 12,200 | 16,864 | ||||||
Total loans | 547,938 | 537,933 | ||||||
Allowance for loan losses | (9,175 | ) | (8,729 | ) | ||||
Net loans | 538,763 | 529,204 | ||||||
Stock in FHLB of Boston, at cost | 4,806 | 4,806 | ||||||
Bank owned life insurance | 11,924 | 11,672 | ||||||
Banking premises and equipment, net | 5,785 | 5,562 | ||||||
Other real estate owned | a" | 696 | ||||||
Accrued interest receivable | 4,170 | 4,470 | ||||||
Other assets | 10,496 | 12,459 | ||||||
Total assets | $ | 1,090,610 | $ | 1,018,949 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Deposits: | ||||||||
Demand | $ | 226,922 | $ | 204,335 | ||||
Interest bearing checking | 242,392 | 238,152 | ||||||
Money market | 69,209 | 53,099 | ||||||
Savings | 272,380 | 224,360 | ||||||
Certificates of deposit | 142,706 | 152,821 | ||||||
Total deposits | 953,609 | 872,767 | ||||||
Short-term borrowings | 238 | 11,441 | ||||||
Long-term borrowings | 30,000 | 38,000 | ||||||
Other liabilities | 15,435 | 15,033 | ||||||
Total liabilities | 999,282 | 937,241 | ||||||
Stockholders' equity: | ||||||||
Common stock, par value $1.00; Authorized | 3,760 | 3,723 | ||||||
Additional paid-in capital | 21,360 | 20,431 | ||||||
Retained earnings | 60,038 | 53,676 | ||||||
Accumulated other comprehensive income | 6,170 | 3,878 | ||||||
Total stockholdersa™ equity | 91,328 | 81,708 | ||||||
Total liabilities and stockholdersa™ equity | $ | 1,090,610 | $ | 1,018,949 |
CAMBRIDGE BANCORP | |||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | |||||||
Quarter Ended September 30, | |||||||
2010 | 2009 | ||||||
(In thousands, except per share data) | |||||||
Interest income: | |||||||
Interest on loans | $ | 7,549 | $ | 6,978 | |||
Interest on taxable investment securities | 3,614 | 4,205 | |||||
Interest on tax exempt investment securities | 461 | 401 | |||||
Interest on overnight investments | 8 | 20 | |||||
Total interest income | 11,632 | 11,604 | |||||
Interest expense: | |||||||
Interest on deposits | 853 | 1,244 | |||||
Interest on borrowed funds | 298 | 397 | |||||
Total interest expense | 1,151 | 1,641 | |||||
Net interest income | 10,481 | 9,963 | |||||
Provision for loan losses | 50 | 300 | |||||
Net interest income after provision for loan losses | 10,431 | 9,663 | |||||
Noninterest income: | |||||||
Wealth management income | 3,421 | 3,276 | |||||
Deposit account fees | 546 | 570 | |||||
ATM/Debit card income | 244 | 229 | |||||
Merchant card services | a" | 173 | |||||
Bank owned life insurance income | 88 | 83 | |||||
Gain on disposition of investment securities | a" | 148 | |||||
Gain on disposition of other real estate owned | 33 | a" | |||||
Other income | 222 | 156 | |||||
Total noninterest income | 4,554 | 4,635 | |||||
Noninterest expense: | |||||||
Salaries and employee benefits | 5,992 | 5,630 | |||||
Occupancy and equipment | 1,648 | 1,627 | |||||
Data processing | 789 | 787 | |||||
Professional services | 435 | 361 | |||||
Marketing | 514 | 350 | |||||
FDIC Insurance | 320 | 293 | |||||
Other expenses | 688 | 656 | |||||
Total noninterest expense | 10,386 | 9,704 | |||||
Income before income taxes | 4,599 | 4,594 | |||||
Income tax expense | 1,423 | 1,433 | |||||
Net income | $ | 3,176 | $ | 3,161 | |||
Per share data: | |||||||
Basic earnings per common share | $ | 0.84 | $ | 0.85 | |||
Diluted earnings per common share | $ | 0.84 | $ | 0.84 | |||
Average shares outstanding - basic | 3,761,286 | 3,740,168 | |||||
Average shares outstanding - diluted | 3,791,682 | 3,743,814 |
CAMBRIDGE BANCORP | ||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
Nine Months Ended September 30, | ||||||||
2010 | 2009 | |||||||
(In thousands, except per share data) | ||||||||
Interest income: | ||||||||
Interest on loans | $ | 22,459 | $ | 20,241 | ||||
Interest on taxable investment securities | 11,171 | 12,589 | ||||||
Interest on tax exempt investment securities | 1,366 | 1,196 | ||||||
Interest on overnight investments | 31 | 50 | ||||||
Total interest income | 35,027 | 34,076 | ||||||
Interest expense: | ||||||||
Interest on deposits | 2,727 | 4,309 | ||||||
Interest on borrowed funds | 946 | 1,310 | ||||||
Total interest expense | 3,673 | 5,619 | ||||||
Net interest income | 31,354 | 28,457 | ||||||
Provision for loan losses | 500 | 900 | ||||||
Net interest income after provision for loan losses | 30,854 | 27,557 | ||||||
Noninterest income: | ||||||||
Wealth management income | 9,153 | 8,437 | ||||||
Deposit account fees | 1,566 | 1,794 | ||||||
ATM/Debit card income | 708 | 634 | ||||||
Merchant card services | 267 | 465 | ||||||
Bank owned life insurance income | 252 | 280 | ||||||
Gain on disposition of investment securities | 146 | 382 | ||||||
Loss on disposition of other real estate owned | (10 | ) | a" | |||||
Gain on disposition of merchant services portfolio | 2,842 | a" | ||||||
Other income | 548 | 528 | ||||||
Total noninterest income | 15,472 | 12,520 | ||||||
Noninterest expense: | ||||||||
Salaries and employee benefits | 17,612 | 16,393 | ||||||
Occupancy and equipment | 4,918 | 4,969 | ||||||
Data processing | 2,400 | 2,379 | ||||||
Professional services | 1,354 | 1,020 | ||||||
Marketing | 1,264 | 1,050 | ||||||
FDIC Insurance | 930 | 1,414 | ||||||
Other expenses | 2,163 | 2,012 | ||||||
Total noninterest expense | 30,641 | 29,237 | ||||||
Income before income taxes | 15,685 | 10,840 | ||||||
Income tax expense | 5,085 | 3,194 | ||||||
Net income | $ | 10,600 | $ | 7,646 | ||||
Per share data: | ||||||||
Basic earnings per common share | $ | 2.83 | $ | 2.05 | ||||
Diluted earnings per common share | $ | 2.81 | $ | 2.04 | ||||
Average shares outstanding - basic | 3,746,753 | 3,737,586 | ||||||
Average shares outstanding - diluted | 3,770,596 | 3,739,819 |
CAMBRIDGE BANCORP | |||||||||
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
Nine Months Ended September 30, | |||||||||
2010 | 2009 | ||||||||
(In thousands) | |||||||||
Cash flows provided by operating activities: | |||||||||
Net income | $ | 10,600 | $ | 7,646 | |||||
Adjustments to arrive at net cash provided by operating activities: | |||||||||
Provision for loan losses | 500 | 900 | |||||||
Amortization of deferred charges/(income), net | 450 | 213 | |||||||
Depreciation and amortization | 1,086 | 1,044 | |||||||
Bank owned life insurance income | (252 | ) | (279 | ) | |||||
Gain on disposition of investment securities | (146 | ) | (382 | ) | |||||
Loss on disposition of other real estate owned | 10 | a" | |||||||
Gain on disposition of merchant services portfolio | (2,842 | ) | a" | ||||||
Compensation expense from stock option | 257 | 227 | |||||||
Change in accrued interest receivable, deferred | 1,183 | 903 | |||||||
Other, net | (4 | ) | 39 | ||||||
Net cash provided by operating activities | 10,842 | 10,311 | |||||||
Cash flows used by investing activities: | |||||||||
Origination of loans | (97,568 | ) | (117,434 | ) | |||||
Purchase of: | |||||||||
Investment securities - AFS | (194,770 | ) | (169,650 | ) | |||||
Investment securities - HTM | (5,441 | ) | (3,626 | ) | |||||
Maturities, calls and principal payments of: | |||||||||
Loans | 87,165 | 74,891 | |||||||
Investment securities - AFS | 105,852 | 73,790 | |||||||
Investment securities - HTM | 9,966 | 26,465 | |||||||
Proceeds from sale of investment securities - AFS | 29,002 | 10,452 | |||||||
Proceeds from sale of other real estate owned | 810 | a" | |||||||
Proceeds from sale of merchant services portfolio | 2,842 | a" | |||||||
Purchase of banking premises and equipment | (1,309 | ) | (720 | ) | |||||
Net cash used by investing activities | (63,451 | ) | (105,832 | ) | |||||
Cash flows provided by financing activities: | |||||||||
Net increase in deposits | 80,842 | 79,269 | |||||||
Net increase/(decrease) in short-term borrowings | (11,203 | ) | 11,779 | ||||||
Repayment of long-term borrowings | (8,000 | ) | (17,000 | ) | |||||
Proceeds from issuance of common stock | 788 | 680 | |||||||
Repurchase of common stock | (380 | ) | (819 | ) | |||||
Cash dividends paid on common stock | (3,937 | ) | (3,694 | ) | |||||
Net cash provided by financing activities | 58,110 | 70,215 | |||||||
Net increase (decrease) in cash and cash equivalents | 5,501 | (25,306 | ) | ||||||
Cash and cash equivalents at beginning of period | 26,174 | 39,651 | |||||||
Cash and cash equivalents at end of period | $ | 31,675 | $ | 14,345 | |||||
Supplemental disclosure of cash flow information: | |||||||||
Cash paid for interest | $ | 3,706 | $ | 5,703 | |||||
Cash paid for income taxes | 5,760 | 2,087 | |||||||
Non-cash transactions: | |||||||||
Change in accumulated other comprehensive income, net of taxes | 2,292 | 1,718 |