CAMBRIDGE BANCORP Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $3,736,000 for the second quarter of 2015 compared to $3,641,000 for the same quarter in 2014. The increase in earnings of $95,000 (2.6%) was attributable to growth in both lending and wealth management. Diluted earnings per share were $0.94 for the second quarter of 2015 compared to $0.92 for the same quarter in 2014.
For the six months ended June 30, 2015, unaudited net income was $7,469,000, an increase of $317,000 (4.4%) compared to $7,152,000 for the first half of 2014. Diluted earnings per share were $1.88 for the first six months of 2015 versus $1.81 for the same period in 2014.
“We are pleased to report the Bank continues to achieve consistent performance quarter-over-quarter,” notes Denis K. Sheahan, president and CEO. “The Bank sustained the trend of growth in loans, and Wealth Management continues to make a significant contribution to noninterest income,” said Sheahan.
Net interest income of $12.8 million for the second quarter of 2015 was $951,000 (8.1%) higher than the same quarter in 2014. For the six months ended June 30, 2015, net interest income of $25.3 million was $1.6 million (6.9%) higher than the same period in 2014.
Noninterest income increased by $410,000 (6.7%) to $6.5 million for the second quarter of 2015 compared to $6.1 million for the same quarter in 2014. The Bank continued to build wealth management income, which increased by $448,000 (10.3%) compared to the same quarter in 2014. Assets under management were $2.3 billion at the end of the second quarter 2015.
Other contributors to the noninterest income for the second quarter of 2015 were increases in gains on loans held for sale of $143,000 and bank owned life insurance income of $21,000, as compared to the same quarter in 2014. Noninterest income was offset by lower income produced from gains on disposition of investment securities of $137,000, ATM/Debit card income of $17,000, deposit account fees of $14,000, and other income of $34,000 compared to the same period in 2014.
The Bank’s net interest margin trended slightly lower due to the continued low interest rate environment. The Bank’s net interest margin stood at 3.26% for the second quarter of 2015 compared to 3.32% for the same quarter in 2014. There was a decrease of seven basis points for the comparable six-month period.
For the second quarter of 2015, noninterest expense totaled $13.1 million, an increase of $696,000 (5.6%) compared to the same quarter in 2014. The primary factor for the increase in noninterest expense centered in salaries and employee benefits and was the result of higher retirement benefit costs.
Since year-end 2014, total loans outstanding have increased by $76.5 million (7.1%) to $1.2 billion. The solid increase in loans outstanding is attributable to residential mortgage and home equity loan growth of $33.4 million (5.9%) and commercial mortgage loan growth of $44.6 million (10.1%). The steady low interest rates provide an attractive environment for qualified households to purchase or access home equity and businesses looking to purchase or refinance properties.
Non-performing loans as a percentage of total loans stood at 0.11% at June 30, 2015, a slight decrease from 0.15% at December 31, 2014. Loan quality remains sound and the Allowance for Loan Losses stood at $15.2 million or 1.31% of total loans outstanding at June 30, 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 was $625,000 for the current quarter.
Total deposits grew modestly by $20.2 million (1.5%) since year-end 2014, and increased by $80.4 million (6.1%) over June 30, 2014.
Total assets at second quarter 2015 end were $1.7 billion, an increase of $91.5 million (5.8%) 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 $1.7 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 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 second 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 | ||||||||||||
| June 30, 2015 | ||||||||||||
| Dollar amounts in thousands (except share data) | ||||||||||||
| Quarter Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
| 2015 | 2014 | 2015 | 2014 | |||||||||
| Interest Income | $ | 13,319 | $ | 12,318 | $ | 26,362 | $ | 24,655 | ||||
| Interest Expense | 566 | 516 | 1,107 | 1,032 | ||||||||
| Net Interest Income | 12,753 | 11,802 | 25,255 | 23,623 | ||||||||
| Provision for Loan Losses | 625 | 150 | 950 | 525 | ||||||||
| Non-Interest Income | 6,511 | 6,101 | 12,876 | 12,146 | ||||||||
| Non-Interest Expense | 13,088 | 12,392 | 26,096 | 24,659 | ||||||||
| Income Before Taxes | 5,551 | 5,361 | 11,085 | 10,585 | ||||||||
| Income Taxes | 1,815 | 1,720 | 3,616 | 3,433 | ||||||||
| Net Income | $ | 3,736 | $ | 3,641 | $ | 7,469 | $ | 7,152 | ||||
Data Per Common Share: | ||||||||||||
| Basic Earnings Per Share | $ | 0.94 | $ | 0.92 | $ | 1.88 | $ | 1.83 | ||||
| Diluted Earnings Per Share | $ | 0.94 | $ | 0.92 | $ | 1.88 | $ | 1.81 | ||||
| Dividends Declared Per Share | $ | 0.45 | $ | 0.42 | $ | 0.90 | $ | 0.84 | ||||
| Avg. Common Shares Outstanding: | ||||||||||||
| Basic | 3,936,081 | 3,887,707 | 3,923,902 | 3,873,549 | ||||||||
| Diluted | 3,988,979 | 3,973,372 | 3,980,145 | 3,960,288 | ||||||||
Selected Operating Ratios: | ||||||||||||
| Net Interest Margin | 3.26% | 3.32% | 3.27% | 3.34% | ||||||||
| Return on Average Assets | 0.91% | 0.97% | 0.92% | 0.96% | ||||||||
| Return on Average Equity | 12.38% | 12.70% | 12.53% | 12.64% | ||||||||
| June 30, | December 31, | June 30, | ||||||||||
| 2015 | 2014 | 2014 | ||||||||||
| Total Assets | $ | 1,665,223 | $ | 1,573,692 | $ | 1,527,063 | ||||||
| Total Loans | 1,157,274 | 1,080,766 | 987,038 | |||||||||
| Non-Performing Loans | 1,297 | 1,629 | 1,386 | |||||||||
| Allowance for Loan Losses | 15,156 | 14,269 | 13,242 | |||||||||
| Allowance to Non-Performing Loans | 1168.42% | 875.79% | 955.52% | |||||||||
| Allowance to Total Loans | 1.31% | 1.32% | 1.34% | |||||||||
| Total Deposits | 1,390,760 | 1,370,536 | 1,310,337 | |||||||||
| Total Stockholders' Equity | 121,400 | 116,258 | 117,241 | |||||||||
| Book Value Per Share | $ | 30.39 | $ | 29.50 | $ | 29.76 | ||||||
| Tangible Book Value Per Share | $ | 30.18 | $ | 29.31 | $ | 29.57 | ||||||
| CAMBRIDGE BANCORP | |||||||||||
| UNAUDITED CONSOLIDATED BALANCE SHEETS | |||||||||||
| June 30, | December 31, | ||||||||||
| 2015 | 2014 | ||||||||||
| (In thousands) | |||||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 23,820 | $ | 17,440 | |||||||
| Investment securities: | |||||||||||
| Available for sale, at fair value | 344,253 | 339,791 | |||||||||
| Held to maturity, at amortized cost | 80,615 | 79,646 | |||||||||
| Total investment securities | 424,868 | 419,437 | |||||||||
| Loans held for sale, at lower of cost or fair value | 2,516 | 284 | |||||||||
| Loans: | |||||||||||
| Residential mortgage | 539,152 | 507,216 | |||||||||
| Commercial mortgage | 486,420 | 441,842 | |||||||||
| Home equity | 58,031 | 56,579 | |||||||||
| Commercial | 45,380 | 49,492 | |||||||||
| Consumer | 28,291 | 25,637 | |||||||||
| Total loans | 1,157,274 | 1,080,766 | |||||||||
| Allowance for loan losses | (15,156 | ) | (14,269 | ) | |||||||
| Net loans | 1,142,118 | 1,066,497 | |||||||||
| Stock in FHLB of Boston, at cost | 8,609 | 7,955 | |||||||||
| Bank owned life insurance | 29,565 | 29,220 | |||||||||
| Banking premises and equipment, net | 8,601 | 8,367 | |||||||||
| Accrued interest receivable | 4,117 | 3,925 | |||||||||
| Other assets | 21,009 | 20,567 | |||||||||
| Total assets | $ | 1,665,223 | $ | 1,573,692 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Deposits: | |||||||||||
| Demand | $ | 420,894 | $ | 390,286 | |||||||
| Interest bearing checking | 325,435 | 352,661 | |||||||||
| Money market | 84,607 | 74,654 | |||||||||
| Savings | 430,450 | 430,040 | |||||||||
| Certificates of deposit | 129,374 | 122,895 | |||||||||
| Total deposits | 1,390,760 | 1,370,536 | |||||||||
| Short-term borrowings | 135,000 | 69,000 | |||||||||
| Other liabilities | 18,063 | 17,898 | |||||||||
| Total liabilities | 1,543,823 | 1,457,434 | |||||||||
| Stockholders' equity: | |||||||||||
| Common stock, par value $1.00; Authorized | |||||||||||
| 10,000,000 shares; Outstanding: 3,995,078 and | |||||||||||
| 3,940,536 shares, respectively | 3,995 | 3,941 | |||||||||
| Additional paid-in capital | 29,897 | 28,264 | |||||||||
| Retained earnings | 94,710 | 91,098 | |||||||||
| Accumulated other comprehensive loss | (7,202 | ) | (7,045 | ) | |||||||
| Total stockholders’ equity | 121,400 | 116,258 | |||||||||
| Total liabilities and stockholders’ equity | $ | 1,665,223 | $ | 1,573,692 | |||||||
| CAMBRIDGE BANCORP | ||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| Quarter Ended June 30, | ||||||||
| 2015 | 2014 | |||||||
| (In thousands, except per share data) | ||||||||
| Interest income: | ||||||||
| Interest on loans | $ | 11,143 | $ | 9,871 | ||||
| Interest on taxable investment securities | 1,406 | 1,729 | ||||||
| Interest on tax exempt investment securities | 691 | 681 | ||||||
| Dividends on FHLB of Boston stock | 69 | 23 | ||||||
| Interest on overnight investments | 10 | 14 | ||||||
| Total interest income | 13,319 | 12,318 | ||||||
| Interest expense: | ||||||||
| Interest on deposits | 495 | 482 | ||||||
| Interest on borrowed funds | 71 | 34 | ||||||
| Total interest expense | 566 | 516 | ||||||
| Net interest income | 12,753 | 11,802 | ||||||
| Provision for loan losses | 625 | 150 | ||||||
| Net interest income after provision for loan losses | 12,128 | 11,652 | ||||||
| Noninterest income: | ||||||||
| Wealth management income | 4,796 | 4,348 | ||||||
| Deposit account fees | 595 | 609 | ||||||
| ATM/Debit card income | 317 | 334 | ||||||
| Bank owned life insurance income | 162 | 141 | ||||||
| Gain on disposition of investment securities | 219 | 356 | ||||||
| Gain on loans held for sale | 175 | 32 | ||||||
| Other income | 247 | 281 | ||||||
| Total noninterest income | 6,511 | 6,101 | ||||||
| Noninterest expense: | ||||||||
| Salaries and employee benefits | 7,768 | 7,063 | ||||||
| Occupancy and equipment | 2,152 | 2,168 | ||||||
| Data processing | 1,182 | 1,156 | ||||||
| Professional services | 419 | 437 | ||||||
| Marketing | 587 | 529 | ||||||
| FDIC Insurance | 211 | 197 | ||||||
| Other expenses | 769 | 842 | ||||||
| Total noninterest expense | 13,088 | 12,392 | ||||||
| Income before income taxes | 5,551 | 5,361 | ||||||
| Income tax expense | 1,815 | 1,720 | ||||||
| Net income | $ | 3,736 | $ | 3,641 | ||||
| Per share data: | ||||||||
| Basic earnings per common share | $ | 0.94 | $ | 0.92 | ||||
| Diluted earnings per common share | $ | 0.94 | $ | 0.92 | ||||
| Average shares outstanding - basic | 3,936,081 | 3,887,707 | ||||||
| Average shares outstanding - diluted | 3,988,979 | 3,973,372 | ||||||
| CAMBRIDGE BANCORP | ||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||
| Quarter Ended June 30, | ||||||||||
| 2015 | 2014 | |||||||||
| (In thousands) | ||||||||||
| Net income | $ | 3,736 | $ | 3,641 | ||||||
| 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/(losses) arising during the period | (1,160 | ) | 1,948 | |||||||
Less: reclassification adjustment for gains recognized in net income | (140 | ) | (228 | ) | ||||||
| Other comprehensive income/(loss) | (1,195 | ) | 1,718 | |||||||
| Comprehensive income/(loss) | $ | 2,541 | $ | 5,359 | ||||||
| CAMBRIDGE BANCORP | ||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF INCOME | ||||||||
| Six Months Ended June 30, | ||||||||
| 2015 | 2014 | |||||||
| (In thousands, except per share data) | ||||||||
| Interest income: | ||||||||
| Interest on loans | $ | 21,916 | $ | 19,537 | ||||
| Interest on taxable investment securities | 2,946 | 3,762 | ||||||
| Interest on tax exempt investment securities | 1,380 | 1,283 | ||||||
| Dividends on FHLB of Boston stock | 104 | 46 | ||||||
| Interest on overnight investments | 16 | 27 | ||||||
| Total interest income | 26,362 | 24,655 | ||||||
| Interest expense: | ||||||||
| Interest on deposits | 977 | 977 | ||||||
| Interest on borrowed funds | 130 | 55 | ||||||
| Total interest expense | 1,107 | 1,032 | ||||||
| Net interest income | 25,255 | 23,623 | ||||||
| Provision for loan losses | 950 | 525 | ||||||
| Net interest income after provision for loan losses | 24,305 | 23,098 | ||||||
| Noninterest income: | ||||||||
| Wealth management income | 9,384 | 8,533 | ||||||
| Deposit account fees | 1,137 | 1,242 | ||||||
| ATM/Debit card income | 589 | 611 | ||||||
| Bank owned life insurance income | 345 | 305 | ||||||
| Gain on disposition of investment securities | 671 | 878 | ||||||
| Gain on loans held for sale | 295 | 57 | ||||||
| Other income | 455 | 520 | ||||||
| Total noninterest income | 12,876 | 12,146 | ||||||
| Noninterest expense: | ||||||||
| Salaries and employee benefits | 15,540 | 14,156 | ||||||
| Occupancy and equipment | 4,291 | 4,265 | ||||||
| Data processing | 2,341 | 2,287 | ||||||
| Professional services | 846 | 991 | ||||||
| Marketing | 1,175 | 1,058 | ||||||
| FDIC Insurance | 419 | 391 | ||||||
| Other expenses | 1,484 | 1,511 | ||||||
| Total noninterest expense | 26,096 | 24,659 | ||||||
| Income before income taxes | 11,085 | 10,585 | ||||||
| Income tax expense | 3,616 | 3,433 | ||||||
| Net income | $ | 7,469 | $ | 7,152 | ||||
| Per share data: | ||||||||
| Basic earnings per common share | $ | 1.88 | $ | 1.83 | ||||
| Diluted earnings per common share | $ | 1.88 | $ | 1.81 | ||||
| Average shares outstanding - basic | 3,923,902 | 3,873,549 | ||||||
| Average shares outstanding - diluted | 3,980,145 | 3,960,288 | ||||||
| CAMBRIDGE BANCORP | ||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||||||||
| Six Months Ended June 30, | ||||||||||
| 2015 | 2014 | |||||||||
| (In thousands) | ||||||||||
| Net income | $ | 7,469 | $ | 7,152 | ||||||
| Other comprehensive income/(loss), net of tax: | ||||||||||
| Defined benefit retirement plans: | ||||||||||
| Change in unfunded retirement liability | 210 | (4 | ) | |||||||
Unrealized gains/(losses) on Available for Sale securities: | ||||||||||
Unrealized holding gains/(losses) arising during the period | 63 | 3,274 | ||||||||
Less: reclassification adjustment for gains recognized in net income | (430 | ) | (563 | ) | ||||||
| Other comprehensive income/(loss) | (157 | ) | 2,707 | |||||||
| Comprehensive income/(loss) | $ | 7,312 | $ | 9,859 | ||||||
| CAMBRIDGE BANCORP | ||||||||||||
| UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
| Six Months Ended June 30, | ||||||||||||
| 2015 | 2014 | |||||||||||
| (In thousands) | ||||||||||||
| Cash flows provided by operating activities: | ||||||||||||
| Net income | $ | 7,469 | $ | 7,152 | ||||||||
| Adjustments to arrive at net cash provided by operating activities: | ||||||||||||
| Provision for loan losses | 950 | 525 | ||||||||||
| Amortization of deferred charges/(income), net | 636 | 480 | ||||||||||
| Depreciation and amortization | 872 | 922 | ||||||||||
| Bank owned life insurance income | (345 | ) | (305 | ) | ||||||||
| Gain on disposition of investment securities | (671 | ) | (878 | ) | ||||||||
Compensation expense from stock option and restricted stock grants | 1,020 | 955 | ||||||||||
| Change in loans held for sale | (2,232 | ) | (413 | ) | ||||||||
Change in accrued interest receivable, deferred taxes, other assets and other liabilities | (57 | ) | (1,671 | ) | ||||||||
| Other, net | 13 | 17 | ||||||||||
| Net cash provided by operating activities | 7,655 | 6,784 | ||||||||||
| Cash flows used by investing activities: | ||||||||||||
| Origination of loans | (138,634 | ) | (112,954 | ) | ||||||||
| Purchase of: | ||||||||||||
| Investment securities - AFS | (89,880 | ) | (38,741 | ) | ||||||||
| Investment securities - HTM | (4,598 | ) | (22,370 | ) | ||||||||
| Maturities, calls and principal payments of: | ||||||||||||
| Loans | 61,865 | 68,203 | ||||||||||
| Investment securities - AFS | 42,639 | 25,087 | ||||||||||
| Investment securities - HTM | 3,597 | 2,266 | ||||||||||
| Proceeds from sale of investment securities - AFS | 42,462 | 27,924 | ||||||||||
| Purchase of bank owned life insurance | — | (5,000 | ) | |||||||||
| Change in FHLB of Boston stock | (654 | ) | (1,234 | ) | ||||||||
| Purchase of banking premises and equipment | (1,106 | ) | 76 | |||||||||
| Net cash used by investing activities | (84,309 | ) | (56,743 | ) | ||||||||
| Cash flows provided by financing activities: | ||||||||||||
| Change in deposits | 20,224 | (98,710 | ) | |||||||||
| Change in short-term borrowings | 66,000 | 85,000 | ||||||||||
| Proceeds from issuance of common stock | 729 | 941 | ||||||||||
| Repurchase of common stock | (341 | ) | (503 | ) | ||||||||
| Cash dividends paid on common stock | (3,578 | ) | (3,293 | ) | ||||||||
| Net cash provided/(used) by financing activities | 83,034 | (16,565 | ) | |||||||||
| Net increase/(decrease) in cash and cash equivalents | 6,380 | (66,524 | ) | |||||||||
| Cash and cash equivalents at beginning of period | 17,440 | 88,107 | ||||||||||
| Cash and cash equivalents at end of period | $ | 23,820 | $ | 21,583 | ||||||||
| Supplemental disclosure of cash flow information: | ||||||||||||
| Cash paid for interest | $ | 1,109 | $ | 1,036 | ||||||||
| Cash paid for income taxes | 2,675 | 4,305 | ||||||||||
| Non-cash transactions: | ||||||||||||
| Change in accumulated other comprehensive income, net of taxes | (157 | ) | 2,707 | |||||||||
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