Cambridge Bancorp (OTCBB: CATC) today announced unaudited net income of $13,403,000 for the year ended December 31, 2012, representing an increase of $926,000, or 7.4%, compared to net income of $12,477,000 for the year ended December 31, 2011. Diluted earnings per share (EPS) were $3.45, a 6.2% increase over diluted earnings per share for the prior year.

"We are pleased to report solid financial performance for the year of 2012," noted Joseph V. Roller II, president and CEO. "Our across-the-board balance sheet growth and steady increase in noninterest income demonstrate that we continue to achieve our goals throughout the Bank while offering a customer-centric banking experience."

The Bank experienced another historic year for deposit growth with an increase of $155.7 million, or 13.8%, as consumers and businesses continued to place their liquid funds with sound financial institutions. Loan growth achieved similar success with an overall increase of $69.0 million, or 10.2%, for the year. Both residential and commercial mortgages showed solid growth for the year, with increases of $17.0 million (5.1%) and $44.8 million (19.4%), respectively. Home equity loans were down by $10.7 million for the year ending December 31, 2012 as many consumers elected to refinance second mortgages into first mortgages due to favorable interest rates.

For the year ended December 31, 2012 net interest income increased $2,143,000, or 4.9%, to $45.9 million compared to $43.7 million for 2011. The increase in net interest income for the year was driven primarily by loan growth, as well as a reduction in deposit costs.

The sustained low interest rate environment resulted in lower yields earned on investment securities and continued to place further pressure on loan pricing. These were the principal causes for the decrease in the Bank's net interest margin of 32 basis points to 3.58% for the year compared to 3.90% for the year ended December 31, 2011.

Noninterest income totaled $20.5 million for the year 2012 compared to $18.1 million for 2011. The Bank's Wealth Management income accounted for a $958,000, or 40.9%, of the upswing in total noninterest income for the year. In addition, during 2012 the Bank began selling 30-year conforming loans to the secondary market. This new revenue source produced gains on loans sold of $592,000 for the year. Other contributors to the noninterest income increase were higher gains on disposition of investment securities of $330,000, higher deposit account and cash management fees of $219,000, and higher bank-owned life insurance income of $194,000 compared to the prior year.

Noninterest expense increased by $3.2 million, or 7.4%, to $45.8 million for the year ended December 31, 2012. The increase is primarily the result of additional investments in salaries and benefits of $2.7 million, and occupancy and equipment of $337,000. The increase of $139,000 in marketing for the year is primarily the result of promoting the Bank's new South End branch, which opened in November of 2012.

Total loans outstanding at year-end 2012 were $742.2 million compared to $673.3 million at year-end 2011. Loan quality remained sound across consumer and corporate customer bases with non-performing loans totaling $1.6 million at December 31, 2012, an increase of $366,000 compared to the year-end 2011. The Allowance for Loan Losses was $10.9 million, or 1.47%, of total loans outstanding at year-end 2012. At December 31, 2011, the Allowance for Loan Losses was $10.2 million, or 1.51%, of total loans outstanding. The provision for loan losses of $800,000 during 2012 was $200,000 lower than the prior year's provision. This decrease was primarily in response to the strength of the loan portfolio in conjunction with the stable levels of non-performers.

In the fourth quarter of 2012 unaudited net income was $3,003,000, compared to $2,910,000 for the same quarter in 2011.

"Results for the fourth quarter were highlighted by an uptrend in noninterest income," said Mr. Roller. "We continue to see solid growth in Wealth Management income, which increased $431,000 (13.8%) for the fourth quarter of 2012 as compared to the fourth quarter of 2011. Gains on loans sold for the quarter produced revenue of $316,000 for the quarter. Noninterest expense was $1.1 million higher for the quarter compared to the same quarter last year due to increases in salaries and benefits and marketing expenditures. The Bank's net interest margin decreased 24 basis points to 3.55% for the fourth quarter compared to 3.79% for the quarter ended December 31, 2011. While we do not anticipate a change in interest rates for some time, the Bank has momentum and is positioned well to compete in this environment."

Total deposits at year-end 2012 were $1.3 billion compared to $1.1 billion at year-end 2011.

Total assets at year-end 2012 were $1.4 billion versus $1.3 billion year-end 2011.

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 123-year-old Massachusetts chartered commercial bank with $1.4 billion in total assets and 12 Massachusetts locations in Cambridge, Boston, Belmont, Concord, Lexington, Lincoln and Weston. Cambridge Trust Company is one of New England's leaders in wealth management with $1.8 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 Portsmouth.

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 2011 Annual Report, which is posted in the investor relations section of our website at www.cambridgetrust.com. We will also post the Cambridge Bancorp 2012 Annual Report at the same site later this quarter.

Financial Highlights:

CAMBRIDGE BANCORP
QUARTERLY UNAUDITED RESULTS
December 31, 2012
Dollar amounts in thousands (except share data)
       
 
Three Months Ended Year Ended
December 31, December 31,
2012 2011 2012 2011
 
Interest Income $ 12,327 $ 12,191 $ 49,066 $ 47,663
Interest Expense   711     969     3,191     3,931  
Net Interest Income 11,616 11,222 45,875 43,732
Provision for Loan Losses 100 250 800 1,000
Non-Interest Income 5,216 4,318 20,489 18,147
Non-Interest Expense   12,217     11,157     45,847     42,685  
Income Before Taxes 4,515 4,133 19,717 18,194
Income Taxes   1,512     1,223     6,314     5,717  
Net Income $ 3,003   $ 2,910   $ 13,403   $ 12,477  
 

Data Per Common Share:

 
Basic Earnings Per Share $ 0.78 $ 0.77 $ 3.49 $ 3.29
Diluted Earnings Per Share $ 0.77 $ 0.76 $ 3.45 $ 3.25
Dividends Declared Per Share $ 0.39 $ 0.37 $ 1.50 $ 1.42
 
Avg. Common Shares Outstanding:
Basic 3,851,439 3,799,977 3,839,681 3,791,167
Diluted 3,900,315 3,836,814 3,879,607 3,834,569
 

Selected Operating Ratios:

 
Net Interest Margin 3.55 % 3.79 % 3.58 % 3.90 %
Return on Average Assets, after taxes 0.87 % 0.93 % 1.00 % 1.06 %
Return on Average Equity, after taxes 11.63 % 11.86 % 13.39 % 13.26 %
 
 
December 31, December 31,
2012 2011
 
Total Assets $ 1,417,986 $ 1,275,860
Total Loans 742,249 673,265
Non-Performing Loans 1,570 1,204
Allowance for Loan Losses 10,948 10,159
Allowance to Non-Performing Loans 697.25 % 844.09 %
Allowance to Total Loans 1.47 % 1.51 %
Total Deposits 1,281,333 1,125,654
Total Stockholders' Equity 104,891 96,633
 
Book Value Per Share $ 27.21 $ 25.39
Tangible Book Value Per Share $ 27.05 $ 25.28
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED BALANCE SHEETS
       
December 31,
2012 2011
(In thousands)
ASSETS
 
Cash and due from banks $ 59,923 $ 22,512
Overnight investments --   --  
Total cash and cash equivalents 59,923 22,512
Investment securities:
Available for sale, at fair value 502,318 470,232
Held-to-maturity, at amortized cost 71,133   74,256  
Total investment securities 573,451 544,488
 
Loans held for sale, at lower of cost or fair value 1,684 --
 
Loans:
Residential mortgage 347,908 330,933
Commercial mortgage 276,428 231,595
Home equity 50,574 61,307
Commercial 47,570 38,260
Consumer 19,769   11,170  
Total loans 742,249 673,265
Allowance for loan losses (10,948 ) (10,159 )
Net loans 731,301 663,106
 
Stock in FHLB of Boston, at cost 5,010 4,806
Bank owned life insurance 22,903 17,331
Banking premises and equipment, net 6,214 6,216
Accrued interest receivable 3,877 4,423
Other assets 13,623   12,978  
Total assets $ 1,417,986   $ 1,275,860  
 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
Deposits:
Demand $ 329,211 $ 285,724
Interest bearing checking 363,575 316,454
Money market 60,850 58,532
Savings 393,541 328,771
Certificates of deposit 134,156   136,173  
Total deposits 1,281,333 1,125,654
 
Short-term borrowings -- 2,500
Long-term borrowings 20,000 30,000
Other liabilities 11,762   21,073  
Total liabilities 1,313,095   1,179,227  
Stockholders' equity:
Common stock, par value $1.00; Authorized
5,000,000 shares; Outstanding: 3,876,930 and
3,805,748 shares, respectively 3,855 3,806
Additional paid-in capital 24,421 23,001
Retained earnings 75,787 68,232
Accumulated other comprehensive income 828   1,594  
Total stockholders' equity 104,891   96,633  
Total liabilities and stockholders' equity $ 1,417,986   $ 1,275,860  
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
         
Three Months Ended December 31,
2012 2011
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 8,919 $ 8,330
Interest on taxable investment securities 2,886 3,338
Interest on tax exempt investment securities 506 502
Dividends on FHLB of Boston stock 7 4
Interest on overnight investments 9 17
Total interest income 12,327 12,191
 
Interest expense:
Interest on deposits 542 673
Interest on borrowed funds 169 296
Total interest expense 711 969
 
Net interest income 11,616 11,222
 
Provision for loan losses 100 250
 
Net interest income after provision for loan losses 11,516 10,972
 
Noninterest income:
Wealth management income 3,553 3,122
Deposit account fees 620 575
ATM/Debit card income 275 251
Bank owned life insurance income 169 128
Gain on disposition of investment securities 129 87
Gain on loans held for sale 316 --
Other income 154 155
Total noninterest income 5,216 4,318
 
Noninterest expense:
Salaries and employee benefits 7,687 6,916
Occupancy and equipment 1,967 1,876
Data processing 888 888
Professional services 322 276
Marketing 487 373
FDIC Insurance 179 155
Other expenses 687 673
Total noninterest expense 12,217 11,157
 
Income before income taxes 4,515 4,133
 
Income tax expense 1,512 1,223
   
Net income $ 3,003 $ 2,910
 
Per share data:
 
Basic earnings per common share $ 0.78 $ 0.77
Diluted earnings per common share $ 0.77 $ 0.76
 
Average shares outstanding - basic 3,851,439 3,799,977
Average shares outstanding - diluted 3,900,315 3,836,814
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
           
Three Months Ended December 31,
2012 2011
(In thousands)
 
 
Net income $ 3,003 $ 2,910
 
Other comprehensive income/(loss), net of tax:
Defined benefit retirement plans:
Change in unfunded retirement liability 391 (2,846 )
Unrealized gains/(losses) on Available for
Sale securities:
Unrealized holding gains/(losses) arising
during the period (1,109 ) (279 )
Less: reclassification adjustment for gains
recognized in net income (89 ) (58 )
   
Other comprehensive income/(loss) (807 ) (3,183 )
   
Comprehensive income/(loss) $ 2,196   $ (273 )
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
           
Year Ended December 31,
2012 2011
(In thousands, except per share data)
 
Interest income:
Interest on loans $ 33,984 $ 32,401
Interest on taxable investment securities 13,003 13,219
Interest on tax exempt investment securities 2,029 1,987
Dividends on FHLB of Boston stock 25 14
Interest on overnight investments 25 42
Total interest income 49,066 47,663
 
Interest expense:
Interest on deposits 2,219 2,745
Interest on borrowed funds 972 1,186
Total interest expense 3,191 3,931
 
Net interest income 45,875 43,732
 
Provision for loan losses 800 1,000
 
Net interest income after provision for loan losses 45,075 42,732
 
Noninterest income:
Wealth management income 14,110 13,152
Deposit account fees 2,398 2,179
ATM/Debit card income 1,043 981
Bank owned life insurance income 713 519
Gain on disposition of investment securities 882 552
Gain on loans held for sale 592 --
Other income 751 764
Total noninterest income 20,489 18,147
 
Noninterest expense:
Salaries and employee benefits 27,835 25,116
Occupancy and equipment 7,660 7,323
Data processing 3,560 3,594
Professional services 1,585 1,588
Marketing 1,842 1,703
FDIC Insurance 704 752
Other expenses 2,661 2,609
Total noninterest expense 45,847 42,685
 
Income before income taxes 19,717 18,194
 
Income tax expense 6,314 5,717
   
Net income $ 13,403 $ 12,477
 
Per share data:
 
Basic earnings per common share $ 3.49 $ 3.29
Diluted earnings per common share $ 3.45 $ 3.25
 
Average shares outstanding - basic 3,839,681 3,791,167
Average shares outstanding - diluted 3,879,607 3,834,569
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
           
Year Ended December 31,
2012 2011
(In thousands)
 
 
Net income $ 13,403 $ 12,477
 
Other comprehensive income/(loss), net of tax:
Defined benefit retirement plans:
Change in unfunded retirement liability 104 (2,941 )
Unrealized gains/(losses) on Available for
Sale securities:
Unrealized holding gains/(losses) arising
during the period (302 ) 2,259
Less: reclassification adjustment for gains
recognized in net income (568 ) (351 )
   
Other comprehensive income/(loss) (766 ) (1,033 )
   
Comprehensive income/(loss) $ 12,637   $ 11,444  
 
CAMBRIDGE BANCORP
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
           
Year Ended December 31,
2012 2011
(In thousands)
Cash flows provided by operating activities:
Net income $ 13,403 $ 12,477
Adjustments to arrive at net cash provided by operating activities:
Provision for loan losses 800 1,000
Amortization of deferred charges/(income), net 1,360 561
Depreciation and amortization 1,430 1,441
Bank owned life insurance income (713 ) (519 )
Gain on disposition of investment securities (882 ) (552 )
Compensation expense from stock option
and restricted stock grants 551 401
Change in loans held for sale (1,684 ) --
Change in accrued interest receivable, deferred taxes,
other assets and other liabilities (8,655 ) 359
Other, net 291   481  
Net cash provided by operating activities 5,901   15,649  
Cash flows used by investing activities:
Origination of loans (205,096 ) (211,667 )
Purchase of:
Investment securities - AFS (201,506 ) (235,502 )
Investment securities - HTM (824 ) (2,531 )
Maturities, calls and principal payments of:
Loans 135,435 106,443
Investment securities - AFS 130,165 164,920
Investment securities - HTM 3,933 9,526
Proceeds from sale of investment securities - AFS 37,786 38,540
Purchase of bank owned life insurance (5,000 ) (5,001 )
Net increase in FHLB of Boston stock (204 ) --
Purchase of banking premises and equipment (1,428 ) (1,614 )
Net cash used by investing activities (106,739 ) (136,886 )
Cash flows provided by financing activities:
Net increase in deposits 155,679 131,846
Net (decrease)/increase in short-term borrowings (2,500 ) 598
Repayment of long-term borrowings (10,000 ) --
Proceeds from issuance of common stock 937 1,224
Repurchase of common stock (103 ) (287 )
Cash dividends paid on common stock (5,764 ) (5,388 )
Net cash provided by financing activities 138,249   127,993  
Net increase in cash and cash equivalents 37,411 6,756
Cash and cash equivalents at beginning of period 22,512   15,756  
Cash and cash equivalents at end of period $ 59,923   $ 22,512  
 
Supplemental disclosure of cash flow information:
Cash paid for interest $ 3,205 $ 3,946
Cash paid for income taxes 6,350 6,475
Non-cash transactions:
Change in accumulated other comprehensive income, net of taxes (766 ) (1,033 )

Cambridge Bancorp
Albert R. Rietheimer, 617-441-1516
Chief Financial Officer & Treasurer