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Cambridge Bancorp Announces Third Quarter Results

Tuesday, October 19, 2010

CAMBRIDGE, Mass. - 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 – an increase of 38.6%. Key factors driving the $2,954,000 increase in net income were the sale of the Bank’s Merchant Services portfolio last quarter and continued growth in net interest income.

“Although there have been some timid signs of improvement in the economy, the current interest rate environment has had a negative impact on the Bank’s net interest margin.  We have been able to offset some of the recent margin pressure through modest growth in the loan portfolio,” notes Joseph V. Roller II, the Bank’s president and CEO. “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.”

Net interest income continued to experience growth despite the Bank’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 Bank’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 Bank’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 England’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
Albert R. Rietheimer
Chief Financial Officer & Treasurer