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Cambridge Bancorp Reports Strong Second Quarter Results; Net Income Amplified by Sale of Merchant Services Portfolio
Tuesday, July 20, 2010
CAMBRIDGE, Mass. – Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $4,678,000 for the second quarter of 2010 compared to $2,479,000 for the same quarter in 2009. Diluted earnings per share were $1.24 for the second quarter of 2010 versus $0.67 for the same quarter in 2009. Key factors driving the $2,199,000 or 89% increase in net income were the sale of the Bank’s Merchant Services portfolio and continued growth in net interest income.
During the quarter, the Bank sold its Merchant Services portfolio to Elavon, Inc., a wholly owned subsidiary of U.S. Bancorp. The after tax impact on earnings of that sale was $1,591,000 or $0.42 per diluted share.
For the first six months ended June 30, 2010, unaudited net income was $7,424,000 compared to $4,485,000 for the first half of 2009. Diluted earnings per share were $1.97 for the first six months of 2010 versus $1.21 for the same period in 2009.
“Our second quarter results are evidence that we continue to build on the momentum of our customer relationship strategy. We are encouraged that as the economy begins to gain traction, we will capitalize on opportunities for growth and remain focused on executing the Bank’s business strategies across all business lines,” notes Joseph V. Roller II, president and CEO.
The Bank continued to experience strong growth in net interest income. The solid increase of $1,024,000 or 10.8% in net interest income for the second quarter of 2010 versus the same quarter in 2009 was a function of growth in loans to consumers and businesses funded by lower cost deposits. Since year-end 2009, total deposits have grown $49.8 million or 5.7% as consumers and businesses sought stable, service-oriented banks for their checking and savings accounts and certificates of deposit. Together these factors produced a net interest margin for the second quarter of 2010 of 4.30%; a slight improvement compared to the 4.26% margin for the quarter ended June 30, 2009.
For the second quarter of 2010, non-interest expense increased $194,000 compared to the same quarter in 2009. The Bank’s FDIC insurance premium was $491,000 lower for the second quarter of 2010 compared to the same quarter in 2009, which partially offset increases in salaries and benefits of $479,000 and professional fees of $181,000 for the current quarter.
Since year-end 2009, total loans outstanding have increased $21.5 million or 4.0%. The Bank’s loan growth came primarily from residential mortgage loans with low interest rates providing an attractive environment for both new homebuyers and homeowners seeking to refinance existing mortgage loans. The demand for commercial working capital loans remains sluggish, resulting in a decrease in commercial loans outstanding due to amortization and repayments since year-end 2009. Meanwhile, there was a modest increase in commercial mortgage loans outstanding in the first half of 2010.
Non-performing loans as a percentage of total loans stood at 0.18% at June 30, 2010, a slight decline from 0.20% at December 31, 2009. Loan quality remains sound and the Allowance for Loan Losses stood at $9.1 million or 1.63% of total loans outstanding at June 30, 2010. At December 31, 2009, the Allowance for Loan Losses was $8.7 million or 1.62% of total loans outstanding. In response to continued loan growth, the provision for loan losses was $150,000 for the current quarter.
Total assets at period end were $1.1 billion versus $979 million one year ago and $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 ten Massachusetts locations in Cambridge, Beacon Hill, Belmont, Concord, Lincoln and Weston. Cambridge Trust Company is one of New England’s leaders in wealth management with $1.3 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.
Albert R. Rietheimer
Chief Financial Officer
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