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Cambridge Bancorp Reports Continued Solid Earnings Performance
Tuesday, July 19, 2011
CAMBRIDGE, Mass.– Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $3,176,000 for the second quarter of 2011 compared to $4,678,000 for the same quarter in 2010. The key factor driving the decrease in net income was the sale of the Bank’s Merchant Services portfolio during the second quarter of 2010. The after tax impact on earnings of that sale was $1,591,000 or $0.42 per diluted share. Excluding that sale, unaudited net income of $3,176,000 for the second quarter of 2011 compared favorably to $3,087,000 for the same quarter in 2010.
Diluted earnings per share were $0.83 for the second quarter of 2011 versus $1.24 for the same quarter in 2010. Excluding the Merchant Services portfolio sale, diluted earnings per share for the same quarter in 2010 were $0.82.
For the six months ended June 30, 2011, unaudited net income was $6,281,000 compared to $7,424,000 for the first half of 2010. Diluted earnings per share were $1.64 for the first six months of 2011 versus $1.97 for the same period in 2010. Excluding the aforementioned Merchant Portfolio sale, net income for first six months of 2011 was $448,000 (7.7%) higher than the same period in 2010.
“We are pleased to report continued solid earnings through the second quarter of the year. Our performance was driven primarily by robust growth in commercial and residential mortgage loans coupled with a healthy increase in wealth management income. Although economic growth is disappointingly slow, the Bank is positioned to capitalize on new business opportunities,” notes Joseph V. Roller II, president and CEO.
Net interest income of $11.0 million for the second quarter of 2011 was $488,000 (4.6%) higher than the same quarter in 2010. For the six months ending June 30, 2011, net interest income of $21.6 million compared to $20.9 million for same period in 2010.
The extended low interest environment continues to negatively impact the Bank’s net interest margin. The Bank’s net interest margin decreased by 28 basis points to 4.02% for the second quarter of 2011 compared to the same quarter in 2010; and by 36 basis points for the comparable six month period. Deposit growth has also moderated, with total deposits increasing by $12.1 million since year-end 2010.
Noninterest income for the second quarter of 2011 was $4.5 million compared to $6.8 million for the same quarter in 2010. Excluding the aforementioned Merchant Portfolio sale, noninterest income for the second quarter of 2011 was $572,000 (14.5%) higher than the same quarter in 2010. The Bank continued to build momentum in generating wealth management income, which improved by $455,000 (15.9%) between the comparable periods.
For the second quarter of 2011, noninterest expense totaled $10.5 million, an increase of $383,000 (3.8%) compared to the same quarter in 2010. The increase in noninterest expense was spread across multiple areas, with the primary factor attributed to salaries and benefits.
Since year-end 2010, total loans outstanding have increased $73.0 million (12.8%) to $641.6 million. The robust increase came primarily from a combination of commercial mortgage loan growth of $40.0 million (22.5%) and residential mortgage loan growth of $37.7 million (13.8%), as low interest rates provide an attractive environment for qualified businesses and individuals looking to purchase or refinance properties.
Non-performing loans as a percentage of total loans stood at 0.14% at June 30, 2011, a slight decrease from 0.20% at December 31, 2010. Loan quality remains sound and the Allowance for Loan Losses stood at $9.8 million or 1.53% of total loans outstanding at June 30, 2011. At December 31, 2010, the Allowance for Loan Losses was $8.9 million or 1.56% of total loans outstanding. In response to continued loan growth, the provision for loan losses was $250,000 for the current quarter.
Cambridge Bancorp and its subsidiary, Cambridge Trust Company, are based in Cambridge, Massachusetts, in the heart of Harvard Square. Cambridge Trust Company is a 121-year-old Massachusetts chartered commercial bank with $1.2 billion in total assets and 11 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 $1.5 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 2010 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 2011 at the same site later this month. Interim results are not necessarily reflective of the results for the entire year.