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Cambridge Bancorp Announces Third Quarter Results
Tuesday, October 18, 2011
CAMBRIDGE, Mass. - Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $3,286,000 for the third quarter compared to $3,176,000 for the same quarter in 2010. Diluted earnings per share (EPS) increased to $0.85 for the third quarter of 2011 versus $0.84 for the same quarter in 2010.
For the nine months ending September 30, 2011, unaudited net income was $9,567,000 versus $10,600,000 for the same period in 2010. Diluted earnings per share were $2.49 for the nine month period versus $2.81 for the same period 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 $9,567,000 for the 2011 nine month period compared favorably to $9,009,000 for the same period in 2010.
“Our third quarter performance was solid with a modest increase in earnings over the same period in 2010. While prevailing conditions continue to constrain overall economic growth, the Bank is well positioned to build, preserve and strengthen customer relationships,” notes Joseph V. Roller II, the Bank’s president and CEO.
Net interest income grew to $11.0 million for the third quarter of 2011, an increase of $478,000 (4.6%) over the third quarter of 2010. For the nine months ending September 30, 2011, net interest income of $32.5 million compared to $31.4 million for the same period in 2010. The increase of $1,156,000 (3.7%) in net interest income for the nine month period of 2011 versus the same period in 2010 was primarily a function of continued growth in the loan portfolio and a reduction in the cost for deposits.
The protracted low interest rate environment continues to put pressure on the Bank’s net interest margin. The Bank’s net interest margin decreased by 18 basis points to 3.94% for the third quarter of 2011 compared to the same quarter in 2010; and by 29 basis points for the comparable nine month periods.
Noninterest income of $4.7 million for the September 2011 quarter was up slightly compared to the same quarter in 2010. The Bank continued to generate solid Wealth Management income, which increased slightly by $39,000 compared to the third quarter of 2010, despite the recent decline in the equity markets. Additionally, this year’s third quarter contained a $104,000 gain on disposition of investment securities not realized in the same quarter of 2010.
Noninterest expense increased modestly by $180,000, or 1.7%, to $10.6 million for the quarter ending September 30, 2011 versus the same quarter in 2010. Salaries and employee benefits, occupancy and equipment, and data processing increases were offset by lower FDIC insurance, marketing, and professional services costs.
Total loans outstanding as of September 30, 2011 were $649.9 million compared to $568.6 million at the end of last year and $547.9 million at September 30, 2010. Since the beginning of 2011, total loans outstanding have increased $81.3 million, with the robust growth attributable to the residential and commercial mortgage loan portfolios. The demand for working capital loans continues to be anemic as companies are cautious in making new investments in the context of uncertainty in the economic recovery.
Non-performing loans as a percentage of total loans stood at 17 basis points at September 30, 2011, a slight decrease from year-end 2010. Loan quality remains solid and the Allowance for Loan Losses stood at $9.9 million or 1.53% of total loans outstanding at September 30, 2011. At December 31, 2010, the Allowance for Loan Losses was $8.9 million or 1.56% of total loans outstanding. The higher provision for loan losses for the nine month period ($750,000 in 2011 versus $500,000 in 2010) is primarily in response to the growth of the loan portfolio.
Deposits continued to grow in the third quarter. Since year-end 2010, deposits have increased $63.5 million (6.4%). Total deposits stood at $1.1 billion at period-end compared to $994 million at December 31, 2010. Total assets at period-end were $1.2 billion compared to $1.1 billion at the end of 2010.
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 $1.4 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 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 2010 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 2011 at the same site later this month. Interim results are not necessarily reflective of the results for the entire year.