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Cambridge Bancorp Announces Steady Earnings for Full-Year 2011
Tuesday, January 24, 2012
CAMBRIDGE, Mass. - Cambridge Bancorp (OTCBB: CATC) today announced unaudited net income of $12,477,000 for the year ended December 31, 2011, compared to net income of $13,254,000 for the year ended December 31, 2010. It should be noted the Bank sold its Merchant Services portfolio during the second quarter of 2010. The after tax impact of that sale was $1,591,000 or $0.42 per diluted share. Excluding that sale, unaudited net income of $12,477,000 for the year ended December 31, 2011 compared favorably by 7.0% to $11,663,000 for the year ended December 31, 2010.
Diluted earnings per share (EPS) were $3.25 for the year ended December 31, 2011 compared to $3.51 diluted earnings per share for the prior year. Excluding the Merchant Services portfolio sale, diluted earnings per share for the year ended December 31, 2010 were $3.09.
“We are pleased to report continued core earnings growth for the full year of 2011,” noted Joseph V. Roller II, president and CEO. “Our 2011 results are evidence that we continue to execute our business plans and remain focused on providing exceptional service to our customers.”
“The Bank experienced another historic year for deposit growth with an increase of $131.8 million (13.3%) as consumers and businesses gravitated to more community-oriented institutions. Loan growth achieved similar success with a $58.0 million (21.3%) increase in residential mortgages and a $53.7 million (30.2%) increase in commercial mortgage loans. While we expect the industry will continue to face the challenges of modest economic growth, a low interest rate environment, and increasing regulatory burden in 2012, we are confident in our ability to execute on our strategies to be the compelling choice for consumers and businesses in our markets,” added Mr. Roller.
For the year ended December 31, 2011 net interest income increased $1,982,000, or 4.7%, to $43.7 million compared to $41.8 million for 2010. The increase in net interest income for the year was driven primarily by sustained deposit and loan growth, as well as a reduction in interest paid on deposits. Lower yields earned on investment securities was the principal cause for the decrease in the Bank’s net interest margin of 25 basis points to 3.90% for the year compared to 4.15% for the year ended December 31, 2010.
Noninterest income totaled $18.1 million for the year 2011 compared to $19.9 million for 2010. The strategic exit from the Merchant Services business was the primary contributor to the Bank’s decrease in noninterest income and earnings, which generated $267,000 in fee income and a $2.8 million gain on the disposition of the portfolio in 2010. Excluding that sale, noninterest income of $18.1 million for the year ended December 31, 2011 compared favorably by 8.2% to $16.8 million for the year ended December 31, 2010. The noninterest income improvement for 2011 was driven by wealth management fee income, which increased by $788,000. Other contributors to the noninterest income increase were higher gains on disposition of investment securities of $318,000 and higher bank-owned life insurance income of $152,000 for the year.
Noninterest expense increased by $1.2 million, or 3.0%, to $42.7 million for the year ended December 31, 2011. The increase is primarily the result of additional investments in salaries and benefits of $1.2 million, and occupancy and equipment of $631,000. These increases were partially offset by a FDIC premium decrease of $544,000.
Total loans outstanding at year-end 2011 were $673 million compared to $569 million at year-end 2010, an increase of $104.7 million or 18.4%. Loan quality remained sound across consumer and corporate customer bases with non-performing loans totaling $1.2 million at December 31, 2011, a slight increase compared to the year-end 2010. The Allowance for Loan Losses was $10.2 million or 1.51% of total loans outstanding at year-end 2011. At December 31, 2010, the Allowance for Loan Losses was $8.9 million or 1.56% of total loans outstanding. The provision for loan losses of $1.0 million during 2011 was $450,000 higher than the prior year’s provision. This increase was primarily in response to the continued growth in the loan portfolio in conjunction with the stable levels of non-performers.
In the fourth quarter of 2011, unaudited net income was $2,910,000, compared to $2,654,000 for the same quarter in 2010.
“Results for the fourth quarter reflect the cumulative growth the Bank has achieved over the year,” said Mr. Roller. “The solid earnings increase of $256,000 (9.6%) for the fourth quarter of 2011 as compared to the fourth quarter of 2010 was attributable to a healthy increase in net interest income of $826,000 and a decrease in our FDIC premium of $212,000. These were partially offset by higher salaries and benefits of $633,000 and an increase in the provision for loan losses of $200,000.”
Total deposits at year-end 2011 were $1.1 billion compared to $994 million at year-end 2010. Total assets at year-end 2011 were $1.3 billion versus $1.1 billion year-end 2010.
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 122-year-old Massachusetts chartered commercial bank with $1.3 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 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 the Cambridge Bancorp 2011 Annual Report at the same site later this quarter.