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Cambridge Bancorp Reports Continued Solid Earnings Performance
Tuesday, July 17, 2012
CAMBRIDGE, Mass. – Cambridge Bancorp (OTCBB: CATC) today reported unaudited net income of $3,451,000 for the second quarter of 2012 compared to $3,176,000 for the same quarter in 2011. The $275,000 (8.7%) increase in earnings was primarily attributable to growth in both net interest income and noninterest income. Diluted earnings per share were $0.89 for the second quarter of 2012 versus $0.83 for the same quarter in 2011. For the six months ended June 30, 2012, unaudited net income was $6,736,000 compared to $6,281,000 for the first half of 2011. Diluted earnings per share were $1.74 for the first six months of 2012 versus $1.64 for the same period in 2011.
“We are pleased to report continued solid earnings through the second quarter of 2012. A sustained increase in deposits and loans drove core earnings, complemented by an upswing in Wealth Management’s assets under management, which has grown by $238 million to $1.7 billion since year-end 2011. While the ongoing low interest rate environment presents challenges, the Bank is prepared to compete in this environment and is positioned to capitalize on new business opportunities. We are also pleased to announce that the Bank received approval to open a branch in Boston’s South End,” notes Joseph V. Roller II, president and CEO.
Net interest income of $11.5 million for the second quarter of 2012 was $545,000 (5.0%) higher than the same quarter in 2011. For the six months ended June 30, 2012, net interest income of $23.1 million was $1.5 million (7.0%) higher than the same period in 2011.
Noninterest income for the second quarter of 2012 was $4.8 million compared to $4.5 million for the same quarter in 2011. The Bank continued to build momentum by generating an additional $77,000 (9.7%) in activity fee income and increasing wealth management income by $56,000 (1.7%) between the comparable periods. Gains on loans sold resulted in $76,000 of noninterest income for the quarter ended June 30, 2012. This is the first quarter the Bank sold 30-year conforming loans to the secondary market. The Bank maintains servicing rights on these loans. Additionally, the second quarter of 2012 contained $172,000 of gains on disposition of investment securities, an increase of $79,000 as compared to the same quarter in 2011.
The extended low interest environment continues to negatively impact the Bank’s net interest margin. The Bank’s net interest margin decreased by 43 basis points to 3.59% for the second quarter of 2012 compared to the same quarter in 2011; and by 30 basis points for the comparable six month period. Deposit growth has accelerated, with total deposits increasing by $77.3 million (6.9%) since year-end 2011.
For the second quarter of 2012, noninterest expense totaled $11.1 million, an increase of $525,000 (5.0%) compared to the same quarter in 2011. The primary factors attributed to the increase in noninterest expense were higher salaries and benefits of $512,000 (8.4%), occupancy and equipment of $79,000 (4.5%), and FDIC insurance of $42,000. These expenses were slightly offset by a decrease in professional services of $85,000 (17.3%) during the second quarter of 2012.
Since year-end 2011, total loans outstanding have increased $29.3 million (4.3%) to $702.5 million. The increase came primarily from commercial mortgage loan growth of $26.7 million (11.5%) as low interest rates provide an attractive environment for qualified businesses looking to purchase or refinance properties.
Non-performing loans as a percentage of total loans stood at 0.16% at June 30, 2012, a slight decrease from 0.18% at December 31, 2011. Loan quality remains sound and the Allowance for Loan Losses stood at $10.8 million or 1.54% of total loans outstanding at June 30, 2012. At December 31, 2011, the Allowance for Loan Losses was $10.2 million or 1.51% of total loans outstanding. Primarily in response to continued loan growth, the provision for loan losses was $250,000 for the current quarter.
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 $1.4 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 $1.7 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 2011 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 2012 at the same site later this month. Interim results are not necessarily reflective of the results for the entire year.