Press Release

Cambridge Bancorp Announces Second Quarter 2019 Earnings and Declares Dividend

Company Release - 7/16/2019 8:30 AM ET

CAMBRIDGE, Mass.--(BUSINESS WIRE)-- Cambridge Bancorp (NASDAQ: CATC) (the “Company”), the parent of Cambridge Trust Company, today announced unaudited net income of $4,272,000 for the quarter ended June 30, 2019, a decrease of $1,839,000, or 30.1%, compared to net income of $6,111,000 for the quarter ended June 30, 2018. Diluted earnings per share were $0.90 for the second quarter of 2019, representing a 39.2% decrease over diluted earnings per share of $1.48 for the same quarter last year. Net income for the first and second quarters of 2019 included merger expenses of $3.5 million, which the Company considers to be non-operating.

Excluding merger expenses related to the Optima Bank & Trust Company (“Optima”) merger and other non-operating adjustments, operating net income was $6,955,000 for the quarter ended June 30, 2019, an increase of $845,000, or 13.8%, compared to operating net income of $6,110,000 for the quarter ended June 30, 2018. Operating diluted earnings per share were $1.47 for the second quarter of 2019, representing a 0.7% decrease over operating diluted earnings per share of $1.48 for the same quarter last year.

For the six months ended June 30, 2019, unaudited net income was $10,470,000, representing a decrease of $1,446,000, or 12.1%, compared to net income of $11,916,000 for the six months ended June 30, 2018. Diluted earnings per share were $2.35 for the first six months of 2019, representing an 18.7% decrease over diluted earnings per share of $2.89 for the same six months of 2018.

Excluding merger expenses related to the Optima merger and other non-operating adjustments, operating net income was $13,287,000 for the six months ended June 30, 2019, an increase of $1,372,000, or 11.5%, compared to operating net income of $11,915,000 for the six months ended June 30, 2018. Operating diluted earnings per share were $2.99 for the first six months of 2019, representing a 3.8% increase over operating diluted earnings per share of $2.88 for the first six months of last year.

Merger with Optima Bank & Trust Company

On April 17, 2019, the Company completed its merger with Optima, adding six banking offices in New Hampshire. As a result of the merger, the Company paid total consideration of $64.3 million, which consisted of 722,746 shares of Cambridge Bancorp common stock issued to Optima shareholders, and $3.5 million in cash. The transaction included the acquisition of $475.4 million in loans and the assumption of $477.2 million in deposits, each at fair value.

The following table provides the purchase price allocation of net assets acquired for this transaction:

 

 

 

Net Assets Acquired

 

 

 

at Fair Value

 

 

 

(dollars in thousands)

 

Assets

 

 

 

 

Cash and cash equivalents

 

$

6,902

 

Investments

 

 

23,298

 

Loans

 

 

475,406

 

Premises and equipment

 

 

6,286

 

Goodwill

 

 

30,794

 

Core deposit and other intangibles

 

 

3,609

 

Other assets

 

 

9,408

 

Total assets acquired

 

 

555,703

 

 

 

 

 

 

Liabilities

 

 

 

 

Deposits

 

 

477,189

 

Borrowings

 

 

13,459

 

Other liabilities

 

 

799

 

Total liabilities assumed

 

 

491,447

 

Purchase price

 

$

64,256

 

 

For further details on the loans and deposits acquired, see the Organic Loan and Deposit Growth table provided near the end of the financial schedules accompanying this release.

Second quarter 2019 highlights as compared to the second quarter of 2018:

  • Organic loan growth of $219.9 million or 15.7%
  • Organic core deposit growth of $98.1 million or 5.9%
  • Total common equity to tangible assets ratio of 7.48%
  • Tangible book value per share increased to $41.72 or 10.3%

“We are pleased to report the Company completed the legal merger with Optima, and are looking forward to the system conversion in July,” noted Denis K. Sheahan, Chairman and CEO. “Net loan originations were strong in the second quarter of 2019, however, the impact to earnings in the second quarter was negative due to the late quarter nature of the loan closings and the corresponding full loan loss provision expense recorded in the quarter.”

Balance Sheet

Total assets increased $639.9 million, or 30.5%, from December 31, 2018, inclusive of the Optima merger, and were $2.7 billion as of June 30, 2019.

Total loans increased $536.8 million, or 34.4%, from December 31, 2018, inclusive of the Optima merger, and stood at $2.1 billion as of June 30, 2019. The increase in total loans was due to a combination of the merger with Optima and non-merger related growth. A table is included accompanying this release to provide detail of organic loan and deposit growth.

Inclusive of Optima:

  • Commercial real estate loans increased $147.5 million, or 19.5%, from $758.0 million at December 31, 2018 to $905.4 million at June 30, 2019. Total loan originations during the first six months of the year were strong despite elevated levels of loan payoffs in the first quarter.
  • Commercial and industrial loans increased $40.6 million, or 43.3%, from $93.7 million at December 31, 2018 to $134.3 million at June 30, 2019.
  • Residential mortgage loans increased $334.2 million, or 55.3%, from $604.3 million at December 31, 2018 to $938.6 million at June 30, 2019.

Excluding Optima, total loans grew by $61.4 million, or 3.9%, from December 31, 2018.

The Company’s total investment securities portfolio decreased by $11.6 million, or 2.6%, from $451.0 million at December 31, 2018 to $439.4 million at June 30, 2019, as cash flows were used to pay down wholesale funding.

The Company recorded additional goodwill of $30.8 million and other merger related intangibles of $3.6 million during the second quarter of 2019, due to the merger with Optima.

Other assets increased $46.7 million, or 168.9%, from December 31, 2018, primarily due to the adoption of new lease accounting guidance in 2019 and higher loan related derivative assets. The adoption of accounting guidance for leases (“ASU 2016-02”) required the Company to recognize $37.6 million of right-of-use lease assets and corresponding net lease liabilities on the balance sheet, inclusive of Optima. The corresponding lease liabilities recognized in accordance with ASU 2016-02 was the primary reason for the increase in other liabilities.

Total deposits grew by $518.3 million, or 28.6%, to $2.3 billion at June 30, 2019, from $1.8 billion, at December 31, 2018, primarily driven by a combination of the impact of the Optima merger and organic core deposit growth.

  • Core deposits, which the Company defines as all deposits other than certificates of deposit, increased by $373.8 million, or 22.1%, to $2.1 billion from $1.7 billion at December 31, 2018, inclusive of the Optima merger.
  • Excluding the impact of the Optima merger, organic growth in core deposits was $59.1 million, or 3.5%, at June 30, 2019. Growth in core deposits during 2019 was attributable to successful deposit campaigns, as we strive to attract and deepen client relationships.
  • Inclusive of the Optima merger, the cost of total deposits for the quarter ended June 30, 2019 was 0.77%, as compared to 0.24% for the quarter ended June 30, 2018, driven by a combination of deposit growth and higher interest rates during 2019. The cost of total deposits for the six months ended June 30, 2019 was 0.67%, as compared to 0.23% for the quarter ended June 30, 2018, driven by a combination of deposit growth and higher interest rates during 2019.

Inclusive of the Optima merger, short-term borrowings were $103.0 million as of June 30, 2019 representing a $13.0 million, or 14.4%, increase from $90.0 million at December 31, 2018. Certificates of deposit, which totaled $265.9 million at June 30, 2019, increased by $144.5 million from $121.4 million at December 31, 2018, primarily due to the merger with Optima. Total brokered certificates of deposit were $70.2 million and $27.5 million at June 30, 2019 and December 31, 2018, respectively, which are included within certificates of deposit.

Net Interest and Dividend Income

For the quarter ended June 30, 2019, net interest and dividend income before provision for loan losses, increased by $3.9 million, or 24.7%, to $19.8 million, as compared to $15.9 million for the quarter ended June 30, 2018, primarily due to loan growth (both organic and as a result of the Optima merger) and higher levels of interest-earning assets.

  • Interest on loans increased $7.3 million, or 51.0%, due to higher interest rates combined with organic and merger related loan growth.
  • Interest on deposits increased $3.3 million, or 315.9%, due to an increase in cost of deposits combined with organic and merger related deposit growth.

The Company’s net interest margin, on a fully taxable equivalent basis, inclusive of the Optima merger, decreased 14 basis points to 3.23% for the quarter ended June 30, 2019, as compared to 3.37% for the quarter ended June 30, 2018.

For the six months ended June 30, 2019, net interest and dividend income before provision for loan losses, increased by $5.0 million, or 16.2%, to $36.0 million, as compared to $31.0 million for the six months ended June 30, 2018, primarily due to loan growth (both organic and as a result of the Optima merger) and higher levels of interest-earning assets.

  • Interest on loans increased by $10.2 million, or 36.7%, due to higher interest rates combined with organic and merger related loan growth.
  • Interest on deposits increased by $4.9 million, or 241.4%, due to an increase in cost of deposits combined with organic and merger related deposit growth.

The Company’s net interest margin, on a fully taxable equivalent basis, inclusive of the Optima merger, decreased eight basis points to 3.24% for the six months ended June 30, 2019, as compared to 3.32% for the six months ended June 30, 2018.

Provision for Loan Loss

During the six months ended June 30, 2019, the allowance for loan losses increased by $707,000, or 4.2%, to $17.5 million at June 30, 2019 due to loan growth and changes in the mix of the loan portfolio. The allowance for loan losses to total loans ratio stood at 0.83% as of June 30, 2019 from 1.08% at December 31, 2018, primarily due to the impact of loans acquired in connection with the Optima merger. These acquired loans are recorded at fair value, including an adjustment for estimated credit losses, and without carryover of the respective portfolio’s historical allowance for loan losses.

Noninterest Income

Inclusive of the Optima merger, total noninterest income increased by $301,000, or 3.8%, to $8.1 million for the quarter ended June 30, 2019, as compared to $7.8 million for the quarter ended June 30, 2018, primarily as a result of higher wealth management revenue, higher deposit account fees, and higher ATM and debit card income, partially offset by lower loan related derivative income. Noninterest income was 29.2% of total revenue for the quarter ended June 30, 2019.

Wealth Management revenue increased by $280,000, or 4.6%, for the second quarter of 2019 as compared to the second quarter of 2018. Wealth Management Assets under Management and Administration increased by $365.6 million, or 12.7%, from December 31, 2018 and ended at $3.2 billion as of June 30, 2019 as a result of appreciation in the equity markets during 2019.

Inclusive of the Optima merger, total noninterest income increased by $80,000, or 0.5%, to $16.1 million for the six months ended June 30, 2019, as compared to $16.0 million for the six months ended June 30, 2018, primarily as a result of higher wealth management revenue, partially offset by lower loan related derivative income and lower other income. Noninterest income was 30.9% of total revenue for the six months ended June 30, 2019.

Wealth Management revenue increased by $278,000, or 2.3%, for the six months ended June 30, 2019, as compared to the six months ended June 30, 2018, primarily due to appreciation in the equity markets. Noninterest income increases were partially offset by a higher loss on the sale of investment securities of $83,000, lower loan related derivative income of $143,000, and lower other income of $114,000 for the six months ended June 30, 2019, as compared to the six months ended June 30, 2018.

Noninterest Expense

Total noninterest expense increased by $5.7 million, or 36.5%, to $21.5 million for the quarter ended June 30, 2019, as compared to $15.8 million for the quarter ended June 30, 2018, primarily driven by merger expenses of $3.5 million combined with higher salaries and employee benefits expense, occupancy and equipment expense, and data processing expense.

  • Merger expenses of $3.5 million were related to professional fees, compensation and severance agreements, as well as contract termination costs associated with the second quarter closing of the Optima merger.
  • Salaries and employee benefits expense increases of $1.0 million were driven by the merger with Optima, increased staffing to support business initiatives, and higher employee benefit costs.
  • Occupancy and equipment expense increases of $472,000 were due to the merger with Optima and additional office space in Boston, MA.
  • Data processing expense increases of $245,000 were due to the merger with Optima and investments made in technology.

Total noninterest expense increased by $6.6 million, or 21.2%, to $37.9 million for the six months ended June 30, 2019, as compared to $31.3 million for the six months ended June 30, 2018, primarily driven by merger expenses of $3.5 million combined with higher salaries and employee benefits expense, occupancy and equipment expense, and data processing expense.

  • Merger expenses of $3.5 million were related to professional fees, compensation and severance agreements, as well as contract termination costs associated with the second quarter closing of the Optima merger.
  • Salaries and employee benefits increases of $1.8 million were driven by the merger with Optima, increased staffing to support business initiatives, and higher employee benefit costs.
  • Occupancy and equipment expense increases of $575,000 were due to the merger with Optima and additional office space in Boston, MA.
  • Data processing expense increases of $361,000 were due to the merger with Optima and investments made in technology.

Asset Quality

Loan quality remained sound with non-performing loans totaling $1.0 million, or 0.05% of total loans outstanding as of June 30, 2019. The allowance for loan losses was $17.5 million, or 0.83% of total loans outstanding at June 30, 2019, as compared to $16.8 million, or 1.08%, of total loans outstanding at year end 2018. The decrease in the allowance to loans ratio during 2019 is due to the impact of loans acquired in connection with the Optima merger. These acquired loans are recorded at fair value, including an adjustment for estimated credit losses, and without carryover of the respective portfolio’s historical allowance for loan losses. Net loan charge-offs remained low at $172,000 for the first six months of 2019. During the second quarter of 2019, we recorded $149,000 in net loan charge-offs.

Income Taxes

Inclusive of the impact of the Optima merger, the Company’s effective tax rate was 26.5% for the quarter ended June 30, 2019, as compared to 23.7% for the quarter ended June 30, 2018. For the six months ended June 30, 2019, the effective tax rate was 23.9%, as compared to 22.8% for the six months ended June 30, 2018.

Dividend & Capital

On July 15, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.51 per share, which is payable on August 15, 2019 to shareholders of record as of the close of business on August 1, 2019.

Inclusive of the merger, the Company’s total shareholders’ equity to total assets ratio increased by 75 basis points to 8.65% as of June 30, 2019, as compared to 7.90% as of June 30, 2018. Book value per share grew by $10.95, or 28.9%, to $48.88 as of June 30, 2019, as compared to $37.93 as of June 30, 2018. The Company’s ratio of tangible common equity to tangible assets decreased 45 basis points to 7.48% at June 30, 2019 from 7.93% at December 31, 2018, primarily due to the impact of goodwill and acquisition related intangibles recorded as a result of the merger with Optima. Tangible book value per share grew by $3.89 or, 10.3%, to $41.72 as of June 30, 2019, as compared to $37.83 as of June 30, 2018.

About Cambridge Bancorp

Cambridge Bancorp, the parent company of Cambridge Trust Company, is based in Cambridge, Massachusetts. Cambridge Trust Company is a 129-year-old Massachusetts chartered commercial bank with approximately $2.7 billion in assets and a total of 16 private banking offices in Massachusetts and New Hampshire. Cambridge Trust Company is one of New England’s leaders in private banking and wealth management with $3.2 billion in client assets under management and administration. The Wealth Management group maintains offices in Boston, Massachusetts and Concord, Manchester, and Portsmouth, New Hampshire.

The accompanying unaudited condensed interim and annual consolidated financial information should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K, which is posted in the investor relations section of the Company’s website at www.cambridgetrust.com.

Forward-looking Statements

Certain statements herein may constitute “forward-looking statements” as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about the Company and its industry involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding the Company’s future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to the Company, are forward-looking statements. Words such as “anticipates,” “believes,” “estimates,” “expects,” “forecasts,” “intends,” “plans,” “projects,” “may,” “will,” “should,” and other similar expressions are intended to identify these forward-looking statements. Such statements are subject to factors that could cause actual results to differ materially from anticipated results. Such factors include, but are not limited to, the following: economic conditions being less favorable than expected, disruptions to the credit and financial markets, weakness in the real estate market, legislative, regulatory or accounting changes that adversely affect the Company’s business and/or competitive position, the Dodd-Frank Act’s consumer protection regulations, challenges from the integration of the Company and Optima resulting in the combined business not operating as effectively as expected, disruptions in the Company’s ability to access the capital markets and other factors that are described in the Company’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year end December 31, 2018, which the Company filed on March 18, 2019. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions which may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. You are cautioned not to place undue reliance on these forward-looking statements.

Non-GAAP Measures

This press release contains financial information determined by methods other than in accordance with accounting principles generally accepted in the United States of America (“GAAP”). This information includes operating earnings and operating EPS, tangible book value per share and the tangible common equity ratio, and return on average assets and return on average equity on an operating basis.

Operating earnings and operating EPS exclude items that management believes are unrelated to its core banking business such as merger and acquisition expenses, gain (loss) on sale of investment securities, and other items. The Company’s management uses operating earnings and operating EPS to measure the strength of the Company’s core banking business and to identify trends that may to some extent be obscured by such excluded gains or losses.

Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders’ equity less goodwill and acquisition related intangible assets, or “tangible common equity,” by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by tangible assets, defined as total assets less goodwill and acquisition related intangibles) and with analysis of return on average assets and return on average common equity on an operating basis. The Company has included information on tangible book value per share, the tangible common equity ratio, and return on average assets and return on average common equity on an operating basis because management believes that investors may find it useful to have access to the same analytical tool used by management. As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles. Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.

These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP. An item which management deems to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP performance measures, including operating earnings, operating EPS, tangible book value per share, the tangible common equity ratio, and return on average assets and return on average equity on an operating basis are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.

Reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures are presented under “GAAP to Non-GAAP Reconciliations.”

 

CAMBRIDGE BANCORP AND SUBSIDIARIES
UNAUDITED QUARTERLY RESULTS
June 30, 2019

 

 

 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

2019

 

2018

 

2019

 

2018

 

 

(dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and Dividend Income

 

$

24,470

 

 

$

16,936

 

 

$

43,588

 

 

$

33,068

 

Interest Expense

 

 

4,694

 

 

 

1,082

 

 

 

7,551

 

 

 

2,061

 

Net Interest and Dividend Income

 

 

19,776

 

 

 

15,854

 

 

 

36,037

 

 

 

31,007

 

Provision for (Release of) Loan Losses

 

 

596

 

 

 

(79

)

 

 

503

 

 

 

330

 

Noninterest Income

 

 

8,145

 

 

 

7,844

 

 

 

16,102

 

 

 

16,022

 

Noninterest Expense

 

 

21,513

 

 

 

15,765

 

 

 

37,886

 

 

 

31,266

 

Income Before Income Taxes

 

 

5,812

 

 

 

8,012

 

 

 

13,750

 

 

 

15,433

 

Income Tax Expense

 

 

1,540

 

 

 

1,901

 

 

 

3,280

 

 

 

3,517

 

Net Income

 

$

4,272

 

 

$

6,111

 

 

$

10,470

 

 

$

11,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Net Income*

 

$

6,955

 

 

$

6,110

 

 

$

13,287

 

 

$

11,915

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

$

0.91

 

 

$

1.49

 

 

$

2.37

 

 

$

2.91

 

Diluted Earnings Per Share

 

 

0.90

 

 

 

1.48

 

 

 

2.35

 

 

 

2.89

 

Operating Diluted Earnings Per Share*

 

 

1.47

 

 

 

1.48

 

 

 

2.99

 

 

 

2.88

 

Dividends Declared Per Share

 

 

0.51

 

 

 

0.48

 

 

 

1.02

 

 

 

0.96

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Avg. Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

4,682,109

 

 

 

4,059,927

 

 

 

4,379,141

 

 

 

4,057,156

 

Diluted

 

 

4,715,724

 

 

 

4,094,489

 

 

 

4,412,239

 

 

 

4,087,790

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Performance Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin, FTE

 

 

3.23

%

 

 

3.37

%

 

 

3.24

%

 

 

3.32

%

Cost of Funds

 

 

0.76

%

 

 

0.23

%

 

 

0.68

%

 

 

0.22

%

Cost of Interest Bearing Liabilities

 

 

1.05

%

 

 

0.34

%

 

 

0.95

%

 

 

0.33

%

Cost of Deposits

 

 

0.77

%

 

 

0.24

%

 

 

0.67

%

 

 

0.23

%

Cost of Deposits excluding Wholesale Deposits

 

 

0.69

%

 

 

0.20

%

 

 

0.61

%

 

 

0.19

%

Return on Average Assets

 

 

0.66

%

 

 

1.25

%

 

 

0.89

%

 

 

1.23

%

Return on Average Earning Assets

 

 

0.69

%

 

 

1.29

%

 

 

0.94

%

 

 

1.27

%

Return on Average Equity

 

 

7.71

%

 

 

16.09

%

 

 

10.79

%

 

 

15.95

%

Efficiency Ratio

 

 

77.05

%

 

 

66.52

%

 

 

72.66

%

 

 

66.48

%

Operating Efficiency Ratio*

 

 

64.71

%

 

 

66.53

%

 

 

65.77

%

 

 

66.49

%

Operating Return on Tangible Common Equity*

 

 

14.37

%

 

 

16.13

%

 

 

14.78

%

 

 

15.99

%

Operating Return on Average Assets*

 

 

1.07

%

 

 

1.25

%

 

 

1.13

%

 

 

1.23

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

December 31,

 

June 30,

 

 

 

 

 

 

2019

 

2018

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

 

 

 

 

$

2,741,308

 

 

$

2,101,384

 

 

$

1,971,214

 

Total Loans

 

 

 

 

 

 

2,096,550

 

 

 

1,559,772

 

 

 

1,401,208

 

Non-Performing Loans

 

 

 

 

 

 

1,009

 

 

 

642

 

 

 

1,161

 

Allowance for Loan Losses

 

 

 

 

 

 

17,475

 

 

 

16,768

 

 

 

15,645

 

Allowance to Total Loans

 

 

 

 

 

 

0.83

%

 

 

1.08

%

 

 

1.12

%

Total Deposits

 

 

 

 

 

 

2,329,665

 

 

 

1,811,410

 

 

 

1,788,287

 

Total Shareholders’ Equity

 

 

 

 

 

 

237,094

 

 

 

167,026

 

 

 

155,692

 

Total Shareholders’ Equity to Total Assets

 

 

 

 

 

 

8.65

%

 

 

7.95

%

 

 

7.90

%

Wealth Management AUM

 

 

 

 

 

 

3,079,770

 

 

 

2,759,547

 

 

 

3,003,494

 

Wealth Management AUM & AUA

 

 

 

 

 

 

3,242,341

 

 

 

2,876,702

 

 

 

3,135,869

 

Book Value Per Share

 

 

 

 

 

$

48.88

 

 

$

40.67

 

 

$

37.93

 

Tangible Common Equity Ratio*

 

 

 

 

 

 

7.48

%

 

 

7.93

%

 

 

7.88

%

Tangible Book Value Per Share*

 

 

 

 

 

$

41.72

 

 

$

40.57

 

 

$

37.83

 

*See GAAP to Non-GAAP Reconciliations.

 

CAMBRIDGE BANCORP AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

June 30, 2019

 

December 31, 2018

 

 

(dollars in thousands, except par value)

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

38,557

 

 

$

18,473

 

Investment securities

 

 

 

 

 

 

 

 

Available for sale, at fair value (amortized cost $153,765 and $172,290, respectively)

 

 

153,053

 

 

 

168,163

 

Held to maturity, at amortized cost (fair value $291,993 and $281,310, respectively)

 

 

286,350

 

 

 

282,869

 

Total investment securities

 

 

439,403

 

 

 

451,032

 

Loans held for sale, at lower of cost or fair value

 

 

384

 

 

 

 

Loans

 

 

 

 

 

 

 

 

Residential mortgage

 

 

938,560

 

 

 

604,331

 

Commercial mortgage

 

 

905,441

 

 

 

757,957

 

Home equity

 

 

85,814

 

 

 

69,336

 

Commercial & Industrial

 

 

134,307

 

 

 

93,712

 

Consumer

 

 

32,428

 

 

 

34,436

 

Total loans

 

 

2,096,550

 

 

 

1,559,772

 

Less: allowance for loan losses

 

 

(17,475

)

 

 

(16,768

)

Net loans

 

 

2,079,075

 

 

 

1,543,004

 

Federal Home Loan Bank of Boston Stock, at cost

 

 

8,245

 

 

 

6,844

 

Bank owned life insurance

 

 

36,996

 

 

 

30,933

 

Banking premises and equipment, net

 

 

14,863

 

 

 

8,578

 

Deferred income taxes, net

 

 

7,267

 

 

 

8,717

 

Accrued interest receivable

 

 

7,485

 

 

 

5,762

 

Goodwill

 

 

31,206

 

 

 

412

 

Merger related intangibles

 

 

3,519

 

 

 

-

 

Other assets

 

 

74,308

 

 

 

27,629

 

Total assets

 

$

2,741,308

 

 

$

2,101,384

 

Liabilities

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

Demand

 

$

587,030

 

 

$

494,492

 

Interest bearing checking

 

 

422,426

 

 

 

431,702

 

Money market

 

 

200,935

 

 

 

135,585

 

Savings

 

 

853,356

 

 

 

628,212

 

Certificates of deposit

 

 

265,918

 

 

 

121,419

 

Total deposits

 

 

2,329,665

 

 

 

1,811,410

 

Short-term borrowings

 

 

103,000

 

 

 

90,000

 

Long-term borrowings

 

 

3,323

 

 

 

3,409

 

Other liabilities

 

 

68,226

 

 

 

29,539

 

Total liabilities

 

 

2,504,214

 

 

 

1,934,358

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

Common stock, par value $1.00; Authorized 10,000,000 shares; Outstanding: 4,850,230 shares and 4,107,051 shares, respectively

 

 

4,850

 

 

 

4,107

 

Additional paid-in capital

 

 

97,844

 

 

 

38,271

 

Retained earnings

 

 

137,036

 

 

 

131,135

 

Accumulated other comprehensive loss

 

 

(2,636

)

 

 

(6,487

)

Total shareholders’ equity

 

 

237,094

 

 

 

167,026

 

Total liabilities and shareholders’ equity

 

$

2,741,308

 

 

$

2,101,384

 

 

 

 

CAMBRIDGE BANCORP AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2019

 

2018

 

2019

 

2018

 

 

(dollars in thousands, except share data)

 

Interest and dividend income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on taxable loans

 

$

21,355

 

 

$

14,132

 

 

$

37,639

 

 

$

27,510

 

Interest on tax-exempt loans

 

 

124

 

 

 

92

 

 

 

213

 

 

 

188

 

Interest on taxable investment securities

 

 

2,116

 

 

 

1,920

 

 

 

4,096

 

 

 

3,634

 

Interest on tax-exempt investment securities

 

 

575

 

 

 

604

 

 

 

1,146

 

 

 

1,226

 

Dividends on FHLB of Boston stock

 

 

81

 

 

 

58

 

 

 

157

 

 

 

109

 

Interest on overnight investments

 

 

219

 

 

 

130

 

 

 

337

 

 

 

401

 

Total interest and dividend income

 

 

24,470

 

 

 

16,936

 

 

 

43,588

 

 

 

33,068

 

Interest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

4,379

 

 

 

1,053

 

 

 

6,880

 

 

 

2,015

 

Interest on borrowed funds

 

 

315

 

 

 

29

 

 

 

671

 

 

 

46

 

Total interest expense

 

 

4,694

 

 

 

1,082

 

 

 

7,551

 

 

 

2,061

 

Net interest and dividend income

 

 

19,776

 

 

 

15,854

 

 

 

36,037

 

 

 

31,007

 

Provision for (Release of) Loan Losses

 

 

596

 

 

 

(79

)

 

 

503

 

 

 

330

 

Net interest and dividend income after provision for loan losses

 

 

19,180

 

 

 

15,933

 

 

 

35,534

 

 

 

30,677

 

Noninterest income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wealth management revenue

 

 

6,419

 

 

 

6,139

 

 

 

12,543

 

 

 

12,265

 

Deposit account fees

 

 

843

 

 

 

774

 

 

 

1,581

 

 

 

1,524

 

ATM/Debit card income

 

 

379

 

 

 

310

 

 

 

655

 

 

 

581

 

Bank owned life insurance income

 

 

162

 

 

 

136

 

 

 

289

 

 

 

264

 

Gain (loss) on disposition of investment securities

 

 

6

 

 

 

2

 

 

 

(81

)

 

 

2

 

Gain on loans held for sale

 

 

15

 

 

 

18

 

 

 

31

 

 

 

45

 

Loan related derivative income

 

 

5

 

 

 

112

 

 

 

441

 

 

 

584

 

Other income

 

 

316

 

 

 

353

 

 

 

643

 

 

 

757

 

Total noninterest income

 

 

8,145

 

 

 

7,844

 

 

 

16,102

 

 

 

16,022

 

Noninterest expense

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

11,459

 

 

 

10,443

 

 

 

22,286

 

 

 

20,516

 

Occupancy and equipment

 

 

2,691

 

 

 

2,219

 

 

 

5,021

 

 

 

4,446

 

Data processing

 

 

1,534

 

 

 

1,289

 

 

 

2,880

 

 

 

2,519

 

Professional services

 

 

760

 

 

 

829

 

 

 

1,567

 

 

 

1,716

 

Marketing

 

 

508

 

 

 

336

 

 

 

912

 

 

 

774

 

FDIC insurance

 

 

278

 

 

 

135

 

 

 

278

 

 

 

286

 

Merger expenses

 

 

3,450

 

 

 

 

 

 

3,541

 

 

 

 

Other expenses

 

 

833

 

 

 

514

 

 

 

1,401

 

 

 

1,009

 

Total noninterest expense

 

 

21,513

 

 

 

15,765

 

 

 

37,886

 

 

 

31,266

 

Income before income taxes

 

 

5,812

 

 

 

8,012

 

 

 

13,750

 

 

 

15,433

 

Income tax expense

 

 

1,540

 

 

 

1,901

 

 

 

3,280

 

 

 

3,517

 

Net income

 

$

4,272

 

 

 

6,111

 

 

$

10,470

 

 

$

11,916

 

Share data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding, basic

 

 

4,682,109

 

 

 

4,059,927

 

 

 

4,379,141

 

 

 

4,057,156

 

Weighted average number of shares outstanding, diluted

 

 

4,715,724

 

 

 

4,094,489

 

 

 

4,412,239

 

 

 

4,087,790

 

Basic earnings per share

 

$

0.91

 

 

$

1.49

 

 

$

2.37

 

 

$

2.91

 

Diluted earnings per share

 

$

0.90

 

 

$

1.48

 

 

$

2.35

 

 

$

2.89

 

 
 

CAMBRIDGE BANCORP AND SUBSIDIARIES
MARGIN & YIELD ANALYSIS

 

 

 

Three Months Ended

 

 

June 30, 2019

 

June 30, 2018

 

 

Average
Balance

 

Interest
Income/
Expenses (1)

 

Rate
Earned/
Paid (1)

 

Average
Balance

 

Interest
Income/
Expenses (1)

 

Rate
Earned/
Paid (1)

 

 

(dollars in thousands)

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-earning assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

$

1,951,133

 

 

$

21,355

 

 

 

4.39

%

 

$

1,379,807

 

 

$

14,132

 

 

 

4.11

%

Tax-exempt

 

 

14,567

 

 

 

157

 

 

 

4.32

 

 

 

9,954

 

 

 

116

 

 

 

4.67

 

Securities available for sale (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

155,762

 

 

 

748

 

 

 

1.93

 

 

 

200,750

 

 

 

823

 

 

 

1.64

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

218,672

 

 

 

1,368

 

 

 

2.51

 

 

 

194,290

 

 

 

1,097

 

 

 

2.26

 

Tax-exempt

 

 

75,423

 

 

 

728

 

 

 

3.87

 

 

 

77,170

 

 

 

764

 

 

 

3.97

 

Cash and cash equivalents

 

 

55,015

 

 

 

219

 

 

 

1.60

 

 

 

42,185

 

 

 

130

 

 

 

1.24

 

Total interest-earning assets (4)

 

 

2,470,572

 

 

 

24,575

 

 

 

3.99

%

 

 

1,904,156

 

 

 

17,062

 

 

 

3.59

%

Non interest-earning assets

 

 

161,855

 

 

 

 

 

 

 

 

 

 

 

71,206

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

 

(16,908

)

 

 

 

 

 

 

 

 

 

 

(15,777

)

 

 

 

 

 

 

 

 

Total assets

 

$

2,615,519

 

 

 

 

 

 

 

 

 

 

$

1,959,585

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

426,725

 

 

$

120

 

 

 

0.11

%

 

$

419,403

 

 

$

52

 

 

 

0.05

%

Savings accounts

 

 

826,726

 

 

 

2,212

 

 

 

1.07

 

 

 

630,755

 

 

 

655

 

 

 

0.42

 

Money market accounts

 

 

201,164

 

 

 

679

 

 

 

1.35

 

 

 

63,093

 

 

 

30

 

 

 

0.19

 

Certificates of deposit

 

 

282,579

 

 

 

1,368