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Section 1: 8-K (8-K)

catc-8k_20190417.htm

 

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 17, 2019

 

CAMBRIDGE BANCORP

(Exact name of Registrant as Specified in Its Charter)

 

 

Massachusetts

(State or Other Jurisdiction of Incorporation)

001-38184

(Commission File Number)

04-2777442

(IRS Employer Identification No.)

 

 

 

 

 

1336 Massachusetts Avenue

Cambridge, MA 02138

 

 

(Address of Principal Executive Offices) (Zip Code)

 

Registrant’s Telephone Number, Including Area Code: (617) 876-5500 

 

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instructions A.2. below):

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☐

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 


Item 2.02 Results of Operations and Financial Condition.

 

On April 17, 2019, Cambridge Bancorp issued a press release in which it disclosed unaudited financial information for the quarter ended March 31, 2019 consolidated earnings. The press release also announced the declaration of a quarterly cash dividend of $0.51 per share. A copy of the press release is furnished as Exhibit 99.1 and is incorporated herein by reference.

 

Information contained herein, including Exhibit 99.1, shall not be deemed filed for the purposes of the Securities Exchange Act of 1934, nor shall such information and Exhibit be deemed incorporated by reference in any filing under the Securities Act of 1933, except as shall be expressly set forth by specific reference in such a filing.

Item 9.01.Financial Statements and Exhibits.

 

(a)  Not applicable.

 

(b)  Not applicable.

 

(c)  Not applicable.

 

(d) Exhibits.

The exhibits required by this item are set forth on the Exhibit Index.

 

 


Exhibit Index

 

Exhibit

Number

 

Description

99.1*

 

Press release dated April 17, 2019.

 

*

Filed herewith.

 

 


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

CAMBRIDGE BANCORP

April 17, 2019

 

 

 

By

/s/ Michael F. Carotenuto

 

 

Michael F. Carotenuto

 

 

Chief Financial Officer

(Principal Financial Officer and Principal Accounting Officer)

 

 

(Back To Top)

Section 2: EX-99.1 (EX-99.1)

catc-ex991_7.htm

 

 

Ex. 99.1

FOR IMMEDIATE RELEASE

 

Cambridge Bancorp Announces First Quarter 2019 Earnings and Declares Dividend

 

 

CAMBRIDGE, MA. (April 17, 2019) - Cambridge Bancorp (NASDAQ: CATC) (the “Company”), the parent of Cambridge Trust Company, today announced unaudited net income of $6,198,000 for the quarter ended March 31, 2019, an increase of $393,000, or 6.8%, compared to net income of $5,805,000 for the quarter ended March 31, 2018. Diluted earnings per share were $1.49 for the first quarter of 2019, representing a 5.7% increase over diluted earnings per share of $1.41 for the same quarter last year.

 

Excluding merger and acquisition expenses incurred during the quarter related to the pending Optima Bank & Trust Company (“Optima”) merger, operating net income was $6,285,000 for the quarter ended March 31, 2019, an increase of $480,000, or 8.3%, compared to $5,805,000 for the quarter ended March 31, 2018. Operating diluted earnings per share were $1.52 for the first quarter of 2019, representing a 7.8% increase over operating diluted earnings per share of $1.41 for the same quarter last year. The merger is anticipated to close on April 17, 2019.

 

First quarter 2019 highlights as compared to the first quarter of 2018:

 

 

Loan growth of $173.4 million, or 12.5%

 

Core deposit growth of $97.0 million, or 5.9%

 

Net income growth of $393,000, or 6.8%

 

Total shareholders’ equity to total assets ratio of 8.06%

 

Book value per share increased to $41.78, or 13.6%

 

“We are pleased to report the Company delivered strong earnings during the first quarter of 2019,” noted Denis K. Sheahan, Chairman and CEO. “Cambridge Bancorp posted strong profitability metrics for the quarter with annualized return on average assets of 1.18% and annualized return on average shareholders’ equity of 14.90%. Loan originations remained strong in the first quarter of 2019, however, payoffs in the commercial real estate lending category dampened overall growth. In addition, deposit campaigns and business development initiatives have led to solid core deposit growth.”

 

Balance Sheet

 

Total assets increased $37.2 million, or 1.8%, from December 31, 2018 and were $2.1 billion as of March 31, 2019.

 

Total loans decreased $4.6 million, or 0.3%, from December 31, 2018 and stood at $1.6 billion as of March 31, 2019. The reduction in total loans was due to a decrease in commercial real estate loans of $8.1 million, from $758.0 million at December 31, 2018 to $749.8 million at March 31, 2019, and decreases in commercial and industrial loans of $3.5 million, or 3.8%, from $93.7 million at December 31, 2018 to $90.2 million at March 31, 2019. These decreases were partially offset by increases in residential mortgage loans of $8.9 million, or 1.5%, from $604.3 million at December 31, 2018 to $613.3 million at March 31, 2019. Total loan originations during the quarter were strong despite elevated levels of loan payoffs, particularly in the commercial real estate portfolio.

 

1

 


The Company’s total investment securities portfolio decreased by $7.4 million, or 1.6%, from $451.0 million at December 31, 2018 to $443.6 million at March 31, 2019. During the quarter, the Company sold $16.0 million of low-yielding bonds at a loss totaling $87,000.

 

Within other assets, the adoption of accounting guidance for leases (“ASU 2016-02”) in 2019 required the Company to recognize right of use lease assets and corresponding lease liabilities on the balance sheet. The increase in other assets of $35.8 million from December 31, 2018 was primarily due to the capitalization of the right of use assets in accordance with ASU 2016-02. The corresponding lease liabilities recognized in accordance with ASU 2016-02 was the primary reason for the increase in other liabilities of $31.0 million.

 

Core deposits, which the Company defines as all deposits other than certificates of deposit, increased by $43.1 million, or 2.6%, from $1.7 billion at December 31, 2018. Growth in core deposits during the quarter was attributable to successful savings and money market campaigns, as we strive to attract and deepen client relationships. The cost of total deposits for the quarter ended March 31, 2019 was 0.55%, as compared to 0.22% for the quarter ended March 31, 2018. Total deposits at March 31, 2019 were $1.9 billion.

 

Short-term borrowings were reduced to zero as of March 31, 2019 from $90.0 million at December 31, 2018 due to strong core deposit growth. Certificates of deposit, which totaled $169.3 million at March 31, 2019, increased by $47.8 million from $121.4 million at December 31, 2018, primarily due to a $45.6 million increase in brokered certificates of deposit, an alternative source of wholesale funding.

 

Net Interest and Dividend Income

 

For the quarter ended March 31, 2019, net interest and dividend income after provision for loan losses increased by $1.6 million, or 10.9%, to $16.4 million, as compared to $14.7 million for the quarter ended March 31, 2018. Interest on loans increased $2.9 million, or 21.5%, which was driven by a combination of net loan growth and the impact of rising rates on our variable rate loan portfolio. Interest on deposits increased by $1.5 million, or 160.0%, due to an increase in cost of deposits combined with strong deposit growth. The Company’s net interest margin, on a fully taxable equivalent basis, decreased two basis points to 3.26% for the quarter ended March 31, 2019, as compared to 3.28% for the quarter ended March 31, 2018.

 

Provision for Loan Loss

 

The Company released $93,000 from the allowance for loan losses due to the volume and change in mix of the loan portfolio during the quarter ended March 31, 2019. The allowance for loan losses to total loans ratio remained strong at 1.07% as of March 31, 2019.  

 

Noninterest Income

 

Total noninterest income decreased by $221,000, or 2.7%, to $8.0 million for the quarter ended March 31, 2019, as compared to $8.2 million for the quarter ended March 31, 2018. The decrease was due to a bank owned life insurance gain recorded in the quarter ended March 31, 2018 as well as losses on the sale of investment securities of $87,000 in the current quarter of 2019. Noninterest income was 32.9% of total revenue for the quarter ended March 31, 2019.

 

Wealth Management revenue remained consistent for the first quarter of 2019 as compared to the first quarter of 2018. Wealth Management Assets under Management and Administration increased by $222.8 million, or 7.7%, from December 31, 2018 and ended at $3.1 billion as of March 31, 2019, primarily as a result of appreciation in the equity markets during the first quarter of 2019.

 

2

 


Noninterest Expense

 

Total noninterest expense increased by $872,000, or 5.6%, to $16.4 million for the quarter ended March 31, 2019, as compared to $15.5 million for the quarter ended March 31, 2018, primarily driven by higher salaries and benefits expense, data processing expense, occupancy and equipment expense, and merger expenses. The increase in salaries and employee benefits expense of $754,000 was driven by increased staffing to support new business development initiatives. The increase of $116,000 in data processing expense was due to investments made in technology. The increase of $103,000 in occupancy and equipment expense was due to the opening of an additional Wealth Management office in Boston, MA. Merger expenses of $91,000 were related to legal, accounting, and regulatory filing costs associated with the pending acquisition of Optima.

 

Noninterest expense increases were partially offset by lower FDIC insurance expense of $151,000 for the quarter ended March 31, 2019, as compared to March 31, 2018, as the Company has begun to recognize its apportioned share of credits associated with the FDIC’s Deposit Insurance Fund which has exceeded its target reserve ratio.

 

Asset Quality

 

Loan quality remained sound with non-performing loans totaling $626,000, or 0.04% of total loans outstanding as of March 31, 2019. The allowance for loan losses was $16.7 million, or 1.07% of total loans outstanding at March 31, 2019, as compared to $16.8 million, or 1.08% of total loans outstanding at year end 2018. Net loan charge offs remained minimal at $23,000 for the first quarter of 2019.

 

Income Taxes

 

The Company’s effective tax rate was 21.9% for the quarter ended March 31, 2019, as compared to 21.8% for the quarter ended March 31, 2018. Additionally, the Company recognized $186,000 of tax benefit resulting from the accounting for share-based payments during the first quarter of 2019.

 

Dividend & Capital

 

On April 16, 2019, the Company’s Board of Directors declared a quarterly cash dividend of $0.51 per share, which is payable on May 16, 2019 to shareholders of record as of the close of business on May 2, 2019.  

 

The Company’s total shareholders’ equity to total assets ratio increased by 11 basis points to 8.06% as of March 31, 2019, as compared to 7.95% as of December 31, 2018. Book value per share grew by $1.11, or 2.7%, to $41.78 as of March 31, 2019, as compared to $40.67 as of December 31, 2018.  

 

Merger Update

 

The Company has received all required regulatory approvals for the proposed merger between Cambridge Trust Company and Optima. The shareholders of Optima approved the transaction at a special meeting held on March 14, 2019. The anticipated closing date of the merger is April 17, 2019, effective at 11:59 p.m. Eastern Standard Time, subject to closing conditions.  The addition of Optima’s six banking offices will bring our total full service banking office count to sixteen and allow us to offer comprehensive private banking and wealth management services in New Hampshire.

 


3

 


About Cambridge Bancorp

 

Cambridge Bancorp, the parent company of Cambridge Trust Company, is based in Cambridge, Massachusetts. Cambridge Trust Company is a 128-year-old Massachusetts chartered commercial bank with approximately $2.1 billion in assets and 10 Massachusetts locations in Cambridge, Boston, Belmont, Concord, Lexington, and Weston. Cambridge Trust Company is one of New England’s leaders in private banking and wealth management with $3.1 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, 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.

 

 

CONTACT:

Cambridge Bancorp

Michael F. Carotenuto

Chief Financial Officer

617-520-5520


4

 


CAMBRIDGE BANCORP AND SUBSIDIARIES

UNAUDITED QUARTERLY RESULTS

March 31, 2019

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

(dollars in thousands, except per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and Dividend Income

 

 

 

 

 

$

19,118

 

 

$

16,132

 

Interest Expense

 

 

 

 

 

 

2,857

 

 

 

979

 

  Net Interest and Dividend Income

 

 

 

 

 

 

16,261

 

 

 

15,153

 

(Release of) Provision for Loan Losses

 

 

 

 

 

 

(93

)

 

 

409

 

Noninterest Income

 

 

 

 

 

 

7,957

 

 

 

8,178

 

Noninterest Expense

 

 

 

 

 

 

16,373

 

 

 

15,501

 

  Income Before Income Taxes

 

 

 

 

 

 

7,938

 

 

 

7,421

 

Income Tax Expense

 

 

 

 

 

 

1,740

 

 

 

1,616

 

  Net Income

 

 

 

 

 

$

6,198

 

 

$

5,805

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Data Per Common Share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic Earnings Per Share

 

 

 

 

 

$

1.51

 

 

$

1.42

 

Diluted Earnings Per Share

 

 

 

 

 

 

1.49

 

 

 

1.41

 

Dividends Declared Per Share

 

 

 

 

 

 

0.51

 

 

 

0.48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Avg. Common Shares Outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

   Basic

 

 

 

 

 

 

4,072,805

 

 

 

4,053,355

 

   Diluted

 

 

 

 

 

 

4,106,658

 

 

 

4,071,975

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selected Operating Ratios:

 

 

 

 

 

 

 

 

 

 

 

 

Net Interest Margin, FTE

 

 

 

 

 

 

3.26

%

 

 

3.28

%

Cost of Funds

 

 

 

 

 

 

0.57

%

 

 

0.21

%

Cost of Interest Bearing Liabilities

 

 

 

 

 

 

0.82

%

 

 

0.31

%

Cost of Deposits

 

 

 

 

 

 

0.55

%

 

 

0.22

%

Cost of Deposits excluding Brokered Deposits

 

 

 

 

 

 

0.50

%

 

 

0.18

%

Return on Average Assets

 

 

 

 

 

 

1.18

%

 

 

1.21

%

Return on Average Earning Assets

 

 

 

 

 

 

1.24

%

 

 

1.24

%

Return on Average Equity

 

 

 

 

 

 

14.90

%

 

 

15.80

%

Efficiency Ratio

 

 

 

 

 

 

67.61

%

 

 

66.44

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2019

 

 

2018

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total Assets

 

$

2,138,548

 

 

$

2,101,384

 

 

$

1,961,750

 

Total Loans

 

 

1,555,154

 

 

 

1,559,772

 

 

 

1,381,754

 

Non-Performing Loans

 

 

626

 

 

 

642

 

 

 

1,547

 

Allowance for Loan Losses

 

 

16,652

 

 

 

16,768

 

 

 

15,732

 

Allowance to Total Loans

 

 

1.07

%

 

 

1.08

%

 

 

1.14

%

Total Deposits

 

 

1,902,383

 

 

 

1,811,410

 

 

 

1,782,392

 

Total Shareholders’ Equity

 

 

172,268

 

 

 

167,026

 

 

 

150,873

 

Total Shareholders’ Equity to Total Assets

 

 

8.06

%

 

 

7.95

%

 

 

7.69

%

Wealth Management AUM

 

 

2,990,375

 

 

 

2,759,547

 

 

 

2,974,798

 

Wealth Management AUM & AUA

 

 

3,099,478

 

 

 

2,876,702

 

 

 

3,140,370

 

Book Value Per Share

 

 

41.78

 

 

 

40.67

 

 

 

36.79

 

 

5

 


CAMBRIDGE BANCORP AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS

 

 

 

March 31, 2019

 

 

December 31, 2018

 

 

 

(dollars in thousands, except par value)

 

Assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

37,006

 

 

$

18,473

 

Investment securities

 

 

 

 

 

 

 

 

Available for sale, at fair value (amortized cost $147,377 and $172,290, respectively)

 

 

144,762

 

 

 

168,163

 

Held to maturity, at amortized cost (fair value $300,607 and $281,310, respectively)

 

 

298,830

 

 

 

282,869

 

Total investment securities

 

 

443,592

 

 

 

451,032

 

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

 

 

 

 

 

 

Loans

 

 

 

 

 

 

 

 

Residential mortgage

 

 

613,254

 

 

 

604,331

 

Commercial mortgage

 

 

749,835

 

 

 

757,957

 

Home equity

 

 

68,849

 

 

 

69,336

 

Commercial & Industrial

 

 

90,172

 

 

 

93,712

 

Consumer

 

 

33,044

 

 

 

34,436

 

Total loans

 

 

1,555,154

 

 

 

1,559,772

 

Less: allowance for loan losses

 

 

(16,652

)

 

 

(16,768

)

Net loans

 

 

1,538,502

 

 

 

1,543,004

 

Federal Home Loan Bank of Boston Stock, at cost

 

 

2,672

 

 

 

6,844

 

Bank owned life insurance

 

 

31,060

 

 

 

30,933

 

Banking premises and equipment, net

 

 

8,719

 

 

 

8,578

 

Deferred income taxes, net

 

 

7,167

 

 

 

8,717

 

Accrued interest receivable

 

 

6,012

 

 

 

5,762

 

Other assets

 

 

63,818

 

 

 

28,041

 

Total assets

 

$

2,138,548

 

 

$

2,101,384

 

Liabilities

 

 

 

 

 

 

 

 

Deposits

 

 

 

 

 

 

 

 

Demand

 

$

490,649

 

 

$

494,492

 

Interest bearing checking

 

 

385,605

 

 

 

431,702

 

Money market

 

 

146,925

 

 

 

135,585

 

Savings

 

 

709,940

 

 

 

628,212

 

Certificates of deposit

 

 

169,264

 

 

 

121,419

 

Total deposits

 

 

1,902,383

 

 

 

1,811,410

 

Short-term borrowings

 

 

 

 

 

90,000

 

Long-term borrowings

 

 

3,366

 

 

 

3,409

 

Other liabilities

 

 

60,531

 

 

 

29,539

 

Total liabilities

 

 

1,966,280

 

 

 

1,934,358

 

Shareholders’ Equity

 

 

 

 

 

 

 

 

Common stock, par value $1.00; Authorized 10,000,000 shares; Outstanding: 4,123,618

   shares and 4,107,051 shares, respectively

 

 

4,124

 

 

 

4,107

 

Additional paid-in capital

 

 

38,239

 

 

 

38,271

 

Retained earnings

 

 

135,235

 

 

 

131,135

 

Accumulated other comprehensive loss

 

 

(5,330

)

 

 

(6,487

)

Total shareholders’ equity

 

 

172,268

 

 

 

167,026

 

Total liabilities and shareholders’ equity

 

$

2,138,548

 

 

$

2,101,384

 

 

 

 

 

6

 


CAMBRIDGE BANCORP AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME

 

 

 

Three Months Ended March 31,

 

 

 

2019

 

 

2018

 

 

 

(dollars in thousands, except share data)

 

Interest and dividend income

 

 

 

 

 

 

 

 

Interest on taxable loans

 

$

16,284

 

 

$

13,378

 

Interest on tax-exempt loans

 

 

89

 

 

 

96

 

Interest on taxable investment securities

 

 

1,980

 

 

 

1,714

 

Interest on tax-exempt investment securities

 

 

571

 

 

 

622

 

Dividends on FHLB of Boston stock

 

 

76

 

 

 

51

 

Interest on overnight investments

 

 

118

 

 

 

271

 

Total interest and dividend income

 

 

19,118

 

 

 

16,132

 

Interest expense

 

 

 

 

 

 

 

 

Interest on deposits

 

 

2,501

 

 

 

962

 

Interest on borrowed funds

 

 

356

 

 

 

17

 

Total interest expense

 

 

2,857

 

 

 

979

 

Net interest and dividend income

 

 

16,261

 

 

 

15,153

 

Provision for Loan Losses

 

 

(93

)

 

 

409

 

Net interest and dividend income after provision for

   loan losses

 

 

16,354

 

 

 

14,744

 

Noninterest income

 

 

 

 

 

 

 

 

Wealth management revenue

 

 

6,124

 

 

 

6,126

 

Deposit account fees

 

 

738

 

 

 

750

 

ATM/Debit card income

 

 

276

 

 

 

271

 

Bank owned life insurance income

 

 

127

 

 

 

128

 

Gain (loss) on disposition of investment securities

 

 

(87

)

 

 

 

Gain on loans held for sale

 

 

16

 

 

 

27

 

Loan related derivative income

 

 

436

 

 

 

472

 

Other income

 

 

327

 

 

 

404

 

Total noninterest income

 

 

7,957

 

 

 

8,178

 

Noninterest expense

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

10,827

 

 

 

10,073

 

Occupancy and equipment

 

 

2,330

 

 

 

2,227

 

Data processing

 

 

1,346

 

 

 

1,230

 

Professional services

 

 

807

 

 

 

887

 

Marketing

 

 

404

 

 

 

438

 

FDIC insurance

 

 

 

 

 

151

 

Merger expenses

 

 

91

 

 

 

 

Other expenses

 

 

568

 

 

 

495

 

Total noninterest expense

 

 

16,373

 

 

 

15,501

 

Income before income taxes

 

 

7,938

 

 

 

7,421

 

Income tax expense

 

 

1,740

 

 

 

1,616

 

Net income

 

$

6,198

 

 

$

5,805

 

Share data:

 

 

 

 

 

 

 

 

Weighted average number of shares outstanding, basic

 

 

4,072,805

 

 

 

4,053,355

 

Weighted average number of shares outstanding, diluted

 

 

4,106,658

 

 

 

4,071,975

 

Basic earnings per share

 

$

1.51

 

 

$

1.42

 

Diluted earnings per share

 

$

1.49

 

 

$

1.41

 

 

 

 


7

 


CAMBRIDGE BANCORP AND SUBSIDIARIES

MARGIN & YIELD ANALYSIS

 

 

 

Three Months Ended

 

 

 

March 31, 2019

 

 

March 31, 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

 

$

1,543,585

 

 

$

16,284

 

 

 

4.28

%

 

$

1,352,562

 

 

$

13,378

 

 

 

4.01

%

Tax-exempt

 

 

9,743

 

 

 

112

 

 

 

4.66

 

 

 

11,039

 

 

 

122

 

 

 

4.48

 

Securities available for sale (3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

164,607

 

 

 

712

 

 

 

1.75

 

 

 

206,463

 

 

 

837

 

 

 

1.64

 

Securities held to maturity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Taxable

 

 

209,347

 

 

 

1,268

 

 

 

2.46

 

 

 

167,010

 

 

 

877

 

 

 

2.13

 

Tax-exempt

 

 

73,851

 

 

 

723

 

 

 

3.97

 

 

 

79,207

 

 

 

787

 

 

 

4.03

 

Cash and due from banks

 

 

33,025

 

 

 

118

 

 

 

1.45

 

 

 

76,931

 

 

 

271

 

 

 

1.43

 

Total interest-earning assets (4)

 

 

2,034,158

 

 

 

19,217

 

 

 

3.83

%

 

 

1,893,212

 

 

 

16,272

 

 

 

3.49

%

Non interest-earning assets

 

 

114,505

 

 

 

 

 

 

 

 

 

 

 

68,608

 

 

 

 

 

 

 

 

 

Allowance for loan losses

 

 

(16,688

)

 

 

 

 

 

 

 

 

 

 

(15,479

)

 

 

 

 

 

 

 

 

Total assets

 

$

2,131,975

 

 

 

 

 

 

 

 

 

 

$

1,946,341

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing deposits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Checking accounts

 

$

391,863

 

 

$

82

 

 

 

0.08

%

 

$

436,741

 

 

$

50

 

 

 

0.05

%

Savings accounts

 

 

688,951

 

 

 

1,486

 

 

 

0.87

 

 

 

611,258

 

 

 

546

 

 

 

0.36

 

Money market accounts

 

 

130,226

 

 

 

380

 

 

 

1.18

 

 

 

65,749

 

 

 

25

 

 

 

0.15

 

Certificates of deposit

 

 

153,257

 

 

 

553

 

 

 

1.46

 

 

 

152,880

 

 

 

341

 

 

 

0.90

 

Total interest-bearing deposits

 

 

1,364,297

 

 

 

2,501

 

 

 

0.74

 

 

 

1,266,628

 

 

 

962

 

 

 

0.31

 

Other borrowed funds

 

 

54,124

 

 

 

356

 

 

 

2.67

 

 

 

3,551

 

 

 

17

 

 

 

1.94

 

Total interest-bearing liabilities

 

 

1,418,421

 

 

 

2,857

 

 

 

0.82

%

 

 

1,270,179

 

 

 

979

 

 

 

0.31

%

Non-interest-bearing liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Demand deposits

 

 

484,068

 

 

 

 

 

 

 

 

 

 

 

504,016

 

 

 

 

 

 

 

 

 

Other liabilities

 

 

60,810

 

 

 

 

 

 

 

 

 

 

 

23,165

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

1,963,299

 

 

 

 

 

 

 

 

 

 

 

1,797,360

 

 

 

 

 

 

 

 

 

Shareholders’ equity

 

 

168,676

 

 

 

 

 

 

 

 

 

 

 

148,981

 

 

 

 

 

 

 

 

 

Total liabilities & shareholders’ equity

 

$

2,131,975

 

 

 

 

 

 

 

 

 

 

$

1,946,341

 

 

 

 

 

 

 

 

 

Net interest income on a fully taxable equivalent basis

 

 

 

 

 

 

16,360

 

 

 

 

 

 

 

 

 

 

 

15,293

 

 

 

 

 

Less taxable equivalent adjustment

 

 

 

 

 

 

(175

)

 

 

 

 

 

 

 

 

 

 

(191

)

 

 

 

 

Net interest income

 

 

 

 

 

$

16,185

 

 

 

 

 

 

 

 

 

 

$

15,102

 

 

 

 

 

Net interest spread (5)

 

 

 

 

 

 

 

 

 

 

3.01

%

 

 

 

 

 

 

 

 

 

 

3.17

%

Net interest margin (6)

 

 

 

 

 

 

 

 

 

 

3.26

%

 

 

 

 

 

 

 

 

 

 

3.28

%

 

(1)

Annualized on a fully taxable equivalent basis calculated using a federal tax rate of 21%.

(2)

Nonaccrual loans are included in average amounts outstanding.

(3)

Average balances of securities available for sale calculated utilizing amortized cost.

(4)

Federal Home Loan Bank stock balance and dividend income is excluded from interest-earning assets.

(5)

Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(6)

Net interest margin represents net interest income on a fully tax equivalent basis as a percentage of average interest-earning assets.

 


8

 


 

GAAP to Non-GAAP Reconciliation (Dollars in thousands except per share data)

 

Statement on Non-GAAP Measures: The Company believes the presentation of the following non-GAAP financial measures provides useful supplemental information that is essential to an investor’s proper understanding of the results of operations and financial condition of the Company. Management uses non-GAAP financial measures in its analysis of the Company’s performance. These non-GAAP measures should not be viewed as substitutes for the financial measures determined in accordance with GAAP, nor are they necessarily comparable to non-GAAP performance measures that may be presented by other companies.

 

 

Three Months Ended March 31,

 

Operating Net Income  / Operating Diluted EPS

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

Net Income (a GAAP measure)

 

$

6,198

 

 

$

5,805

 

Merger Expenses (Pretax)

 

 

91

 

 

 

 

Tax Effect of Merger-related Expenses(1)

 

 

(4

)

 

 

 

Operating Net Income (a non-GAAP measure)

 

$

6,285

 

 

$

5,805

 

Less Dividends and Undistributed Earnings Allocated to Participating Securities

 

 

(61

)

 

 

(64

)

Operating Income Applicable to Common Shareholders

 

$

6,224

 

 

$

5,741

 

Weighted Average Diluted Shares

 

 

4,106,658

 

 

 

4,071,975

 

Operating Diluted earnings per share (a non-GAAP measure)

 

$

1.52

 

 

$

1.41

 

 

(1)

The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company’s combined marginal tax rate to only those items included in net taxable income.

 

 

 

9

 

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