Cambridge Bancorp Announces First Quarter 2022 Earnings and Declares Quarterly Dividend
Cambridge Bancorp Announces First Quarter 2022 Earnings and Declares Quarterly Dividend

CAMBRIDGE, Mass., April 20, 2022 /PRNewswire/ — Cambridge Bancorp (NASDAQ: CATC) (the “Company”), the parent company of Cambridge Trust Company (the “Bank”), today announced unaudited net income of $13.3 million for the quarter ended March 31, 2022. Net income for the first quarter was relatively unchanged as compared to net income of $13.3 million for the quarter ended December 31, 2021. Diluted earnings per share were $1.89 for the quarter ended March 31, 2022, representing a 0.5% increase as compared to diluted earnings per share of $1.88 for the quarter ended December 31, 2021.

First Quarter 2022 Highlights:

  • Financial performance ratios for the quarter ended March 31, 2022 were strong with Operating Return on Average Assets (“ROA”) of 1.09% and Operating Return on Tangible Common Shareholders’ Equity (“ROTCE”) of 14.13%.
  • Total loans, excluding loans under the Small Business Administration’s (“SBA”) Paycheck Protection Program (“PPP”), increased by $106.7 million, or 3.2%, to $3.4 billion at March 31, 2022 from $3.3 billion at December 31, 2021.
  • Core deposits at March 31, 2022 increased by $170.9 million, or 4.1%, from December 31, 2021.
  • Asset quality at March 31, 2022, remained excellent with ratios of non-performing loans to total loans and non-performing assets to total assets at 0.17% and 0.12%, respectively.

“The Cambridge Trust Team delivered another quarter of strong performance in a period of market volatility,” noted Denis K. Sheahan, Chairman, President and CEO. “New business pipelines remain robust and our balance sheet is positioned to benefit in a rising rate environment.”

Balance Sheet

Total assets increased by $126.8 million, or 2.6%, from $4.89 billion at December 31, 2021 to $5.02 billion at March 31, 2022.

Total loans increased by $98.1 million, or 3.0%, from $3.32 billion at December 31, 2021 to $3.42 billion at March 31, 2022. Excluding PPP loans, total loans increased by $106.7 million, or 3.2%, from December 31, 2021.

  • Residential real estate loans increased by $32.1 million, from $1.42 billion at December 31, 2021 to $1.45 billion at March 31, 2022.
  • Commercial real estate loans increased by $68.5 million, from $1.51 billion at December 31, 2021 to $1.58 billion at March 31, 2022.
  • Commercial and industrial loans, excluding PPP loans, were relatively unchanged and totaled $249.2 million at March 31, 2022 and $247.2 million at December 31, 2021.
  • PPP loans were $13.6 million and $22.2 million at March 31, 2022 and December 31, 2021, respectively, and are included in commercial and industrial loans on the consolidated balance sheets.

The Company’s total investment securities portfolio increased by $129.2 million, or 11.0%, from $1.17 billion at December 31, 2021 to $1.30 billion at March 31, 2022, as the Company invested excess cash.

Total deposits increased by $142.6 million, or 3.3%, to $4.47 billion at March 31, 2022 from $4.33 billion at December 31, 2021.

  • Core deposits, which the Company defines as all deposits other than certificates of deposit, increased by $170.9 million, or 4.1%, to $4.34 billion at March 31, 2022, as a result of growth from new and existing client relationships.
  • The cost of total deposits for the quarter ended March 31, 2022 was 0.17%, as compared to 0.15% for the quarter ended December 31, 2021, an increase of two basis points. At March 31, 2022, the spot cost of deposits was 0.16%.

Net Interest and Dividend Income

Net interest and dividend income, before the release of credit losses, increased by $96,000, or 0.3%, to $31.9 million for the quarter ended March 31, 2022, from $31.8 million for the quarter ended December 31, 2021. This increase was primarily due to an increase in average earning assets, partially offset by a decrease in PPP loan income.

The Company’s net interest margin on a fully taxable equivalent basis decreased by 10 basis points to 2.74% for the quarter ended March 31, 2022, as compared to 2.84% for the quarter ended December 31, 2021.

In order to provide greater disclosure of the impact of loan related merger accounting and the impact of the SBA’s PPP loan program, a reconciliation of the Company’s net interest margin, on a fully taxable equivalent basis, to an adjusted net interest margin, on a fully taxable equivalent basis, is shown below. Excluding the impact of merger related loan accretion and the impact of PPP loans, the adjusted net interest margin, on a fully taxable equivalent basis, for the quarter ended March 31, 2022, was 2.67%, representing a three basis point decrease from the adjusted net interest margin, on a fully taxable equivalent basis, of 2.70% for the quarter ended December 31, 2021.



Three Months Ended




March 31, 2022




Average
Balance



Interest
Income/
Expenses



Rate
Earned/
Paid




(dollars in thousands)


Total interest-earning assets (GAAP)


$

4,753,838








Net interest income on a fully taxable equivalent basis (GAAP)





$

32,111





Net interest margin on a fully taxable equivalent basis (GAAP)









2.74

%

Less: Paycheck Protection Program loan impact



(17,650)




(311)




-0.02

%

Less: Accretion of loan fair value adjustments






(642)




-0.05

%

Adjusted net interest margin on a fully taxable equivalent basis


$

4,736,188



$

31,158




2.67

%

Release of Credit Losses 

During the quarter ended March 31, 2022, the Company recorded a release of credit losses of $412,000, as compared to a release of credit losses of $273,000 for the quarter ended December 31, 2021, as a result of improving forward-looking economic assumptions and the resulting decrease in loss expectations in the Company’s allowance for credit losses modeling.

Noninterest Income 

Total noninterest income decreased by $100,000, or 0.9%, to $11.4 million for the quarter ended March 31, 2022, as compared to $11.5 million for the quarter ended December 31, 2021. This change was primarily the result of lower wealth management revenue and lower loan related derivative income, partially offset by higher other income. Noninterest income was 26.3% of total revenue for the quarter ended March 31, 2022. 

  • Wealth management revenue decreased by $451,000, or 5.0%, to $8.6 million for the first quarter of 2022, as compared to $9.0 million for the fourth quarter of 2021. Wealth Management Assets under Management and Administration were $4.7 billion at March 31, 2022, a decrease of $193.8 million, or 4.0%, from December 31, 2021, primarily due to declines within the equity markets.
  • Loan related derivative income decreased by $200,000, or 40.3%, to $296,000 for the quarter ended March 31, 2022, as compared to $496,000 for the quarter ended December 31, 2021.
  • Other income increased by $577,000, or 77.9%, to $1.3 million for the quarter ended March 31, 2022, as compared to $741,000 for the quarter ended December 31, 2021, primarily due to equity warrant revenue associated with an Innovation Banking loan in addition to gains recognized on a community development fund investment.

Noninterest Expense 

Total noninterest expense increased by $407,000, or 1.6%, to $25.9 million for the quarter ended March 31, 2022, as compared to $25.5 million for the quarter ended December 31, 2021. During the quarter ended March 31, 2022, there were increases in salary and employee benefits expense, partially offset by decreases in non-operating expenses, professional services expense, and marketing expense as compared to the quarter ended December 31, 2021. 

  • Salary and employee benefits expense increased by $1.2 million, or 7.3%, to $17.4 million for the quarter ended March 31, 2022, from $16.2 million for the quarter ended December 31, 2021, primarily due to the seasonality of higher employee benefit costs during the first quarter combined with recent staffing additions and regular merit increases.
  • There were no non-operating expenses for the quarter ended March 31, 2022, as compared to $331,000 for the quarter ended December 31, 2021.
  • Professional services decreased by $290,000, or 21.4%, to $1.1 million for the quarter ended March 31, 2022, from $1.4 million for the quarter ended December 31, 2021, primarily due to lower consulting fees associated with the wealth management system conversion completed in the fourth quarter of 2021 and lower recruiting expenses.
  • Marketing expense decreased by $288,000, or 56.3%, to $224,000 for the quarter ended March 31, 2022, from $512,000 for the quarter ended December 31, 2021, due to timing of marketing spend.

Asset Quality 

Non-performing loans totaled $5.9 million, or 0.17% of total loans outstanding, at March 31, 2022. The allowance for credit losses was $34.1 million, or 1.00% of total loans outstanding excluding PPP loans, at March 31, 2022, as compared to $34.5 million, or 1.05% of total loans outstanding excluding PPP loans, at December 31, 2021.

The Company recorded net loan recoveries of $13,000, or 0.00% of total loans (annualized), for both the quarters ended March 31, 2022 and  December 31, 2021.

The following table shows additional and historical information regarding non-performing assets, early-stage delinquency (30-89 days delinquent), and troubled debt restructurings: 



Nonperforming Assets




March 31, 2022



December 31, 2021



March 31, 2021




(dollars in thousands)


Total nonperforming loans


$

5,943



$

5,386



$

7,363


Other real estate owned









1,820


     Total nonperforming assets


$

5,943



$

5,386



$

9,183


Troubled debt restructurings (“TDRs”):










     Non-performing (included in total non-performing loans above)


$

737



$

758



$

796


     Performing










          Total troubled debt restructurings


$

737



$

758



$

796


Nonperforming loans/total loans



0.17

%



0.16

%



0.23

%

Nonperforming assets/total assets



0.12

%



0.11

%



0.22

%

TDRs/total loans



0.02

%



0.02

%



0.03

%



Additional Asset Quality Indicators




March 31, 2022



December 31, 2021



March 31, 2021


Delinquent loans 30-89 days past due/total loans



0.41

%



0.32

%



0.21

%

Quarterly net recoveries (charge-offs)/total loans (annualized)



0.00

%



0.00

%



0.00

%

Year to date net recoveries (charge-offs)/total loans



0.00

%



0.00

%



0.00

%

Allowance for credit losses/nonperforming loans



573.95

%



640.48

%



484.12

%

Allowance for credit losses/total loans ex. PPP loans



1.00

%



1.05

%



1.18

%

Income Taxes 

The Company’s effective tax rate was 25.0% for the quarter ended March 31, 2022, as compared to 26.5% for the quarter ended December 31, 2021.

Dividend and Capital

On April 19, 2022, the Company’s Board of Directors declared a quarterly cash dividend of $0.64 per share, which is payable on May 19, 2022, to shareholders of record as of the close of business on May 5, 2022. The Company did not repurchase any shares under its previously announced share repurchase program during the three months ended March 31, 2022.

The Company’s ratio of tangible common equity to tangible assets decreased to 7.69% at March 31, 2022 from 7.92% at December 31, 2021, primarily due to increases in unrealized losses within the Company’s available for sale investment securities portfolio combined with asset growth during the quarter ended March 31, 2022.

Tangible book value per share decreased by $0.49, or 0.9%, to $54.52 at March 31, 2022, as compared to $55.01 at December 31, 2021, as a result of increases in unrealized losses within the Company’s available for sale investment securities portfolio partially offset by income earned during the quarter ended March 31, 2022.

Investor Conference Call and Investor Presentation

An investor presentation is available on the investor relations section of the Company’s website: http://ir.cambridgetrust.com or within the hyperlink provided below. This presentation includes additional details regarding the Company’s loan portfolio, liquidity position, and other financial disclosures. Click here to download.

Cambridge Bancorp will also conduct a conference call/webcast at 11:00 a.m. Eastern Time on Wednesday, April 20, 2022, to discuss the results for the quarter. Participants are encouraged to pre-register for the conference call using the following link: https://dpregister.com/sreg/10163886/f179f311fe.

Callers who pre-register will be given dial-in instructions and a unique PIN to gain immediate access to the call. Participants may pre-register at any time prior to the call and will immediately receive simple instructions via email. Additionally, participants may reach the registration link and access the webcast by logging in through the investor section of the Company’s website at http://ir.cambridgetrust.com.

Those parties who do not have Internet access or are otherwise unable to pre-register for this event may still participate at the above time by dialing 1-866-777-2509 and asking the operator to join the Cambridge Bancorp (CATC) earnings call. Participants are requested to dial-in a few minutes before the scheduled start of the call. The webcast will be archived for three months on our investor relations website at https://ir.cambridgetrust.com/news-market-information/presentations/default.aspx.

About Cambridge Bancorp

Cambridge Bancorp, the parent company of Cambridge Trust Company, is based in Cambridge, Massachusetts. Cambridge Trust Company is a 132-year-old Massachusetts chartered commercial bank with approximately $5.0 billion in assets at March 31, 2022, and a total of 19 Massachusetts and New Hampshire locations. Cambridge Trust Company is one of New England’s leaders in private banking and wealth management with $4.7 billion in client assets under management and administration at March 31, 2022. The Wealth Management group maintains offices in Boston and Wellesley, 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 http://ir.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, the impact of any laws or regulations applicable to the Company, and measures being taken in response to the COVID-19 pandemic and the impact of the COVID-19 pandemic on the Company’s business 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: the current global economic uncertainty and economic conditions being less favorable than expected; disruptions to the credit and financial markets; changes in the Company’s accounting policies or in accounting standards; 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; the duration and scope of the COVID-19 pandemic and its impact on levels of consumer confidence; actions that governments, businesses and individuals take in response to the COVID-19 pandemic; the impact of the COVID-19 pandemic and actions taken in response to the pandemic on global and regional economies and economic activity; a prolonged resurgence in the severity of the COVID-19 pandemic due to variants and mutations of the virus; the pace of recovery when the COVID-19 pandemic subsides; challenges from the integration of the Company and Wellesley resulting in the combined business not operating as effectively as expected; disruptions in the Company’s ability to access the capital markets; the cost savings of the merger with Wellesley may not be fully realized or may take longer to realize than expected; operating costs, customer loss, and business disruption following the merger with Wellesley, including adverse effects on relationships with employees, may be greater than expected; and other factors that are described in the Company’s filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K for the year end December 31, 2021, which the Company filed on March 14, 2022. 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 net income and operating diluted earnings per share, tangible book value per share and the tangible common equity ratio, operating return on average assets, operating return on tangible common equity, and operating efficiency ratio.

Operating net income and operating diluted earnings per share exclude items that management believes are unrelated to its core banking business such as merger and acquisition expenses, gain (loss) on disposition of investment securities, and other items. The Company’s management uses operating net income and operating diluted earnings per share 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 an analysis of tangible book value per share (which is computed by dividing shareholders’ 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), return on average assets and return on tangible common equity on an operating basis, and the operating efficiency ratio (which is computed by dividing noninterest expense adjusted for non-operating expenses and total revenue adjusted for gain/(loss) on disposition of investment securities). The Company has included information on these non-GAAP financial measures because the Company 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-operating 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 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.”

CONTACT:
Cambridge Bancorp
Michael F. Carotenuto
Chief Financial Officer
617-520-5520

 

CAMBRIDGE BANCORP AND SUBSIDIARIES

QUARTERLY UNAUDITED RESULTS






Three Months Ended




March 31,



December 31,



March 31,




2022



2021



2021




(dollars in thousands, except per share data)


Interest and Dividend Income


$

33,898



$

33,511



$

32,821


Interest Expense



2,029




1,738




1,415


  Net Interest and Dividend Income



31,869




31,773




31,406


Release of Credit Losses



(412)




(273)




(206)


Noninterest Income



11,354




11,454




10,849


Noninterest Expense



25,875




25,468




24,219


Income Before Income Taxes



17,760




18,032




18,242


Income Tax Expense



4,444




4,770




4,743


  Net Income


$

13,316



$

13,262



$

13,499












Operating Net Income*


$

13,316



$

13,501



$

13,499












Data Per Common Share:










 Basic Earnings Per Share


$

1.91



$

1.90



$

1.95


 Diluted Earnings Per Share



1.89




1.88




1.92


 Operating Diluted Earnings Per Share*



1.89




1.92




1.92


 Dividends Declared Per Share



0.64




0.61




0.55


 Average Common Shares Outstanding:










   Basic



6,948,040




6,934,702




6,907,861


   Diluted



7,010,983




7,007,761




6,987,216












Selected Performance Ratios:










 Net Interest Margin, FTE



2.74

%



2.84

%



3.35

%

 Adjusted Net Interest Margin, FTE



2.67

%



2.70

%



3.16

%

 Cost of Funds



0.17

%



0.15

%



0.15

%

 Cost of Interest-Bearing Liabilities



0.27

%



0.24

%



0.23

%

 Cost of Deposits



0.17

%



0.15

%



0.15

%

 Cost of Deposits excluding Wholesale Deposits



0.17

%



0.15

%



0.14

%

 Return on Average Assets



1.09

%



1.12

%



1.35

%

 Return on Average Equity



12.37

%



12.24

%



13.53

%

 Efficiency Ratio*



59.86

%



58.92

%



57.32

%

 Operating Return on Average Assets*



1.09

%



1.15

%



1.35

%

 Operating Return on Tangible Common Equity*



14.13

%



14.27

%



15.65

%

 Operating Efficiency Ratio*



59.86

%



58.15

%



57.32

%













March 31,



December 31,



March 31,




2022



2021



2021




(dollars in thousands, except per share data)


Total Assets


$

5,018,379



$

4,891,544



$

4,253,173


Total Loans


$

3,417,213



$

3,319,106



$

3,180,371


Total Deposits


$

4,473,735



$

4,331,152



$

3,730,065


Allowance for Credit Losses


$

34,110



$

34,496



$

35,646


Allowance to Total Loans (ex. PPP Loans)



1.00

%



1.05

%



1.18

%

Non-Performing Loans


$

5,943



$

5,386



$

7,363


Non-Performing Loans/Total Loans



0.17

%



0.16

%



0.23

%

QTD Net Recoveries (Charge-offs) to Total Loans (annualized)



0.00

%



0.00

%



0.00

%

Tangible Common Equity Ratio*



7.69

%



7.92

%



8.41

%

Book Value Per Share


$

62.30



$

62.83



$

58.57


Tangible Book Value Per Share*


$

54.52



$

55.01



$

50.70


Wealth Management AUM


$

4,464,512



$

4,656,183



$

4,083,811


Wealth Management AUM & AUA


$

4,659,297



$

4,853,119



$

4,267,326


* See GAAP to Non-GAAP Reconciliations










 

 

CAMBRIDGE BANCORP AND SUBSIDIARIES

UNAUDITED CONSOLIDATED BALANCE SHEETS






March 31, 2022



December 31, 2021




(dollars in thousands, except par value)


Assets







Cash and cash equivalents


$

81,748



$

180,153


Investment securities







     Available for sale, at fair value (amortized cost $202,688 and $201,270, respectively)



188,205




197,803


     Held to maturity, at amortized cost (fair value $1,043,391 and $971,092, respectively)



1,115,824




977,061


          Total investment securities



1,304,029




1,174,864


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



918




1,490


Loans







     Residential mortgage



1,447,141




1,415,079


     Commercial mortgage



1,579,494




1,511,002


     Home equity



86,559




87,960


     Commercial and industrial



262,772




269,446


     Consumer



41,247




35,619


          Total loans



3,417,213




3,319,106


     Less: allowance for credit losses on loans



(34,110)




(34,496)


          Net loans



3,383,103




3,284,610


Federal Home Loan Bank of Boston Stock, at cost



4,816




4,816


Bank owned life insurance



47,157




46,970


Banking premises and equipment, net



17,136




17,326


Right-of-use asset operating leases



29,757




31,273


Deferred income taxes, net



10,460




9,985


Accrued interest receivable



9,718




9,162


Goodwill



51,912




51,912


Merger-related intangibles, net



2,526




2,617


Other assets



75,099




76,366


               Total assets


$

5,018,379



$

4,891,544


Liabilities







Deposits







     Demand


$

1,426,310



$

1,393,935


     Interest-bearing checking



785,003




763,188


     Money market



1,209,765




1,104,238


     Savings



918,895




907,722


     Certificates of deposit



133,762




162,069


          Total deposits



4,473,735




4,331,152


Borrowings



16,140




16,510


Operating lease liabilities



32,271




33,871


Other liabilities



60,068




72,174


               Total liabilities



4,582,214




4,453,707


Shareholders’ Equity







Common stock, par value $1.00; Authorized: 10,000,000 shares; Outstanding: 7,000,995 shares and 6,968,192 shares, respectively



7,001




6,968


Additional paid-in capital



228,538




229,205


Retained earnings



211,730




202,874


Accumulated other comprehensive loss



(11,104)




(1,210)


               Total shareholders’ equity



436,165




437,837


               Total liabilities and shareholders’ equity


$

5,018,379



$

4,891,544


 

 

CAMBRIDGE BANCORP AND SUBSIDIARIES

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME






Three Months Ended




March 31, 2022



December 31, 2021



March 31, 2021




(dollars in thousands, except share data)


Interest and dividend income










     Interest on taxable loans


$

28,404



$

29,044



$

30,325


     Interest on tax-exempt loans



350




355




222


     Interest on taxable investment securities



4,411




3,354




1,585


     Interest on tax-exempt investment securities



654




668




658


     Dividends on FHLB of Boston stock



25




27





     Interest on overnight investments



54




63




31


          Total interest and dividend income



33,898




33,511




32,821


Interest expense










     Interest on deposits



1,896




1,607




1,275


     Interest on borrowed funds



133




131




140


          Total interest expense



2,029




1,738




1,415


               Net interest and dividend income



31,869




31,773




31,406


Release of credit losses



(412)




(273)




(206)


               Net interest and dividend income after release of credit losses



32,281




32,046




31,612


Noninterest income










     Wealth management revenue



8,574




9,025




8,151


     Deposit account fees



506




519




474


     ATM/Debit card income



379




423




333


     Bank owned life insurance income



187




197




196


     Gain on loans sold, net



94




53




569


     Loan related derivative income



296




496




671


     Other income



1,318




741




455


          Total noninterest income



11,354




11,454




10,849


Noninterest expense










     Salaries and employee benefits



17,391




16,215




16,045


     Occupancy and equipment



3,542




3,516




3,576


     Data processing



2,645




2,564




2,034


     Professional services



1,064




1,354




1,272


     Marketing



224




512




463


     FDIC insurance



455




416




336


     Non-operating expenses






331





     Other expenses



554




560




493


          Total noninterest expense



25,875




25,468




24,219


               Income before income taxes



17,760




18,032




18,242


Income tax expense



4,444




4,770




4,743


               Net income


$

13,316



$

13,262



$

13,499


Share data:










     Weighted average shares outstanding, basic



6,948,040




6,934,702




6,907,861


     Weighted average shares outstanding, diluted



7,010,983




7,007,761




6,987,216


     Basic earnings per share


$

1.91



$

1.90



$

1.95


     Diluted earnings per share


$

1.89



$

1.88



$

1.92


  

 

CAMBRIDGE BANCORP AND SUBSIDIARIES

MARGIN & YIELD ANALYSIS






Three Months Ended




March 31, 2022



December 31, 2021



March 31, 2021




Average
Balance



Interest
Income/
Expenses
 (1)



Rate
Earned/
Paid (1)



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


$

3,314,082



$

28,404




3.48

%


$

3,231,227



$

29,044




3.57

%


$

3,142,319



$

30,325




3.91

%

     Tax-exempt



46,702




443




3.85




46,152




448




3.85




26,279




281




4.34


Securities available for
   sale (3)




























     Taxable



203,193




650




1.30




207,207




613




1.17




229,693




694




1.23


Securities held to maturity




























     Taxable



937,047




3,761




1.63




704,880




2,741




1.54




183,678




891




1.97


     Tax-exempt



104,837




828




3.20




105,731




845




3.17




102,348




832




3.30


Cash and cash equivalents



147,977




54




0.15




174,088




63




0.14




144,567




31




0.09


     Total interest-earning
        assets (4)



4,753,838




34,140




2.91

%



4,469,285




33,754




3.00

%



3,828,884




33,054




3.50

%

     Non-interest-earning
        assets



238,864










243,647










259,248








Allowance for credit losses



(34,780)










(35,108)










(35,988)








     Total assets


$

4,957,922









$

4,677,824









$

4,052,144








LIABILITIES AND
   SHAREHOLDERS’
   EQUITY




























Interest-bearing deposits




























     Checking accounts


$

764,706



$

44




0.02

%


$

712,123



$

67




0.04

%


$

632,754



$

83




0.05

%

     Savings accounts



923,168




177




0.08




942,118




218




0.09




977,415




272




0.11


     Money market accounts



1,187,173




1,570




0.54




969,233




1,152




0.47




586,142




537




0.37


     Certificates of deposit



144,114




105




0.30




177,960




170




0.38




239,356




383




0.65


          Total interest-bearing
             deposits



3,019,161




1,896




0.25




2,801,434




1,607




0.23




2,435,667




1,275




0.21


Other borrowed funds



16,369




133




3.30




16,636




131




3.12




22,009




140




2.58


          Total interest-bearing
             liabilities



3,035,530




2,029




0.27

%



2,818,070




1,738




0.24

%



2,457,676




1,415




0.23

%

Non-interest-bearing
   liabilities




























     Demand deposits



1,388,409










1,324,162










1,085,048








     Other liabilities



97,373










105,698










104,744








     Total liabilities



4,521,312










4,247,930










3,647,468








Shareholders’ equity



436,610










429,894










404,676








     Total liabilities &
        shareholders’
        equity


$

4,957,922









$

4,677,824









$

4,052,144








Net interest income on a
   fully taxable equivalent
   basis






32,111










32,016










31,639





Less taxable equivalent
   adjustment






(267)










(270)










(233)





Net interest income





$

31,844









$

31,746









$

31,406





Net interest spread (5)









2.64

%









2.76

%









3.27

%

Net interest margin (6)









2.74

%









2.84

%









3.35

%



(1)

Annualized on a fully taxable equivalent basis calculated using a federal tax rate of 21% in 2022 and 2021

(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 is excluded from interest-earning assets and associated dividend income is excluded from interest income.

(5)

Net interest spread represents the difference between the weighted average yield on interest-earning assets, inclusive of PPP loans outstanding during 2022 and 2021, 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, inclusive of PPP loans outstanding during 2022 and 2021.

GAAP to Non-GAAP Reconciliations (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


Operating Net Income / Operating Diluted Earnings Per Share


March 31, 2022



December 31, 2021



March 31, 2021




(dollars in thousands, except share data)


Net Income (a GAAP measure)


$

13,316



$

13,262



$

13,499


     Add: Non-operating expenses (GAAP)






331





Tax effect of non-operating adjustments (1)






(92)





     Operating Net Income (a non-GAAP
        measure)


$

13,316



$

13,501



$

13,499


Less: Dividends and Undistributed Earnings
   Allocated to Participating Securities (a non-GAAP measure)



(59)




(61)




(57)


     Operating Net Income Applicable to Common
        Shareholders (a non-GAAP measure)


$

13,257



$

13,440



$

13,442


Weighted Average Diluted Shares



7,010,983




7,007,761




6,987,216


     Operating Diluted Earnings Per Share
        (a non-GAAP measure)


$

1.89



$

1.92



$

1.92




(1)

The net tax benefit associated with non-operating items is determined by assessing whether each non-operating 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. 

 



March 31, 2022



December 31, 2021



March 31, 2021




(dollars in thousands)


Tangible Common Equity:










Shareholders’ equity (GAAP)


$

436,165



$

437,837



$

407,673


Less: Goodwill and acquisition related intangibles (GAAP)



(54,438)




(54,529)




(54,799)


Tangible Common Equity (a non-GAAP measure)


$

381,727



$

383,308



$

352,874


Total assets (GAAP)


$

5,018,379



$

4,891,544



$

4,253,173


Less: Goodwill and acquisition related intangibles (GAAP)



(54,438)




(54,529)




(54,799)


Tangible assets (a non-GAAP measure)


$

4,963,941



$

4,837,015



$

4,198,374


     Tangible Common Equity Ratio (a non-GAAP
        measure)



7.69

%



7.92

%



8.41

%











Tangible Book Value Per Share:










Tangible Common Equity (a non-GAAP measure)


$

381,727



$

383,308



$

352,874


Common shares outstanding



7,000,995




6,968,192




6,960,194


     Tangible Book Value Per Share (a non-GAAP measure)


$

54.52



$

55.01



$

50.70


 



Three Months Ended




March 31, 2022



December 31, 2021



March 31, 2021




(dollars in thousands)


Efficiency Ratio: (1)










Noninterest expense


$

25,875



$

25,468



$

24,219


Net interest and dividend income


$

31,869



$

31,773



$

31,406


Total noninterest income



11,354




11,454




10,849


     Total revenue


$

43,223



$

43,227



$

42,255


          Efficiency Ratio



59.86

%



58.92

%



57.32

%











Operating Efficiency Ratio: (2)










Noninterest expense


$

25,875



$

25,468



$

24,219


Non-operating expenses (Pretax)






(331)





     Operating expense (a non-GAAP measure)


$

25,875



$

25,137



$

24,219


Total revenue


$

43,223



$

43,227



$

42,255


          Operating Efficiency Ratio (a non-GAAP measure)



59.86

%



58.15

%



57.32

%













Three Months Ended




March 31, 2022



December 31, 2021



March 31, 2021




(dollars in thousands)


Operating Return on Tangible Common Equity: (3)










Operating Net Income (a non-GAAP measure)


$

13,316



$

13,501



$

13,499


Average common equity


$

436,610



$

429,894



$

404,676


Average goodwill and merger related intangibles



(54,483)




(54,574)




(54,847)


     Average tangible common equity (a non-GAAP measure)


$

382,127



$

375,320



$

349,829


          Operating Return on Tangible Common Equity (a non-GAAP measure)



14.13

%



14.27

%



15.65

%











Operating Return on Average Assets: (4)










Operating Net Income (a non-GAAP measure)


$

13,316



$

13,501



$

13,499


Average assets


$

4,957,922



$

4,677,824



$

4,052,144


Operating Return on Average Assets (a non-GAAP measure)



1.09

%



1.15

%



1.35

%



(1)

The efficiency ratio represents noninterest expense as a percentage of the sum of net interest and dividend income and noninterest income.

(2)

Operating efficiency ratio represents operating expense as a percentage of total revenue. 

(3)

Operating return on tangible common equity represents operating net income as a percentage of average tangible common equity.

(4)

Operating return on average assets represents operating net income as a percentage of average assets.

SOURCE Cambridge Bancorp

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