Cambridge Bancorp Announces Operating Results for Q2 and Declares Dividend

Rhea-AI Summary

Cambridge Bancorp (NASDAQ: CATC) reported a net loss of $1,716,000 for Q2 2020, down 140.2% from a net income of $4,272,000 in Q2 2019. The diluted loss per share was $0.29, a 132.2% decrease from $0.90 a year earlier. Including merger effects with Wellesley Bancorp, operating net income was $7,788,000, a 12.0% year-over-year increase. For the first half of 2020, net income was $5,516,000, a 47.3% decrease from $10,470,000 in 2019. The company recorded strong asset quality with non-performing loans at 0.31% of total loans.

Positive

• Operating net income of $7,788,000 for Q2 2020, up 12.0% YoY.
• Organic loan growth of $79.1 million, or 3.6% YTD, excluding PPP loans.
• Strong asset quality with non-performing loans at 0.31% of total loans.
• Total deposits increased by $917.0 million, or 38.9%, to $3.3 billion.

Negative

• Net loss of $1,716,000 for Q2 2020, a 140.2% decrease YoY.
• Diluted loss per share of $0.29, down 132.2% from previous year.
• Total noninterest expense up 18.9% to $25.6 million driven by merger costs.

CAMBRIDGE, Mass., July 28, 2020 /PRNewswire/ -- Cambridge Bancorp (NASDAQ: CATC) (the "Company"), the parent company of Cambridge Trust Company (the "Bank"), today announced an unaudited net loss of $1,716,000 for the quarter ended June 30, 2020, a decrease of $5,988,000, or 140.2%, compared to net income of $4,272,000 for the quarter ended June 30, 2019. The diluted loss per share was $0.29 for the second quarter of 2020, representing a 132.2% decrease over diluted earnings per share of $0.90 for the second quarter of 2019.

The results for the second quarter include the merger with Wellesley Bancorp Inc. ("Wellesley") and the corresponding impact to the provision for credit losses, merger expenses, and other non-operating items. Excluding these items, operating net income was $7,788,000 for the quarter ended June 30, 2020, an increase of $833,000, or 12.0%, compared to operating net income of $6,955,000 for the quarter ended June 30, 2019. Operating diluted earnings per share were $1.32 for the second quarter of 2020, representing a 10.2% decrease over operating diluted earnings per share of $1.47 for the same quarter last year. Further discussion of the merger accounting impact of the current and expected credit loss accounting standard ("CECL") is detailed below and in the Non-GAAP Reconciliation tables at the end of this document.

For the six months ended June 30, 2020, unaudited net income was $5,516,000, representing a decrease of $4,954,000, or 47.3%, compared to net income of $10,470,000 for the six months ended June 30, 2019. Diluted earnings per share were $0.97 for the six months ended June 30, 2020, representing a 58.7% decrease over diluted earnings per share of $2.35 for the same six months ended June 30, 2019.

The results for the six months ended June 30, 2020 also include the merger accounting impact of the CECL accounting standard within the provision for credit losses, merger expenses, and other non-operating items. Excluding these items, operating net income was $15,210,000 for the six months ended June 30, 2020, an increase of $1,923,000, or 14.5%, compared to operating net income of $13,287,000 for the six months ended June 30, 2019. Operating diluted earnings per share were $2.68 for the six months ended June 30, 2020, representing a 10.4% decrease over operating diluted earnings per share of $2.99 for the six months ended June 30, 2019.

Second quarter 2020 highlights:

• Completed the merger with Wellesley which included banking assets of $985.6 million and client wealth management assets of $339 million.
• Asset quality remains strong with ratios of non-performing loans to total loans and non-performing assets to total assets at 0.31% and 0.30%, respectively. Early stage delinquency (30-89 days delinquent) as of June 30, 2020 represents only 0.22% of total loans.
• Reflecting weakening economic conditions, management increased the allowance for credit loss to 1.08% of total loans, excluding loans made under the Small Business Administration's ("SBA") Paycheck Protection Program ("PPP").
• Organic loan growth of $79.1 million, or 3.6% year to date, excluding loans originated under the SBA's PPP
• Organic core deposit growth of $191.9 million, or 8.8% year to date.
• Tangible common equity ratio of 8.27% at June 30, 2020.
• Tangible book value per share of $47.34 at June 30, 2020.
• A supplemental presentation for the quarter is available on our investor relations website: ir.cambridgetrust.com or within the hyperlink provided within this release. This presentation includes additional detail regarding the loan portfolio, liquidity position and other COVID-19 disclosures.

"Throughout this period of uncertainty, we were able to deliver for our clients not only in terms of support through the PPP program, but also for our communities in terms of outreach. I want to specifically thank my colleagues for all of their hard work and welcome our new colleagues from our merger with Wellesley," noted Denis K. Sheahan, Chairman and CEO. "Although the quarter's results include the one-time impact of the merger on our allowance for credit losses as required by CECL and a continued increase in provisioning levels associated with the COVID-19 pandemic, we delivered solid operating results with continued strength in asset quality."

Merger with Wellesley

On June 1, 2020, the Company completed its merger with Wellesley which added 6 banking offices in Massachusetts. The Company paid total consideration of $88.8 million, which consisted of 1,502,814 shares of Cambridge Bancorp common stock issued to Wellesley shareholders. The transaction included the acquisition of $870.0 million in loans and the assumption of $760.9 million in deposits, each at fair value. 

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

		At June 1, 2020
		Wellesley Book Value				Purchase Accounting Adjustments				Net Assets Acquired at Fair Value
		(dollars in thousands)
Total Purchase Price										$	88,766
Assets
Cash and cash equivalents		$	44,667			$	—			$	44,667
Investments			23,331				—				23,331
Gross Loans			883,659				(13,626)				870,033
Allowance for loan loss			(8,461)				8,461				—
Premises and equipment			2,972				1,040				4,012
Other assets			41,082				2,505				43,587
Total assets acquired			987,250				(1,620)				985,630
Liabilities
Deposits			758,976				1,902				760,878
Borrowings & Subordinated debt			132,005				477				132,482
Other liabilities			21,847				2,362				24,209
Total liabilities assumed			912,828				4,741				917,569
Net Assets Acquired		$	74,422			$	(6,361)			$	68,061
Goodwill										$	20,705

The Company recorded a gross loan fair value mark of $14.9 million or 1.7% of acquired loans on June 1, 2020. For further details on the loans and deposits acquired, see "Organic Loan and Deposit Growth" table provided near the end of the financial schedules accompanying this release.

Balance Sheet

Total assets increased $1.2 billion, or 40.9% from December 31, 2019, inclusive of the Wellesley merger, and were $4.0 billion as of June 30, 2020.

Total loans increased by $1.1 billion, or 49.7%, from December 31, 2019, inclusive of the Wellesley merger, and stood at $3.3 billion as of June 30, 2020. The increase in total loans was due to a combination of the merger with Wellesley and organic growth during 2020. A table is included accompanying this release to provide detail of organic loan and deposit growth.

Inclusive of Wellesley:

• Residential real estate loans increased by $433.7 million from $917.6 million at December 31, 2019 to $1.4 billion at June 30, 2020.
• Commercial real estate loans increased by $352.9 million, from $1.1 billion at December 31, 2019 to $1.4 billion at June 30, 2020.
• Commercial & industrial loans increased by $281.0 million from $133.2 million at December 31, 2019 to $414.2 million at June 30, 2020.
• Loans under the SBA's PPP amounted to $189.3 million at June 30, 2020. PPP loans are included in commercial and industrial loans.

Excluding Wellesley and PPP loans, total loans grew by $79.1 million, or 3.6%, from December 31, 2019.

The Company recorded goodwill of $20.7 million during the second quarter of 2020, due to the merger with Wellesley. Total goodwill as of June 30, 2020 was $51.9 million.

Other assets increased $51.5 million, or 121.8%, to $93.8 million, from $42.3 million at December 31, 2019, primarily due to valuation adjustments associated with loan level interest rate derivatives ($39.8M) due to both changes in interest rates and additional loan level derivatives acquired in connection with the Wellesley merger.

Total deposits grew by $917.0 million, or 38.9%, to $3.3 billion at June 30, 2020, primarily driven by a combination of the impact of the Wellesley merger, organic deposit growth and funds from the PPP program.

• Core deposits, which the Company defines as all deposits other than certificates of deposit, increased by $740.6 million, or 34.0%, to $2.9 billion at June 30, 2020, inclusive of the Wellesley merger.
• Excluding the impact of the Wellesley merger, organic growth in core deposits was $191.9 million, or 8.8%.
• Inclusive of the Wellesley merger, the cost of total deposits for the quarter ended June 30, 2020 was 0.21%, as compared to 0.68% for the quarter ended December 31, 2019, a reduction of 47 basis points driven by reduced interest rates during 2020. The cost of total deposits for the six months ended June 30, 2020 was 0.36%, as compared to 0.67% for the six months ended June 30, 2019, a reduction of 31 basis points driven by reduced interest rates during 2020. At June 30, 2020, the spot cost of deposits was 0.27%.

Certificates of deposit totaled $358.6 million at June 30, 2020, an increase of $176.3 million from $182.3 million at December 31, 2019, primarily due to the Wellesley merger. Total brokered certificates of deposit, which are included within certificates of deposit, were $87.4 million and $7.1 million at June 30, 2020 and December 31, 2019, respectively.

Borrowings were $237.9 million as of June 30, 2020, representing a $102.2 million, or 75.3% increase from $135.7 million at December 31, 2019, primarily due to the Wellesley merger.

Net Interest and Dividend Income

For the quarter ended June 30, 2020, net interest and dividend income before the provision for credit losses increased by $9.0 million, or 45.6%, to $28.8 million, as compared to $19.8 million for the quarter ended June 30, 2019, primarily due to loan growth (both organic and as a result of the Wellesley merger), lower costs of funds, higher levels of interest earning assets, and loan accretion associated with merger accounting.

The Company's net interest margin, on a fully taxable equivalent basis, inclusive of the Wellesley merger, increased 38 basis points to 3.77% for the quarter ended June 30, 2020, as compared to 3.39% for the quarter ended March 31, 2020. This increase was a function of the Company taking steps to reduce deposit costs combined with the accretion of loan fair value adjustments associated with the Wellesley merger.

In order to provide greater disclosure of the impact of loan merger accounting and the impact of the SBA's PPP loan program, we have provided a reconciliation of the net interest margin to an adjusted net interest margin shown below. Excluding the impact of merger related loan accretion and the impact of PPP loans, the adjusted net interest margin for the quarter ended June 30, 2020 was 3.46%, representing a seven basis points increase over the prior quarter net interest margin of 3.39% and a 23 basis points increase when compared to 3.23% for the second quarter of 2019. 

		Three Months Ended
		June 30, 2020
		Average Balance				Interest Income/ Expenses				Rate Earned/ Paid
		(dollars in thousands)
Total interest-earning assets (GAAP)		$	3,086,114
Net interest income on a fully taxable equivalent basis (GAAP)						$	28,952
Net interest margin (GAAP)											3.77	%
Less: Paycheck Protection Program loan impact			(127,025)				(724)				0.06	%
Less: Merger related loan accretion							(2,783)				-0.37	%
Adjusted net interest margin		$	2,959,089			$	25,445				3.46	%

Provision for Credit Losses

The provision for credit losses during the quarter ended June 30, 2020 includes the impact of the merger on the Company's allowance for credit losses under CECL accounting standard. CECL requires the removal of Wellesley's prior allowance for loan loss through the balance sheet as goodwill and re-establishment of a new allowance for credit loss through the income statement within the provision for credit loss. Total provision expense for the three months ended June 30, 2020 was $14.4 million of which the impact of the CECL merger accounting on June 1, 2020 was $8.6 million, inclusive of unfunded commitments, and is considered by the Company to be a non-operating expense.

During the second quarter of 2020, the Company increased its reserve for credit loss levels by recording $5.7 million in additional provision for credit losses due to anticipated losses associated with the pandemic, as well as changes in loan balances. For the six months ended June 30, 2020, the Company has recorded a total of $6.4 million of provision for credit losses associated with the expected impact of the pandemic on future loan losses, and during the six months ended June 30, 2020, the Company recorded total provision for credit losses of $16.4 million. Additional detail on our CECL methodology can be found within the CECL section of this release.

Noninterest Income

Inclusive of the Wellesley merger, total noninterest income increased by $827,000, or 10.2%, to $9.0 million for the quarter ended June 30, 2020, as compared to $8.1 million for the quarter ended June 30, 2019, primarily as a result of increases in wealth management revenue, loan related derivative income, and higher gains on loans sold. Noninterest income was 23.8% of total revenue for the quarter ended June 30, 2020.

• Wealth management revenue increased by $616,000, or 9.6%, to $7.0 million for the second quarter of 2020, as compared to $6.4 million for the second quarter of 2019. Wealth Management Assets under Management and Administration were $3.7 billion as of June 30, 2020, an increase of $278.4 million, or 8.1%, from December 31, 2019, primarily as a result of the Wellesley merger, partially offset by reductions within the equity markets during 2020.
• Loan related derivative income increased by $329,000 to $334,000 for the second quarter of 2020, as compared to $5,000 for the second quarter of 2019, due to increased loan volume and the associated derivative transactions executed during the quarter.
• Gain on loans sold increased by $178,000, to $193,000 for the second quarter of 2020, as compared to $15,000 for the second quarter of 2019, due to increased sales of residential mortgages.

Inclusive of the Wellesley merger, total noninterest income increased by $1.7 million, or 10.5%, to $17.8 million for the six months ended June 30, 2020, as compared to $16.1 million for the six months ended June 30, 2019, primarily as a result of increases in wealth management revenue, loan related derivative income, and higher gains on loans sold. Noninterest income was 25.8% of total revenue for the six months ended June 30, 2020.

• Wealth management revenue increased by $1.1 million, or 8.9%, to $13.7 million for the six months ended June 30, 2020, as compared to $12.5 million for the six months ended June 30, 2019.
• Loan related derivative income increased by $403,000, or 91.4%, to $844,000 for the six months ended June 30, 2020 , as compared to $441,000 for the six months ended of 2019, due to increased loan volume and the associated derivative transactions executed throughout the year.
• Gain on loans sold increased by $281,000, to $312,000 for the six months ended June 30, 2020, as compared to $31,000 for the six months ended June 30, 2019, due to increased sales of residential mortgages.

Noninterest Expense

Total noninterest expense increased by $4.1 million, or 18.9%, to $25.6 million for the quarter ended June 30, 2020, as compared to $21.5 million for the quarter ended June 30, 2019, primarily driven by merger related expenses, increases in salaries and employee benefits expense, occupancy and equipment expense, and data processing expense.

• Merger expenses were $4.4 million during the quarter.
• Salaries and employee benefits expense increased $2.1 million, or 18.2%, driven by increased staffing related to the mergers with Optima Bank & Trust ("Optima") in 2019 and Wellesley in the second quarter of 2020, additions to support business initiatives, and higher employee benefit costs.
• Occupancy and equipment expense increased $247,000, or 9.2%, primarily as a result of additional branches and office space as a result of the Wellesley merger that was not reflected within the second quarter of 2019.
• Data processing expense increased $298,000, or 19.4%, primarily as a result of the merger with Wellesley and investments made in technology.

During the second quarter, the Company reduced the value of its other real estate loan ("REO") holdings through other expense by $486,000 primarily as a result of revaluation due to the pandemic.

Total noninterest expense increased by $7.6 million, or 20.1%, to $45.5 million for the six months ended June 30, 2020, as compared to $37.9 million for the six months ended June 30, 2019, primarily driven by merger related expenses, increases in salaries and employee benefits expense, occupancy and equipment expense, and data processing expense as a result of our mergers with Optima in 2019 and Wellesley in 2020.

• Merger expenses were $4.6 million year to date.
• Salaries and employee benefits expense increased $4.3 million, or 19.2%, primarily as a result of increased staffing related to the mergers with Optima and Wellesley in 2019 and 2020 respectively, additions to support business initiatives, normal merit increases and higher employee benefit costs.
• Occupancy and equipment expense increased $724,000, or 14.4%, primarily as a result of additional branches and office space as a result the mergers with Optima and Wellesley.
• Data processing expense increased $637,000, or 22.1%, primarily as a result of the mergers with Optima and Wellesley combined with investments made in technology.

Asset Quality 

Non-performing loans totaled $10.3 million, or 0.31% of total loans outstanding as of June 30, 2020. Early stage delinquency (30-89 days delinquent) represented 0.22% of total loans outstanding as of June 30, 2020.

Net loan charge-offs remained low at $135,000, or 0.02% of total loans (annualized) for the three months ended June 30, 2020, as compared to $148,000, or 0.03% of total loans (annualized) for the for the three months ended June 30, 2019. Net loan charge-offs were $400,000, or 0.02% of total loans (annualized) for the six months ended June 30, 2020, as compared to $172,000, or 0.02% of total loans (annualized) for the six months ended June 30, 2019.

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

		Nonperforming Assets
		June 30, 2020				March 31, 2020				December 31, 2019
		(dollars in thousands)
Total nonperforming loans		$	10,251			$	3,379			$	5,651
Other real estate owned			1,970				2,457				163
Total nonperforming assets		$	12,221			$	5,836			$	5,814
Troubled debt restructurings:
Non-performing (included in total non-performing loans above)		$	262			$	262			$	227
Performing			—				—				—
Total troubled debt restructurings		$	262			$	262			$	227
Nonperforming loans/total loans			0.31	%			0.15	%			0.25	%
Nonperforming assets/total assets			0.30	%			0.20	%			0.20	%
TDRs/total loans			0.01	%			0.01	%			0.01	%
		Additional Asset Quality Indicators
Purchased Credit Deteriorated "(PCD")/total loans			0.58	%			—				—
Delinquent loans 30-89 days past due/total loans			0.22	%			0.76	%			0.50	%
Net charge-offs/total loans (annualized)			0.02	%			0.05	%			0.07	%
Allowance for credit losses/nonperforming loans			331.81	%			596.72	%			321.71	%
Allowance for credit losses/total loans excluding PPP			1.08	%			0.89	%			0.82	%

CECL

The Company adopted Accounting Standard Update ("ASU") 2016-13 - Measurement of Credit Losses on Financial Instruments, in the first quarter of 2020. ASU 2016-13 or CECL requires earlier recognition of credit losses using a lifetime credit loss measurement approach for financial assets carried at amortized cost and requires consideration of a broader range of reasonable and supportable information to determine credit loss estimates including economic factors. The Company's CECL methodology has two main components; a quantitative loss estimate and a qualitative loss estimate. Loan level probability of default, loss given default, and discounted cash-flows are the primary basis for the quantitative loss estimation. The qualitative loss estimate is used to make adjustments that may not be represented within the quantitative analysis and includes adjustments for concentration risk, collateral risk, current payment performance and other internal/external factors.  Unemployment is the primary economic factor used within the quantitative methodology and the forward-looking estimates of unemployment reflect management's assessment of unemployment as derived from multiple sources.  Additionally, as previously discussed, the second quarter's Allowance for Credit Loss ("ACL") includes the impact of the merger with Wellesley which required the Company to de-recognize prior allowance for loan loss from the acquired entity and record an allowance for credit loss through the income statement for the acquired loan portfolio based on current CECL assumptions. This one-time recognition of the ACL is considered to be non-operating in nature as described above within the provision for credit loss section of this release.

For the three months ended June 30, 2020, the Company increased the allowance for credit losses by $13.9 million primarily due to the merger with Wellesley and the forecasted impact of the COVID-19 pandemic on the economic factors utilized within the CECL methodology. For the six months ended June 30, 2020, the Company increased the allowance for credit losses by $15.8 million primarily due to the merger with Wellesley and the forecasted impact of the COVID-19 pandemic on the economic factors utilized within the CECL methodology. These increases were based on the information available to the Company at each quarter end.

The allowance for credit losses in total was $34.0 million, or 1.08% of total loans outstanding at June 30, 2020 excluding PPP loans, as compared to $18.2 million, or 0.82% of total loans outstanding at year end 2019.

COVID-19 Update

During the first and second quarters of 2020, the Company announced a range of initiatives to help clients, communities, and employees navigate the many financial challenges caused by the novel corona virus ("COVID-19") pandemic.  As a result of the COVID-19 crisis, the Company has taken the following steps to provide support to any client experiencing a hardship during this uncertain time.

For Banking Clients:

• Enhanced safety measures in all banking office lobbies and while all offices are now open services are available by appointment if requested
• Increased telephone banking support through the Client Resource Calling Center
• Waived penalties for early certificate of deposit withdrawals
• Increased ATM withdrawal limits and debit card spending
• Convenient and secure digital platforms for remote banking

For Consumer Loan Clients:

• Postponement of residential loan foreclosures
• Payment deferrals on mortgages and home equity loans
• Forgiving late charges for consumer loan payments

For Business and Commercial Banking Clients:

• Participating in the Small Business Administration ("SBA") Paycheck Protection Program lending program, the Company has processed and obtained SBA approval for 892 loan applications totaling $189.3 million as of June 30, 2020. Additional detail on these loans can be found within the financial section of this document.
• Increased remote deposit limits
• Implemented payment relief options for commercial loans, based on need
• Providing assistance with access to government support and lending programs
• Treasury management services to support business continuity
• Secure online and mobile banking platforms

For Wealth Management Clients:

The Company's wealth management team is closely monitoring the economy and financial markets and continues to actively manage clients' portfolios through the current volatility.  We have urged clients to reach out to their Relationship Manager directly with any questions or concerns.

For Communities:

In addition to the 270 plus organizations the Company supports through its annual charitable giving, the Company donated an additional $250,000 to organizations that are providing relief to those impacted by COVID-19 and has committed to donating $100,000 to organizations committed to eradicating racism and inequities in our black communities. 

For Employees:

The Company is taking precautions to protect the health and safety of its staff, while continuing to provide uninterrupted service to clients. Efforts include:

• Enhanced safety measures for all banking office lobbies in connection with state guidelines
• Increased cleaning of all office locations
• 90%+ of staff working remotely with the exception of essential banking office employees
• Teleconferencing for meetings

Forbearance/Modifications. The Company has instituted payment deferral programs to aid existing borrowers with payment forbearance. For commercial and consumer borrowers, we have endeavored to provide payment relief for borrowers who have been impacted by the COVID-19 virus and have requested payment assistance. We expect to continue to accrue interest on these loans during the payment deferral period. Detailed information on client deferrals is included within the financial section of this document.

Income Taxes

Inclusive of the impact of the Wellesley merger, the Company's effective tax rate was a credit of 23.9% for the quarter ended June 30, 2020, as compared to 26.5% for the quarter ended June 30, 2019. For the six months ended June 30, 2020, the effective tax rate was 21.6%, as compared to 23.9% for the six months ended June 30, 2019.

Dividend & Capital

On July 27, 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.53 per share, which is payable on August 27, 2020, to shareholders of record as of the close of business on August 13, 2020.  This represents an increase of $0.02 per share, as compared to the $0.51 per share dividend paid in same quarter of 2019.

Inclusive of the merger, the Company's total shareholders' equity to total assets ratio increased by 87 basis points to 9.52% as of June 30, 2020, as compared to 8.65% as of June 30, 2019. Book value per share grew by $6.41, or 13.1%, to $55.29 as of June 30, 2020, as compared to $48.88 as of June 30, 2019.

The Company's ratio of tangible common equity to tangible assets increased to 8.27%, at June 30, 2020, from 7.48% at June 30, 2019, primarily as a result of the capital offering in December of 2019, increased earnings during the period, increased valuations of interest rate derivative positions, and an increase in unrealized gains in the available for sale investments portfolio. Tangible book value per share grew by $5.62, or 13.5% to $47.34 as of June 30, 2020, as compared to $41.72 as of June 30, 2019. 

Supplemental Earnings Release Information:
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About Cambridge Bancorp

Cambridge Bancorp, the parent company of Cambridge Trust Company, is based in Cambridge, Massachusetts. Cambridge Trust Company is a 130-year-old Massachusetts chartered commercial bank with approximately $4.0 billion in assets as of June 30, 2020, and a total of 22 Massachusetts and New Hampshire locations. Cambridge Trust Company is one of New England's leaders in private banking and wealth management with $3.7 billion in client assets under management and administration as of June 30, 2020. 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 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, 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 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, the pace of recovery when the COVID-19 pandemic subsides, challenges from the integration of the Company and Optima 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 Wellesley merger, 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, 2019, which the Company filed on March 16, 2020. 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, and return on average assets, return on tangible common equity, and efficiency ratio on an operating basis.

Operating net income and operating diluted earnings per share exclude items that management believes are unrelated to its core banking business such as merger, acquisition, and capital raise 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 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), analysis of 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 nonoperating expenses and total revenue adjusted for gain/loss on disposition of investment securities). The Company has included information on tangible book value per share, the tangible common equity ratio, and return on average assets and return on tangible 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 net income, operating diluted earnings per share, tangible book value per share, the tangible common equity ratio, and return on average assets, return on average equity, and efficiency ratio 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."

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

 

CAMBRIDGE BANCORP AND SUBSIDIARIES  QUARTERLY UNAUDITED RESULTS
		Three Months Ended												Six Months Ended
		June 30,				March 31,				June 30,				June 30,
		2020				2020				2019				2020				2019
		(dollars in thousands, except per share data)
Interest and Dividend Income		$	30,531			$	26,095			$	24,470			$	56,626			$	43,588
Interest Expense			1,742				3,695				4,694				5,437				7,551
Net Interest and Dividend Income			28,789				22,400				19,776				51,189				36,037
Provision for Credit Losses			14,430				2,000				596				16,430				503
Noninterest Income			8,972				8,818				8,145				17,790				16,102
Noninterest Expense			25,587				19,925				21,513				45,512				37,886
(Loss) Income Before Income Taxes			(2,256)				9,293				5,812				7,037				13,750
Income Tax (Benefit) Expense			(540)				2,061				1,540				1,521				3,280
Net (Loss) Income		$	(1,716)			$	7,232			$	4,272			$	5,516			$	10,470
Operating Net Income*		$	7,788			$	7,434			$	6,955			$	15,210			$	13,287
Data Per Common Share:
Basic (Loss) Earnings Per Share		$	(0.29)			$	1.34			$	0.91			$	0.97			$	2.37
Diluted (Loss) Earnings Per Share			(0.29)				1.33				0.90				0.97				2.35
Operating Diluted Earnings Per Share*			1.32				1.37				1.47				2.68				2.99
Dividends Declared Per Share			0.53				0.53				0.51				1.06				1.02
Avg. Common Shares Outstanding:
Basic			5,912,889				5,397,040				4,682,109				5,652,908				4,379,141
Diluted			5,912,889				5,432,099				4,715,724				5,670,438				4,412,239
Selected Performance Ratios:
Net Interest Margin, FTE			3.77	%			3.39	%			3.23	%			3.59	%			3.24	%
Cost of Funds			0.23	%			0.56	%			0.76	%			0.38	%			0.68	%
Cost of Interest Bearing Liabilities			0.33	%			0.80	%			1.05	%			0.55	%			0.95	%
Cost of Deposits			0.21	%			0.54	%			0.77	%			0.36	%			0.67	%
Cost of Deposits excl. Wholesale Deposits			0.19	%			0.53	%			0.69	%			0.34	%			0.61	%
Return on Average Assets			(0.21)	%			1.02	%			0.66	%			0.36	%			0.89	%
Return on Average Equity			(2.10)	%			9.99	%			7.71	%			3.58	%			10.79	%
Efficiency Ratio*			67.76	%			63.83	%			77.05	%			65.98	%			72.66	%
Operating Return on Average Assets*			0.95	%			1.05	%			1.07	%			1.00	%			1.13	%
Operating Return on Tang Common Equity*			10.92	%			11.65	%			14.37	%			11.26	%			14.78	%
Operating Efficiency Ratio*			56.30	%			63.01	%			64.71	%			59.34	%			65.77	%
		June 30,				March 31,				December 31,				June 30,
		2020				2020				2019				2019
Total Assets		$	4,022,750			$	2,852,629			$	2,855,563			$	2,741,308
Total Loans			3,332,884				2,255,802				2,226,728				2,096,550
Total Deposits			3,275,843				2,390,359				2,358,878				2,329,665
Wealth Management AUM			3,572,286				2,932,393				3,287,371				3,079,770
Wealth Management AUM & AUA			3,731,226				3,071,266				3,452,852				3,242,341
Nonperforming loans/total loans			0.31	%			0.15	%			0.25	%			0.05	%
Allowance to Total Loans (excluding PPP)			1.08	%			0.89	%			0.82	%			0.83	%
Net charge-offs to Total Loans (annualized)			0.02	%			0.05	%			0.07	%			0.03	%
Total Shareholders' Equity to Total Assets			9.52	%			10.44	%			10.04	%			8.65	%
Tangible Common Equity Ratio*			8.27	%			9.34	%			8.93	%			7.48	%
Book Value Per Share		$	55.29			$	54.96			$	53.06			$	48.88
Tangible Book Value Per Share*		$	47.34			$	48.60			$	46.66			$	41.72
* See GAAP to Non-GAAP Reconciliations

 

CAMBRIDGE BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED BALANCE SHEETS
		June 30, 2020				March 31, 2020				December 31, 2019
		(dollars in thousands, except par value)
Assets
Cash and cash equivalents		$	60,742			$	42,989			$	61,335
Investment securities
Available for sale, at fair value (amortized cost $130,761, $115,485, and $141,109,respectively)			134,227				117,947				140,330
Held to maturity, at amortized cost (fair value $257,121, $256,860, and $264,114, respectively)			244,551				246,906				258,172
Total investment securities			378,778				364,853				398,502
Loans held for sale, at lower of cost or fair value			2,614				2,875				1,546
Loans
Residential mortgage			1,351,308				917,103				917,566
Commercial mortgage			1,413,427				1,089,796				1,060,574
Home equity			116,067				83,066				80,675
Commercial & Industrial			414,243				127,648				133,236
Consumer			37,839				38,189				34,677
Total loans			3,332,884				2,255,802				2,226,728
Less: allowance for credit losses on loans			(34,014)				(20,163)				(18,180)
Net loans			3,298,870				2,235,639				2,208,548
Federal Home Loan Bank of Boston Stock, at cost			9,262				6,268				7,854
Bank owned life insurance			45,747				37,479				37,319
Banking premises and equipment, net			18,482				14,593				14,756
Right-of-use asset operating leases			38,912				32,312				33,587
Deferred income taxes, net			11,855				3,721				8,229
Accrued interest receivable			8,631				6,872				7,052
Goodwill			51,912				31,206				31,206
Merger related intangibles, net			3,158				3,248				3,338
Other assets			93,787				70,574				42,291
Total assets		$	4,022,750			$	2,852,629			$	2,855,563
Liabilities
Deposits
Demand		$	929,846			$	608,240			$	630,593
Interest bearing checking			606,999				506,654				450,098
Money market			419,537				175,158				181,406
Savings			960,847				880,944				914,499
Certificates of deposit			358,614				219,363				182,282
Total deposits			3,275,843				2,390,359				2,358,878
Borrowings			237,897				75,147				135,691
Subordinated debt			9,920				—				—
Operating lease liabilities			40,453				33,813				35,054
Other liabilities			75,577				55,551				39,379
Total liabilities			3,639,690				2,554,870				2,569,002
Shareholders' Equity
Common stock, par value $1.00; Authorized: 10,000,000 shares; Outstanding: 6,927,699 shares, 5,417,983 shares, and 5,400,868 shares,  respectively			6,928				5,418				5,401
Additional paid-in capital			224,540				137,186				136,766
Retained earnings			146,305				150,891				146,875
Accumulated other comprehensive income (loss)			5,287				4,264				(2,481)
Total shareholders' equity			383,060				297,759				286,561
Total liabilities and shareholders' equity		$	4,022,750			$	2,852,629			$	2,855,563

 

CAMBRIDGE BANCORP AND SUBSIDIARIES UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
		Three Months Ended												Six Months Ended
		June 30, 2020				March 31, 2020				June 30, 2019				June 30, 2020				June 30, 2019
		(dollars in thousands, except share data)
Interest and dividend income
Interest on taxable loans		$	28,130			$	23,338			$	21,355			$	51,468			$	37,639
Interest on tax-exempt loans			211				198				124				409				213
Interest on taxable investment securities			1,521				1,723				2,116				3,244				4,096
Interest on tax-exempt investment securities			601				595				575				1,196				1,146
Dividends on FHLB of Boston stock			52				101				81				153				157
Interest on overnight investments			16				140				219				156				337
Total interest and dividend income			30,531				26,095				24,470				56,626				43,588
Interest expense
Interest on deposits			1,396				3,129				4,379				4,525				6,880
Interest on borrowed funds			282				566				315				848				671
Interest on subordinated debt			64				-				-				64				-
Total interest expense			1,742				3,695				4,694				5,437				7,551
Net interest and dividend income			28,789				22,400				19,776				51,189				36,037
Provision for credit losses			14,430				2,000				596				16,430				503
Net interest and dividend income after provision for credit losses			14,359				20,400				19,180				34,759				35,534
Noninterest income
Wealth management revenue			7,035				6,627				6,419				13,662				12,543
Deposit account fees			695				791				843				1,486				1,581
ATM/Debit card income			290				307				379				597				655
Bank owned life insurance income			165				160				162				325				289
Income (loss) on disposition of investment securities			69				—				6				69				(81)
Gain on loans sold			193				119				15				312				31
Loan related derivative income			334				510				5				844				441
Other income			191				304				316				495				643
Total noninterest income			8,972				8,818				8,145				17,790				16,102
Noninterest expense
Salaries and employee benefits			13,542				13,016				11,459				26,558				22,286
Occupancy and equipment			2,938				2,807				2,691				5,745				5,021
Data processing			1,832				1,685				1,534				3,517				2,880
Professional services			1,098				859				760				1,957				1,567
Marketing			486				256				508				742				912
FDIC insurance			318				179				278				497				278
Nonoperating expenses			4,366				253				3,450				4,619				3,541
Other expenses			1,007				870				833				1,877				1,401
Total noninterest expense			25,587				19,925				21,513				45,512				37,886
(Loss) income  before income taxes			(2,256)				9,293				5,812				7,037				13,750
Income tax (benefit) expense			(540)				2,061				1,540				1,521				3,280
Net (loss) income		$	(1,716)				7,232				4,272			$	5,516			$	10,470
Share data:
Weighted average number of shares outstanding, basic			5,912,889				5,397,040				4,682,109				5,652,908				4,379,141
Weighted average number of shares outstanding, diluted			5,912,889				5,432,099				4,715,724				5,670,438				4,412,239
Basic (loss) earnings per share		$	(0.29)			$	1.34			$	0.91			$	0.97			$	2.37
Diluted (loss) earnings per share		$	(0.29)			$	1.33			$	0.90			$	0.97			$	2.35

 

CAMBRIDGE BANCORP AND SUBSIDIARIES MARGIN & YIELD ANALYSIS
		Three Months Ended
		June 30, 2020												March 31, 2020												June 30, 2019
		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		$	2,660,482			$	28,130				4.25	%		$	2,204,862			$	23,338				4.26	%		$	1,951,133			$	21,355				4.39	%
Tax-exempt			21,004				267				5.11				23,605				250				4.26				14,567				157				4.32
Securities available for sale (3)
Taxable			115,875				557				1.93				133,402				660				1.99				155,762				748				1.93
Securities held to maturity
Taxable			158,431				964				2.45				169,433				1,063				2.52				218,672				1,368				2.51
Tax-exempt			84,885				760				3.60				83,193				754				3.65				75,423				728				3.87
Cash and cash equivalents			45,437				16				0.14				59,845				140				0.94				55,015				219				1.60
Total interest-earning assets (4)			3,086,114				30,694				4.00	%			2,674,340				26,205				3.94	%			2,470,572				24,575				3.99	%
Non interest-earning assets			233,240												192,184												161,855
Allowance for credit losses			(23,272)												(18,423)												(16,908)
Total assets		$	3,296,082											$	2,848,101											$	2,615,519
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Checking accounts		$	541,482			$	209				0.16	%		$	457,189			$	159				0.14	%		$	426,725			$	120				0.11	%
Savings accounts			915,835				462				0.20				888,973				1,772				0.80				826,726				2,212				1.07
Money market accounts			270,951				140				0.21				193,048				449				0.94				201,164				679				1.35
Certificates of deposit			230,798				585				1.02				187,318				749				1.61				282,579				1,368				1.94
Total interest-bearing deposits			1,959,066				1,396				0.29				1,726,528				3,129				0.73				1,737,194				4,379				1.01
Subordinated debt			3,266				64				7.88				-				-			-					-				-			-
Other borrowed funds			138,052				282				0.82				127,389				566				1.79				50,447				315				2.50
Total interest-bearing liabilities			2,100,384				1,742				0.33	%			1,853,917				3,695				0.80	%			1,787,641				4,694				1.05	%
Non-interest-bearing liabilities
Demand deposits			770,202												622,892												541,380
Other liabilities			97,431												80,089												64,182
Total liabilities			2,968,017												2,556,898												2,393,203
Shareholders' equity			328,065												291,203												222,316
Total liabilities & shareholders' equity		$	3,296,082											$	2,848,101											$	2,615,519
Net interest income on a fully taxable equivalent basis							28,952												22,510												19,881
Less taxable equivalent adjustment							(215)												(211)												(186)
Net interest income						$	28,737											$	22,299											$	19,695
Net interest spread (5)											3.67	%											3.14	%											2.94	%
Net interest margin (6)											3.77	%											3.39	%											3.23	%

(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)	Net interest spread represents the difference between the weighted average yield on interest-earning assets, inclusive of PPP loans originated during 2020, 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 originated during 2020.

 

CAMBRIDGE BANCORP AND SUBSIDIARIES MARGIN & YIELD ANALYSIS
		Six Months Ended
		June 30, 2020												June 30, 2019
		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		$	2,432,672			$	51,468				4.25	%		$	1,748,485			$	37,639				4.34	%
Tax-exempt			22,305				518				4.67				12,168				269				4.46
Securities available for sale (3)
Taxable			124,651				1,218				1.96				160,160				1,460				1.84
Securities held to maturity
Taxable			163,932				2,026				2.49				214,035				2,636				2.48
Tax-exempt			84,039				1,514				3.62				74,641				1,451				3.92
Cash and cash equivalents			52,627				156				0.60				44,081				337				1.54
Total interest-earning assets (4)			2,880,226				56,900				3.97	%			2,253,570				43,792				3.92	%
Non interest-earning assets			212,712												138,310
Allowance for loan losses			(20,848)												(16,799)
Total assets		$	3,072,090											$	2,375,081
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing deposits
Checking accounts		$	499,335			$	368				0.15	%		$	409,390			$	202				0.10	%
Savings accounts			902,404				2,232				0.50				758,219				3,697				0.98
Money market accounts			231,999				589				0.51				165,891				1,060				1.29
Certificates of deposit			209,058				1,336				1.29				218,275				1,921				1.77
Total interest-bearing deposits			1,842,796				4,525				0.49	%			1,551,775				6,880				0.89	%
Subordinated debt			1,633				64				7.88				-				-			-
Other borrowed funds			132,720				848				1.28				52,275				671				2.59
Total interest-bearing liabilities			1,977,149				5,437				0.55	%			1,604,050				7,551				0.95	%
Non-interest-bearing liabilities
Demand deposits			696,547												512,882
Other liabilities			88,760												62,505
Total liabilities			2,762,456												2,179,437
Shareholders' equity			309,634												195,644
Total liabilities & shareholders' equity		$	3,072,090											$	2,375,081
Net interest income on a fully taxable equivalent basis							51,463												36,241
Less taxable equivalent adjustment							(427)												(361)
Net interest income						$	51,036											$	35,880
Net interest spread (5)											3.42	%											2.97	%
Net interest margin (6)											3.59	%											3.24	%

(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)	Net interest spread represents the difference between the weighted average yield on interest-earning assets, inclusive of PPP loans originated during 2020, 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 originated during 2020.

 

Organic Loan and Deposit Growth (dollars in thousands)
																		June 2020 vs December 2019
		June 30, 2020				March 31, 2020				December 31, 2019				Balance Acquired				Organic Growth/(Decline) $				Organic Growth/(Decline) %
Loans
Residential mortgage		$	1,351,308				917,103			$	917,566			$	403,855			$	29,887			3.3%
Commercial mortgage			1,413,427				1,089,796				1,060,574				290,909				61,944			5.8%
Home equity			116,067				83,066				80,675				36,213				(821)			(1.0%)
Commercial & Industrial			414,243				127,648				133,236				138,953				142,054			106.6%
Consumer			37,839				38,189				34,677				103				3,059			8.8%
Total loans		$	3,332,884			$	2,255,802			$	2,226,728			$	870,033			$	236,123			10.6%
PPP Loans			(157,017)				—				—				—				(157,017)				—
Total Loans excluding PPP*		$	3,175,867			$	2,255,802			$	2,226,728			$	870,033			$	79,106			3.6%
Deposits
Demand		$	929,846			$	608,240			$	630,593				175,912			$	123,341			19.6%
Interest bearing checking			606,999				506,654				450,098				49,944				106,957			23.8%
Money market			419,537				175,158				181,406				250,226				(12,095)			(6.7%)
Savings			960,847				880,944				914,499				72,700				(26,352)			(2.9%)
Core deposits			2,917,229				2,170,996				2,176,596				548,782				191,851			8.8%
Certificates of deposit			358,614				219,363				182,282				212,096				(35,764)			(19.6%)
Total deposits		$	3,275,843			$	2,390,359			$	2,358,878			$	760,878			$	156,087			6.6%

*PPP loans are included within Commercial and Industrial

 

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								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
Operating Net Income / Operating Diluted Earnings Per Share		2020				2019				2020				2019
		(in thousands, except share data)
Net (Loss) Income (a GAAP measure)		$	(1,716)			$	4,272			$	5,516			$	10,470
Add: Merger and Capital issuance expenses (Pretax)			4,366				3,450				4,619				3,541
Add: (Gain) Loss on disposition of investment securities			(69)				(6)				(69)				81
Provision established for acquired Wellesley loans			8,638				—				8,638				—
Tax effect of non-operating adjustments(1)			(3,431)				(761)				(3,494)				(805)
Operating Net Income (a non-GAAP measure)		$	7,788			$	6,955			$	15,210			$	13,287
Less: Dividends and Undistributed Earnings Allocated to Participating Securities (GAAP)			(4)				(35)				(26)				(94)
Operating Income Applicable to Common Shareholders (a non-GAAP measure)		$	7,784			$	6,920			$	15,184			$	13,193
Weighted Average Diluted Shares			5,912,889				4,715,724				5,670,438				4,412,239
Operating Diluted Earnings Per Share (a non-GAAP measure)		$	1.32			$	1.47			$	2.68			$	2.99

(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.

 

		June 30, 2020				December 31, 2019				June 30, 2019
		(in thousands, except share data)
Tangible Common Equity:
Shareholders' equity (GAAP)		$	383,060			$	286,561			$	237,094
Less: Goodwill and acquisition related intangibles (GAAP)			(55,070)				(34,544)				(34,725)
Tangible Common Equity (a non-GAAP measure)			327,990				252,017				202,369
Total assets (GAAP)			4,022,750				2,855,563				2,741,308
Less: Goodwill and acquisition related intangibles (GAAP)			(55,070)				(34,544)				(34,725)
Tangible assets (a non-GAAP measure)		$	3,967,680			$	2,821,019			$	2,706,583
Tangible Common Equity Ratio (a non-GAAP measure)			8.27	%			8.93	%			7.48	%
Tangible Book Value Per Share:
Tangible Common Equity (a non-GAAP measure)		$	327,990			$	252,017			$	202,369
Common shares outstanding			6,927,699				5,400,868				4,850,230
Tangible Book Value Per Share (a non-GAAP measure)		$	47.34			$	46.66			$	41.72

 

		Three Months Ended												Six Months Ended
		June 30, 2020				March 31, 2020				June 30, 2019				June 30, 2020				June 30, 2019
		(in thousands, except share data)
Efficiency Ratio:
Noninterest expense		$	25,587			$	19,925			$	21,513			$	45,512			$	37,886
Net interest and dividend income			28,789				22,400				19,776				51,189				36,037
Total noninterest income			8,972				8,818				8,145				17,790				16,102
Total revenue		$	37,761			$	31,218			$	27,921			$	68,979			$	52,139
Efficiency Ratio			67.76	%			63.83	%			77.05	%			65.98	%			72.66	%
Operating Efficiency Ratio:
Noninterest expense		$	25,587			$	19,925			$	21,513			$	45,512			$	37,886
Merger and capital issuance expenses (Pretax)			(4,366)				(253)				(3,450)				(4,619)				(3,541)
Operating expense (a non-GAAP measure)			21,221				19,672				18,063				40,893				34,345
Total revenue		$	37,761			$	31,218			$	27,921			$	68,979			$	52,139
Add: (Gain) Loss on disposition of investment securities			(69)				—				(6)				(69)				81
Operating revenue (a non-GAAP measure)		$	37,692			$	31,218			$	27,915			$	68,910			$	52,220
Operating Efficiency Ratio (a non-GAAP measure)			56.30	%			63.01	%			64.71	%			59.34	%			65.77	%
Operating Return on Tangible Common Equity:
Operating Net Income (a non-GAAP measure)		$	7,788			$	7,434			$	6,955			$	15,210			$	13,287
Average common equity		$	328,065			$	291,203			$	222,316			$	309,634			$	195,644
Average Goodwill and merger related intangibles			(41,240)				(34,508)				(28,120)				(37,874)				(14,343)
Average tangible common equity		$	286,825			$	256,695			$	194,196			$	271,760			$	181,301
Operating Return on Tangible Common Equity (a non-GAAP measure)			10.92	%			11.65	%			14.37	%			11.26	%			14.78	%
Operating Return on Average Assets:
Operating Net Income (a non-GAAP measure)		$	7,788			$	7,434			$	6,955			$	15,210			$	13,287
Average assets		$	3,296,082			$	2,848,101			$	2,615,519			$	3,072,090			$	2,375,081
Operating Return on Average Assets (a non-GAAP measure)			0.95	%			1.05	%			1.07	%			1.00	%			1.13	%

 

COVID-19 Additional Disclosures
		Loans with Deferred Payments as of June 30, 2020
		Portfolio Total				# of loans deferred				P&I				Interest Only				Total				% of total
		(dollars in thousands)
Residential Mortgages		$	1,351,308				119			$	52,827			$	—			$	52,827				3.9	%
Commercial Mortgages			1,413,427				81				55,888				43,990				99,878				7.1	%
Home Equity			116,067				13				1,707				—				1,707				1.5	%
Commercial & Industrial			414,243				62				17,589				2,644				20,233				4.9	%
Consumer loans			37,839				—				—				—				—				0.0	%
Total		$	3,332,884				275			$	128,011			$	46,634			$	174,645				5.2	%

 

		PPP Loans as of June 30, 2020
		Portfolio Total				# of loans				% of count				% of amount
Loan size:		(dollars in thousands)
Below $100k		$	19,613				476				53	%			10	%
$100k to $500k			67,040				318				36	%			35	%
$500k to $1 million			38,718				58				7	%			20	%
Above $1 million			68,392				40				4	%			35	%
Total		$	193,763				892				100	%			100	%
Unearned fees net of deferred costs			(4,457)
Total net of unearned fees			189,306

 

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SOURCE Cambridge Bancorp

FAQ

What was Cambridge Bancorp's net income for Q2 2020?

Cambridge Bancorp reported a net loss of $1,716,000 for Q2 2020.

How did the merger with Wellesley Bancorp affect CATC's financials?

The merger impacted provisions for credit losses and led to increased operating net income despite an overall net loss.

What is the diluted loss per share for CATC in Q2 2020?

The diluted loss per share for Q2 2020 was $0.29.

How much did total deposits increase for CATC in the second quarter of 2020?

Total deposits increased by $917.0 million, or 38.9%, to $3.3 billion.