Cambridge Bancorp , 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:
“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.
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.
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 |
Interest |
Rate |
||||||||||
(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.
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.
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.
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.