Cambridge Bancorp Announces First Quarter 2024 Results and Declares Quarterly Dividend
Operating net income, which excludes non-operating items, namely merger related and office consolidation charges, as detailed in the accounting principles generally accepted in
Merger with Eastern Bankshares, Inc.
On
"We are pleased with the progress on our pending merger with Eastern and look forward to introducing
First Quarter 2024 Highlights:
- Financial performance ratios for the three months ended
March 31, 2024 were as follows:- Return on Average Assets ("ROA") of 0.51% and Operating ROA of 0.60%.
- Return on Average Equity of 5.19% and Operating Return on Tangible Common Shareholders' Equity ("ROTCE") of 6.94%.
- Wealth Management Assets Under Management and Administration increased by
$533.4 million or 12.5%, to$4.80 billion atMarch 31, 2024 from$4.27 billion atMarch 31, 2023 . Wealth management revenue increased by$778,000 , or 9.8%, to$8.7 million for the three months endedMarch 31, 2024 from$7.9 million for the three months endedMarch 31, 2023 . - Asset quality ratios at
March 31, 2024 : non-performing loans to total loans and non-performing assets to total assets at 0.43% and 0.32%, respectively. - The common equity to assets ratio increased to 9.97% at
March 31, 2024 from 9.87% atDecember 31, 2023 . The tangible common equity to tangible assets ratio increased to 8.76% atMarch 31, 2024 from 8.67% atDecember 31, 2023 . - Book value per share increased to
$68.27 atMarch 31, 2024 from$68.14 atDecember 31, 2023 . - Available sources of liquidity at
March 31, 2024 totaled approximately$2.35 billion . This is approximately two times the amount of uninsured deposits atMarch 31, 2024 .
Balance Sheet
Total assets decreased by
Total loans decreased by
- Residential real estate loans decreased by
$15.0 million , from$1.63 billion atDecember 31, 2023 to$1.61 billion atMarch 31, 2024 . - Commercial real estate loans decreased by
$9.2 million , from$1.93 billion atDecember 31, 2023 to$1.92 billion atMarch 31, 2024 . - Home equity loans decreased by
$5.0 million , from$95.6 million atDecember 31, 2023 to$90.6 million atMarch 31, 2024 . - Commercial and industrial loans increased by
$4.8 million , or 1.4%, from$343.7 million atDecember 31, 2023 to$348.5 million atMarch 31, 2024 . - Consumer loans decreased by
$2.4 million , from$24.4 million atDecember 31, 2023 to$22.0 million atMarch 31, 2024 .
The Company's total investment securities portfolio decreased by
Total deposits, excluding wholesale deposits remained flat as compared to
- Certificates of deposit totaled
$575.0 million atMarch 31, 2024 , representing a decrease of$99.4 million , or 14.7%, from$674.4 million atDecember 31, 2023 , primarily driven by lower wholesale deposit balances. Total wholesale certificates of deposit, which are included within certificates of deposit, were$161.1 million and$291.7 million atMarch 31, 2024 andDecember 31, 2023 , respectively. - The cost of total deposits was 2.18% for the three months ended
March 31, 2024 , as compared to 2.19% for the three months endedDecember 31, 2023 . The cost of total deposits excluding wholesale deposits was 1.97% for the three months endedMarch 31, 2024 , as compared to 1.89% for the three months endedDecember 31, 2023 . AtMarch 31, 2024 , the spot cost of non-wholesale deposits was 2.00%, as compared to 1.88% atDecember 31, 2023 .
Borrowings totaled
Net Interest and Dividend Income
Net interest and dividend income, before the provision for credit losses, decreased by
The Company's net interest margin on a fully taxable equivalent basis decreased by four basis points to 2.10% for the three months ended
In order to provide greater disclosure of the impact of loan related merger accounting, 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, the adjusted net interest margin, on a fully taxable equivalent basis, for the three months ended
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Three Months Ended |
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Average |
|
|
Interest |
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|
Rate |
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|||
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(dollars in thousands) |
|
|||||||||
Total interest-earning assets (GAAP) |
|
$ |
5,153,226 |
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|
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||
Net interest income on a fully taxable equivalent basis (GAAP) |
|
|
|
|
$ |
26,856 |
|
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|
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||
Net interest margin on a fully taxable equivalent basis (GAAP) |
|
|
|
|
|
|
|
|
2.10 |
% |
||
Less: Accretion of loan fair value adjustments (GAAP) |
|
|
|
|
|
(554) |
|
|
|
-0.05 |
% |
|
Adjusted net interest margin on a fully taxable equivalent basis (non-GAAP) |
|
$ |
5,153,226 |
|
|
$ |
26,302 |
|
|
|
2.05 |
% |
Provision for Credit Losses
During the three months ended
Noninterest Income
Total noninterest income increased by
- Wealth management revenue increased by
$237,000 , or 2.8%, to$8.7 million for the three months endedMarch 31, 2024 , as compared to$8.5 million for the three months endedDecember 31, 2023 . Wealth Management Assets under Management and Administration were$4.80 billion atMarch 31, 2024 , an increase of$205.6 million , or 4.5%, from$4.60 billion atDecember 31, 2023 , primarily due to improvements in the equity and bond markets. - Loan related derivative income decreased by
$96,000 , or 84.2%, to$18,000 for the three months endedMarch 31, 2024 , as compared to$114,000 for the three months endedDecember 31, 2023 , primarily as a result of lower volume of loan related derivative transactions.
Noninterest Expense
Total noninterest expense increased by
- Non-operating expense increased by
$709,000 , or 101.6%, to$1.4 million for the three months endedMarch 31, 2024 , from$698,000 for the three months endedDecember 31, 2023 , due to merger expenses of$673,000 related to the Eastern merger and office consolidation expenses of$734,000 associated with the recent sublease of an operations center, as the Company decreased its leased office space. This will improve future run rate occupancy cost. - Salary and employee benefits expense increased by
$260,000 , or 1.5%, to$17.3 million for the three months endedMarch 31, 2024 , from$17.1 million for the three months endedDecember 31, 2023 , primarily due to the seasonality of higher employee benefit costs during the first quarter combined with regular merit increases. These increases were partially offset by lower head count during the quarter, which has amounted to a reduction in salaries and benefits expense of 6.3% since the same period last year. - Data processing fees increased by
$239,000 , or 9.2%, to$2.8 million for the three months endedMarch 31, 2024 , from$2.6 million for the three months endedDecember 31, 2023 . - Professional fees increased by
$225,000 , or 37.5%, to$825,000 for the three months endedMarch 31, 2024 , from$600,000 for the three months endedDecember 31, 2023 , primarily due to the timing of higher legal and consulting costs.
Asset Quality
Non-performing loans totaled
The Company recorded net loan charge-offs of
The following table shows additional and historical information regarding non-performing assets and early-stage delinquency (30-89 days delinquent):
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Non-performing Assets |
|
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|||
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(dollars in thousands) |
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Non-performing assets |
|
$ |
17,201 |
|
|
$ |
16,567 |
|
|
$ |
7,262 |
|
|
|
|
|
|
|
|
|
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|||
Non-performing loans/total loans |
|
|
0.43 |
% |
|
|
0.41 |
% |
|
|
0.18 |
% |
Non-performing assets/total assets |
|
|
0.32 |
% |
|
|
0.31 |
% |
|
|
0.13 |
% |
|
|
Additional Asset Quality Indicators |
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|||
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|||
Delinquent loans 30-89 days past due/total loans |
|
|
0.55 |
% |
|
|
0.60 |
% |
|
|
0.39 |
% |
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/total loans |
|
|
0.98 |
% |
|
|
0.97 |
% |
|
|
0.95 |
% |
Income Taxes
The Company's effective tax rate was 25.6% for the three months ended
Dividend and Capital
On
The Company's common equity to assets ratio increased to 9.97% at
Book value per share at
Investor Presentation:
An investor presentation is available on the investor relations section of the Company's website at http://ir.cambridgetrust.com or at 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.
About
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, and the impact of any laws or regulations applicable to the Company. 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 failure to complete the proposed merger of the Company and
Non-GAAP Measures
This press release contains financial information determined by methods other than in accordance with 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 accordance with generally accepted 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:
Interim Chief Financial Officer
617-520-5520
QUARTERLY UNAUDITED RESULTS |
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Three Months Ended |
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2024 |
|
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2023 |
|
|
2023 |
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|||
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(dollars in thousands, except per share data) |
|
|||||||||
Interest and Dividend Income |
|
$ |
56,213 |
|
|
$ |
56,950 |
|
|
$ |
51,742 |
|
Interest Expense |
|
|
29,181 |
|
|
|
28,800 |
|
|
|
17,494 |
|
Net Interest and Dividend Income |
|
|
27,032 |
|
|
|
28,150 |
|
|
|
34,248 |
|
Provision for Credit Losses |
|
|
125 |
|
|
|
569 |
|
|
|
60 |
|
Noninterest Income |
|
|
10,606 |
|
|
|
10,437 |
|
|
|
10,715 |
|
Noninterest Expense |
|
|
28,259 |
|
|
|
26,901 |
|
|
|
28,328 |
|
Income Before Income Taxes |
|
|
9,254 |
|
|
|
11,117 |
|
|
|
16,575 |
|
Income Tax Expense |
|
|
2,366 |
|
|
|
3,083 |
|
|
|
4,159 |
|
Net Income |
|
$ |
6,888 |
|
|
$ |
8,034 |
|
|
$ |
12,416 |
|
|
|
|
|
|
|
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|
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|
|||
Operating Net Income* |
|
$ |
7,996 |
|
|
$ |
8,724 |
|
|
$ |
12,722 |
|
|
|
|
|
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|||
Data Per Common Share: |
|
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|
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|
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|
|||
Basic Earnings Per Share |
|
$ |
0.88 |
|
|
$ |
1.02 |
|
|
$ |
1.59 |
|
Diluted Earnings Per Share |
|
|
0.87 |
|
|
|
1.02 |
|
|
|
1.58 |
|
Operating Diluted Earnings Per Share* |
|
|
1.02 |
|
|
|
1.11 |
|
|
|
1.62 |
|
Dividends Declared Per Share |
|
|
0.67 |
|
|
|
0.67 |
|
|
|
0.67 |
|
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Average Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|||
Basic |
|
|
7,835,273 |
|
|
|
7,834,383 |
|
|
|
7,792,474 |
|
Diluted |
|
|
7,865,193 |
|
|
|
7,853,823 |
|
|
|
7,826,162 |
|
|
|
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|
|
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Selected Performance Ratios: |
|
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|
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|
|||
Net Interest Margin, FTE |
|
|
2.10 |
% |
|
|
2.14 |
% |
|
|
2.63 |
% |
Adjusted Net Interest Margin, FTE |
|
|
2.05 |
% |
|
|
2.10 |
% |
|
|
2.58 |
% |
Cost of Funds |
|
|
2.28 |
% |
|
|
2.20 |
% |
|
|
1.34 |
% |
Cost of Interest-Bearing Liabilities |
|
|
3.13 |
% |
|
|
3.04 |
% |
|
|
1.96 |
% |
Cost of Deposits |
|
|
2.18 |
% |
|
|
2.19 |
% |
|
|
1.36 |
% |
Cost of Deposits excluding Wholesale Deposits |
|
|
1.97 |
% |
|
|
1.89 |
% |
|
|
1.01 |
% |
Return on Average Assets |
|
|
0.51 |
% |
|
|
0.59 |
% |
|
|
0.91 |
% |
Return on Average Equity |
|
|
5.19 |
% |
|
|
6.06 |
% |
|
|
9.68 |
% |
Efficiency Ratio |
|
|
75.08 |
% |
|
|
69.72 |
% |
|
|
63.00 |
% |
Operating Efficiency Ratio* |
|
|
71.34 |
% |
|
|
67.91 |
% |
|
|
62.06 |
% |
Operating Return on Average Assets* |
|
|
0.60 |
% |
|
|
0.64 |
% |
|
|
0.93 |
% |
Operating Return on Tangible Common Equity* |
|
|
6.94 |
% |
|
|
7.61 |
% |
|
|
11.52 |
% |
|
|
|
|
|
|
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|||
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|||
|
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||
|
|
(dollars in thousands, except per share data) |
|
|||||||||
Total Assets |
|
$ |
5,373,840 |
|
|
$ |
5,417,666 |
|
|
$ |
5,528,584 |
|
Total Loans |
|
$ |
3,994,749 |
|
|
$ |
4,021,544 |
|
|
$ |
4,018,082 |
|
Total Deposits |
|
$ |
4,185,382 |
|
|
$ |
4,321,178 |
|
|
$ |
4,656,776 |
|
Allowance for Credit Losses |
|
$ |
39,347 |
|
|
$ |
38,944 |
|
|
$ |
38,005 |
|
Allowance to Total Loans |
|
|
0.98 |
% |
|
|
0.97 |
% |
|
|
0.95 |
% |
Non-Performing Loans |
|
$ |
17,201 |
|
|
$ |
16,567 |
|
|
$ |
7,262 |
|
Non-Performing Loans/Total Loans |
|
|
0.43 |
% |
|
|
0.41 |
% |
|
|
0.18 |
% |
QTD Net Recoveries (Charge-offs) to Total Loans (annualized) |
|
|
0.00 |
% |
|
|
0.00 |
% |
|
|
0.00 |
% |
Tangible Common Equity Ratio* |
|
|
8.76 |
% |
|
|
8.67 |
% |
|
|
8.32 |
% |
Book Value Per Share |
|
$ |
68.27 |
|
|
$ |
68.14 |
|
|
$ |
67.14 |
|
Tangible Book Value Per Share* |
|
$ |
59.23 |
|
|
$ |
59.08 |
|
|
$ |
57.98 |
|
Wealth Management AUM |
|
$ |
4,501,369 |
|
|
$ |
4,326,152 |
|
|
|
4,005,805 |
|
Wealth Management AUM & AUA |
|
$ |
4,800,772 |
|
|
$ |
4,595,209 |
|
|
|
4,267,343 |
|
* See GAAP to Non-GAAP Reconciliations |
|
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|
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|
. |
|
UNAUDITED CONSOLIDATED BALANCE SHEETS |
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|
|
(dollars in thousands, except share information) |
|
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Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
29,705 |
|
|
$ |
33,004 |
|
Investment securities |
|
|
|
|
|
|
||
Available for sale, at fair value (amortized cost |
|
|
133,222 |
|
|
|
137,838 |
|
Held to maturity, at amortized cost (fair value |
|
|
940,618 |
|
|
|
959,332 |
|
Total investment securities |
|
|
1,073,840 |
|
|
|
1,097,170 |
|
|
|
|
|
|
|
|
||
Loans |
|
|
|
|
|
|
||
Residential mortgage |
|
|
1,611,271 |
|
|
|
1,626,264 |
|
Commercial mortgage |
|
|
1,922,278 |
|
|
|
1,931,473 |
|
Home equity |
|
|
90,647 |
|
|
|
95,649 |
|
Commercial and industrial |
|
|
348,549 |
|
|
|
343,711 |
|
Consumer |
|
|
22,004 |
|
|
|
24,447 |
|
Total loans |
|
|
3,994,749 |
|
|
|
4,021,544 |
|
Less: allowance for credit losses on loans |
|
|
(39,347) |
|
|
|
(38,944) |
|
Net loans |
|
|
3,955,402 |
|
|
|
3,982,600 |
|
|
|
|
24,291 |
|
|
|
19,056 |
|
Bank owned life insurance |
|
|
35,471 |
|
|
|
35,265 |
|
Banking premises and equipment, net |
|
|
20,858 |
|
|
|
21,753 |
|
Right-of-use asset operating leases |
|
|
21,694 |
|
|
|
23,233 |
|
Deferred income taxes, net |
|
|
14,359 |
|
|
|
15,299 |
|
Accrued interest receivable |
|
|
15,226 |
|
|
|
15,765 |
|
|
|
|
64,539 |
|
|
|
64,539 |
|
Merger-related intangibles, net |
|
|
6,327 |
|
|
|
6,550 |
|
Other assets |
|
|
112,128 |
|
|
|
103,432 |
|
Total assets |
|
$ |
5,373,840 |
|
|
$ |
5,417,666 |
|
Liabilities |
|
|
|
|
|
|
||
Deposits |
|
|
|
|
|
|
||
Demand- Non Interest bearing |
|
$ |
965,090 |
|
|
$ |
1,032,413 |
|
Interest-bearing checking |
|
|
1,202,713 |
|
|
|
1,132,518 |
|
Money market |
|
|
934,958 |
|
|
|
983,480 |
|
Savings |
|
|
507,640 |
|
|
|
498,386 |
|
Certificates of deposit |
|
|
574,981 |
|
|
|
674,381 |
|
Total deposits |
|
|
4,185,382 |
|
|
|
4,321,178 |
|
Borrowings |
|
|
546,405 |
|
|
|
452,155 |
|
Operating lease liabilities |
|
|
23,914 |
|
|
|
25,165 |
|
Other liabilities |
|
|
82,543 |
|
|
|
84,595 |
|
Total liabilities |
|
|
4,838,244 |
|
|
|
4,883,093 |
|
Shareholders' Equity |
|
|
|
|
|
|
||
Common stock, par value |
|
|
7,846 |
|
|
|
7,845 |
|
Additional paid-in capital |
|
|
294,294 |
|
|
|
293,950 |
|
Retained earnings |
|
|
252,124 |
|
|
|
250,492 |
|
Accumulated other comprehensive loss |
|
|
(18,668) |
|
|
|
(17,714) |
|
Total shareholders' equity |
|
|
535,596 |
|
|
|
534,573 |
|
Total liabilities and shareholders' equity |
|
$ |
5,373,840 |
|
|
$ |
5,417,666 |
|
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||
|
||||||||||||
|
|
Three Months Ended |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||
|
|
(dollars in thousands, except per share amounts) |
|
|||||||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|||
Interest on taxable loans |
|
$ |
50,123 |
|
|
$ |
50,884 |
|
|
$ |
45,333 |
|
Interest on tax-exempt loans |
|
|
399 |
|
|
|
399 |
|
|
|
376 |
|
Interest on taxable investment securities |
|
|
4,661 |
|
|
|
4,745 |
|
|
|
5,050 |
|
Interest on tax-exempt investment securities |
|
|
511 |
|
|
|
519 |
|
|
|
585 |
|
Dividends on FHLB of |
|
|
419 |
|
|
|
304 |
|
|
|
72 |
|
Interest on overnight investments |
|
|
100 |
|
|
|
99 |
|
|
|
326 |
|
Total interest and dividend income |
|
|
56,213 |
|
|
|
56,950 |
|
|
|
51,742 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|||
Interest on deposits |
|
|
23,330 |
|
|
|
24,817 |
|
|
|
15,944 |
|
Interest on borrowed funds |
|
|
5,851 |
|
|
|
3,983 |
|
|
|
1,550 |
|
Total interest expense |
|
|
29,181 |
|
|
|
28,800 |
|
|
|
17,494 |
|
Net interest and dividend income |
|
|
27,032 |
|
|
|
28,150 |
|
|
|
34,248 |
|
Provision for credit losses |
|
|
125 |
|
|
|
569 |
|
|
|
60 |
|
Net interest and dividend income after provision for credit losses |
|
|
26,907 |
|
|
|
27,581 |
|
|
|
34,188 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|||
Wealth management revenue |
|
|
8,715 |
|
|
|
8,478 |
|
|
|
7,937 |
|
Deposit account fees |
|
|
811 |
|
|
|
746 |
|
|
|
869 |
|
ATM/Debit card income |
|
|
360 |
|
|
|
400 |
|
|
|
511 |
|
Bank owned life insurance income |
|
|
203 |
|
|
|
202 |
|
|
|
187 |
|
Gain on loans sold, net |
|
|
15 |
|
|
|
16 |
|
|
|
13 |
|
Loan related derivative income |
|
|
18 |
|
|
|
114 |
|
|
|
234 |
|
Other income |
|
|
484 |
|
|
|
481 |
|
|
|
964 |
|
Total noninterest income |
|
|
10,606 |
|
|
|
10,437 |
|
|
|
10,715 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|||
Salaries and employee benefits |
|
|
17,322 |
|
|
|
17,062 |
|
|
|
18,488 |
|
Occupancy and equipment |
|
|
3,577 |
|
|
|
3,534 |
|
|
|
3,747 |
|
Data processing |
|
|
2,824 |
|
|
|
2,585 |
|
|
|
2,641 |
|
Professional services |
|
|
825 |
|
|
|
600 |
|
|
|
1,123 |
|
Marketing |
|
|
229 |
|
|
|
154 |
|
|
|
426 |
|
|
|
|
795 |
|
|
|
918 |
|
|
|
379 |
|
Non-operating expenses |
|
|
1,407 |
|
|
|
698 |
|
|
|
424 |
|
Other expenses |
|
|
1,280 |
|
|
|
1,350 |
|
|
|
1,100 |
|
Total noninterest expense |
|
|
28,259 |
|
|
|
26,901 |
|
|
|
28,328 |
|
Income before income taxes |
|
|
9,254 |
|
|
|
11,117 |
|
|
|
16,575 |
|
Income tax expense |
|
|
2,366 |
|
|
|
3,083 |
|
|
|
4,159 |
|
Net income |
|
$ |
6,888 |
|
|
$ |
8,034 |
|
|
$ |
12,416 |
|
Share data: |
|
|
|
|
|
|
|
|
|
|||
Weighted average shares outstanding, basic |
|
|
7,835,273 |
|
|
|
7,834,383 |
|
|
|
7,792,474 |
|
Weighted average shares outstanding, diluted |
|
|
7,865,193 |
|
|
|
7,853,823 |
|
|
|
7,826,162 |
|
Basic earnings per share |
|
$ |
0.88 |
|
|
$ |
1.02 |
|
|
$ |
1.59 |
|
Diluted earnings per share |
|
$ |
0.87 |
|
|
$ |
1.02 |
|
|
$ |
1.58 |
|
MARGIN & YIELD ANALYSIS |
||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||
|
|
Three Months Ended |
|
|||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||
|
|
Average |
|
|
Interest |
|
|
Rate |
|
|
Average |
|
|
Interest |
|
|
Rate |
|
|
Average |
|
|
Interest |
|
|
Rate |
|
|||||||||
|
|
(dollars in thousands) |
|
|||||||||||||||||||||||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Taxable |
|
$ |
3,953,820 |
|
|
$ |
50,123 |
|
|
|
5.10 |
% |
|
$ |
3,978,452 |
|
|
$ |
50,884 |
|
|
|
5.07 |
% |
|
$ |
3,986,380 |
|
|
$ |
45,333 |
|
|
|
4.61 |
% |
Tax-exempt |
|
|
54,458 |
|
|
|
506 |
|
|
|
3.74 |
|
|
|
53,132 |
|
|
|
506 |
|
|
|
3.78 |
|
|
|
51,028 |
|
|
|
476 |
|
|
|
3.78 |
|
Securities available for |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Taxable |
|
|
161,707 |
|
|
|
652 |
|
|
|
1.62 |
|
|
|
166,003 |
|
|
|
669 |
|
|
|
1.60 |
|
|
|
180,510 |
|
|
|
713 |
|
|
|
1.60 |
|
Securities held to maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Taxable |
|
|
867,313 |
|
|
|
4,009 |
|
|
|
1.86 |
|
|
|
885,576 |
|
|
|
4,076 |
|
|
|
1.83 |
|
|
|
948,233 |
|
|
|
4,337 |
|
|
|
1.85 |
|
Tax-exempt |
|
|
83,653 |
|
|
|
647 |
|
|
|
3.11 |
|
|
|
84,990 |
|
|
|
657 |
|
|
|
3.07 |
|
|
|
95,212 |
|
|
|
740 |
|
|
|
3.15 |
|
Cash and cash equivalents |
|
|
32,275 |
|
|
|
100 |
|
|
|
1.25 |
|
|
|
31,768 |
|
|
|
99 |
|
|
|
1.24 |
|
|
|
50,831 |
|
|
|
326 |
|
|
|
2.60 |
|
Total interest-earning |
|
|
5,153,226 |
|
|
|
56,037 |
|
|
|
4.37 |
% |
|
|
5,199,921 |
|
|
|
56,891 |
|
|
|
4.34 |
% |
|
|
5,312,194 |
|
|
|
51,925 |
|
|
|
3.96 |
% |
Non-interest-earning |
|
|
279,422 |
|
|
|
|
|
|
|
|
|
285,093 |
|
|
|
|
|
|
|
|
|
268,670 |
|
|
|
|
|
|
|
||||||
Allowance for credit losses |
|
|
(38,951) |
|
|
|
|
|
|
|
|
|
(38,226) |
|
|
|
|
|
|
|
|
|
(37,784) |
|
|
|
|
|
|
|
||||||
Total assets |
|
$ |
5,393,697 |
|
|
|
|
|
|
|
|
$ |
5,446,788 |
|
|
|
|
|
|
|
|
$ |
5,543,080 |
|
|
|
|
|
|
|
||||||
LIABILITIES AND |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Checking accounts |
|
$ |
1,167,639 |
|
|
$ |
6,095 |
|
|
|
2.10 |
% |
|
$ |
1,160,636 |
|
|
$ |
5,948 |
|
|
|
2.03 |
% |
|
$ |
880,040 |
|
|
$ |
2,025 |
|
|
|
0.93 |
% |
Savings accounts |
|
|
502,793 |
|
|
|
1,438 |
|
|
|
1.15 |
|
|
|
540,052 |
|
|
|
1,561 |
|
|
|
1.15 |
|
|
|
771,219 |
|
|
|
1,357 |
|
|
|
0.71 |
|
Money market accounts |
|
|
953,885 |
|
|
|
8,094 |
|
|
|
3.41 |
|
|
|
984,696 |
|
|
|
8,267 |
|
|
|
3.33 |
|
|
|
1,129,934 |
|
|
|
6,462 |
|
|
|
2.32 |
|
Certificates of deposit |
|
|
678,436 |
|
|
|
7,703 |
|
|
|
4.57 |
|
|
|
769,384 |
|
|
|
9,041 |
|
|
|
4.66 |
|
|
|
692,644 |
|
|
|
6,100 |
|
|
|
3.57 |
|
Total interest-bearing |
|
|
3,302,753 |
|
|
|
23,330 |
|
|
|
2.84 |
|
|
|
3,454,768 |
|
|
|
24,817 |
|
|
|
2.85 |
|
|
|
3,473,837 |
|
|
|
15,944 |
|
|
|
1.86 |
|
Other borrowed funds |
|
|
443,734 |
|
|
|
5,851 |
|
|
|
5.30 |
|
|
|
302,738 |
|
|
|
3,983 |
|
|
|
5.22 |
|
|
|
137,516 |
|
|
|
1,550 |
|
|
|
4.57 |
|
Total interest-bearing |
|
|
3,746,487 |
|
|
|
29,181 |
|
|
|
3.13 |
% |
|
|
3,757,506 |
|
|
|
28,800 |
|
|
|
3.04 |
% |
|
|
3,611,353 |
|
|
|
17,494 |
|
|
|
1.96 |
% |
Non-interest-bearing |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Demand deposits |
|
|
1,001,451 |
|
|
|
|
|
|
|
|
|
1,035,191 |
|
|
|
|
|
|
|
|
|
1,290,924 |
|
|
|
|
|
|
|
||||||
Other liabilities |
|
|
111,620 |
|
|
|
|
|
|
|
|
|
128,246 |
|
|
|
|
|
|
|
|
|
120,877 |
|
|
|
|
|
|
|
||||||
Total liabilities |
|
|
4,859,558 |
|
|
|
|
|
|
|
|
|
4,920,943 |
|
|
|
|
|
|
|
|
|
5,023,154 |
|
|
|
|
|
|
|
||||||
Shareholders' equity |
|
|
534,139 |
|
|
|
|
|
|
|
|
|
525,845 |
|
|
|
|
|
|
|
|
|
519,926 |
|
|
|
|
|
|
|
||||||
Total liabilities & |
|
$ |
5,393,697 |
|
|
|
|
|
|
|
|
$ |
5,446,788 |
|
|
|
|
|
|
|
|
$ |
5,543,080 |
|
|
|
|
|
|
|
||||||
Net interest income on a |
|
|
|
|
|
26,856 |
|
|
|
|
|
|
|
|
|
28,091 |
|
|
|
|
|
|
|
|
|
34,431 |
|
|
|
|
||||||
Less taxable equivalent |
|
|
|
|
|
(243) |
|
|
|
|
|
|
|
|
|
(245) |
|
|
|
|
|
|
|
|
|
(255) |
|
|
|
|
||||||
Net interest income |
|
|
|
|
$ |
26,613 |
|
|
|
|
|
|
|
|
$ |
27,846 |
|
|
|
|
|
|
|
|
$ |
34,176 |
|
|
|
|
||||||
Net interest spread (5) |
|
|
|
|
|
|
|
|
1.24 |
% |
|
|
|
|
|
|
|
|
1.30 |
% |
|
|
|
|
|
|
|
|
2.00 |
% |
||||||
Net interest margin (6) |
|
|
|
|
|
|
|
|
2.10 |
% |
|
|
|
|
|
|
|
|
2.14 |
% |
|
|
|
|
|
|
|
|
2.63 |
% |
(1) |
Annualized on a fully taxable equivalent basis calculated using a federal tax rate of 21% in 2024 and 2023. |
(2) |
Nonaccrual loans are included in average amounts outstanding. |
(3) |
Average balances of securities available for sale calculated utilizing amortized cost. |
(4) |
|
(5) |
Net interest spread represents the difference between the weighted average yield on interest-earning assets, inclusive of Paycheck Protection Program ("PPP") loans outstanding during 2024 and 2023, 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 2024 and 2023. |
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 |
|
|
|
|
|
|
|
|
|
|||
|
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||
|
|
(dollars in thousands, except share data) |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||
Net Income (a GAAP measure) |
|
$ |
6,888 |
|
|
$ |
8,034 |
|
|
$ |
12,416 |
|
Add: Mergers and office consolidation expenses (1) |
|
|
1,407 |
|
|
|
698 |
|
|
|
424 |
|
Less: Tax effect of non-operating expenses (2) |
|
|
(299) |
|
|
|
(8) |
|
|
|
(118) |
|
Operating Net Income (a non-GAAP measure) |
|
$ |
7,996 |
|
|
$ |
8,724 |
|
|
$ |
12,722 |
|
Less: Dividends and Undistributed Earnings Allocated |
|
|
(10) |
|
|
|
(13) |
|
|
|
(26) |
|
Operating Net Income Applicable to Common |
|
$ |
7,986 |
|
|
$ |
8,711 |
|
|
$ |
12,696 |
|
Weighted Average Diluted Shares |
|
|
7,865,193 |
|
|
|
7,853,823 |
|
|
|
7,826,162 |
|
Operating Diluted Earnings Per Share |
|
$ |
1.02 |
|
|
$ |
1.11 |
|
|
$ |
1.62 |
|
(1) |
The Company recorded merger expenses of |
(2) |
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. |
|
|
|
|
|
|
|
|
|
|
|||
|
|
(dollars in thousands) |
|
|||||||||
Tangible Common Equity: |
|
|
|
|
|
|
|
|
|
|||
Shareholders' equity (GAAP) |
|
$ |
535,596 |
|
|
$ |
534,573 |
|
|
$ |
525,949 |
|
Less: |
|
|
(70,866) |
|
|
|
(71,089) |
|
|
|
(71,758) |
|
Tangible Common Equity (a non-GAAP measure) |
|
$ |
464,730 |
|
|
$ |
463,484 |
|
|
$ |
454,191 |
|
Total assets (GAAP) |
|
$ |
5,373,840 |
|
|
$ |
5,417,666 |
|
|
$ |
5,528,584 |
|
Less: |
|
|
(70,866) |
|
|
|
(71,089) |
|
|
|
(71,758) |
|
Tangible assets (a non-GAAP measure) |
|
$ |
5,302,974 |
|
|
$ |
5,346,577 |
|
|
$ |
5,456,826 |
|
Tangible Common Equity Ratio (a non-GAAP |
|
|
8.76 |
% |
|
|
8.67 |
% |
|
|
8.32 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Tangible Book Value Per Share: |
|
|
|
|
|
|
|
|
|
|||
Tangible Common Equity (a non-GAAP measure) |
|
$ |
464,730 |
|
|
$ |
463,484 |
|
|
$ |
454,191 |
|
Common shares outstanding |
|
|
7,845,598 |
|
|
|
7,845,452 |
|
|
|
7,833,997 |
|
Tangible Book Value Per Share (a non-GAAP measure) |
|
$ |
59.23 |
|
|
$ |
59.08 |
|
|
$ |
57.98 |
|
|
|
Three Months Ended |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||
|
|
(dollars in thousands) |
|
|||||||||
Efficiency Ratio: (1) |
|
|
|
|
|
|
|
|
|
|||
Noninterest expense |
|
$ |
28,259 |
|
|
$ |
26,901 |
|
|
$ |
28,328 |
|
Net interest and dividend income |
|
$ |
27,032 |
|
|
$ |
28,150 |
|
|
$ |
34,248 |
|
Total noninterest income |
|
|
10,606 |
|
|
|
10,437 |
|
|
|
10,715 |
|
Total revenue |
|
$ |
37,638 |
|
|
$ |
38,587 |
|
|
$ |
44,963 |
|
Efficiency Ratio |
|
|
75.08 |
% |
|
|
69.72 |
% |
|
|
63.00 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Operating Efficiency Ratio: (2) |
|
|
|
|
|
|
|
|
|
|||
Noninterest expense |
|
$ |
28,259 |
|
|
$ |
26,901 |
|
|
$ |
28,328 |
|
Mergers and office consolidation expenses (Pretax) |
|
|
(1,407) |
|
|
|
(698) |
|
|
|
(424) |
|
Operating expense (a non-GAAP measure) |
|
$ |
26,852 |
|
|
$ |
26,203 |
|
|
$ |
27,904 |
|
Operating revenue (a non-GAAP measure) |
|
$ |
37,638 |
|
|
$ |
38,587 |
|
|
$ |
44,963 |
|
Operating Efficiency Ratio (a non-GAAP measure) |
|
|
71.34 |
% |
|
|
67.91 |
% |
|
|
62.06 |
% |
|
|
|
|
|
|
|
|
|
|
|||
|
|
Three Months Ended |
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
2024 |
|
|
2023 |
|
|
2023 |
|
|||
|
|
(dollars in thousands) |
|
|||||||||
Operating Return on Tangible Common Equity: (3) |
|
|
|
|
|
|
|
|
|
|||
Operating Net Income (a non-GAAP measure) |
|
$ |
7,996 |
|
|
$ |
8,724 |
|
|
$ |
12,722 |
|
Average common equity |
|
$ |
534,139 |
|
|
$ |
525,845 |
|
|
$ |
519,926 |
|
Average goodwill and merger related intangibles |
|
|
(70,988) |
|
|
|
(71,207) |
|
|
|
(71,876) |
|
Average tangible common equity (a non-GAAP measure) |
|
$ |
463,151 |
|
|
$ |
454,638 |
|
|
$ |
448,050 |
|
Operating Return on Tangible Common Equity (a non-GAAP measure) |
|
|
6.94 |
% |
|
|
7.61 |
% |
|
|
11.52 |
% |
|
|
|
|
|
|
|
|
|
|
|||
Operating Return on Average Assets: (4) |
|
|
|
|
|
|
|
|
|
|||
Operating Net Income (a non-GAAP measure) |
|
$ |
7,996 |
|
|
$ |
8,724 |
|
|
$ |
12,722 |
|
Average assets |
|
$ |
5,393,697 |
|
|
$ |
5,446,788 |
|
|
$ |
5,543,080 |
|
Operating Return on Average Assets (a non-GAAP measure) |
|
|
0.60 |
% |
|
|
0.64 |
% |
|
|
0.93 |
% |
(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. |
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