Cambridge Bancorp Reports First Quarter Results

Business Wire, April 27, 2009

CAMBRIDGE, Mass. -- Cambridge Bancorp (OTC BB: CATC) today reported unaudited net income of $2,006,000 for the first quarter of 2009, or $0.54 per diluted share, compared to $2,311,000, or $0.61 per diluted share, for the same quarter in 2008. The quarter-over-quarter earnings decrease of $305,000 (13.2%) was attributable to a combination of lower non-interest income and higher non-interest expenses for the period.

Joseph V. Roller II, president and CEO, noted “First quarter earnings were down somewhat from the same quarter in 2008 yet we are confident that our traditional business practices and diversified business model have positioned the Bank to capitalize on opportunities to grow. Our momentum is strong as we continue to build the company by bringing in new relationships and doing more business with our existing customers. During these challenging times, the Bank’s focus on a personalized approach with experienced bankers who offer practical advice and guidance is especially well received. ”

Non-interest income for the first quarter of 2009 was $629,000 lower than the same quarter in 2008. Fees from wealth management were affected by the steep decline in the equity market and were $484,000 lower in 2009 versus 2008. In addition, gains taken on investment securities were negligible in this most recent quarter compared to $158,000 in the first quarter of 2008.

The two principal factors of higher non-interest expenses were salaries and benefits, and Federal Deposit Insurance Corporation (FDIC) premiums. The combined increase in expense of these items in the first quarter of 2009 over the same quarter in 2008 was $730,000. Salaries and benefits were higher due to key employee hires in wealth management and to the recent opening of the Bank’s tenth branch, as well as larger expense accruals for the Bank’s defined benefit retirement plan. Beginning in 2009, the FDIC’s assessment schedule increased the rate insured banks pay for deposit insurance as part of the restoration plan.

Offsetting some of the aforementioned items was very strong performance in net interest income, which increased $1.1 million (13.9%) in the first quarter of 2009 compared to the first quarter of 2008. The Bank’s net interest margin of 4.20% for the three months ended March 31, 2009 compared favorably to 3.95% for the first quarter of 2008. Deposits increased by $34 million to $802 million since year-end 2008 and by $76 million (10.5%) over the same quarter in 2008.

Non-performing loans as a percentage of total loans stood at 0.40% at March 31, 2009, a modest increase compared to 0.34% at December 31, 2008. Loan quality remains sound and the Allowance for Loan Losses stood at $8.0 million or 1.70% of total loans outstanding at March 31, 2009. At December 31, 2008, the Allowance for Loan Losses was $7.7 million or 1.63% of total loans outstanding.

Cambridge Bancorp and its subsidiary, Cambridge Trust Company, are based in Cambridge, Massachusetts, in the heart of Harvard Square. Cambridge Trust Company is a 118-year-old Massachusetts chartered commercial bank with $934 million in total assets and ten Massachusetts locations in Cambridge, Beacon Hill, Belmont, Concord, Lincoln, and Weston. Cambridge Trust Company is one of New England’s leaders in wealth management with $1.2 billion in client assets under management. In addition, Cambridge Trust Company of New Hampshire offers wealth management services at two New Hampshire locations, Concord and Exeter.

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