Cambridge Bancorp CATC (the "Company"), the parent of Cambridge Trust Company, today announced unaudited net income of $4,272,000 for the quarter ended June 30, 2019, a decrease of $1,839,000, or 30.1%, compared to net income of $6,111,000 for the quarter ended June 30, 2018. Diluted earnings per share were $0.90 for the second quarter of 2019, representing a 39.2% decrease over diluted earnings per share of $1.48 for the same quarter last year. Net income for the first and second quarters of 2019 included merger expenses of $3.5 million, which the Company considers to be non-operating.
Excluding merger expenses related to the Optima Bank & Trust Company ("Optima") merger and other non-operating adjustments, operating net income was $6,955,000 for the quarter ended June 30, 2019, an increase of $845,000, or 13.8%, compared to operating net income of $6,110,000 for the quarter ended June 30, 2018. Operating diluted earnings per share were $1.47 for the second quarter of 2019, representing a 0.7% decrease over operating diluted earnings per share of $1.48 for the same quarter last year.
For the six months ended June 30, 2019, unaudited net income was $10,470,000, representing a decrease of $1,446,000, or 12.1%, compared to net income of $11,916,000 for the six months ended June 30, 2018. Diluted earnings per share were $2.35 for the first six months of 2019, representing an 18.7% decrease over diluted earnings per share of $2.89 for the same six months of 2018.
Excluding merger expenses related to the Optima merger and other non-operating adjustments, operating net income was $13,287,000 for the six months ended June 30, 2019, an increase of $1,372,000, or 11.5%, compared to operating net income of $11,915,000 for the six months ended June 30, 2018. Operating diluted earnings per share were $2.99 for the first six months of 2019, representing a 3.8% increase over operating diluted earnings per share of $2.88 for the first six months of last year.
Merger with Optima Bank & Trust Company
On April 17, 2019, the Company completed its merger with Optima, adding six banking offices in New Hampshire. As a result of the merger, the Company paid total consideration of $64.3 million, which consisted of 722,746 shares of Cambridge Bancorp common stock issued to Optima shareholders, and $3.5 million in cash. The transaction included the acquisition of $475.4 million in loans and the assumption of $477.2 million in deposits, each at fair value.
The following table provides the purchase price allocation of net assets acquired for this transaction:
|
|
Net Assets Acquired |
|
|
|
|
at Fair Value |
|
|
|
|
(dollars in thousands) |
|
|
Assets |
|
|
|
|
Cash and cash equivalents |
|
$ |
6,902 |
|
Investments |
|
|
23,298 |
|
Loans |
|
|
475,406 |
|
Premises and equipment |
|
|
6,286 |
|
Goodwill |
|
|
30,794 |
|
Core deposit and other intangibles |
|
|
3,609 |
|
Other assets |
|
|
9,408 |
|
Total assets acquired |
|
|
555,703 |
|
|
|
|
|
|
Liabilities |
|
|
|
|
Deposits |
|
|
477,189 |
|
Borrowings |
|
|
13,459 |
|
Other liabilities |
|
|
799 |
|
Total liabilities assumed |
|
|
491,447 |
|
Purchase price |
|
$ |
64,256 |
|
For further details on the loans and deposits acquired, see the Organic Loan and Deposit Growth table provided near the end of the financial schedules accompanying this release.
Second quarter 2019 highlights as compared to the second quarter of 2018:
- Organic loan growth of $219.9 million or 15.7%
- Organic core deposit growth of $98.1 million or 5.9%
- Total common equity to tangible assets ratio of 7.48%
- Tangible book value per share increased to $41.72 or 10.3%
"We are pleased to report the Company completed the legal merger with Optima, and are looking forward to the system conversion in July," noted Denis K. Sheahan, Chairman and CEO. "Net loan originations were strong in the second quarter of 2019, however, the impact to earnings in the second quarter was negative due to the late quarter nature of the loan closings and the corresponding full loan loss provision expense recorded in the quarter."
Balance Sheet
Total assets increased $639.9 million, or 30.5%, from December 31, 2018, inclusive of the Optima merger, and were $2.7 billion as of June 30, 2019.
Total loans increased $536.8 million, or 34.4%, from December 31, 2018, inclusive of the Optima merger, and stood at $2.1 billion as of June 30, 2019. The increase in total loans was due to a combination of the merger with Optima and non-merger related growth. A table is included accompanying this release to provide detail of organic loan and deposit growth.
Inclusive of Optima:
- Commercial real estate loans increased $147.5 million, or 19.5%, from $758.0 million at December 31, 2018 to $905.4 million at June 30, 2019. Total loan originations during the first six months of the year were strong despite elevated levels of loan payoffs in the first quarter.
- Commercial and industrial loans increased $40.6 million, or 43.3%, from $93.7 million at December 31, 2018 to $134.3 million at June 30, 2019.
- Residential mortgage loans increased $334.2 million, or 55.3%, from $604.3 million at December 31, 2018 to $938.6 million at June 30, 2019.
Excluding Optima, total loans grew by $61.4 million, or 3.9%, from December 31, 2018.
The Company's total investment securities portfolio decreased by $11.6 million, or 2.6%, from $451.0 million at December 31, 2018 to $439.4 million at June 30, 2019, as cash flows were used to pay down wholesale funding.
The Company recorded additional goodwill of $30.8 million and other merger related intangibles of $3.6 million during the second quarter of 2019, due to the merger with Optima.
Other assets increased $46.7 million, or 168.9%, from December 31, 2018, primarily due to the adoption of new lease accounting guidance in 2019 and higher loan related derivative assets. The adoption of accounting guidance for leases ("ASU 2016-02") required the Company to recognize $37.6 million of right-of-use lease assets and corresponding net lease liabilities on the balance sheet, inclusive of Optima. The corresponding lease liabilities recognized in accordance with ASU 2016-02 was the primary reason for the increase in other liabilities.
Total deposits grew by $518.3 million, or 28.6%, to $2.3 billion at June 30, 2019, from $1.8 billion, at December 31, 2018, primarily driven by a combination of the impact of the Optima merger and organic core deposit growth.
- Core deposits, which the Company defines as all deposits other than certificates of deposit, increased by $373.8 million, or 22.1%, to $2.1 billion from $1.7 billion at December 31, 2018, inclusive of the Optima merger.
- Excluding the impact of the Optima merger, organic growth in core deposits was $59.1 million, or 3.5%, at June 30, 2019. Growth in core deposits during 2019 was attributable to successful deposit campaigns, as we strive to attract and deepen client relationships.
- Inclusive of the Optima merger, the cost of total deposits for the quarter ended June 30, 2019 was 0.77%, as compared to 0.24% for the quarter ended June 30, 2018, driven by a combination of deposit growth and higher interest rates during 2019. The cost of total deposits for the six months ended June 30, 2019 was 0.67%, as compared to 0.23% for the quarter ended June 30, 2018, driven by a combination of deposit growth and higher interest rates during 2019.
Inclusive of the Optima merger, short-term borrowings were $103.0 million as of June 30, 2019 representing a $13.0 million, or 14.4%, increase from $90.0 million at December 31, 2018. Certificates of deposit, which totaled $265.9 million at June 30, 2019, increased by $144.5 million from $121.4 million at December 31, 2018, primarily due to the merger with Optima. Total brokered certificates of deposit were $70.2 million and $27.5 million at June 30, 2019 and December 31, 2018, respectively, which are included within certificates of deposit.
Net Interest and Dividend Income
For the quarter ended June 30, 2019, net interest and dividend income before provision for loan losses, increased by $3.9 million, or 24.7%, to $19.8 million, as compared to $15.9 million for the quarter ended June 30, 2018, primarily due to loan growth (both organic and as a result of the Optima merger) and higher levels of interest-earning assets.
- Interest on loans increased $7.3 million, or 51.0%, due to higher interest rates combined with organic and merger related loan growth.
- Interest on deposits increased $3.3 million, or 315.9%, due to an increase in cost of deposits combined with organic and merger related deposit growth.
The Company's net interest margin, on a fully taxable equivalent basis, inclusive of the Optima merger, decreased 14 basis points to 3.23% for the quarter ended June 30, 2019, as compared to 3.37% for the quarter ended June 30, 2018.
For the six months ended June 30, 2019, net interest and dividend income before provision for loan losses, increased by $5.0 million, or 16.2%, to $36.0 million, as compared to $31.0 million for the six months ended June 30, 2018, primarily due to loan growth (both organic and as a result of the Optima merger) and higher levels of interest-earning assets.
- Interest on loans increased by $10.2 million, or 36.7%, due to higher interest rates combined with organic and merger related loan growth.
- Interest on deposits increased by $4.9 million, or 241.4%, due to an increase in cost of deposits combined with organic and merger related deposit growth.
The Company's net interest margin, on a fully taxable equivalent basis, inclusive of the Optima merger, decreased eight basis points to 3.24% for the six months ended June 30, 2019, as compared to 3.32% for the six months ended June 30, 2018.
Provision for Loan Loss
During the six months ended June 30, 2019, the allowance for loan losses increased by $707,000, or 4.2%, to $17.5 million at June 30, 2019 due to loan growth and changes in the mix of the loan portfolio. The allowance for loan losses to total loans ratio stood at 0.83% as of June 30, 2019 from 1.08% at December 31, 2018, primarily due to the impact of loans acquired in connection with the Optima merger. These acquired loans are recorded at fair value, including an adjustment for estimated credit losses, and without carryover of the respective portfolio's historical allowance for loan losses.
Noninterest Income
Inclusive of the Optima merger, total noninterest income increased by $301,000, or 3.8%, to $8.1 million for the quarter ended June 30, 2019, as compared to $7.8 million for the quarter ended June 30, 2018, primarily as a result of higher wealth management revenue, higher deposit account fees, and higher ATM and debit card income, partially offset by lower loan related derivative income. Noninterest income was 29.2% of total revenue for the quarter ended June 30, 2019.
Wealth Management revenue increased by $280,000, or 4.6%, for the second quarter of 2019 as compared to the second quarter of 2018. Wealth Management Assets under Management and Administration increased by $365.6 million, or 12.7%, from December 31, 2018 and ended at $3.2 billion as of June 30, 2019 as a result of appreciation in the equity markets during 2019.
Inclusive of the Optima merger, total noninterest income increased by $80,000, or 0.5%, to $16.1 million for the six months ended June 30, 2019, as compared to $16.0 million for the six months ended June 30, 2018, primarily as a result of higher wealth management revenue, partially offset by lower loan related derivative income and lower other income. Noninterest income was 30.9% of total revenue for the six months ended June 30, 2019.
Wealth Management revenue increased by $278,000, or 2.3%, for the six months ended June 30, 2019, as compared to the six months ended June 30, 2018, primarily due to appreciation in the equity markets. Noninterest income increases were partially offset by a higher loss on the sale of investment securities of $83,000, lower loan related derivative income of $143,000, and lower other income of $114,000 for the six months ended June 30, 2019, as compared to the six months ended June 30, 2018.
Noninterest Expense
Total noninterest expense increased by $5.7 million, or 36.5%, to $21.5 million for the quarter ended June 30, 2019, as compared to $15.8 million for the quarter ended June 30, 2018, primarily driven by merger expenses of $3.5 million combined with higher salaries and employee benefits expense, occupancy and equipment expense, and data processing expense.
- Merger expenses of $3.5 million were related to professional fees, compensation and severance agreements, as well as contract termination costs associated with the second quarter closing of the Optima merger.
- Salaries and employee benefits expense increases of $1.0 million were driven by the merger with Optima, increased staffing to support business initiatives, and higher employee benefit costs.
- Occupancy and equipment expense increases of $472,000 were due to the merger with Optima and additional office space in Boston, MA.
- Data processing expense increases of $245,000 were due to the merger with Optima and investments made in technology.
Total noninterest expense increased by $6.6 million, or 21.2%, to $37.9 million for the six months ended June 30, 2019, as compared to $31.3 million for the six months ended June 30, 2018, primarily driven by merger expenses of $3.5 million combined with higher salaries and employee benefits expense, occupancy and equipment expense, and data processing expense.
- Merger expenses of $3.5 million were related to professional fees, compensation and severance agreements, as well as contract termination costs associated with the second quarter closing of the Optima merger.
- Salaries and employee benefits increases of $1.8 million were driven by the merger with Optima, increased staffing to support business initiatives, and higher employee benefit costs.
- Occupancy and equipment expense increases of $575,000 were due to the merger with Optima and additional office space in Boston, MA.
- Data processing expense increases of $361,000 were due to the merger with Optima and investments made in technology.
Asset Quality
Loan quality remained sound with non-performing loans totaling $1.0 million, or 0.05% of total loans outstanding as of June 30, 2019. The allowance for loan losses was $17.5 million, or 0.83% of total loans outstanding at June 30, 2019, as compared to $16.8 million, or 1.08%, of total loans outstanding at year end 2018. The decrease in the allowance to loans ratio during 2019 is due to the impact of loans acquired in connection with the Optima merger. These acquired loans are recorded at fair value, including an adjustment for estimated credit losses, and without carryover of the respective portfolio's historical allowance for loan losses. Net loan charge-offs remained low at $172,000 for the first six months of 2019. During the second quarter of 2019, we recorded $149,000 in net loan charge-offs.
Income Taxes
Inclusive of the impact of the Optima merger, the Company's effective tax rate was 26.5% for the quarter ended June 30, 2019, as compared to 23.7% for the quarter ended June 30, 2018. For the six months ended June 30, 2019, the effective tax rate was 23.9%, as compared to 22.8% for the six months ended June 30, 2018.
Dividend & Capital
On July 15, 2019, the Company's Board of Directors declared a quarterly cash dividend of $0.51 per share, which is payable on August 15, 2019 to shareholders of record as of the close of business on August 1, 2019.
Inclusive of the merger, the Company's total shareholders' equity to total assets ratio increased by 75 basis points to 8.65% as of June 30, 2019, as compared to 7.90% as of June 30, 2018. Book value per share grew by $10.95, or 28.9%, to $48.88 as of June 30, 2019, as compared to $37.93 as of June 30, 2018. The Company's ratio of tangible common equity to tangible assets decreased 45 basis points to 7.48% at June 30, 2019 from 7.93% at December 31, 2018, primarily due to the impact of goodwill and acquisition related intangibles recorded as a result of the merger with Optima. Tangible book value per share grew by $3.89 or, 10.3%, to $41.72 as of June 30, 2019, as compared to $37.83 as of June 30, 2018.
About Cambridge Bancorp
Cambridge Bancorp, the parent company of Cambridge Trust Company, is based in Cambridge, Massachusetts. Cambridge Trust Company is a 129-year-old Massachusetts chartered commercial bank with approximately $2.7 billion in assets and a total of 16 private banking offices in Massachusetts and New Hampshire. Cambridge Trust Company is one of New England's leaders in private banking and wealth management with $3.2 billion in client assets under management and administration. The Wealth Management group maintains offices in Boston, 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, and the impact of any laws or regulations applicable to the Company, 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: economic conditions being less favorable than expected, disruptions to the credit and financial markets, 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, challenges from the integration of the Company and Optima resulting in the combined business not operating as effectively as expected, disruptions in the Company's ability to access the capital markets and other factors that are described in the Company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year end December 31, 2018, which the Company filed on March 18, 2019. 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 earnings and operating EPS, tangible book value per share and the tangible common equity ratio, and return on average assets and return on average equity on an operating basis.
Operating earnings and operating EPS exclude items that management believes are unrelated to its core banking business such as merger and acquisition expenses, gain (loss) on sale of investment securities, and other items. The Company's management uses operating earnings and operating EPS 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 stockholders' 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) and with analysis of return on average assets and return on average common equity on an operating basis. The Company has included information on tangible book value per share, the tangible common equity ratio, and return on average assets and return on average 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 earnings, operating EPS, tangible book value per share, the tangible common equity ratio, and return on average assets and return on average equity 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."
CAMBRIDGE BANCORP AND SUBSIDIARIES
|
||||||||||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
(dollars in thousands, except per share data) |
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest and Dividend Income |
|
$ |
24,470 |
|
|
$ |
16,936 |
|
|
$ |
43,588 |
|
|
$ |
33,068 |
|
Interest Expense |
|
|
4,694 |
|
|
|
1,082 |
|
|
|
7,551 |
|
|
|
2,061 |
|
Net Interest and Dividend Income |
|
|
19,776 |
|
|
|
15,854 |
|
|
|
36,037 |
|
|
|
31,007 |
|
Provision for (Release of) Loan Losses |
|
|
596 |
|
|
|
(79 |
) |
|
|
503 |
|
|
|
330 |
|
Noninterest Income |
|
|
8,145 |
|
|
|
7,844 |
|
|
|
16,102 |
|
|
|
16,022 |
|
Noninterest Expense |
|
|
21,513 |
|
|
|
15,765 |
|
|
|
37,886 |
|
|
|
31,266 |
|
Income Before Income Taxes |
|
|
5,812 |
|
|
|
8,012 |
|
|
|
13,750 |
|
|
|
15,433 |
|
Income Tax Expense |
|
|
1,540 |
|
|
|
1,901 |
|
|
|
3,280 |
|
|
|
3,517 |
|
Net Income |
|
$ |
4,272 |
|
|
$ |
6,111 |
|
|
$ |
10,470 |
|
|
$ |
11,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Net Income* |
|
$ |
6,955 |
|
|
$ |
6,110 |
|
|
$ |
13,287 |
|
|
$ |
11,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Data Per Common Share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic Earnings Per Share |
|
$ |
0.91 |
|
|
$ |
1.49 |
|
|
$ |
2.37 |
|
|
$ |
2.91 |
|
Diluted Earnings Per Share |
|
|
0.90 |
|
|
|
1.48 |
|
|
|
2.35 |
|
|
|
2.89 |
|
Operating Diluted Earnings Per Share* |
|
|
1.47 |
|
|
|
1.48 |
|
|
|
2.99 |
|
|
|
2.88 |
|
Dividends Declared Per Share |
|
|
0.51 |
|
|
|
0.48 |
|
|
|
1.02 |
|
|
|
0.96 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avg. Common Shares Outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
4,682,109 |
|
|
|
4,059,927 |
|
|
|
4,379,141 |
|
|
|
4,057,156 |
|
Diluted |
|
|
4,715,724 |
|
|
|
4,094,489 |
|
|
|
4,412,239 |
|
|
|
4,087,790 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selected Performance Ratios: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest Margin, FTE |
|
|
3.23 |
% |
|
|
3.37 |
% |
|
|
3.24 |
% |
|
|
3.32 |
% |
Cost of Funds |
|
|
0.76 |
% |
|
|
0.23 |
% |
|
|
0.68 |
% |
|
|
0.22 |
% |
Cost of Interest Bearing Liabilities |
|
|
1.05 |
% |
|
|
0.34 |
% |
|
|
0.95 |
% |
|
|
0.33 |
% |
Cost of Deposits |
|
|
0.77 |
% |
|
|
0.24 |
% |
|
|
0.67 |
% |
|
|
0.23 |
% |
Cost of Deposits excluding Wholesale Deposits |
|
|
0.69 |
% |
|
|
0.20 |
% |
|
|
0.61 |
% |
|
|
0.19 |
% |
Return on Average Assets |
|
|
0.66 |
% |
|
|
1.25 |
% |
|
|
0.89 |
% |
|
|
1.23 |
% |
Return on Average Earning Assets |
|
|
0.69 |
% |
|
|
1.29 |
% |
|
|
0.94 |
% |
|
|
1.27 |
% |
Return on Average Equity |
|
|
7.71 |
% |
|
|
16.09 |
% |
|
|
10.79 |
% |
|
|
15.95 |
% |
Efficiency Ratio |
|
|
77.05 |
% |
|
|
66.52 |
% |
|
|
72.66 |
% |
|
|
66.48 |
% |
Operating Efficiency Ratio* |
|
|
64.71 |
% |
|
|
66.53 |
% |
|
|
65.77 |
% |
|
|
66.49 |
% |
Operating Return on Tangible Common Equity* |
|
|
14.37 |
% |
|
|
16.13 |
% |
|
|
14.78 |
% |
|
|
15.99 |
% |
Operating Return on Average Assets* |
|
|
1.07 |
% |
|
|
1.25 |
% |
|
|
1.13 |
% |
|
|
1.23 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
June 30, |
||||||
|
|
|
|
|
|
2019 |
|
2018 |
|
2018 |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
|
|
|
$ |
2,741,308 |
|
|
$ |
2,101,384 |
|
|
$ |
1,971,214 |
|
Total Loans |
|
|
|
|
|
|
2,096,550 |
|
|
|
1,559,772 |
|
|
|
1,401,208 |
|
Non-Performing Loans |
|
|
|
|
|
|
1,009 |
|
|
|
642 |
|
|
|
1,161 |
|
Allowance for Loan Losses |
|
|
|
|
|
|
17,475 |
|
|
|
16,768 |
|
|
|
15,645 |
|
Allowance to Total Loans |
|
|
|
|
|
|
0.83 |
% |
|
|
1.08 |
% |
|
|
1.12 |
% |
Total Deposits |
|
|
|
|
|
|
2,329,665 |
|
|
|
1,811,410 |
|
|
|
1,788,287 |
|
Total Shareholders' Equity |
|
|
|
|
|
|
237,094 |
|
|
|
167,026 |
|
|
|
155,692 |
|
Total Shareholders' Equity to Total Assets |
|
|
|
|
|
|
8.65 |
% |
|
|
7.95 |
% |
|
|
7.90 |
% |
Wealth Management AUM |
|
|
|
|
|
|
3,079,770 |
|
|
|
2,759,547 |
|
|
|
3,003,494 |
|
Wealth Management AUM & AUA |
|
|
|
|
|
|
3,242,341 |
|
|
|
2,876,702 |
|
|
|
3,135,869 |
|
Book Value Per Share |
|
|
|
|
|
$ |
48.88 |
|
|
$ |
40.67 |
|
|
$ |
37.93 |
|
Tangible Common Equity Ratio* |
|
|
|
|
|
|
7.48 |
% |
|
|
7.93 |
% |
|
|
7.88 |
% |
Tangible Book Value Per Share* |
|
|
|
|
|
$ |
41.72 |
|
|
$ |
40.57 |
|
|
$ |
37.83 |
|
*See GAAP to Non-GAAP Reconciliations.
CAMBRIDGE BANCORP AND SUBSIDIARIES
|
||||||||
|
|
June 30, 2019 |
|
December 31, 2018 |
||||
|
|
(dollars in thousands, except par value) |
|
|||||
Assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
38,557 |
|
|
$ |
18,473 |
|
Investment securities |
|
|
|
|
|
|
|
|
Available for sale, at fair value (amortized cost $153,765 and $172,290, respectively) |
|
|
153,053 |
|
|
|
168,163 |
|
Held to maturity, at amortized cost (fair value $291,993 and $281,310, respectively) |
|
|
286,350 |
|
|
|
282,869 |
|
Total investment securities |
|
|
439,403 |
|
|
|
451,032 |
|
Loans held for sale, at lower of cost or fair value |
|
|
384 |
|
|
|
— |
|
Loans |
|
|
|
|
|
|
|
|
Residential mortgage |
|
|
938,560 |
|
|
|
604,331 |
|
Commercial mortgage |
|
|
905,441 |
|
|
|
757,957 |
|
Home equity |
|
|
85,814 |
|
|
|
69,336 |
|
Commercial & Industrial |
|
|
134,307 |
|
|
|
93,712 |
|
Consumer |
|
|
32,428 |
|
|
|
34,436 |
|
Total loans |
|
|
2,096,550 |
|
|
|
1,559,772 |
|
Less: allowance for loan losses |
|
|
(17,475 |
) |
|
|
(16,768 |
) |
Net loans |
|
|
2,079,075 |
|
|
|
1,543,004 |
|
Federal Home Loan Bank of Boston Stock, at cost |
|
|
8,245 |
|
|
|
6,844 |
|
Bank owned life insurance |
|
|
36,996 |
|
|
|
30,933 |
|
Banking premises and equipment, net |
|
|
14,863 |
|
|
|
8,578 |
|
Deferred income taxes, net |
|
|
7,267 |
|
|
|
8,717 |
|
Accrued interest receivable |
|
|
7,485 |
|
|
|
5,762 |
|
Goodwill |
|
|
31,206 |
|
|
|
412 |
|
Merger related intangibles |
|
|
3,519 |
|
|
|
- |
|
Other assets |
|
|
74,308 |
|
|
|
27,629 |
|
Total assets |
|
$ |
2,741,308 |
|
|
$ |
2,101,384 |
|
Liabilities |
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
Demand |
|
$ |
587,030 |
|
|
$ |
494,492 |
|
Interest bearing checking |
|
|
422,426 |
|
|
|
431,702 |
|
Money market |
|
|
200,935 |
|
|
|
135,585 |
|
Savings |
|
|
853,356 |
|
|
|
628,212 |
|
Certificates of deposit |
|
|
265,918 |
|
|
|
121,419 |
|
Total deposits |
|
|
2,329,665 |
|
|
|
1,811,410 |
|
Short-term borrowings |
|
|
103,000 |
|
|
|
90,000 |
|
Long-term borrowings |
|
|
3,323 |
|
|
|
3,409 |
|
Other liabilities |
|
|
68,226 |
|
|
|
29,539 |
|
Total liabilities |
|
|
2,504,214 |
|
|
|
1,934,358 |
|
Shareholders' Equity |
|
|
|
|
|
|
|
|
Common stock, par value $1.00; Authorized 10,000,000 shares; Outstanding: 4,850,230 shares and 4,107,051 shares, respectively |
|
|
4,850 |
|
|
|
4,107 |
|
Additional paid-in capital |
|
|
97,844 |
|
|
|
38,271 |
|
Retained earnings |
|
|
137,036 |
|
|
|
131,135 |
|
Accumulated other comprehensive loss |
|
|
(2,636 |
) |
|
|
(6,487 |
) |
Total shareholders' equity |
|
|
237,094 |
|
|
|
167,026 |
|
Total liabilities and shareholders' equity |
|
$ |
2,741,308 |
|
|
$ |
2,101,384 |
|
|
|
CAMBRIDGE BANCORP AND SUBSIDIARIES
|
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
(dollars in thousands, except share data) |
|
|||||||||||||
Interest and dividend income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on taxable loans |
|
$ |
21,355 |
|
|
$ |
14,132 |
|
|
$ |
37,639 |
|
|
$ |
27,510 |
|
Interest on tax-exempt loans |
|
|
124 |
|
|
|
92 |
|
|
|
213 |
|
|
|
188 |
|
Interest on taxable investment securities |
|
|
2,116 |
|
|
|
1,920 |
|
|
|
4,096 |
|
|
|
3,634 |
|
Interest on tax-exempt investment securities |
|
|
575 |
|
|
|
604 |
|
|
|
1,146 |
|
|
|
1,226 |
|
Dividends on FHLB of Boston stock |
|
|
81 |
|
|
|
58 |
|
|
|
157 |
|
|
|
109 |
|
Interest on overnight investments |
|
|
219 |
|
|
|
130 |
|
|
|
337 |
|
|
|
401 |
|
Total interest and dividend income |
|
|
24,470 |
|
|
|
16,936 |
|
|
|
43,588 |
|
|
|
33,068 |
|
Interest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest on deposits |
|
|
4,379 |
|
|
|
1,053 |
|
|
|
6,880 |
|
|
|
2,015 |
|
Interest on borrowed funds |
|
|
315 |
|
|
|
29 |
|
|
|
671 |
|
|
|
46 |
|
Total interest expense |
|
|
4,694 |
|
|
|
1,082 |
|
|
|
7,551 |
|
|
|
2,061 |
|
Net interest and dividend income |
|
|
19,776 |
|
|
|
15,854 |
|
|
|
36,037 |
|
|
|
31,007 |
|
Provision for (Release of) Loan Losses |
|
|
596 |
|
|
|
(79 |
) |
|
|
503 |
|
|
|
330 |
|
Net interest and dividend income after provision for loan losses |
|
|
19,180 |
|
|
|
15,933 |
|
|
|
35,534 |
|
|
|
30,677 |
|
Noninterest income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wealth management revenue |
|
|
6,419 |
|
|
|
6,139 |
|
|
|
12,543 |
|
|
|
12,265 |
|
Deposit account fees |
|
|
843 |
|
|
|
774 |
|
|
|
1,581 |
|
|
|
1,524 |
|
ATM/Debit card income |
|
|
379 |
|
|
|
310 |
|
|
|
655 |
|
|
|
581 |
|
Bank owned life insurance income |
|
|
162 |
|
|
|
136 |
|
|
|
289 |
|
|
|
264 |
|
Gain (loss) on disposition of investment securities |
|
|
6 |
|
|
|
2 |
|
|
|
(81 |
) |
|
|
2 |
|
Gain on loans held for sale |
|
|
15 |
|
|
|
18 |
|
|
|
31 |
|
|
|
45 |
|
Loan related derivative income |
|
|
5 |
|
|
|
112 |
|
|
|
441 |
|
|
|
584 |
|
Other income |
|
|
316 |
|
|
|
353 |
|
|
|
643 |
|
|
|
757 |
|
Total noninterest income |
|
|
8,145 |
|
|
|
7,844 |
|
|
|
16,102 |
|
|
|
16,022 |
|
Noninterest expense |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits |
|
|
11,459 |
|
|
|
10,443 |
|
|
|
22,286 |
|
|
|
20,516 |
|
Occupancy and equipment |
|
|
2,691 |
|
|
|
2,219 |
|
|
|
5,021 |
|
|
|
4,446 |
|
Data processing |
|
|
1,534 |
|
|
|
1,289 |
|
|
|
2,880 |
|
|
|
2,519 |
|
Professional services |
|
|
760 |
|
|
|
829 |
|
|
|
1,567 |
|
|
|
1,716 |
|
Marketing |
|
|
508 |
|
|
|
336 |
|
|
|
912 |
|
|
|
774 |
|
FDIC insurance |
|
|
278 |
|
|
|
135 |
|
|
|
278 |
|
|
|
286 |
|
Merger expenses |
|
|
3,450 |
|
|
|
— |
|
|
|
3,541 |
|
|
|
— |
|
Other expenses |
|
|
833 |
|
|
|
514 |
|
|
|
1,401 |
|
|
|
1,009 |
|
Total noninterest expense |
|
|
21,513 |
|
|
|
15,765 |
|
|
|
37,886 |
|
|
|
31,266 |
|
Income before income taxes |
|
|
5,812 |
|
|
|
8,012 |
|
|
|
13,750 |
|
|
|
15,433 |
|
Income tax expense |
|
|
1,540 |
|
|
|
1,901 |
|
|
|
3,280 |
|
|
|
3,517 |
|
Net income |
|
$ |
4,272 |
|
|
|
6,111 |
|
|
$ |
10,470 |
|
|
$ |
11,916 |
|
Share data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of shares outstanding, basic |
|
|
4,682,109 |
|
|
|
4,059,927 |
|
|
|
4,379,141 |
|
|
|
4,057,156 |
|
Weighted average number of shares outstanding, diluted |
|
|
4,715,724 |
|
|
|
4,094,489 |
|
|
|
4,412,239 |
|
|
|
4,087,790 |
|
Basic earnings per share |
|
$ |
0.91 |
|
|
$ |
1.49 |
|
|
$ |
2.37 |
|
|
$ |
2.91 |
|
Diluted earnings per share |
|
$ |
0.90 |
|
|
$ |
1.48 |
|
|
$ |
2.35 |
|
|
$ |
2.89 |
|
CAMBRIDGE BANCORP AND SUBSIDIARIES
|
||||||||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||||||||
|
|
June 30, 2019 |
|
June 30, 2018 |
||||||||||||||||||||
|
|
Average
|
|
Interest
|
|
Rate
|
|
Average
|
|
Interest
|
|
Rate
|
||||||||||||
|
|
(dollars in thousands) |
|
|||||||||||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
$ |
1,951,133 |
|
|
$ |
21,355 |
|
|
|
4.39 |
% |
|
$ |
1,379,807 |
|
|
$ |
14,132 |
|
|
|
4.11 |
% |
Tax-exempt |
|
|
14,567 |
|
|
|
157 |
|
|
|
4.32 |
|
|
|
9,954 |
|
|
|
116 |
|
|
|
4.67 |
|
Securities available for sale (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
155,762 |
|
|
|
748 |
|
|
|
1.93 |
|
|
|
200,750 |
|
|
|
823 |
|
|
|
1.64 |
|
Securities held to maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
218,672 |
|
|
|
1,368 |
|
|
|
2.51 |
|
|
|
194,290 |
|
|
|
1,097 |
|
|
|
2.26 |
|
Tax-exempt |
|
|
75,423 |
|
|
|
728 |
|
|
|
3.87 |
|
|
|
77,170 |
|
|
|
764 |
|
|
|
3.97 |
|
Cash and cash equivalents |
|
|
55,015 |
|
|
|
219 |
|
|
|
1.60 |
|
|
|
42,185 |
|
|
|
130 |
|
|
|
1.24 |
|
Total interest-earning assets (4) |
|
|
2,470,572 |
|
|
|
24,575 |
|
|
|
3.99 |
% |
|
|
1,904,156 |
|
|
|
17,062 |
|
|
|
3.59 |
% |
Non interest-earning assets |
|
|
161,855 |
|
|
|
|
|
|
|
|
|
|
|
71,206 |
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
|
(16,908 |
) |
|
|
|
|
|
|
|
|
|
|
(15,777 |
) |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,615,519 |
|
|
|
|
|
|
|
|
|
|
$ |
1,959,585 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Checking accounts |
|
$ |
426,725 |
|
|
$ |
120 |
|
|
|
0.11 |
% |
|
$ |
419,403 |
|
|
$ |
52 |
|
|
|
0.05 |
% |
Savings accounts |
|
|
826,726 |
|
|
|
2,212 |
|
|
|
1.07 |
|
|
|
630,755 |
|
|
|
655 |
|
|
|
0.42 |
|
Money market accounts |
|
|
201,164 |
|
|
|
679 |
|
|
|
1.35 |
|
|
|
63,093 |
|
|
|
30 |
|
|
|
0.19 |
|
Certificates of deposit |
|
|
282,579 |
|
|
|
1,368 |
|
|
|
1.94 |
|
|
|
142,588 |
|
|
|
316 |
|
|
|
0.89 |
|
Total interest-bearing deposits |
|
|
1,737,194 |
|
|
|
4,379 |
|
|
|
1.01 |
|
|
|
1,255,839 |
|
|
|
1,053 |
|
|
|
0.34 |
|
Other borrowed funds |
|
|
50,447 |
|
|
|
315 |
|
|
|
2.50 |
|
|
|
5,660 |
|
|
|
29 |
|
|
|
2.06 |
|
Total interest-bearing liabilities |
|
|
1,787,641 |
|
|
|
4,694 |
|
|
|
1.05 |
% |
|
|
1,261,499 |
|
|
|
1,082 |
|
|
|
0.34 |
% |
Non-interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
541,380 |
|
|
|
|
|
|
|
|
|
|
|
522,218 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
64,182 |
|
|
|
|
|
|
|
|
|
|
|
23,504 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
2,393,203 |
|
|
|
|
|
|
|
|
|
|
|
1,807,221 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
222,316 |
|
|
|
|
|
|
|
|
|
|
|
152,364 |
|
|
|
|
|
|
|
|
|
Total liabilities & shareholders' equity |
|
$ |
2,615,519 |
|
|
|
|
|
|
|
|
|
|
$ |
1,959,585 |
|
|
|
|
|
|
|
|
|
Net interest income on a fully taxable equivalent basis |
|
|
|
|
|
|
19,881 |
|
|
|
|
|
|
|
|
|
|
|
15,980 |
|
|
|
|
|
Less taxable equivalent adjustment |
|
|
|
|
|
|
(186 |
) |
|
|
|
|
|
|
|
|
|
|
(184 |
) |
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
19,695 |
|
|
|
|
|
|
|
|
|
|
$ |
15,796 |
|
|
|
|
|
Net interest spread (5) |
|
|
|
|
|
|
|
|
|
|
2.94 |
% |
|
|
|
|
|
|
|
|
|
|
3.25 |
% |
Net interest margin (6) |
|
|
|
|
|
|
|
|
|
|
3.23 |
% |
|
|
|
|
|
|
|
|
|
|
3.37 |
% |
(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) |
Interest rate spread represents the difference between the weighted average yield on interest-earning assets 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. |
|
CAMBRIDGE BANCORP AND SUBSIDIARIES
|
||||||||||||||||||||||||
|
|
Six Months Ended |
||||||||||||||||||||||
|
|
June 30, 2019 |
|
June 30, 2018 |
||||||||||||||||||||
|
|
Average
|
|
Interest
|
|
Rate
|
|
Average
|
|
Interest
|
|
Rate
|
||||||||||||
|
|
(dollars in thousands) |
|
|||||||||||||||||||||
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-earning assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans (2) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
$ |
1,748,485 |
|
|
$ |
37,639 |
|
|
|
4.34 |
% |
|
$ |
1,366,260 |
|
|
$ |
27,510 |
|
|
|
4.06 |
% |
Tax-exempt |
|
|
12,168 |
|
|
|
269 |
|
|
|
4.46 |
|
|
|
10,494 |
|
|
|
237 |
|
|
|
4.55 |
|
Securities available for sale (3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
160,160 |
|
|
|
1,460 |
|
|
|
1.84 |
|
|
|
203,591 |
|
|
|
1,659 |
|
|
|
1.64 |
|
Securities held to maturity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Taxable |
|
|
214,035 |
|
|
|
2,636 |
|
|
|
2.48 |
|
|
|
180,725 |
|
|
|
1,975 |
|
|
|
2.20 |
|
Tax-exempt |
|
|
74,641 |
|
|
|
1,451 |
|
|
|
3.92 |
|
|
|
78,183 |
|
|
|
1,551 |
|
|
|
4.00 |
|
Cash and cash equivalents |
|
|
44,081 |
|
|
|
337 |
|
|
|
1.54 |
|
|
|
59,462 |
|
|
|
401 |
|
|
|
1.36 |
|
Total interest-earning assets (4) |
|
|
2,253,570 |
|
|
|
43,792 |
|
|
|
3.92 |
% |
|
|
1,898,715 |
|
|
|
33,333 |
|
|
|
3.54 |
% |
Non interest-earning assets |
|
|
138,310 |
|
|
|
|
|
|
|
|
|
|
|
69,913 |
|
|
|
|
|
|
|
|
|
Allowance for loan losses |
|
|
(16,799 |
) |
|
|
|
|
|
|
|
|
|
|
(15,628 |
) |
|
|
|
|
|
|
|
|
Total assets |
|
$ |
2,375,081 |
|
|
|
|
|
|
|
|
|
|
$ |
1,953,000 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest-bearing deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Checking accounts |
|
$ |
409,390 |
|
|
$ |
202 |
|
|
|
0.10 |
% |
|
$ |
428,024 |
|
|
$ |
102 |
|
|
|
0.05 |
% |
Savings accounts |
|
|
758,219 |
|
|
|
3,697 |
|
|
|
0.98 |
|
|
|
621,060 |
|
|
|
1,200 |
|
|
|
0.39 |
|
Money market accounts |
|
|
165,891 |
|
|
|
1,060 |
|
|
|
1.29 |
|
|
|
64,414 |
|
|
|
55 |
|
|
|
0.17 |
|
Certificates of deposit |
|
|
218,275 |
|
|
|
1,921 |
|
|
|
1.77 |
|
|
|
147,706 |
|
|
|
658 |
|
|
|
0.90 |
|
Total interest-bearing deposits |
|
|
1,551,775 |
|
|
|
6,880 |
|
|
|
0.89 |
% |
|
|
1,261,204 |
|
|
|
2,015 |
|
|
|
0.32 |
% |
Other borrowed funds |
|
|
52,275 |
|
|
|
671 |
|
|
|
2.59 |
|
|
|
4,612 |
|
|
|
46 |
|
|
|
2.01 |
|
Total interest-bearing liabilities |
|
|
1,604,050 |
|
|
|
7,551 |
|
|
|
0.95 |
% |
|
|
1,265,816 |
|
|
|
2,061 |
|
|
|
0.33 |
% |
Non-interest-bearing liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand deposits |
|
|
512,882 |
|
|
|
|
|
|
|
|
|
|
|
513,167 |
|
|
|
|
|
|
|
|
|
Other liabilities |
|
|
62,505 |
|
|
|
|
|
|
|
|
|
|
|
23,335 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
|
2,179,437 |
|
|
|
|
|
|
|
|
|
|
|
1,802,318 |
|
|
|
|
|
|
|
|
|
Shareholders' equity |
|
|
195,644 |
|
|
|
|
|
|
|
|
|
|
|
150,682 |
|
|
|
|
|
|
|
|
|
Total liabilities & shareholders' equity |
|
$ |
2,375,081 |
|
|
|
|
|
|
|
|
|
|
$ |
1,953,000 |
|
|
|
|
|
|
|
|
|
Net interest income on a fully taxable equivalent basis |
|
|
|
|
|
|
36,241 |
|
|
|
|
|
|
|
|
|
|
|
31,272 |
|
|
|
|
|
Less taxable equivalent adjustment |
|
|
|
|
|
|
(361 |
) |
|
|
|
|
|
|
|
|
|
|
(374 |
) |
|
|
|
|
Net interest income |
|
|
|
|
|
$ |
35,880 |
|
|
|
|
|
|
|
|
|
|
$ |
30,898 |
|
|
|
|
|
Net interest spread (5) |
|
|
|
|
|
|
|
|
|
|
2.97 |
% |
|
|
|
|
|
|
|
|
|
|
3.21 |
% |
Net interest margin (6) |
|
|
|
|
|
|
|
|
|
|
3.24 |
% |
|
|
|
|
|
|
|
|
|
|
3.32 |
% |
(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) |
Interest rate spread represents the difference between the weighted average yield on interest-earning assets 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. |
|
Organic Loan and Deposit Growth (dollars in thousands) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 2018 vs June 2019 |
||||||
|
|
June 30,
|
|
|
March 31,
|
|
|
December 31,
|
|
Balance
|
|
|
Organic
|
|
Organic
|
||||||||
Loans |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Residential mortgage |
|
$ |
938,560 |
|
|
$ |
613,254 |
|
|
$ |
604,331 |
|
$ |
314,552 |
|
|
$ |
19,677 |
|
|
3.3% |
||
Commercial mortgage |
|
|
905,441 |
|
|
|
749,835 |
|
|
|
757,957 |
|
|
114,338 |
|
|
|
33,146 |
|
|
4.4% |
||
Home equity |
|
|
85,814 |
|
|
|
68,849 |
|
|
|
69,336 |
|
|
15,452 |
|
|
|
1,026 |
|
|
1.5% |
||
Commercial & Industrial |
|
|
134,307 |
|
|
|
90,172 |
|
|
|
93,712 |
|
|
30,215 |
|
|
|
10,380 |
|
|
11.1% |
||
Consumer |
|
|
32,428 |
|
|
|
33,044 |
|
|
|
34,436 |
|
|
849 |
|
|
|
(2,857 |
) |
|
-8.3% |
||
Total loans |
|
$ |
2,096,550 |
|
|
$ |
1,555,154 |
|
|
$ |
1,559,772 |
|
$ |
475,406 |
|
|
$ |
61,372 |
|
|
3.9% |
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Demand |
|
$ |
587,030 |
|
|
$ |
490,649 |
|
|
$ |
494,492 |
|
$ |
58,722 |
|
|
$ |
33,816 |
|
|
6.8% |
||
Interest bearing checking |
|
|
422,426 |
|
|
|
385,605 |
|
|
|
431,702 |
|
|
49,454 |
|
|
|
(58,730 |
) |
|
-13.6% |
||
Money market |
|
|
200,935 |
|
|
|
146,925 |
|
|
|
135,585 |
|
|
68,183 |
|
|
|
(2,833 |
) |
|
-2.1% |
||
Savings |
|
|
853,356 |
|
|
|
709,940 |
|
|
|
628,212 |
|
|
138,285 |
|
|
|
86,859 |
|
|
13.8% |
||
Core deposits |
|
|
2,063,747 |
|
|
|
1,733,119 |
|
|
|
1,689,991 |
|
|
314,644 |
|
|
|
59,112 |
|
|
3.5% |
||
Certificates of deposit |
|
|
265,918 |
|
|
|
169,264 |
|
|
|
121,419 |
|
|
162,545 |
|
|
|
(18,046 |
) |
|
-14.9% |
||
Total deposits |
|
$ |
2,329,665 |
|
|
$ |
1,902,383 |
|
|
$ |
1,811,410 |
|
$ |
477,189 |
|
|
$ |
41,066 |
|
|
2.3% |
||
|
|
|
|
|
|
Fair Value Marks Associated with the Optima Merger |
||||
The following table summarizes the day one fair value adjustments the Company recorded as a result of the merger with Optima. |
||||
|
|
Fair Value Adjustments for Assets Acquired and Liabilities Assumed |
||
|
|
(dollars in thousands) |
||
Loans |
|
$ |
(6,255 |
) |
Core deposit intangible |
|
|
3,609 |
|
Banking premises and equipment |
|
|
912 |
|
Deposits |
|
|
(472 |
) |
Total Adjustments |
|
$ |
(2,206 |
) |
|
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 June 30, |
|
Six Months Ended June 30, |
||||||||||||
Operating Net Income / Operating Diluted EPS |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (a GAAP measure) |
|
$ |
4,272 |
|
|
$ |
6,111 |
|
|
$ |
10,470 |
|
|
$ |
11,916 |
|
Add: Merger Expenses (Pretax) |
|
|
3,450 |
|
|
|
— |
|
|
|
3,541 |
|
|
|
— |
|
Add: (Gain)/loss on disposition of investment securities |
|
|
(6 |
) |
|
|
(2 |
) |
|
|
81 |
|
|
|
(2 |
) |
Tax effect of Merger Expenses and Gain (loss) on disposition of investment securities(1) |
|
|
(761 |
) |
|
|
1 |
|
|
|
(805 |
) |
|
|
1 |
|
Operating Net Income (a non-GAAP measure) |
|
$ |
6,955 |
|
|
$ |
6,110 |
|
|
$ |
13,287 |
|
|
$ |
11,915 |
|
Less: Dividends and Undistributed Earnings Allocated to Participating Securities (GAAP) |
|
|
(35 |
) |
|
|
(60 |
) |
|
|
(94 |
) |
|
|
(122 |
) |
Operating Income Applicable to Common Shareholders (a non-GAAP measure) |
|
$ |
6,920 |
|
|
$ |
6,050 |
|
|
$ |
13,193 |
|
|
$ |
11,793 |
|
Weighted Average Diluted Shares |
|
|
4,715,724 |
|
|
|
4,094,489 |
|
|
|
4,412,239 |
|
|
|
4,087,790 |
|
Operating Diluted earnings per share (a non-GAAP measure) |
|
$ |
1.47 |
|
|
$ |
1.48 |
|
|
$ |
2.99 |
|
|
$ |
2.88 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
Operating Efficiency Ratio |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Interest and Dividend Income |
|
$ |
19,776 |
|
|
$ |
15,854 |
|
|
$ |
36,037 |
|
|
$ |
31,007 |
|
Noninterest Income |
|
|
8,145 |
|
|
|
7,844 |
|
|
|
16,102 |
|
|
|
16,022 |
|
Less: Gain/(loss) on disposition of investment securities |
|
|
6 |
|
|
|
2 |
|
|
|
(81 |
) |
|
|
2 |
|
Operating Revenue (a non-GAAP measure) |
|
|
27,915 |
|
|
|
23,696 |
|
|
|
52,220 |
|
|
|
47,027 |
|
Noninterest Expense |
|
|
21,513 |
|
|
|
15,765 |
|
|
|
37,886 |
|
|
|
31,266 |
|
Less: Merger Expenses |
|
|
3,450 |
|
|
|
— |
|
|
|
3,541 |
|
|
|
— |
|
Operating Expense (a non-GAAP measure) |
|
$ |
18,063 |
|
|
$ |
15,765 |
|
|
$ |
34,345 |
|
|
$ |
31,266 |
|
Operating Efficiency Ratio (a non-GAAP measure) |
|
|
64.71 |
% |
|
|
66.53 |
% |
|
|
65.77 |
% |
|
|
66.49 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
Operating Return on Tangible Common Equity |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Net Income (a non-GAAP measure) |
|
$ |
6,955 |
|
|
$ |
6,110 |
|
|
$ |
13,287 |
|
|
$ |
11,915 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Shareholders' Equity (GAAP) |
|
|
222,316 |
|
|
|
152,364 |
|
|
|
195,644 |
|
|
|
150,682 |
|
Less: Average Goodwill and merger related intangibles (GAAP) |
|
|
28,120 |
|
|
|
412 |
|
|
|
14,343 |
|
|
|
412 |
|
Tangible Common Equity (a non-GAAP measure) |
|
$ |
194,196 |
|
|
$ |
151,952 |
|
|
$ |
181,301 |
|
|
$ |
150,270 |
|
Operating Return on Tangible Common Equity (a non-GAAP measure) |
|
|
14.37 |
% |
|
|
16.13 |
% |
|
|
14.78 |
% |
|
|
15.99 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
Operating Return on Average Assets |
|
2019 |
|
2018 |
|
2019 |
|
2018 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Net Income (a non-GAAP measure) |
|
$ |
6,955 |
|
|
$ |
6,110 |
|
|
$ |
13,287 |
|
|
$ |
11,915 |
|
Average Assets (GAAP) |
|
|
2,615,519 |
|
|
|
1,959,585 |
|
|
|
2,375,081 |
|
|
|
1,953,000 |
|
Operating Return on Average Assets (a non-GAAP measure) |
|
|
1.07 |
% |
|
|
1.25 |
% |
|
|
1.13 |
% |
|
|
1.23 |
% |
(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. |
|
The following tables summarize the calculation of the Company's tangible common equity ratio and tangible book value per share for the periods indicated:
|
June 30, 2019 |
|
December 31, 2018 |
|
June 30, 2018 |
||||||
|
(in thousands, except share data) |
||||||||||
Tangible Common Equity: |
|
|
|
|
|
|
|
|
|
|
|
Shareholders' equity (GAAP) |
$ |
237,094 |
|
|
$ |
167,026 |
|
|
$ |
155,692 |
|
Less: Goodwill and acquisition related intangibles (GAAP) |
|
(34,725 |
) |
|
|
(412 |
) |
|
|
(412 |
) |
Tangible Common Equity (a non-GAAP measure) |
|
202,369 |
|
|
|
166,614 |
|
|
|
155,280 |
|
Total assets (GAAP) |
|
2,741,308 |
|
|
|
2,101,384 |
|
|
|
1,971,214 |
|
Less: Goodwill and acquisition related intangibles (GAAP) |
|
(34,725 |
) |
|
|
(412 |
) |
|
|
(412 |
) |
Tangible assets (a non-GAAP measure) |
$ |
2,706,583 |
|
|
$ |
2,100,972 |
|
|
$ |
1,970,802 |
|
Tangible Common Equity Ratio (a non-GAAP measure) |
|
7.48 |
% |
|
|
7.93 |
% |
|
|
7.88 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Book Value Per Share: |
|
|
|
|
|
|
|
|
|
|
|
Tangible Common Equity (a non-GAAP measure) |
$ |
202,369 |
|
|
$ |
166,614 |
|
|
$ |
155,280 |
|
Common shares outstanding |
|
4,850,230 |
|
|
|
4,107,051 |
|
|
|
4,104,317 |
|
Tangible Book Value Per Share (a non-GAAP measure) |
$ |
41.72 |
|
|
$ |
40.57 |
|
|
$ |
37.83 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20190716005555/en/
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