Market Overview

Cambridge Bancorp Announces First Quarter 2018 Earnings and Declares Dividend

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Cambridge Bancorp (NASDAQ:CATC) (the "Company"), the parent of
Cambridge Trust Company, today announced unaudited net income of
$5,805,000 for the quarter ended March 31, 2018, an increase of
$1,477,000, or 34.1%, compared to net income of $4,328,000 for the
quarter ended March 31, 2017. Diluted earnings per share were $1.41 for
the first quarter of 2018, representing a 33.0% increase over diluted
earnings per share of $1.06 for the same quarter last year.

First quarter 2018 highlights as compared to the first quarter of 2017:

  • Wealth Management Assets under Management and Administration now at
    $3.1 billion, an increase of 12.3%
  • Revenue of $23.3 million, an increase of 9.6%
  • Loan growth of $70.9 million, or 5.4%
  • Core deposit growth of $128.6 million, or 8.5%
  • Federal statutory corporate tax rate decreased to 21% from 35%

"We are pleased to report the Company delivered strong earnings during
the first quarter of 2018," noted Denis K. Sheahan, Chairman and CEO.
"Cambridge Bancorp posted strong profitability metrics for the quarter
with annualized return on average assets of 1.21% and annualized return
on average shareholders' equity of 15.80%. In the midst of continued
loan payoffs, net loan growth resumed, and the Bank's focus on core
deposits, growth in noninterest income businesses, and expense control
led to an increase in income before income taxes of 17.6% in the first
quarter versus the same period a year ago."

Balance Sheet

Total assets increased $11.8 million, or 0.6%, from December 31, 2017
and were $2.0 billion as of March 31, 2018.

Total loans increased $30.9 million, or 2.3%, from December 31, 2017 and
stood at $1.4 billion as of March 31, 2018. The growth in total loans
was primarily due to the increase in commercial real estate loans of
$22.6 million, from $633.6 million at December 31, 2017 to $656.3
million at March 31, 2018, and increases in commercial and industrial
loans of $10.1 million, or 15.4%, from $65.3 million at December 31,
2017 to $75.4 million at March 31, 2018. Net loan growth during the
quarter was healthy despite continued strong competition in the greater
Boston area and continued elevated levels of loan payoffs.

The Company's total investment securities portfolio increased by $25.1
million, or 5.7%, from $437.2 million at December 31, 2017 to $462.3
million at March 31, 2018.

Core deposits, which the Company defines as all deposits other than
certificates of deposit, increased by $20.6 million, or 1.3%, from
December 31, 2017. The cost of total deposits for the quarter ended
March 31, 2018 was 0.22%, as compared to 0.17% for the quarter ended
March 31, 2017. Total deposits at March 31, 2018 were $1.8 billion.

Net Interest and Dividend Income

For the quarter ended March 31, 2018, net interest and dividend income
after provision for loan losses increased by $813,000, or 5.8%, to $14.7
million, as compared to $13.9 million for the quarter ended March 31,
2017. Interest on loans increased $970,000, or 7.8%, which was driven by
a combination of net loan growth and the impact of rising rates on our
variable rate loan portfolio. The Company's net interest margin, on a
fully taxable equivalent basis, increased two basis points to 3.28% for
the quarter ended March 31, 2018, as compared to 3.26% for the quarter
ended March 31, 2017 using federal tax rates of 21% and 35%,
respectively.

Noninterest Income

Total noninterest income increased by $851,000, or 11.6%, to $8.2
million for the quarter ended March 31, 2018, as compared to $7.3
million for the quarter ended March 31, 2017, primarily as a result of
higher Wealth Management revenue and higher loan related derivative
income associated with the Company's interest rate risk strategy.
Noninterest income was 35.1% of total revenue for the quarter ended
March 31, 2018. Wealth Management revenue increased by $764,000, or
14.2%, for the first quarter of 2018, as compared to the first quarter
of 2017, primarily due to market appreciation. Wealth Management Assets
under Management and Administration increased by $54.7 million, or 1.8%,
from December 31, 2017 and ended at $3.1 billion as of March 31, 2018.
Loan related derivative income increased $284,000 for the first quarter
of 2018, as compared to the first quarter of 2017, due to the volume of
derivative transactions executed in the first quarter of 2018.

Noninterest income increases were partially offset by lower gains on
loans held for sale of $208,000 and lower deposit account fee income of
$63,000 for the quarter ended March 31, 2018, as compared to the quarter
ended March 31, 2017.

Noninterest Expense

Total noninterest expense increased by $555,000, or 3.7%, to $15.5
million for the quarter ended March 31, 2018, as compared to $14.9
million for the quarter ended March 31, 2017, primarily driven by higher
salaries and employee benefits expense and higher marketing expense. The
increase in salaries and employee benefits expense of $917,000 was
driven by the combination of increased staffing to support business
initiatives, higher employee benefit costs, and the adoption of new
accounting guidance ("ASU 2017-07") for net periodic pension costs and
net periodic postretirement benefit costs. The amount added to salaries
and benefits expense from the adoption of ASU 2017-07 during the first
quarter of 2018 was approximately $239,000, which was correspondingly
recorded as a decrease in other expense during the first quarter of
2018. The adoption of ASU 2017-07 required that the Company represent
the impacted line items for the first quarter of 2017. The result of
this retrospective application for the first quarter of 2017 was a
decrease in salaries and benefits expense of approximately $56,000 and a
corresponding increase in other expense for the same amount. The
increase of $168,000 in marketing expense was due to the increased focus
of growing brand awareness within our markets.

Noninterest expense increases were partially offset by lower other
expenses of $418,000 primarily resulting from the adoption of new
accounting guidance for net periodic pension cost and net periodic
postretirement benefit cost as discussed above, lower data processing
costs of $93,000, and lower occupancy and equipment expenses of $26,000
for the quarter ended March 31, 2018, as compared to March 31, 2017.

Asset Quality

Loan quality remained sound with non-performing loans totaling $1.5
million, or 0.11% of total loans outstanding as of March 31, 2018. The
allowance for loan losses was $15.7 million, or 1.14% of total loans
outstanding at March 31, 2018, as compared to $15.3 million, or 1.13% of
total loans outstanding at year end 2017.

Income Taxes

In accordance with the Tax Cuts and Jobs Act of 2017, the Company's
federal statutory corporate tax rate decreased from 35% to 21% effective
January 1, 2018. The effective tax rate was 21.8% for the quarter ended
March 31, 2018, as compared to 31.4% for the quarter ended March 31,
2017. Additionally, the Company recognized $148,000 of tax benefit
resulting from the accounting for share-based payments during the first
quarter of 2018.

Dividend

On April 17, 2018, the Company's Board of Directors declared a quarterly
cash dividend of $0.48 per share, which is payable on May 17, 2018 to
shareholders of record as of the close of business on May 3, 2018. This
represents an increase of $0.02 per share, as compared to $0.46 per
share declared during the same quarter of 2017.

About Cambridge Bancorp

Cambridge Bancorp, the parent company of Cambridge Trust Company, is
based in Cambridge, Massachusetts. Cambridge Trust Company is a
128-year-old Massachusetts chartered commercial bank with $2.0 billion
in assets and 10 Massachusetts locations in Cambridge, Boston, Belmont,
Concord, Lexington, and Weston. Cambridge Trust Company is one of New
England's leaders in wealth management with $3.1 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"
within the meaning of the Private Securities Litigation Reform Act of
1995 ("PSLRA"). These statements are intended to take advantage of the
"safe harbor" provisions of the PSLRA. These statements are based on the
beliefs and assumptions of management of the Company and its
subsidiaries and on the information available to management at the time
that these statements were made. Since these statements reflect the
views of management concerning future events, these statements involve
risks, uncertainties, and assumptions. As a result, actual results may
differ from those contemplated by these statements. Forward-looking
statements can be identified by the fact that they do not relate
strictly to historical or current facts. Such statements may be
identified by the use of words such as "believe," "expect,"
"anticipate," "forecast," "estimate," "intend," "will," "would,"
"should," "could," "may," or similar words. There are a number of
factors, many of which are beyond the Company's control, that could
cause actual conditions, events, or results to differ materially from
those in the forward-looking statements. Factors that may cause actual
results to differ materially from those contemplated by such
forward-looking statements include, among others, changes in the
interest rate environment, unfavorable or less than favorable changes in
general economic conditions (nationally or regionally), our ability to
continue to increase loans and deposit growth, increased competitive
pressures among depository and other financial institutions, legislative
and regulatory changes that adversely affect the businesses in which the
Company is engaged, changes in the securities market, and other factors
that are described in the Company's filings with the Securities and
Exchange Commission. Readers should not place undue reliance on these
forward-looking statements, which speak only as of the date they are
made. The Company disclaims any intent or obligation to update any
forward-looking statements, whether in response to new information,
future events, or otherwise, except as may be required by law.

CAMBRIDGE BANCORP AND SUBSIDIARIES
UNAUDITED QUARTERLY
RESULTS
March 31, 2018

        Three Months Ended
March 31,
2018     2017
(dollars in thousands, except per share data)
       
Interest and Dividend Income $ 16,132 $ 14,673
Interest Expense   979   712
Net Interest and Dividend Income 15,153 13,961
Provision for Loan Losses 409 30
Noninterest Income 8,178 7,327
Noninterest Expense   15,501   14,946
Income Before Income Taxes
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