Core Viewpoint - Eastern Bankshares, Inc. and Cambridge Bancorp have received all necessary regulatory approvals to complete their merger, expected to close on or about July 12, 2024, creating a $26 billion organization positioned as Greater Boston's leading local bank and the largest bank-owned independent investment advisor in Massachusetts [1][2]. Company Overview - Eastern Bankshares, Inc. is the stock holding company for Eastern Bank, founded in 1818, with over 120 locations and approximately $21 billion in total assets as of March 31, 2024 [5]. - Cambridge Bancorp, the parent company of Cambridge Trust Company, has approximately $5.37 billion in assets and operates 22 locations in Massachusetts and New Hampshire as of March 31, 2024 [6]. Merger Details - The merger was initially announced on September 19, 2023, and received shareholder approval on February 28, 2024 [2]. - The combined entity will enhance product and service offerings to customers, maintaining familiar faces in key roles [2].

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited financial statements show a slight asset decrease to **$5.37 billion** and a **44.5% net income decline** to **$6.9 million** in Q1 2024 - The unaudited consolidated financial statements include all normal recurring adjustments necessary for a fair presentation of the company's financial position and results of operations in accordance with GAAP. Interim results are not necessarily indicative of full-year results[14](index=14&type=chunk) [Unaudited Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) Total assets slightly decreased to **$5.37 billion** by March 31, 2024, driven by lower deposits and investment securities, offset by increased borrowings Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2024 | December 31, 2023 | Change (%) | | :--- | :--- | :--- | :--- | | **Total Assets** | **$5,373,840** | **$5,417,666** | **(0.8%)** | | Net Loans | $3,955,402 | $3,982,600 | (0.7%) | | Total Investment Securities | $1,073,840 | $1,097,170 | (2.1%) | | **Total Liabilities** | **$4,838,244** | **$4,883,093** | **(0.9%)** | | Total Deposits | $4,185,382 | $4,321,178 | (3.1%) | | Borrowings | $546,405 | $452,155 | 20.8% | | **Total Shareholders' Equity** | **$535,596** | **$534,573** | **0.2%** | [Unaudited Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) Net income for Q1 2024 significantly decreased by **44.5%** to **$6.9 million**, primarily due to a **21.1% decline** in net interest income Consolidated Income Statement (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Total Interest & Dividend Income | $56,213 | $51,742 | 8.6% | | Total Interest Expense | $29,181 | $17,494 | 66.8% | | **Net Interest Income** | **$27,032** | **$34,248** | **(21.1%)** | | Provision for Credit Losses | $125 | $60 | 108.3% | | Total Noninterest Income | $10,606 | $10,715 | (1.0%) | | Total Noninterest Expense | $28,259 | $28,328 | (0.2%) | | **Net Income** | **$6,888** | **$12,416** | **(44.5%)** | | **Diluted EPS** | **$0.87** | **$1.58** | **(44.9%)** | [Unaudited Consolidated Statements of Comprehensive Income](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for Q1 2024 was **$5.9 million**, significantly lower than prior year, impacted by net income and other comprehensive loss Consolidated Comprehensive Income (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Net Income | $6,888 | $12,416 | | Other Comprehensive Income (Loss) | $(954) | $2,103 | | **Comprehensive Income** | **$5,934** | **$14,519** | [Unaudited Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Shareholders' equity increased slightly to **$535.6 million** by March 31, 2024, primarily from net income, partially offset by dividends and other comprehensive loss Changes in Shareholders' Equity (Q1 2024, in thousands) | Item | Amount | | :--- | :--- | | Balance at December 31, 2023 | $534,573 | | Net Income | $6,888 | | Other Comprehensive Loss | $(954) | | Dividends Declared ($0.67/share) | $(5,256) | | Share Based Compensation & Other | $345 | | **Balance at March 31, 2024** | **$535,596** | [Unaudited Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) Cash and cash equivalents decreased by **$3.3 million** in Q1 2024, with operating and investing inflows offset by financing outflows Consolidated Cash Flows (Three Months Ended March 31, in thousands) | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $1,481 | $4,554 | | Net Cash from Investing Activities | $42,089 | $63,581 | | Net Cash from Financing Activities | $(46,869) | $(28,088) | | **Net Change in Cash** | **$(3,299)** | **$40,047** | | Cash at Beginning of Period | $33,004 | $30,719 | | **Cash at End of Period** | **$29,705** | **$70,766** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, investment and loan portfolios, credit loss allowance, derivatives, fair value, and regulatory capital adequacy - The Company operates as a private bank with a single reportable operating segment, focusing on private banking and wealth management services[53](index=53&type=chunk) - As of March 31, 2024, the Company and its bank subsidiary met all minimum capital requirements and were considered **'well-capitalized'** by the FRB and FDIC[91](index=91&type=chunk)[114](index=114&type=chunk) - The company utilizes interest rate swaps and floors to mitigate interest rate risk. As of March 31, 2024, derivative assets totaled **$50.7 million** and derivative liabilities totaled **$46.9 million**[117](index=117&type=chunk)[157](index=157&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **44.5% net income decrease** to higher funding costs, compressing net interest margin to **2.10%** - On September 19, 2023, the Company entered into a merger agreement with Eastern Bankshares, Inc. The merger was approved by the Company's shareholders on February 28, 2024, and remains subject to regulatory approval and other customary closing conditions[197](index=197&type=chunk) - Net income for Q1 2024 decreased by **$5.5 million** (**44.5%**) to **$6.9 million** compared to Q1 2023, primarily due to lower net interest income and higher non-operating expenses related to the merger[211](index=211&type=chunk) - Net interest margin, on a fully taxable equivalent basis, decreased by **53 basis points** to **2.10%** for Q1 2024, compared to **2.63%** for Q1 2023, mainly due to higher cost of funds[214](index=214&type=chunk) [Results of Operations](index=50&type=section&id=RESULTS%20OF%20OPERATIONS) Q1 2024 operating results show a **21.1% decline** in net interest income to **$27.0 million**, despite stable noninterest income and expense Key Operating Metrics (Q1 2024 vs Q1 2023) | Metric | Q1 2024 | Q1 2023 | Change | | :--- | :--- | :--- | :--- | | Net Interest Income | $27.0M | $34.2M | -21.1% | | Provision for Credit Losses | $125k | $60k | +108.3% | | Wealth Management Revenue | $8.7M | $7.9M | +9.8% | | Total Noninterest Income | $10.6M | $10.7M | -1.0% | | Total Noninterest Expense | $28.3M | $28.3M | 0.0% | | Net Income | $6.9M | $12.4M | -44.5% | - Interest expense on deposits increased by **46.3%** and on borrowings by **277.5%** year-over-year, reflecting the higher interest rate environment[213](index=213&type=chunk) - Non-operating expenses increased by **$983,000**, primarily due to merger expenses with Eastern and office consolidation costs[221](index=221&type=chunk) [Changes in Financial Condition](index=53&type=section&id=CHANGES%20IN%20FINANCIAL%20CONDITION) Total assets decreased by **$43.8 million** to **$5.37 billion**, driven by declines in loans and deposits, partially offset by increased borrowings Balance Sheet Changes (Dec 31, 2023 to Mar 31, 2024) | Account | Change ($M) | Change (%) | | :--- | :--- | :--- | | Total Assets | $(43.8) | (0.8%) | | Total Loans | $(26.8) | (0.7%) | | Investment Securities | $(23.3) | (2.1%) | | Total Deposits | $(135.8) | (3.1%) | | Borrowings | $94.3 | 20.8% | | Shareholders' Equity | $1.0 | 0.2% | - Tangible book value per share increased to **$59.23** at March 31, 2024, from **$59.08** at December 31, 2023[225](index=225&type=chunk)[248](index=248&type=chunk) [Loan Portfolio](index=59&type=section&id=LOANS) The **$4.0 billion** loan portfolio is primarily commercial mortgage (**48%**) and residential mortgage (**40%**), with non-performing loans at **0.43%** Loan Portfolio Composition (March 31, 2024) | Loan Category | Amount ($B) | % of Total | | :--- | :--- | :--- | | Commercial Mortgage | $1.92 | 48% | | Residential Mortgage | $1.61 | 40% | | Commercial & Industrial | $0.35 | 9% | | Home Equity | $0.09 | 2% | | Consumer | $0.02 | 1% | | **Total Loans** | **$3.99** | **100%** | - Total non-performing loans were **$17.2 million** (**0.43%** of gross loans) at March 31, 2024, up from **$16.6 million** (**0.41%** of gross loans) at December 31, 2023[296](index=296&type=chunk)[266](index=266&type=chunk) - The allowance for credit losses for loans stood at **$39.3 million**, or **0.98%** of total loans outstanding, at March 31, 2024[237](index=237&type=chunk)[302](index=302&type=chunk) [Liquidity and Capital Resources](index=79&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) The Company maintains strong liquidity with **$2.35 billion** in available funds and remains **'well-capitalized'** under all regulatory requirements - At March 31, 2024, the Company had access to total funds of **$2.35 billion**, including borrowing capacity from the FHLB of Boston and the FRB of Boston[327](index=327&type=chunk)[333](index=333&type=chunk)[305](index=305&type=chunk) - The Company and the Bank are subject to various regulatory capital requirements and exceeded the minimum levels to be considered **'well-capitalized'** as of March 31, 2024[374](index=374&type=chunk)[91](index=91&type=chunk) - Shareholders' equity increased to **$535.6 million** at March 31, 2024, from **$534.6 million** at December 31, 2023, mainly due to net income of **$6.9 million**, partially offset by **$5.3 million** in dividend payments[328](index=328&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risk is interest rate risk, with a **+200 bps shock** projected to decrease NII by **5.6%** and EVE by **25.4%** Net Interest Income Sensitivity (Instantaneous Parallel Shock, as of March 31, 2024) | Rate Shock (bps) | % Change in NII (Next 12 Months) | | :--- | :--- | | +300 | (8.3)% | | +200 | (5.6)% | | +100 | (2.6)% | | -100 | 2.8% | | -200 | 4.2% | - The Bank's economic value of equity (EVE) analysis estimated that a **+200 basis point** rate shock would decrease EVE by **25.4%**, while a **-200 basis point** shock would increase EVE by **21.8%**[352](index=352&type=chunk)[371](index=371&type=chunk) - The Company utilizes derivative financial instruments, including interest rate floors and swaps, to manage its exposure to interest rate fluctuations in both rising and falling rate environments[347](index=347&type=chunk)[321](index=321&type=chunk)[348](index=348&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were **effective** as of March 31, 2024, with no material changes to internal controls - Based on an evaluation as of March 31, 2024, the Chief Executive Officer and interim Chief Financial Officer concluded that the Company's disclosure controls and procedures were **effective**[359](index=359&type=chunk) - There were no changes in the Company's internal controls over financial reporting during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, these controls[360](index=360&type=chunk) [PART II. OTHER INFORMATION](index=51&type=section&id=PART%20II.%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently a party to any material pending legal proceedings in the ordinary course of business - The Company is not currently party to any material pending legal proceedings[380](index=380&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) No material changes to the risk factors previously disclosed in the 2023 Annual Report on Form 10-K - There have been no material changes to the risk factors previously disclosed in the 2023 Annual Report[362](index=362&type=chunk)[381](index=381&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=51&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company repurchased **5,782 shares** in Q1 2024 for tax liabilities, with the 2023 repurchase program now expired Share Repurchases (Q1 2024) | Period | Total Shares Repurchased | Weighted Avg. Price Paid | | :--- | :--- | :--- | | January 2024 | 873 | $66.51 | | February 2024 | 3,130 | $68.31 | | March 2024 | 1,779 | $64.48 | | **Total** | **5,782** | **N/A** | - The share repurchase program authorized in March 2023 expired on March 13, 2024, and the Board has not authorized a new program[382](index=382&type=chunk) [Item 5. Other Information](index=51&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during Q1 2024 - No directors or executive officers adopted or terminated any Rule 10b5-1 trading plans during the first quarter of 2024[365](index=365&type=chunk) [Item 6. Exhibits](index=52&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including SOX certifications and Inline XBRL documents - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and Inline XBRL data files (101.INS, 101.SCH, 104)[387](index=387&type=chunk)

Cambridge (CATC) came out with quarterly earnings of $1.02 per share, missing the Zacks Consensus Estimate of $1.05 per share. This compares to earnings of $1.62 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -2.86%. A quarter ago, it was expected that this bank would post earnings of $0.92 per share when it actually produced earnings of $1.11, delivering a surprise of 20.65%.Over the last four quarters, the company has surpa ...

Financial Highlights and Corporate Developments The company reported a sequential decline in Q1 2024 profitability, marked by strong wealth management growth and stable asset quality, while advancing its merger with Eastern Bankshares [First Quarter 2024 Financial Highlights](index=1&type=section&id=First%20Quarter%202024%20Financial%20Highlights) Cambridge Bancorp reported a sequential decline in Q1 2024 GAAP net income to $6.9 million and diluted EPS to $0.87, alongside strong wealth management growth, stable asset quality, and robust liquidity Q1 2024 vs Q4 2023 Profitability (GAAP) | Metric | Q1 2024 | Q4 2023 | Change | | :--- | :--- | :--- | :--- | | Net Income | $6.9 million | $8.0 million | -14.3% | | Diluted EPS | $0.87 | $1.02 | -14.7% | Q1 2024 vs Q4 2023 Profitability (Operating, Non-GAAP) | Metric | Q1 2024 | Q4 2023 | Change | | :--- | :--- | :--- | :--- | | Operating Net Income | $8.0 million | $8.7 million | -8.3% | | Operating Diluted EPS | $1.02 | $1.11 | -8.1% | Q1 2024 Key Performance Ratios | Ratio | Value | | :--- | :--- | | Return on Average Assets (ROA) | 0.51% | | Operating ROA | 0.60% | | Return on Average Equity | 5.19% | | Operating ROTCE | 6.94% | - Wealth Management Assets Under Management and Administration grew by **12.5% year-over-year** to **$4.80 billion**, with associated revenue increasing **9.8%** to **$8.7 million**[4](index=4&type=chunk) - Asset quality remained stable, with non-performing loans to total loans at **0.43%** and non-performing assets to total assets at **0.32%** as of March 31, 2024[4](index=4&type=chunk) - The company maintained a strong liquidity position with available sources of approximately **$2.35 billion**, which is about **two times** the amount of its uninsured deposits[5](index=5&type=chunk) [Merger with Eastern Bankshares, Inc.](index=1&type=section&id=Merger%20with%20Eastern%20Bankshares%20Inc.) The company is proceeding with its all-stock merger with Eastern Bankshares, Inc., approved by shareholders and now pending regulatory approval - An Agreement and Plan of Merger was entered into with Eastern Bankshares, Inc. on September 19, 2023, for an **all-stock transaction**[3](index=3&type=chunk) - Under the terms, each share of Cambridge Bancorp (CATC) common stock will be exchanged for **4.956 shares of Eastern common stock**[3](index=3&type=chunk) - Shareholders of both companies approved the merger on February 28, 2024; the merger remains subject to regulatory approval[3](index=3&type=chunk) Financial Performance Analysis This section analyzes the company's Q1 2024 financial performance, detailing balance sheet shifts, net interest income, expense trends, asset quality, and capital position [Balance Sheet Analysis](index=2&type=section&id=Balance%20Sheet%20Analysis) Total assets slightly decreased to **$5.37 billion** in Q1 2024, driven by a contraction in the loan portfolio and a strategic reduction in higher-cost wholesale deposits - Total assets decreased by **$43.8 million**, or **0.8%**, to **$5.37 billion** at March 31, 2024[22](index=22&type=chunk) Loan Portfolio Changes (Q1 2024 vs Q4 2023) | Loan Category | Change | | :--- | :--- | | Total Loans | -$26.8M (-0.7%) | | Residential Real Estate | -$15.0M | | Commercial Real Estate | -$9.2M | | Commercial & Industrial | +$4.8M (+1.4%) | - Total deposits decreased by **$135.8 million (3.1%)** to **$4.19 billion**, mainly from a **$130.6 million** reduction in wholesale certificates of deposit[23](index=23&type=chunk)[24](index=24&type=chunk) - The company increased borrowings by **$94.3 million**, shifting funding toward lower-cost FHLB Boston borrowings to replace higher-priced wholesale deposits[12](index=12&type=chunk)[23](index=23&type=chunk) - The cost of total deposits was stable at **2.18%** for Q1 2024, compared to **2.19%** for Q4 2023[24](index=24&type=chunk) [Net Interest and Dividend Income](index=3&type=section&id=Net%20Interest%20and%20Dividend%20Income) Net interest income decreased by **4.0%** to **$27.0 million** in Q1 2024 due to higher funding costs, resulting in a 4 basis point compression of the net interest margin to **2.10%** - Net interest and dividend income decreased by **$1.1 million**, or **4.0%**, to **$27.0 million** for Q1 2024 compared to Q4 2023, primarily due to higher cost of funds[13](index=13&type=chunk) Net Interest Margin (FTE) | Metric | Q1 2024 | Q4 2023 | Change | | :--- | :--- | :--- | :--- | | Net Interest Margin (GAAP) | 2.10% | 2.14% | -4 bps | | Adjusted Net Interest Margin (Non-GAAP) | 2.05% | 2.10% | -5 bps | [Provision for Credit Losses](index=3&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses significantly decreased to **$125 thousand** in Q1 2024, primarily due to lower average loan balances and a low unemployment rate - The provision for credit losses was **$125 thousand** for Q1 2024, a decrease from **$569 thousand** in Q4 2023[26](index=26&type=chunk) - The decrease in provision was mainly due to lower average loan balances and a low unemployment rate[26](index=26&type=chunk) [Noninterest Income](index=3&type=section&id=Noninterest%20Income) Total noninterest income increased by **1.6%** to **$10.6 million** in Q1 2024, primarily driven by growth in wealth management revenue, partially offset by a significant drop in loan-related derivative income - Total noninterest income rose by **$169 thousand (1.6%)** to **$10.6 million** in Q1 2024, constituting **28.2%** of total revenue[27](index=27&type=chunk) - Wealth management revenue increased by **$237 thousand (2.8%)** to **$8.7 million**, as Assets under Management and Administration grew by **$205.6 million (4.5%)** to **$4.80 billion**[28](index=28&type=chunk) - Loan related derivative income decreased by **$96 thousand (84.2%)** to **$18 thousand** due to lower transaction volume[28](index=28&type=chunk) [Noninterest Expense](index=4&type=section&id=Noninterest%20Expense) Total noninterest expense rose by **5.0%** to **$28.3 million** in Q1 2024, primarily due to **$1.4 million** in non-operating expenses for merger and office consolidation costs - Total noninterest expense increased by **$1.4 million (5.0%)** to **$28.3 million** in Q1 2024[30](index=30&type=chunk) - Non-operating expenses increased by **$709 thousand**, comprising **$673 thousand** in merger expenses and **$734 thousand** in office consolidation costs[31](index=31&type=chunk) - Salaries and employee benefits expense increased by **$260 thousand (1.5%)** due to seasonal factors and merit increases, but decreased **6.3%** compared to Q1 2023 due to lower headcount[31](index=31&type=chunk) [Asset Quality](index=4&type=section&id=Asset%20Quality) Asset quality remained broadly stable in Q1 2024, with non-performing loans slightly increasing to **$17.2 million** and negligible net charge-offs of **$2 thousand** Asset Quality Indicators | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Non-performing loans | $17.2 million | $16.6 million | | Non-performing loans / Total loans | 0.43% | 0.41% | | Allowance for credit losses (ACL) | $39.3 million | $38.9 million | | ACL / Total loans | 0.98% | 0.97% | - Net loan charge-offs were minimal at **$2 thousand** for Q1 2024, representing **0.00%** of total loans (annualized)[44](index=44&type=chunk) Delinquency Rate | Metric | March 31, 2024 | December 31, 2023 | March 31, 2023 | | :--- | :--- | :--- | :--- | | Delinquent loans 30-89 days past due/total loans | 0.55% | 0.60% | 0.39% | [Dividend and Capital](index=5&type=section&id=Dividend%20and%20Capital) The Board declared a **$0.67** per share quarterly cash dividend, with no share repurchases, while capital ratios improved, including tangible common equity to tangible assets increasing to **8.76%** - A quarterly cash dividend of **$0.67 per share** was declared, payable on May 23, 2024[33](index=33&type=chunk) - No shares were repurchased in Q1 2024, and the 2023 share repurchase program expired on March 13, 2024, without a new program being authorized[33](index=33&type=chunk) Capital Ratios and Book Value | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Common equity to assets | 9.97% | 9.87% | | Tangible common equity to tangible assets | 8.76% | 8.67% | | Book value per share | $68.27 | $68.14 | | Tangible book value per share | $59.23 | $59.08 | Financial Statements and Reconciliations This section presents detailed unaudited financial statements, including balance sheets, income statements, margin analysis, and reconciliations of GAAP to non-GAAP measures [Quarterly Unaudited Results (Summary Table)](index=8&type=section&id=Quarterly%20Unaudited%20Results%20%28Summary%20Table%29) This section provides a consolidated summary of the company's unaudited quarterly financial results, comparing key income statement items and per-share data across recent quarters Quarterly Unaudited Results Summary | (dollars in thousands, except per share data) | Three Months Ended March 31, 2024 | Three Months Ended Dec 31, 2023 | Three Months Ended March 31, 2023 | | :--- | :--- | :--- | :--- | | 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 | | **Net Income** | **$6,888** | **$8,034** | **$12,416** | | **Diluted Earnings Per Share** | **$0.87** | **$1.02** | **$1.58** | | **Operating Diluted EPS*** | **$1.02** | **$1.11** | **$1.62** | [Unaudited Consolidated Balance Sheets](index=10&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) This section presents the company's unaudited consolidated balance sheets, detailing the composition of assets, liabilities, and shareholders' equity, with total assets at **$5.37 billion** Consolidated Balance Sheet Summary (in thousands) | | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Assets** | **$5,373,840** | **$5,417,666** | | Net Loans | $3,955,402 | $3,982,600 | | Total Investment Securities | $1,073,840 | $1,097,170 | | **Total Liabilities** | **$4,838,244** | **$4,883,093** | | Total Deposits | $4,185,382 | $4,321,178 | | Borrowings | $546,405 | $452,155 | | **Total Shareholders' Equity** | **$535,596** | **$534,573** | [Unaudited Consolidated Statements of Income](index=12&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) This section provides detailed unaudited consolidated statements of income, breaking down interest and noninterest income and expenses for recent three-month periods Consolidated Statements of Income (in thousands) | | Three Months Ended March 31, 2024 | Three Months Ended Dec 31, 2023 | | :--- | :--- | :--- | | Total interest and dividend income | $56,213 | $56,950 | | Total interest expense | $29,181 | $28,800 | | **Net interest and dividend income** | **$27,032** | **$28,150** | | Provision for credit losses | $125 | $569 | | Total noninterest income | $10,606 | $10,437 | | Total noninterest expense | $28,259 | $26,901 | | **Net income** | **$6,888** | **$8,034** | [Margin & Yield Analysis](index=14&type=section&id=Margin%20%26%20Yield%20Analysis) This section provides a detailed analysis of the company's net interest margin and yields on a fully taxable equivalent basis, showing a net interest margin of **2.10%** for Q1 2024 Margin & Yield Analysis (Q1 2024 vs Q4 2023) | Metric | Q1 2024 | Q4 2023 | | :--- | :--- | :--- | | Yield on Interest-earning assets | 4.37% | 4.34% | | Cost of Interest-bearing liabilities | 3.13% | 3.04% | | Net interest spread | 1.24% | 1.30% | | Net interest margin (FTE) | 2.10% | 2.14% | [GAAP to Non-GAAP Reconciliations](index=15&type=section&id=GAAP%20to%20Non-GAAP%20Reconciliations) This section provides reconciliations of GAAP to non-GAAP financial measures, including adjustments for merger and office consolidation expenses, to present core business performance - Management uses non-GAAP measures such as operating net income, tangible book value, and operating efficiency ratio to evaluate core business performance, excluding items like merger and office consolidation expenses[38](index=38&type=chunk)[39](index=39&type=chunk) Operating Net Income Reconciliation (Q1 2024, in thousands) | | Amount | | :--- | :--- | | Net Income (GAAP) | $6,888 | | Add: Mergers and office consolidation expenses | $1,407 | | Less: Tax effect of non-operating expenses | ($299) | | **Operating Net Income (Non-GAAP)** | **$7,996** | Tangible Common Equity and Book Value (March 31, 2024, in thousands) | | Amount | | :--- | :--- | | Shareholders' equity (GAAP) | $535,596 | | Less: Goodwill and acquisition related intangibles | ($70,866) | | **Tangible Common Equity (Non-GAAP)** | **$464,730** | | **Tangible Book Value Per Share (Non-GAAP)** | **$59.23** | Supplementary Information This section provides background on Cambridge Bancorp and includes important disclosures regarding forward-looking statements and associated risks [About Cambridge Bancorp](index=6&type=section&id=About%20Cambridge%20Bancorp) Cambridge Bancorp is the parent of Cambridge Trust Company, a Massachusetts-chartered commercial bank with **$5.37 billion** in assets and **$4.8 billion** in client assets under management as of March 31, 2024 - Cambridge Bancorp is the parent of Cambridge Trust Company, a bank with **$5.37 billion** in assets and **22 locations** as of March 31, 2024[49](index=49&type=chunk) - The company is a leader in New England private banking and wealth management, with **$4.8 billion** in client assets under management and administration[49](index=49&type=chunk) [Forward-looking Statements](index=6&type=section&id=Forward-looking%20Statements) This section contains a standard safe harbor statement, cautioning that forward-looking statements are subject to substantial risks and uncertainties, including those related to the pending Eastern merger and economic conditions - The report contains forward-looking statements subject to risks and uncertainties as defined by the Private Securities Litigation Reform Act of 1995[51](index=51&type=chunk) - Key risk factors include the failure to complete the Eastern merger, interest rate changes, economic uncertainty, and regulatory changes[51](index=51&type=chunk)

CAMBRIDGE, Mass., April 8, 2024 /PRNewswire/ -- Cambridge Bancorp (NASDAQ: CATC), expects to report results for the first quarter of 2024 prior to the market open on Tuesday, April 23, 2024. About Cambridge Bancorp Cambridge Bancorp, the parent company of Cambridge Trust Company, is based in Cambridge, Massachusetts. Cambridge Trust Company is a 133-year-old Massachusetts chartered commercial bank with approximately $5.42 billion in assets at December 31, 2023, and a total of 22 Massachusetts and New Hampsh ...

PART I [Business](index=6&type=section&id=Item%201.%20Business) Cambridge Bancorp, a bank holding company, provides wealth management, commercial, and personal banking services, with **$5.4 billion** in assets and a pending merger - Cambridge Bancorp is a bank holding company headquartered in Cambridge, MA, with one bank subsidiary, Cambridge Trust Company. As of December 31, 2023, it had total assets of approximately **$5.4 billion** and operated **22 banking offices**[274](index=274&type=chunk) - The company's core services include Wealth Management, Commercial Banking, and Personal Banking. As of December 31, 2023, the Wealth Management Group had approximately **$4.6 billion** in Assets under Management and Administration[274](index=274&type=chunk) - On September 19, 2023, the Company entered into a merger agreement with Eastern Bankshares, Inc. Upon completion, each share of Cambridge Bancorp common stock will be converted into **4.956 shares** of Eastern Common Stock[305](index=305&type=chunk) - The merger with Northmark Bank was completed on October 1, 2022. The company acquired total assets of **$428.7 million**, assumed liabilities of **$378.5 million**, and recorded **$12.6 million** in goodwill[10](index=10&type=chunk)[279](index=279&type=chunk) - The company is subject to supervision and regulation by multiple governmental authorities, including the Federal Reserve, the Massachusetts Division of Banks (MA DOB), the State of New Hampshire Banking Department, and the FDIC[13](index=13&type=chunk) [Risk Factors](index=26&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks from the pending Eastern Merger, acquisition integration, economic downturns, interest rate volatility, and cybersecurity threats - The pendency of the Eastern Merger could disrupt business, affect relationships with customers and employees, and divert significant management resources, regardless of whether the merger is completed[50](index=50&type=chunk)[51](index=51&type=chunk) - Failure to complete the Eastern Merger could negatively impact the company's stock price and financial results, and the company would have to recognize substantial incurred expenses without realizing the expected benefits[57](index=57&type=chunk)[60](index=60&type=chunk) - The integration of Northmark presents challenges, and failure to integrate efficiently could result in not achieving anticipated benefits like cost savings and operating efficiencies, potentially having an adverse effect on the company's business and results[79](index=79&type=chunk) - The company's financial performance is sensitive to interest rate variations. Rising interest rates have decreased the value of the held-to-maturity securities portfolio, and the company would realize losses if required to sell them to meet liquidity needs[35](index=35&type=chunk)[363](index=363&type=chunk) - Cybersecurity breaches pose a significant risk. The company depends on data processing and vendor services, and a breach could lead to information loss, financial costs, and reputational harm[100](index=100&type=chunk) [Unresolved Staff Comments](index=44&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that there are no unresolved staff comments - None[26](index=26&type=chunk) [Cybersecurity](index=44&type=section&id=Item%201C.%20Cybersecurity) The company's cybersecurity program, based on NIST framework and overseen by the Board's Risk Committee, includes 24/7 monitoring, with no material threats identified to date - The Company's cybersecurity program is based on the National Institute of Standards and Technology (NIST) Cybersecurity Framework and is integrated into the Enterprise Risk Management (ERM) program[28](index=28&type=chunk) - The Board's Risk Committee has primary oversight for cybersecurity risks. Management, including the CIO and Director of Information Security, reports to the Board at least quarterly[40](index=40&type=chunk) - The company maintains a security operations center with **24/7 monitoring** and a Cybersecurity Incident Response Plan (CSIRP) to manage and respond to threats[28](index=28&type=chunk)[243](index=243&type=chunk) - Management has not identified any risks from cybersecurity threats, including from previous incidents, that have materially affected or are reasonably likely to materially affect the company's business, operations, or financial condition[29](index=29&type=chunk) [Properties](index=45&type=section&id=Item%202.%20Properties) The company operates from **22 banking offices**, including its Cambridge headquarters, and additional operations and wealth management centers - The Company operates through **22 banking offices**, with its headquarters in Cambridge, Massachusetts. It also has operations centers in Burlington, MA, and Portsmouth, NH, and five wealth management offices[245](index=245&type=chunk) [Legal Proceedings](index=45&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any material pending legal proceedings, with management believing no current claims will have a material adverse effect - The Company is not currently party to any material pending legal proceedings[246](index=246&type=chunk) [Mine Safety Disclosures](index=45&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - None[247](index=247&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=46&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on NASDAQ under 'CATC', with **7.8 million** shares outstanding and **$2.68** cash dividends per share in 2023, but its stock performance has lagged indices - The Company's common stock trades on the NASDAQ under the symbol **"CATC"**. As of March 8, 2024, there were **7,846,510 shares** outstanding[43](index=43&type=chunk)[44](index=44&type=chunk) Dividend and Stock Information | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Cash Dividends Declared per Share | $2.68 | $2.56 | | Closing Stock Price (Dec 31) | $69.40 | N/A | Stock Performance Comparison (Cumulative Total Return) | Index | 12/31/18 | 12/31/23 | | :--- | :--- | :--- | | Cambridge Bancorp | $100.00 | $98.22 | | S&P U.S. BMI Banks Index | $100.00 | $147.41 | | KBW NASDAQ Bank Index | $100.00 | $131.57 | - In March 2023, the Board authorized a new share repurchase program for up to **5.0%** of outstanding shares. No shares were repurchased under this program during the year ended December 31, 2023[425](index=425&type=chunk) [Reserved](index=48&type=section&id=Item%206.%20Reserved) This item is reserved - Item 6 is reserved[92](index=92&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=49&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial performance, with **net income falling to $34.1 million** in 2023 due to rising funding costs, and details critical accounting estimates, portfolio breakdowns, and risk management - The company's results are largely dependent on net interest income and non-interest income from wealth management services. Key factors affecting results include interest rate levels, operating expenses, and provision for credit losses[93](index=93&type=chunk) - The company considers its critical accounting estimates to be the allowance for credit losses and income taxes, which involve significant judgment and are susceptible to change[397](index=397&type=chunk) Key Financial Highlights (2023 vs 2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Income | $34.1 million | $52.9 million | | Diluted EPS | $4.34 | $7.30 | | Net Interest Margin | 2.30% | 2.92% | | Total Assets (Year-End) | $5.42 billion | $5.56 billion | | Total Deposits (Year-End) | $4.32 billion | $4.82 billion | [Results of Operations](index=53&type=section&id=7.1%20Results%20of%20Operations) Net income for 2023 decreased by **35.5% to $34.1 million** due to a **$22.4 million** drop in net interest income from rising funding costs, while 2022 net income also saw a slight decrease Comparison of Operations (2023 vs. 2022) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Net Income | $34.1 million | $52.9 million | | Diluted EPS | $4.34 | $7.30 | | Net Interest Income | $120.8 million | $143.2 million | | Provision for Credit Losses | $0.9 million | $3.9 million | | Noninterest Income | $41.7 million | $43.0 million | | Noninterest Expense | $115.2 million | $110.4 million | - The decrease in 2023 net interest income was primarily due to higher costs of funds, which increased to **1.86%** from **0.34%** in 2022, partially offset by higher yields on earning assets[152](index=152&type=chunk)[433](index=433&type=chunk) - Wealth management revenues remained stable at **$33.0 million** for both 2023 and 2022. Assets under management increased to **$4.33 billion** at year-end 2023 from **$3.88 billion** in 2022, driven by positive net market impact[155](index=155&type=chunk)[124](index=124&type=chunk) - For 2022 vs. 2021, net income decreased by **$1.1 million (2.1%)** to **$52.9 million**. This was due to a **$9.9 million** increase in noninterest expenses (including merger costs) and a **$5.2 million** increase in the provision for credit losses, which offset a **$15.2 million** rise in net interest income[437](index=437&type=chunk) [Financial Condition](index=60&type=section&id=7.2%20Financial%20Condition) As of December 31, 2023, total assets decreased by **2.6% to $5.42 billion**, driven by declines in investment securities and loans, while deposits fell by **10.3%**, leading to increased borrowings Balance Sheet Summary (Year-End) | Account | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Total Assets | $5.42 billion | $5.56 billion | | Net Loans | $3.98 billion | $4.03 billion | | Total Investment Securities | $1.10 billion | $1.21 billion | | **Liabilities & Equity** | | | | Total Deposits | $4.32 billion | $4.82 billion | | Total Borrowings | $452.2 million | $105.2 million | | Total Shareholders' Equity | $534.6 million | $517.6 million | - Total loans decreased by **$41.3 million (1.0%)** to **$4.02 billion**, with decreases seen across residential, home equity, C&I, and consumer loan portfolios, slightly offset by an increase in commercial real estate loans[443](index=443&type=chunk) - Total deposits decreased by **$494.2 million (10.3%)**, primarily due to lower money market, savings, and wholesale deposit balances. Uninsured deposits decreased to **$1.42 billion** from **$2.50 billion** in 2022[444](index=444&type=chunk)[215](index=215&type=chunk) - Total borrowings increased by **$346.9 million (329.8%)** to **$452.2 million**, as the Company shifted wholesale funding towards FHLB Boston borrowings[474](index=474&type=chunk) - Tangible book value per share grew by **3.4%** to **$59.08** as of December 31, 2023, from **$57.15** a year prior[166](index=166&type=chunk) [Liquidity and Capital Resources](index=87&type=section&id=7.3%20Liquidity%20and%20Capital%20Resources) The company manages liquidity primarily through core deposits and borrowings, with **$2.55 billion** in available funds and capital levels exceeding regulatory minimums for a "well-capitalized" institution - The company's primary source of liquidity is core deposits, with secondary sources including borrowings from the FHLB of Boston and FRB of Boston. At December 31, 2023, total available funds were **$2.55 billion**[535](index=535&type=chunk) - As of December 31, 2023, the Company and the Bank exceeded all regulatory minimum capital levels to be considered **"well-capitalized"**[232](index=232&type=chunk) - The company had outstanding commitments to extend credit of **$994.2 million** and standby letters of credit of **$34.1 million** as of December 31, 2023[260](index=260&type=chunk) Contractual Obligations as of Dec 31, 2023 | Obligation | Total | Less Than 1 Year | 1 to 3 Years | 3 to 5 Years | After 5 Years | | :--- | :--- | :--- | :--- | :--- | :--- | | FHLBB advances | $452.2 million | $406.0 million | $45.0 million | $0.7 million | $0.4 million | | Certificates of deposit | $674.4 million | $655.3 million | $17.3 million | $1.8 million | $0 | | Lease obligations | $27.1 million | $7.0 million | $10.7 million | $5.5 million | $3.9 million | [Quantitative and Qualitative Disclosures About Market Risk](index=90&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company manages interest rate risk, its primary market risk, through income simulation and EVE analysis, with policy limits for rate changes, showing a **4.0%** decrease in net interest income for a **+200 bps** shock - The Company's primary market risk is interest rate risk. Management actively monitors and manages this exposure through tools like income simulation models and Economic Value of Equity (EVE) analysis[192](index=192&type=chunk)[251](index=251&type=chunk) Net Interest Income Sensitivity (Parallel Rate Shocks, Year 1) | Change in Interest Rates (bps) | % Change in Net Interest Income | | :--- | :--- | | +300 | (5.9)% | | +200 | (4.0)% | | +100 | (1.9)% | | -100 | 1.8% | | -200 | 2.5% | - The company uses interest rate derivatives, including swaps and floors, to manage its exposure to changes in interest rates in both rising and falling rate environments[225](index=225&type=chunk)[530](index=530&type=chunk) - An EVE analysis at year-end 2023 estimated that an instantaneous **+200 bps** rate increase would decrease the economic value of equity by **23.6%**, while a **-200 bps** decrease would increase it by **18.7%**[256](index=256&type=chunk) [Financial Statements and Supplementary Data](index=91&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2021-2023, including balance sheets, income statements, and cash flows, along with detailed notes and the independent auditor's unqualified opinion Consolidated Balance Sheet (Year-End) | (in thousands) | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Total Assets | $5.42 billion | $5.56 billion | | **Liabilities & Equity** | | | | Total Deposits | $4.32 billion | $4.82 billion | | Total Liabilities | $4.88 billion | $5.04 billion | | Total Shareholders' Equity | $534.6 million | $517.6 million | Consolidated Statement of Income | (in thousands) | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | Net Interest Income | $120.8 million | $143.2 million | $128.0 million | | Provision for Credit Losses | $0.9 million | $3.9 million | ($1.3 million) | | Noninterest Income | $41.7 million | $43.0 million | $44.3 million | | Noninterest Expense | $115.2 million | $110.4 million | $100.5 million | | **Net Income** | **$34.1 million** | **$52.9 million** | **$54.0 million** | - The independent auditor, Wolf & Company, P.C., issued an unqualified opinion on the consolidated financial statements and on the effectiveness of the company's internal control over financial reporting[985](index=985&type=chunk)[1045](index=1045&type=chunk) [Changes in and Disagreements With Accountants on Accounting and Financial Disclosure](index=166&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20With%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[1048](index=1048&type=chunk) [Controls and Procedures](index=166&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with no material changes - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of December 31, 2023[1024](index=1024&type=chunk) - Management assessed internal control over financial reporting using the COSO 2013 framework and concluded it was effective as of December 31, 2023[1026](index=1026&type=chunk) - There were no changes in the Company's internal control over financial reporting in 2023 that materially affected, or are reasonably likely to materially affect, these controls[1049](index=1049&type=chunk) [Other Information](index=167&type=section&id=Item%209B.%20Other%20Information) This item is not applicable - Not applicable[1052](index=1052&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=167&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable - Not applicable[1028](index=1028&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=168&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) This section provides information on the company's **16-member** Board of Directors and executive officers, detailing Board committee structures, director independence, and the adopted Code of Ethics - The Board is comprised of **16 members**, divided into three classes. The report provides biographical information for each director[1029](index=1029&type=chunk) - The Board has determined that all directors are independent under NASDAQ Listing Rules, with the exception of CEO Denis K. Sheahan and Daniel R. Morrison due to their employment history[643](index=643&type=chunk) - The Board has four primary committees: Audit, Compensation, Governance, and Risk. The report lists the members and chair of each committee[1067](index=1067&type=chunk) - The company has adopted a Code of Ethics applicable to all employees, officers, and directors. A copy is available on the company's website[1113](index=1113&type=chunk) [Executive Compensation](index=180&type=section&id=Item%2011.%20Executive%20Compensation) This section details executive compensation, aligning pay with performance, with **2023 annual incentive payouts below target**, a rebalanced long-term incentive plan, and a **17:1** CEO-to-median-employee pay ratio - The company's compensation philosophy is to provide competitive pay that rewards performance, with a majority of 2023 target total direct compensation for NEOs being performance-based[1125](index=1125&type=chunk)[1143](index=1143&type=chunk) 2023 Incentive Plan Company Performance | Company Performance Measure | Target | Actual Performance | Achievement | | :--- | :--- | :--- | :--- | | Operating ROTCE | 10.57% | 8.86% | 59.53% | | Operating Income | $62.2 million | $53.6 million | 65.25% | | **Total Achievement** | | | **62.39%** | - The 2021-2023 Performance-Based Restricted Stock Unit (PRSU) cycle vested at **50.5%** of target based on the company's performance against its comparator group[561](index=561&type=chunk)[1171](index=1171&type=chunk) - The CEO pay ratio for 2023 was **17:1**, with the CEO's total compensation at **$1,823,987** and the median employee's at **$106,376**[585](index=585&type=chunk)[617](index=617&type=chunk)[1224](index=1224&type=chunk) - The company maintains double-trigger change in control agreements with its NEOs, designed to promote stability and align management's interests with shareholders during potential transactions[582](index=582&type=chunk)[1175](index=1175&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=222&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) This section discloses beneficial ownership, with BlackRock, Inc. holding **8.1%** of common stock and directors and executive officers as a group owning **4.4%** as of March 8, 2024 - As of March 8, 2024, BlackRock, Inc. is the only known beneficial owner of more than **5%** of the Company's common stock, holding **633,933 shares**, or **8.1%**[590](index=590&type=chunk)[1228](index=1228&type=chunk) - As of March 8, 2024, all directors and executive officers as a group (**25 individuals**) beneficially owned **341,939 shares**, representing **4.4%** of the outstanding common stock[1263](index=1263&type=chunk) Equity Compensation Plan Information (as of Dec 31, 2023) | Plan Category | Securities to be Issued Upon Exercise | Securities Remaining for Future Issuance | | :--- | :--- | :--- | | Equity compensation plans approved by shareholders | 137,853 | 148,339 | [Certain Relationships and Related Transactions, and Director Independence](index=225&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company has procedures for reviewing related-person transactions, with no disclosures required in 2023, and the Board has determined all continuing directors are independent under NASDAQ rules, except for two executives - The Company has a policy requiring that any transaction with a related person must be on terms comparable to those with an unrelated third party and be approved in advance by the Governance Committee[685](index=685&type=chunk) - During 2023, there were no related person transactions that required disclosure under SEC rules. All transactions with directors and officers were made in the ordinary course of business on substantially the same terms as those prevailing for comparable transactions with other persons[686](index=686&type=chunk) - The Board has determined that all of its continuing directors are independent under NASDAQ Listing Rules, except for Denis K. Sheahan (President & CEO) and Daniel R. Morrison (former CEO of Cambridge Trust New Hampshire)[643](index=643&type=chunk) [Principal Accounting Fees and Services](index=227&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) The company's independent auditor, Wolf & Company, P.C., received **$655,488** in total fees for 2023, covering audit, audit-related, tax, and other services, all pre-approved by the Audit Committee Fees Paid to Wolf & Company, P.C. | Fee Type | 2023 | 2022 | | :--- | :--- | :--- | | Audit Fees | $360,000 | $365,000 | | Audit Related Services | $54,200 | $36,680 | | Tax Fees | $57,500 | $42,000 | | All Other Fees | $183,788 | $219,792 | | **Total** | **$655,488** | **$663,472** | - The Audit Committee pre-approved **100%** of the services performed by the independent registered public accounting firm[655](index=655&type=chunk) PART IV [Exhibits, Financial Statement Schedules](index=229&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists documents filed as part of the Annual Report on Form 10-K, including financial statements, the merger agreement with Eastern Bankshares, Inc., and various executive compensation and certification documents - The financial statements required for this item are included in Item 8 of the report[667](index=667&type=chunk) - Key exhibits filed with the report include the Agreement and Plan of Merger with Eastern Bankshares, Inc., various executive compensation plans and agreements, and certifications by the Principal Executive and Financial Officers[666](index=666&type=chunk)[662](index=662&type=chunk)[664](index=664&type=chunk) [Form 10-K Summary](index=231&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - None[682](index=682&type=chunk)

For the quarter ended December 2023, Cambridge (CATC) reported revenue of $38.53 million, down 24.4% over the same period last year. EPS came in at $1.11, compared to $1.92 in the year-ago quarter.The reported revenue compares to the Zacks Consensus Estimate of $37.7 million, representing a surprise of +2.20%. The company delivered an EPS surprise of +20.65%, with the consensus EPS estimate being $0.92.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and ho ...

Cambridge (CATC) came out with quarterly earnings of $1.11 per share, beating the Zacks Consensus Estimate of $0.92 per share. This compares to earnings of $1.92 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 20.65%. A quarter ago, it was expected that this bank would post earnings of $1.06 per share when it actually produced earnings of $1.15, delivering a surprise of 8.49%.Over the last four quarters, the company has surpas ...

CAMBRIDGE, Mass., Jan. 30, 2024 /PRNewswire/ -- Cambridge Bancorp (NASDAQ: CATC) (the "Company"), the parent company of Cambridge Trust Company, today announced unaudited net income of $34.1 million for the year ended December 31, 2023, a decrease of $18.8 million, or 35.5%, as compared to net income of $52.9 million for the year ended December 31, 2022. Diluted earnings per share were $4.34 for the year ended December 31, 2023, representing a 40.5% decrease as compared to $7.30 for the year ended December ...

[PART I—FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%E2%80%94FINANCIAL%20INFORMATION) This section provides the unaudited financial statements and management's discussion and analysis of Cambridge Bancorp's financial condition and results of operations [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for Cambridge Bancorp as of September 30, 2023, and for the three and nine-month periods then ended [Unaudited Consolidated Balance Sheets](index=3&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) As of September 30, 2023, total assets decreased to **$5.45 billion** from **$5.56 billion** at year-end 2022, primarily due to reductions in investment securities and loans Consolidated Balance Sheet Highlights (Unaudited) | Account | Sep 30, 2023 ($ millions) | Dec 31, 2022 ($ millions) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | 25.35 | 30.72 | | Total investment securities | 1,116.84 | 1,205.41 | | Net loans | 3,989.77 | 4,025.08 | | **Total assets** | **5,452.03** | **5,559.74** | | **Liabilities & Equity** | | | | Total deposits | 4,565.93 | 4,815.38 | | Borrowings | 233.91 | 105.21 | | **Total liabilities** | **4,926.00** | **5,042.19** | | **Total shareholders' equity** | **526.03** | **517.55** | [Unaudited Consolidated Statements of Income](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Income) Net income significantly decreased for both the third quarter and nine-month period of 2023, primarily due to a substantial increase in interest expense compressing net interest income Consolidated Income Statement Highlights (Unaudited) | Metric | Q3 2023 ($ millions) | Q3 2022 ($ millions) | Nine Months 2023 ($ millions) | Nine Months 2022 ($ millions) | | :--- | :--- | :--- | :--- | :--- | | Net interest and dividend income | 28.65 | 36.28 | 92.66 | 102.33 | | Provision for credit losses | 0.20 | 0.61 | 0.34 | 0.20 | | Total noninterest income | 10.55 | 10.44 | 31.29 | 32.95 | | Total noninterest expense | 29.65 | 26.34 | 88.32 | 78.51 | | **Net income** | **6.54** | **14.62** | **26.08** | **41.59** | | **Diluted earnings per share** | **$0.83** | **$2.07** | **$3.32** | **$5.90** | [Unaudited Consolidated Statements of Comprehensive Income](index=6&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Comprehensive%20Income) Comprehensive income for Q3 2023 decreased to **$3.8 million**, reflecting lower net income and unrealized losses on available-for-sale securities and interest rate swaps Comprehensive Income (Unaudited) | Metric | Q3 2023 ($ millions) | Q3 2022 ($ millions) | Nine Months 2023 ($ millions) | Nine Months 2022 ($ millions) | | :--- | :--- | :--- | :--- | :--- | | Net income | 6.54 | 14.62 | 26.08 | 41.59 | | Other comprehensive income (loss) | (2.78) | (6.54) | (2.76) | (21.11) | | **Comprehensive income** | **3.76** | **8.08** | **23.32** | **20.48** | [Unaudited Consolidated Statements of Changes in Shareholders' Equity](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders%27%20Equity) Total shareholders' equity increased to **$526.0 million** at September 30, 2023, driven by net income partially offset by cash dividends and other comprehensive loss Changes in Shareholders' Equity (Nine Months Ended Sep 30, 2023) | Component | Amount ($ millions) | | :--- | :--- | | Balance at Dec 31, 2022 | 517.55 | | Net income | 26.08 | | Other comprehensive loss | (2.76) | | Share based compensation | 0.89 | | Dividends declared ($2.01/share) | (15.73) | | **Balance at Sep 30, 2023** | **526.03** | [Unaudited Consolidated Statements of Cash Flows](index=8&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the nine months ended September 30, 2023, net cash decreased by **$5.4 million**, with operating and investing activities providing cash while financing activities used cash Cash Flow Summary (Nine Months Ended) | Activity | Sep 30, 2023 ($ millions) | Sep 30, 2022 ($ millions) | | :--- | :--- | :--- | | Net cash provided by operating activities | 24.43 | 23.35 | | Net cash provided by (used in) investing activities | 106.93 | (386.86) | | Net cash (used in) provided by financing activities | (136.72) | 214.90 | | **Net change in cash and cash equivalents** | **(5.37)** | **(148.61)** | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed disclosures supporting the primary financial statements, covering accounting policies, investment securities, loans, credit quality, capital adequacy, and fair value measurements - The Company adopted ASU 2022-02, which eliminated the accounting guidance for troubled debt restructurings (TDRs) and enhanced disclosure requirements for loan modifications to borrowers experiencing financial difficulty; the adoption on January 1, 2023, did not have a material impact on the financial statements[12](index=12&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, highlighting decreased net income due to net interest margin compression and providing details on the pending merger - On September 19, 2023, the Company entered into a merger agreement with Eastern Bankshares, Inc., where each share of Cambridge Bancorp common stock will be converted into the right to receive **4.956 shares of Eastern Common Stock**[437](index=437&type=chunk) - The company's critical accounting estimates, which involve significant judgment and could materially impact financial results, are identified as the allowance for credit losses and income taxes[132](index=132&type=chunk) [Results of Operations](index=38&type=section&id=Results%20of%20Operations) Net income significantly declined for both the third quarter and nine-month period of 2023, primarily due to decreased net interest income and increased noninterest expense Quarterly Performance (Q3 2023 vs Q3 2022) | Metric | Q3 2023 ($ millions) | Q3 2022 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Net Income | 6.5 | 14.6 | -55.2% | | Diluted EPS | $0.83 | $2.07 | -59.9% | | Net Interest Income | 28.6 | 36.3 | -21.0% | | Noninterest Expense | 29.6 | 26.3 | +12.6% | Nine-Month Performance (2023 vs 2022) | Metric | Nine Months 2023 ($ millions) | Nine Months 2022 ($ millions) | Change | | :--- | :--- | :--- | :--- | | Net Income | 26.1 | 41.6 | -37.3% | | Diluted EPS | $3.32 | $5.90 | -43.7% | | Net Interest Income | 92.7 | 102.3 | -9.5% | | Noninterest Expense | 88.3 | 78.5 | +12.5% | [Changes in Financial Condition](index=42&type=section&id=Changes%20in%20Financial%20Condition) Total assets decreased by **$107.7 million** to **$5.45 billion**, while total deposits declined by **$249.5 million**, and shareholders' equity grew to **$526.0 million** - Total loans decreased by **$34.9 million (0.9%)** to **$4.03 billion** at September 30, 2023[169](index=169&type=chunk) - Total deposits decreased by **$249.5 million (5.2%)** to **$4.57 billion**, with deposits excluding wholesale CDs decreasing by **$351.2 million (7.9%)**[170](index=170&type=chunk) - Tangible book value per share increased to **$57.96** at September 30, 2023, from **$57.15** at December 31, 2022[171](index=171&type=chunk) [Investment Securities](index=44&type=section&id=Investment%20Securities) The total investment securities portfolio decreased by **7.3%** to **$1.12 billion**, comprising available-for-sale and held-to-maturity securities with significant unrealized losses on AFS Investment Securities Portfolio Composition | Category | Sep 30, 2023 (Amortized Cost in $ millions) | Dec 31, 2022 (Amortized Cost in $ millions) | | :--- | :--- | :--- | | Available for Sale | 167.9 | 182.0 | | Held to Maturity | 980.6 | 1,050.0 | | **Total** | **1,148.5** | **1,232.0** | - The Company did not record an allowance for credit losses on its investment securities as of September 30, 2023, as it does not expect to suffer a credit loss and does not intend to sell securities before recovery[176](index=176&type=chunk)[67](index=67&type=chunk) [Loans](index=46&type=section&id=Loans) The total loan portfolio was **$4.03 billion**, with commercial mortgages and residential mortgages representing the largest segments Loan Portfolio Composition | Loan Category | Sep 30, 2023 ($ millions) | % of Total | | :--- | :--- | :--- | | Commercial mortgage | 1,922.46 | 48% | | Residential mortgage | 1,627.46 | 40% | | Commercial and industrial | 355.80 | 9% | | Home equity | 93.36 | 2% | | Consumer | 28.89 | 1% | | **Total loans** | **4,027.97** | **100%** | - The company does not offer subprime, Alt-A, Option ARM, or reverse mortgage loans[230](index=230&type=chunk) [Asset Quality and Allowance for Credit Losses](index=51&type=section&id=Asset%20Quality%20and%20Allowance%20for%20Credit%20Losses) Non-performing loans increased to **$7.8 million**, and the allowance for credit losses on loans stood at **$38.2 million**, or **0.95%** of total loans Asset Quality Metrics | Metric | Sep 30, 2023 ($ millions) | Dec 31, 2022 ($ millions) | | :--- | :--- | :--- | | Non-performing loans | 7.8 | 6.5 | | Non-performing loans / Gross loans | 0.19% | 0.16% | | Allowance for credit losses (ACL) | 38.2 | 37.8 | | ACL / Total loans | 0.95% | 0.93% | - Following the adoption of ASU 2022-02, the company no longer recognizes Troubled Debt Restructurings (TDRs); as of September 30, 2023, the company had no loan modifications or restructurings due to borrower financial difficulty[241](index=241&type=chunk)[240](index=240&type=chunk) [Liquidity and Capital Resources](index=58&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains a strong liquidity position with **$2.61 billion** in available funding and exceeds all regulatory capital requirements to be considered 'well-capitalized' - At September 30, 2023, the Company had access to funds totaling **$2.61 billion**, including borrowing capacity from the FHLB of Boston and the Federal Reserve's Bank Term Funding Program (BTFP)[322](index=322&type=chunk) - The Company and the Bank were considered 'well-capitalized' as of September 30, 2023, exceeding all minimum regulatory capital requirements[112](index=112&type=chunk)[299](index=299&type=chunk) - Total shareholders' equity increased to **$526.0 million** at September 30, 2023, from **$517.6 million** at December 31, 2022, primarily due to net income of **$26.1 million**, partially offset by dividend payments of **$15.7 million**[276](index=276&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=57&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate risk, with simulations projecting significant impacts on the economic value of equity from rate changes Economic Value of Equity (EVE) Sensitivity Analysis (as of Sep 30, 2023) | Rate Shock | Change in EVE | Resulting EVE Ratio | | :--- | :--- | :--- | | +200 bps | -18.9% | 10.1% | | -200 bps | +15.4% | 12.8% | [Item 4. Controls and Procedures](index=60&type=section&id=Item%204.%20Controls%20and%20Procedures) The company's disclosure controls and procedures were deemed effective as of September 30, 2023, with no material changes in internal controls over financial reporting during the quarter - Management concluded that the Company's disclosure controls and procedures were effective as of September 30, 2023[327](index=327&type=chunk) - No changes in internal controls over financial reporting that have materially affected or are reasonably likely to materially affect the controls were identified during the quarter[328](index=328&type=chunk) [PART II. OTHER INFORMATION](index=61&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section covers legal proceedings, new risk factors related to the pending merger, unregistered sales of equity securities, and other miscellaneous disclosures [Item 1. Legal Proceedings](index=61&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any material pending legal proceedings, with management expecting no material adverse effects from ordinary course claims - The Company is not currently party to any material pending legal proceedings[330](index=330&type=chunk) [Item 1A. Risk Factors](index=61&type=section&id=Item%201A.%20Risk%20Factors) New risks related to the pending merger with Eastern Bankshares, Inc. include potential business disruptions, regulatory approval uncertainties, and the impact of a termination fee - The pendency of the merger could adversely affect business, results of operations, and financial condition due to disruptions and uncertainty[306](index=306&type=chunk)[332](index=332&type=chunk) - The merger is subject to regulatory approvals which may delay completion or impose adverse conditions[309](index=309&type=chunk)[334](index=334&type=chunk) - Failure to complete the merger could negatively impact the company's stock price and future financial results[311](index=311&type=chunk)[336](index=336&type=chunk) - A termination fee of **$21.0 million** payable to Eastern in specified circumstances may discourage other acquisition proposals[314](index=314&type=chunk)[350](index=350&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=63&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During Q3 2023, the company repurchased **160 shares** of common stock for employee tax liabilities, with no repurchases under the formal program Share Repurchases (Q3 2023) | Period | Total Shares Repurchased | Weighted Average Price Paid Per Share | | :--- | :--- | :--- | | July 2023 | 0 | $ - | | August 2023 | 160 | $56.16 | | September 2023 | 0 | $ - | | **Total** | **160** | **$56.16** | - The Company did not repurchase any shares under its formal 2023 Repurchase Program during the three months ended September 30, 2023[341](index=341&type=chunk) [Other Items (Defaults, Mine Safety, Other Info, Exhibits)](index=63&type=section&id=Item%203%2C%204%2C%205%2C%206) The company reported no defaults on senior securities, confirmed mine safety disclosures are not applicable, and listed exhibits including the merger agreement - No defaults upon senior securities were reported[352](index=352&type=chunk) - A list of exhibits filed with the 10-Q is provided, including the Agreement and Plan of Merger with Eastern Bankshares, Inc[355](index=355&type=chunk)