Cambridge Bancorp(US:CATC)2023-05-04 11:01Financial Performance - Net income decreased by $900,000, or 6.8%, to $12.4 million for the quarter ended March 31, 2023, compared to $13.3 million for the same quarter in 2022[183] - Diluted earnings per share were $1.58 for the quarter ended March 31, 2023, down from $1.89 for the same quarter in 2022[183] - Net interest income for the period was $4,018,082, with a net interest margin of 3.0%[276] - Operating net income for the three months ended March 31, 2023, was $12,722,000, with diluted earnings per share of $1.62[278] - The net interest income for the three months ended March 31, 2023, was $34.176 million, compared to $40.763 million for the same period in 2022[307] - The net interest margin for the three months ended March 31, 2023, was 2.63%, down from 3.08% for the same period in 2022[307] Income and Expenses - Higher noninterest expense increased by $2.5 million, while noninterest income decreased by $639,000, partially offset by an increase in net interest and dividend income of $2.4 million[183] - Total noninterest income decreased by $639,000, or 5.6%, to $10.7 million for the quarter ended March 31, 2023, primarily due to lower wealth management revenue[241] - Total noninterest expense increased by $2.5 million, or 9.5%, to $28.3 million for the quarter ended March 31, 2023, primarily driven by increases in salaries and employee benefits[243] - Interest expense increased by $15.5 million, or 762.2%, to $17.5 million for the quarter ended March 31, 2023, compared to $2.0 million for the same quarter in 2022[212] Assets and Liabilities - As of March 31, 2023, the Company had total assets of approximately $5.5 billion, with total deposits decreasing by $158.6 million, or 3.3%, to $4.66 billion from $4.82 billion at December 31, 2022[205][220] - Total assets as of March 31, 2023, were $5.543 billion, compared to $5.525 billion at December 31, 2022[307] - Total liabilities as of March 31, 2023, were $5.023 billion, compared to $5.014 billion at December 31, 2022[307] - Total borrowings increased by $135.8 million, or 129.1%, to $241.0 million at March 31, 2023, from $105.2 million at December 31, 2022[249] - The Company had access to funds totaling $2.69 billion as of March 31, 2023, including approximately $159.5 million from the Federal Reserve's BTFP[317] Loans and Credit Quality - Total loans decreased by $44.8 million, or 1.1%, from $4.06 billion at December 31, 2022, to $4.02 billion at March 31, 2023[246] - Total non-performing loans increased by $720,000, or 11.0%, to $7.2 million as of March 31, 2023, compared to December 31, 2022, primarily due to an increase in residential loans on non-accrual[270] - The allowance for credit losses at the end of the period was $38.005 million, up from $37.774 million at December 31, 2022, representing 0.95% of loans outstanding[301] - The Company recorded a provision for credit losses of $60,000 for the quarter ended March 31, 2023, compared to a release of provision for credit losses of $412,000 for the same quarter in 2022[213] Interest Rate Risk - The Company’s financial condition is subject to risks including changes in interest rates, which could affect interest rate spreads and net interest income[183] - The Company actively manages its interest rate sensitivity position to control exposure of net interest income to risks associated with interest rate movements[339] - The average rate earned on interest-earning assets was 4.3%, while the average rate paid on interest-bearing liabilities was 2.5%[276] - The Company uses interest rate sensitivity analysis and gap analysis to manage interest rate risk[312] Regulatory and Compliance - The Dodd-Frank Act's consumer protection regulations may adversely affect the Company's business and financial condition[183] - The Company exceeded regulatory capital requirements as of March 31, 2023, to be considered "well-capitalized"[319] - The Company’s ability to pay dividends is subject to regulatory review and restrictions, primarily relying on dividends received from the Bank[345] Deposits and Funding - The Company relies on competitive pricing and products to attract and retain deposits, with a variety of deposit accounts offered[329] - The Company’s total deposits as of March 31, 2023, amounted to $4,656,776 thousand, a decrease from $4,815,376 thousand as of December 31, 2022[330] - The total amount of wholesale certificates of deposit increased to $523,176 thousand, representing 11.2% of total deposits, up from 7.9% ($381,559 thousand) in the previous quarter[330] - The Company’s retail certificates of deposit under $250,000 increased to $138,476 thousand, representing 3.0% of total deposits, up from 2.5% ($117,532 thousand) in the previous quarter[330]