Company Overview

Cambridge Bancorp is a Massachusetts-based bank holding company with $5.4 billion in assets as of March 2024. Its main subsidiary is Cambridge Trust Company, which operates 22 banking offices in Eastern Massachusetts and New Hampshire. The company focuses on four core services: wealth management, commercial banking, consumer lending, and personal banking.

Financial Highlights

• Net income for Q1 2024 was $6.9 million, down 44.5% from $12.4 million in Q1 2023, primarily due to lower net interest income and higher non-operating expenses.

• Diluted EPS was $0.87 in Q1 2024 versus $1.58 in Q1 2023.

• Net interest margin decreased 53 basis points to 2.10% in Q1 2024, driven by higher cost of funds.

• Total loans declined 0.7% from December 2023 to $4.0 billion at March 2024, while total deposits decreased 3.1% to $4.2 billion over the same period.

Merger Agreement with Eastern Bankshares

• In September 2023, Cambridge Bancorp announced a merger agreement with Eastern Bankshares valued at $856 million.

• The merger is expected to close in mid-2024, pending regulatory approval. It will expand Cambridge Bancorp’s footprint in Eastern Massachusetts.

Financial Outlook

• Cambridge Bancorp expects the Eastern Bankshares merger to drive revenue and cost synergies, although merger-related costs will impact earnings in the near term.

• The company is monitoring risks related to interest rates, credit quality, deposit costs, and the general economy. It believes the allowance for loan losses is currently adequate.

• Capital levels remain strong, with capital ratios well above regulatory minimums for a “well-capitalized” designation.

In summary, Cambridge Bancorp delivered lower profits in Q1 2024 amid margin compression, but maintains a solid financial position and positive long-term outlook thanks to the pending Eastern Bankshares merger.