Sign in

You're signed outSign in or to get full access.

CB

CAMBRIDGE BANCORP (CATC)·Q1 2024 Earnings Summary

Executive Summary

  • Q1 2024: Net income $6.9M and diluted EPS $0.87; operating diluted EPS $1.02. Sequentially lower vs Q4 2023 ($8.0M, $1.02) and materially down YoY vs Q1 2023 ($12.4M, $1.58) .
  • Total revenue was $37.638M, down vs Q4 2023 ($38.587M) and vs Q1 2023 ($44.963M), with NIM compressing to 2.10% (from 2.14% in Q4 and 2.63% YoY) amid elevated deposit costs (2.18%) .
  • Liquidity remained strong (~$2.35B, ~2x uninsured deposits), while funding mix shifted: wholesale CDs declined and borrowings (FHLB) increased; capital ratios and book value ticked up .
  • Dividend maintained at $0.67 per share (payable May 23, 2024); merger with Eastern Bankshares progressing (shareholder approvals completed; regulatory approvals pending) .

What Went Well and What Went Wrong

What Went Well

  • Wealth management strength: AUM&AUA rose to $4.80B (+4.5% q/q), and wealth management revenue increased to $8.7M (+2.8% q/q; +9.8% YoY) on market improvements .
  • Capital and book value improved: common equity/assets to 9.97% (from 9.87%), TCE ratio to 8.76% (from 8.67%), book value per share to $68.27 (from $68.14) .
  • Strategic progress: “We are pleased with the progress on our pending merger with Eastern and look forward to introducing Cambridge Trust clients to the strengths of the combined organization,” said CEO Denis K. Sheahan .

What Went Wrong

  • Margin and spread pressure: NIM (FTE) fell to 2.10% (-4 bps q/q; -53 bps YoY), with adjusted NIM at 2.05%; net interest and dividend income declined to $27.0M (-4.0% q/q; -21.0% YoY) on higher funding costs .
  • Expense inflation: Total noninterest expense rose to $28.3M (+5.0% q/q), driven by non-operating merger/office consolidation costs (+$709K), higher data processing and professional fees .
  • Asset quality normalization: Non-performing loans increased to $17.2M and NPL/Loans to 0.43% (from 0.41% in Q4 and 0.18% YoY) though net charge-offs were de minimis .

Financial Results

Quarter-on-Quarter Trend (oldest → newest)

MetricQ3 2023Q4 2023Q1 2024
Total Revenue ($USD Millions)$39.196 $38.587 $37.638
Diluted EPS ($)$0.83 $1.02 $0.87
Operating Diluted EPS ($)$1.15 $1.11 $1.02
Net Interest Margin, FTE (%)2.18% 2.14% 2.10%
Cost of Deposits (%)2.09% 2.19% 2.18%
Efficiency Ratio (%)75.64% 69.72% 75.08%
Net Interest & Dividend Income ($USD Millions)$28.647 $28.150 $27.032
Noninterest Income ($USD Millions)$10.549 $10.437 $10.606
Provision for Credit Losses ($USD Millions)$0.195 $0.569 $0.125

Year-over-Year (Q1 2023 → Q1 2024)

MetricQ1 2023Q1 2024
Total Revenue ($USD Millions)$44.963 $37.638
Diluted EPS ($)$1.58 $0.87
Operating Diluted EPS ($)$1.62 $1.02
Net Interest Margin, FTE (%)2.63% 2.10%
Cost of Deposits (%)1.36% 2.18%

Segment/Income Mix (Noninterest Income detail; oldest → newest)

Category ($USD Millions)Q3 2023Q4 2023Q1 2024
Wealth Management Revenue$8.513 $8.478 $8.715
Deposit Account Fees$0.852 $0.746 $0.811
ATM/Debit Card Income$0.403 $0.400 $0.360
Loan-related Derivative Income$0.058 $0.114 $0.018
BOLI Income$0.197 $0.202 $0.203
Other Income$0.499 $0.481 $0.484

KPIs and Balance Sheet (oldest → newest)

KPIQ3 2023Q4 2023Q1 2024
AUM & AUA ($USD Millions)$4,268.394 $4,595.209 $4,800.772
Total Deposits ($USD Millions)$4,565.926 $4,321.178 $4,185.382
Borrowings ($USD Millions)$233.905 $452.155 $546.405
NPL/Total Loans (%)0.19% 0.41% 0.43%
Allowance/Total Loans (%)0.95% 0.97% 0.98%
Book Value per Share ($)$67.04 $68.14 $68.27
Tangible Book Value per Share ($)$57.96 $59.08 $59.23

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Dividend per Share ($)Q2 2024 payout (declared on results)$0.67 (declared Jan 29, 2024) $0.67 (declared Apr 22, 2024; payable May 23, 2024) Maintained
  • Management did not provide quantitative guidance for revenue, margins, OpEx, OI&E, or tax rate in the Q1 press release; forward-looking statements referenced merger conditions and macro/funding factors .

Earnings Call Themes & Trends

Note: No Q1 2024 earnings call transcript was located in our document catalog; press release-driven themes below. The company announced the Q1 release date via PR on April 8, 2024 .

TopicPrevious Mentions (Q-2 and Q-1: Q3 & Q4 2023)Current Period (Q1 2024)Trend
Funding mix & wholesale CDsMigrated wholesale funding toward FHLB; wholesale CDs up in Q3 then reduced in Q4; funding costs rising Lower wholesale CDs; replaced with lower-cost FHLB; borrowings +$94.3M q/q Continued shift to FHLB; wholesale CDs reduced
Deposit costsCost of deposits rose to 2.09% in Q3; 2.19% in Q4 2.18%; non-wholesale spot rose to 2.00% (from 1.88%) Elevated; stabilizing overall, rising non-wholesale spot
Net interest marginNIM fell from 2.26% to 2.18% in Q3; 2.14% in Q4 2.10%; adjusted NIM 2.05% Ongoing compression
Asset qualityNPL/Loans 0.19% in Q3; rose to 0.41% in Q4 due to specific loan NPL/Loans 0.43%; ACL/Loans 0.98% Mild further deterioration; coverage steady
Liquidity~$2.6B (≈2x uninsured deposits) at Q3 and Q4 ~$2.35B (≈2x uninsured deposits) Strong; modestly lower with balance sheet contraction
Merger with EasternAnnounced Sept 2023; progressing; expected timeline updates in Q4 Shareholder approvals completed Feb 28; regulatory approvals pending; CEO reaffirmed progress Advancing toward close

Management Commentary

  • “We are pleased with the progress on our pending merger with Eastern and look forward to introducing Cambridge Trust clients to the strengths of the combined organization,” noted Denis K. Sheahan, Chairman, President and CEO .
  • “We navigated through 2023 with strong liquidity and robust capital levels, despite a challenging environment in terms of interest rates and the impact to deposit and loan growth. The timeline for the planned merger with Eastern Bank is progressing as anticipated.” — Denis K. Sheahan .
  • Q1 highlights emphasized ROA (0.51% operating ROA 0.60%), ROTCE (6.94%), liquidity (~$2.35B, ~2x uninsured deposits), and increases in capital ratios and book value per share .

Q&A Highlights

  • No Q1 2024 earnings call transcript was found; therefore, Q&A highlights and any guidance clarifications are unavailable. The company announced the Q1 release timing via press release but did not furnish an earnings call transcript in our catalog .

Estimates Context

  • S&P Global consensus estimates for CATC (EPS and revenue) were unavailable in our retrieval; as a result, formal comparisons to Wall Street consensus cannot be provided for Q1 2024.
  • Where third-party websites suggest estimate comparisons, we do not rely on them; we anchor estimate comparisons to S&P Global when available (not available in this case).

Key Takeaways for Investors

  • Top-line pressure persisted: total revenue fell to $37.638M, down q/q and YoY, as NIM compressed to 2.10% and deposit costs remained elevated; operating EPS declined to $1.02 q/q and YoY .
  • Funding mix transformation is ongoing: wholesale CDs reduced; FHLB borrowings increased to $546.4M; expect continued scrutiny of cost of funds and adjusted NIM (2.05%) .
  • Wealth management remains a stabilizer: revenue rose to $8.7M and AUM&AUA to $4.80B, supporting fee income resiliency amid rate pressure .
  • Asset quality normalizing: NPLs/Loans at 0.43% vs 0.41% in Q4; watch credit metrics as the cycle matures, though net charge-offs were negligible .
  • Capital/Book value improvements and maintained dividend ($0.67) provide support to shareholder returns pending the Eastern merger outcome .
  • Merger with Eastern: shareholder approvals completed; regulatory approvals pending; merger synergy expectations and cost structure changes could become near-term stock catalysts once timing is clarified .
  • Near-term focus: funding costs trajectory, margin stabilization, and merger developments; medium-term thesis hinges on fee income durability, credit normalization, and post-merger strategic positioning .

Appendix: Source Documents

  • Q1 2024 8-K 2.02 and Exhibit 99.1 press release: “Cambridge Bancorp Announces First Quarter 2024 Results and Declares Quarterly Dividend” (Apr 23, 2024) .
  • Q4 2023 8-K and press release: “Cambridge Bancorp Announces Results for 2023 and Declares Quarterly Dividend” (Jan 30, 2024) .
  • Q3 2023 8-K and press release: “Cambridge Bancorp Announces Third Quarter 2023 Results and Declares Dividend” (Oct 17, 2023) .
  • Other relevant press release: “Cambridge Bancorp Sets First Quarter 2024 Earnings Release Date” (Apr 8, 2024) .