Cambridge Trust Co. had first quarter net income of nearly $13.5 million, or diluted earnings per share of $1.92, compared to fourth quarter net income of $13.01 million, or diluted earnings per share of $1.86. Before acquiring Wellesley Bank on June 1, Cambridge Trust had net income in the first quarter of 2020 of $7.23 million, or diluted earnings per share of $1.33.
The bank increased its quarterly shareholder dividend by $0.06 per share, or 11 percent, from $0.55 per share in the first quarter to $0.61.
“The Cambridge Trust team continued to deliver support for our clients and our communities including participating in the second round of the PPP,” Denis K. Sheahan, Cambridge Trust’s chairman and CEO, said in a statement. “Financial performance in the first quarter remained strong, and I am pleased to see strength in deposit growth, loan asset quality, and new business pipelines. I am also pleased to report a significant increase of 11 percent in the company’s quarterly common stock dividend.”
The bank has originated 557 Paycheck Protection Program loans in the current round of funding for $92.9 million, which the bank said supported an estimated 7,612 local jobs. Combined with the loans originated in 2020, Cambridge Trust has processed approximately 1,450 PPP loans. The bank said in its investor presentation that about 78 percent of its PPP loans from last year’s round have been or are in the process of being forgiven.
Cambridge Trust was able to decrease its allowance for credit losses with a $206,000 release, which the bank said was due to lower loan balances, excluding PPP loans, and changes in assumptions associated with economic factors and qualitative factors used in its methodology.
The allowance for credit losses was $35.6 million, or 1.18 percent of total loans outstanding, not including PPP loans, compared to $36 million, or 1.19 percent, in the fourth quarter. Because PPP loans are guaranteed by the U.S. Small Business Administration, they do not require an an allowance for credit losses.
Cambridge Trust’s noninterest income remained unchanged at $10.8 million from the fourth quarter. Increases in wealth management revenue and loan related derivative income, partially offset by lower other income, including reductions in commercial loan prepayment premiums. Noninterest income was 25.7% of total revenue in the first quarter compared to 24.7 percent in the fourth quarter.
Wealth management revenue increased by $87,000, or 1.1 percent, to $8.2 million in the first quarter compared to $8.1 million in the fourth quarter. Wealth management assets under management and administration were $4.27 billion on March 31, an increase of $99.4 million, or 2.4 percent, from Dec. 31. The bank said the increase was primarily due to appreciation within the equity markets during the first quarter of 2021.
