Cambridge Bancorp Reports Solid Second Quarter Results

"We are pleased to report sustained earnings growth for the quarter, with a notable increase in net interest income of $844,000 (11.0%) over the same quarter in 2007" notes Joseph V. Roller II, president and CEO. "The continued uptrend in net interest income was driven primarily by loan growth. In this changing financial market, we continue to be active while maintaining our vigorous credit underwriting standards. Moreover, since December 2007, loan growth has been funded by a comparable increase in deposits. In addition, the Bank's net interest margin of 4.05% for the current quarter, while slightly lower than the same quarter in 2007, was 10 basis points higher than the first quarter of 2008."

Since June 2007 loan outstandings have increased $69 million. Half of the growth originated in the commercial real estate sector with the remainder coming from a combination of residential mortgages and home equity loans.

Non-performing loans as a percentage of total loans stood at 0.23% at June 30, 2008, a decline from 0.27% at December 31, 2007. Loan quality remains strong and the Allowance for Loan Losses stood at $7.2 million or 1.60% of total loans outstanding at June 30, 2008. At December 31, 2007, the Allowance for Loan Losses was $6.7 million or 1.59% of total loans outstanding. In response to continued commercial loan growth, the provision for loan losses was $250,000 for the current quarter, an increase of $150,000 over the comparable 2007 quarter.

Total assets at period end were $894 million versus $799 million one year ago and $850 million at the end of 2007.

Cambridge Bancorp and its subsidiary, Cambridge Trust Company, are based in Cambridge, Massachusetts, in the heart of Harvard Square. Cambridge Trust Company is a 117-year-old Massachusetts chartered commercial bank with $894 million in total assets and nine Massachusetts locations in Cambridge, Concord, Lincoln, Weston, and Beacon Hill. Cambridge Trust Company is one of New England's leaders in wealth management with $1.5 billion in client assets under management. In addition, Cambridge Trust Company of New Hampshire offers wealth management services at two New Hampshire locations, Concord and Exeter.

Financial Highlights:

CAMBRIDGE BANCORP QUARTERLY UNAUDITED RESULTS June 30, 2008 ---------------------------------------------------------------------- Dollar amounts in thousands (except share data) Quarter Ended Six Months Ended June 30, June 30, ----------------------- ----------------------- 2008 2007 2008 2007 ----------- ----------- ----------- ----------- Interest Income $ 11,085 $ 10,471 $ 22,006 $ 20,634 Interest Expense 2,567 2,797 5,572 5,452 ----------- ----------- ----------- ----------- Net Interest Income 8,518 7,674 16,434 15,182 Provision for Loan Losses 250 100 500 200 Non-Interest Income 4,289 4,210 8,561 8,200 Non-Interest Expense 8,914 8,324 17,562 16,490 ----------- ----------- ----------- ----------- Income Before Taxes 3,643 3,460 6,933 6,692 Income Taxes 1,112 1,125 2,091 2,114 ----------- ----------- ----------- ----------- Net Income $ 2,531 $ 2,335 $ 4,842 $ 4,578 =========== =========== =========== =========== Data Per Common Share: ----------------------- Basic Earnings Per Share $ 0.68 $ 0.61 $ 1.29 $ 1.19 Diluted Earnings Per Share $ 0.67 $ 0.60 $ 1.28 $ 1.18 Dividends Declared Per Share $ 0.31 $ 0.28 $ 0.62 $ 0.56 Avg. Common Shares Outstanding: Basic 3,766,038 3,837,731 3,765,584 3,844,806 Diluted 3,779,243 3,859,815 3,779,272 3,872,271 Selected Operating Ratios: ----------------------- Net Interest Margin 4.05% 4.06% 4.00% 4.05% Return on Average Assets, after taxes 1.14% 1.18% 1.12% 1.17% Return on Average Equity, after taxes 14.07% 14.43% 13.53% 14.25% June 30, December June 30, 31, 2008 2007 2007 ----------- ----------- ----------- Total Assets $ 893,546 $ 849,808 $ 799,390 Total Loans 448,790 418,748 379,916 Non-Performing Loans 1,043 1,129 1,036 Allowance for Loan Losses 7,201 6,659 6,152 Allowance to Non- Performing Loans 690.63% 589.74% 593.55% Allowance to Total Loans 1.60% 1.59% 1.62% Total Deposits 738,238 698,625 678,907 Total Stockholders' Equity 70,325 69,912 63,885 Book Value Per Share $ 18.63 $ 18.49 $ 16.67 Tangible Book Value Per Share $ 18.23 $ 18.04 $ 16.17

CAMBRIDGE BANCORP UNAUDITED BALANCE SHEETS June 30, December 31, 2008 2007 -------- -------- (In thousands) ASSETS Cash and due from banks $ 22,260 $ 18,715 Federal funds sold 704 10,128 -------- -------- Total cash and cash equivalents 22,964 28,843 Investment securities: Available for sale, at fair value 275,841 218,579 Held-to-maturity, at amortized cost 120,186 158,818 -------- -------- Total investment securities 396,027 377,397 Loans: Residential mortgage 188,129 174,100 Commercial mortgage 145,937 128,764 Home equity 65,176 66,994 Commercial 32,654 36,249 Consumer 16,894 12,641 -------- -------- Total loans 448,790 418,748 Allowance for loan losses (7,201) (6,659) -------- -------- Net loans 441,589 412,089 Bank owned life insurance 11,089 10,841 Banking premises and equipment, net 5,173 5,195 Accrued interest receivable 4,468 4,953 Other assets 12,236 10,490 -------- -------- Total assets $893,546 $849,808 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand $190,739 $189,034 Interest bearing checking 203,051 221,715 Money market 57,892 47,230 Savings 141,627 91,761 Certificates of deposit 144,929 148,885 -------- -------- Total deposits 738,238 698,625 Short-term borrowings 19,022 35,540 Long-term borrowings 55,000 35,000 Other liabilities 10,961 10,731 -------- -------- Total liabilities 823,221 779,896 -------- -------- Stockholders' equity: Common stock, par value $1.00; Authorized 5,000,000 shares; Outstanding: 3,774,575 and 3,768,397 shares, respectively 3,775 3,768 Additional paid-in capital 19,728 19,202 Retained earnings 47,644 46,132 Accumulated other comprehensive income (loss) (822) 810 -------- -------- Total stockholders' equity 70,325 69,912 -------- -------- Total liabilities and stockholders' equity $893,546 $849,808 ======== ========

CAMBRIDGE BANCORP UNAUDITED STATEMENTS OF INCOME Quarter Ended June 30, -------------------- 2008 2007 --------- --------- (In thousands, except per share data) Interest income: Interest on loans $ 6,571 $ 5,996 Interest on investment securities 4,403 4,418 Interest on federal funds sold 111 57 --------- --------- Total interest income 11,085 10,471 --------- --------- Interest expense: Interest on deposits 1,935 2,324 Interest on borrowed funds 632 473 --------- --------- Total interest expense 2,567 2,797 --------- --------- Net interest income 8,518 7,674 Provision for loan losses 250 100 --------- --------- Net interest income after provision for loan losses 8,268 7,574 --------- --------- Noninterest income: Wealth management income 2,920 2,946 Deposit account fees 576 633 ATM/Debit card income 220 214 Merchant card services 146 259 Bank owned life insurance income 131 -- Gain on disposition of investment securities 87 -- Other income 209 158 --------- --------- Total noninterest income 4,289 4,210 --------- --------- Noninterest expense: Salaries and employee benefits 5,059 4,686 Occupancy and equipment 1,636 1,529 Data processing 698 687 Professional services 432 379 Marketing 372 305 Other expenses 717 738 --------- --------- Total noninterest expense 8,914 8,324 --------- --------- Income before income taxes 3,643 3,460 Income tax expense 1,112 1,125 --------- --------- Net income $ 2,531 $ 2,335 ========= ========= Per share data: Basic earnings per common share $ 0.68 $ 0.61 Diluted earnings per common share $ 0.67 $ 0.60 Average shares outstanding - basic 3,766,038 3,837,731 Average shares outstanding - diluted 3,779,243 3,859,815

CAMBRIDGE BANCORP UNAUDITED STATEMENTS OF INCOME Six Months Ended June 30, -------------------- 2008 2007 --------- --------- (In thousands, except per share data) Interest income: Interest on loans $ 13,182 $ 11,794 Interest on investment securities 8,703 8,769 Interest on federal funds sold 121 71 --------- --------- Total interest income 22,006 20,634 --------- --------- Interest expense: Interest on deposits 4,190 4,471 Interest on borrowed funds 1,382 981 --------- --------- Total interest expense 5,572 5,452 --------- --------- Net interest income 16,434 15,182 Provision for loan losses 500 200 --------- --------- Net interest income after provision for loan losses 15,934 14,982 --------- --------- Noninterest income: Wealth management income 5,872 5,660 Deposit account fees 1,166 1,251 ATM/Debit card income 415 405 Merchant card services 262 437 Bank owned life insurance income 249 -- Gain on disposition of investment securities 245 119 Other income 352 328 --------- --------- Total noninterest income 8,561 8,200 --------- --------- Noninterest expense: Salaries and employee benefits 10,061 9,280 Occupancy and equipment 3,190 3,068 Data processing 1,425 1,345 Professional services 794 832 Marketing 685 570 Other expenses 1,407 1,395 --------- --------- Total noninterest expense 17,562 16,490 --------- --------- Income before income taxes 6,933 6,692 Income tax expense 2,091 2,114 --------- --------- Net income $ 4,842 $ 4,578 ========= ========= Per share data: Basic earnings per common share $ 1.29 $ 1.19 Diluted earnings per common share $ 1.28 $ 1.18 Average shares outstanding - basic 3,765,584 3,844,806 Average shares outstanding - diluted 3,779,272 3,872,271

SOURCE: Cambridge Bancorp

Cambridge Bancorp Albert R. Rietheimer, 617-441-1516 Senior Vice President, Chief Financial Officer & Treasurer