Cambridge Bancorp Reports Earnings Growth for Full-Year 2008

In the fourth quarter of 2008 unaudited net income was flat at $2.2 million compared to the same quarter in 2007.

"Our fourth quarter results were adversely impacted by the decline in the equity markets, which resulted in a decrease of $480,000 or 15.7% in wealth management fees compared to the fourth quarter of 2007," noted Joseph V. Roller II, president and CEO. "In addition, non-interest expenses trended higher as the Bank filled key positions in wealth management and commercial services, made additional investments in marketing, and opened a new branch in Belmont. These important investments helped to position the Bank well for long term growth."

"We are pleased to report sustained earnings growth for 2008," said Mr. Roller. "The key contributor to the increase in 2008 performance was solid growth in net interest income of $3.7 million or 12.2%, driven primarily by loan growth coupled with a reduction in interest expense on deposits. While we fully expect to continue to face headwinds during this economic downturn, we are intensely focused on managing through this difficult period. The overall strength of our company will allow us to execute on prudent, long term opportunities for future growth."

Total deposits at year-end 2008 were $768 million, an increase of $69.0 million or 9.9%, compared to $699 million at year-end 2007.

Total loans outstanding for year-end 2008 were $472 million compared to $419 million at year-end 2007, an increase of $53.1 million or 12.7%. Loan quality remained strong with non-performing loans totaling $1.6 million at December 31, 2008 compared to $1.1 million at the end of 2007. The Allowance for Loan Losses was $7.7 million or 1.63% of total loans outstanding at year-end 2008. At December 31, 2007, the Allowance for Loan Losses was $6.7 million or 1.59% of total loans outstanding. The higher provision for loan losses of $1.0 million during the year 2008 was primarily in response to the overall growth in the loan portfolio and recognition of current market conditions.

Total assets at year-end 2008 were $917 million versus $850 million year-end 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 118-year-old Massachusetts chartered commercial bank with $917 million in total assets and ten Massachusetts locations in Cambridge, Beacon Hill, Belmont, Concord, Lincoln, and Weston. Cambridge Trust Company is one of New England's leaders in wealth management with $1.2 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 December 31, 2008 Dollar amounts in thousands (except share data) Quarter Ended Year Ended December 31, December 31, 2008 2007 2008 2007 Interest Income $ 11,327 $ 10,969 $ 44,783 $ 42,547 Interest Expense 2,369 3,341 10,447 11,953 Net Interest Income 8,958 7,628 34,336 30,594 Provision for Loan Losses 250 200 1,000 700 Non-Interest Income 3,756 4,343 16,848 17,061 Non-Interest Expense 9,294 8,666 36,267 33,583 Income Before Taxes 3,170 3,105 13,917 13,372 Income Taxes 930 868 4,304 4,129 Net Income $ 2,240 $ 2,237 $ 9,613 $ 9,243 Data Per Common Share: Basic Earnings Per Share $ 0.60 $ 0.59 $ 2.56 $ 2.42 Diluted Earnings Per Share $ 0.60 $ 0.59 $ 2.56 $ 2.41 Dividends Declared Per Share $ 0.33 $ 0.31 $ 1.28 $ 1.18 Avg. Common Shares Outstanding: Basic 3,726,701 3,775,602 3,748,547 3,818,360 Diluted 3,734,998 3,789,861 3,758,352 3,837,572 Selected Operating Ratios: Net Interest Margin 4.23% 3.88% 4.11% 3.99% Return on Average Assets, after taxes 1.00% 1.08% 1.09% 1.15% Return on Average Equity, after taxes 12.37% 13.25% 13.46% 14.17% December 31, December 31, 2008 2007 Total Assets $ 917,212 $ 849,808 Total Loans 471,814 418,748 Non-Performing Loans 1,602 1,129 Allowance for Loan Losses 7,696 6,659 Allowance to Non-Performing Loans 480.35% 589.74% Allowance to Total Loans 1.63% 1.59% Total Deposits 767,654 698,625 Total Stockholders' Equity 76,044 69,912 Book Value Per Share $ 20.29 $ 18.49 Tangible Book Value Per Share $ 19.93 $ 18.04

CAMBRIDGE BANCORP UNAUDITED BALANCE SHEETS December 31, December 31, 2008 2007 (In thousands) ASSETS Cash and due from banks $ 13,472 $ 18,715 Federal funds sold 26,179 10,128 Total cash and cash equivalents 39,651 28,843 Investment securities: Available for sale, at fair value 276,711 218,579 Held-to-maturity, at amortized cost 105,785 158,818 Total investment securities 382,496 377,397 Loans: Residential mortgage 195,510 174,100 Commercial mortgage 157,787 128,764 Home equity 68,419 66,994 Commercial 36,842 36,249 Consumer 13,256 12,641 Total loans 471,814 418,748 Allowance for loan losses (7,696 ) (6,659 ) Net loans 464,118 412,089 Bank owned life insurance 11,310 10,841 Banking premises and equipment, net 5,979 5,195 Accrued interest receivable 4,391 4,953 Other assets 9,267 10,490 Total assets $ 917,212 $ 849,808 LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand $ 200,877 $ 189,034 Interest bearing checking 212,053 221,715 Money market 51,537 47,230 Savings 140,285 91,761 Certificates of deposit 162,902 148,885 Total deposits 767,654 698,625 Short-term borrowings 3,019 35,540 Long-term borrowings 55,000 35,000 Other liabilities 15,495 10,731 Total liabilities 841,168 779,896 Stockholders' equity: Common stock, par value $1.00; Authorized 5,000,000 shares; Outstanding: 3,748,642 and 3,768,397 shares, respectively 3,749 3,768 Additional paid-in capital 19,749 19,202 Retained earnings 49,384 46,132 Accumulated other comprehensive income 3,162 810 Total stockholders' equity 76,044 69,912 Total liabilities and stockholders' equity $ 917,212 $ 849,808

CAMBRIDGE BANCORP UNAUDITED STATEMENTS OF INCOME Quarter Ended December 31, 2008 2007 (In thousands, except per share data) Interest income: Interest on loans $ 6,808 $ 6,672 Interest on investment securities 4,519 4,292 Interest on federal funds sold -- 5 Total interest income 11,327 10,969 Interest expense: Interest on deposits 1,726 2,491 Interest on borrowed funds 643 850 Total interest expense 2,369 3,341 Net interest income 8,958 7,628 Provision for loan losses 250 200 Net interest income after provision for loan losses 8,708 7,428 Noninterest income: Wealth management income 2,574 3,054 Deposit account fees 613 626 ATM/Debit card income 211 215 Merchant card services 145 175 Bank owned life insurance income 107 137 Gain on disposition of investment securities 5 3 Other income 101 133 Total noninterest income 3,756 4,343 Noninterest expense: Salaries and employee benefits 5,548 5,206 Occupancy and equipment 1,582 1,476 Data processing 695 663 Professional services 264 394 Marketing 333 287 FDIC Insurance 115 17 Other expenses 757 623 Total noninterest expense 9,294 8,666 Income before income taxes 3,170 3,105 Income tax expense 930 868 Net income $ 2,240 $ 2,237 Per share data: Basic earnings per common share $ 0.60 $ 0.59 Diluted earnings per common share $ 0.60 $ 0.59 Average shares outstanding - basic 3,726,701 3,775,602 Average shares outstanding - diluted 3,734,998 3,789,861

CAMBRIDGE BANCORP UNAUDITED STATEMENTS OF INCOME Year Ended December 31, 2008 2007 (In thousands, except per share data) Interest income: Interest on loans $ 26,808 $ 24,987 Interest on investment securities 17,852 17,471 Interest on federal funds sold 123 89 Total interest income 44,783 42,547 Interest expense: Interest on deposits 7,669 9,436 Interest on borrowed funds 2,778 2,517 Total interest expense 10,447 11,953 Net interest income 34,336 30,594 Provision for loan losses 1,000 700 Net interest income after provision for loan losses 33,336 29,894 Noninterest income: Wealth management income 11,749 11,995 Deposit account fees 2,371 2,485 ATM/Debit card income 844 827 Merchant card services 564 843 Bank owned life insurance income 469 179 Gain on disposition of investment securities 251 122 Other income 600 610 Total noninterest income 16,848 17,061 Noninterest expense: Salaries and employee benefits 21,004 19,312 Occupancy and equipment 6,427 6,026 Data processing 2,912 2,720 Professional services 1,462 1,613 Marketing 1,421 1,137 FDIC Insurance 208 78 Other expenses 2,833 2,697 Total noninterest expense 36,267 33,583 Income before income taxes 13,917 13,372 Income tax expense 4,304 4,129 Net income $ 9,613 $ 9,243 Per share data: Basic earnings per common share $ 2.56 $ 2.42 Diluted earnings per common share $ 2.56 $ 2.41 Average shares outstanding - basic 3,748,547 3,818,360 Average shares outstanding - diluted 3,758,352 3,837,572

SOURCE: Cambridge Bancorp

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