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

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