Cambridge Bancorp (NASDAQ:CATC) Q4 2022 Earnings Conference Call January 24, 2023 11:00 AM ET

Company Participants

Denis Sheahan - Chairman, President and Chief Executive Officer

Michael Carotenuto - Chief Financial Officer

Conference Call Participants

Mark Fitzgibbon - Piper Sandler

Thomas Reid - Raymond James

Chris O'Connell - KBW

Bernard Horn - Polaris

Operator

Welcome to the Cambridge Bancorp Fourth Quarter Earnings Conference Call.

We will be making forward-looking statements during this call and actual results may differ materially. We encourage you to review the disclaimer in our earnings release dealing with forward-looking information, which applies to statements made in this call.

In addition, some of our discussion may include references to non-GAAP financial measures. Information about those measures, including reconciliation to GAAP measures may be found in our SEC filings and in our earnings release.

All participants will be in listen-only mode. [Operator Instructions] Please note this event is being recorded.

I would now like to turn the conference over to Mr. Denis Sheahan, Chairman, President and Chief Executive Officer. Please go ahead, sir.

Denis Sheahan

Thank you, and thank you everyone for joining our earnings conference call today.

I'm joined by our Chief Financial Officer, Michael Carotenuto, who will provide a review of the fourth quarter and an outlook for 2023. For your reference, 2023 estimates are included on Page 23 of an Investor Presentation we posted along with the earnings released this morning.

I'm pleased to report another solid year at Cambridge Bancorp. Loan growth was robust, asset quality remains excellent, capital grew very nicely, and the net interest margin expanded during the year. All of this balanced against a challenging period for deposit growth and wealth revenue as a result of market volatility and interest rates.

Organic loan growth, excluding merger balances continued into the fourth quarter in both commercial and residential lending with 3.6% linked-quarter growth and year-over-year growth of 13.3%.

Core deposits, excluding merger balances, decreased by 5.2% during the year as a result of increased market competition, attractive yields within the fixed income markets and clients using funds for other opportunistic investments.

Wealth Management assets decreased primarily due to market volatility during the year. Client assets under management and administration totaled $4 billion as of year-end '22.

The tangible common equity ratio rose to 8.12% as of year-end, and the company delivered a return on average assets of 1.1% and a return on tangible common equity of 14.18%, both on an operating basis.