updated 2/14/2011 9:16:22 AM ET 2011-02-14T14:16:22

CAMBRIDGE, Ohio, Feb. 14, 2011 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the bank services holding company for Advantage Bank, today announced fourth quarter financial results.

For the quarter ended December 31, 2010, the Company reported net earnings of $1.0 million, or $0.14 per share. The Company's year-to-date loss through December 31, 2010 is $14.6 million, or $2.02 per share as Camco has continued to concentrate on decreasing criticized, non-performing and delinquent loans, while increasing total loans. Loan loss reserves to total loans also increased from 2.38% to 2.46% at December 31, 2010.

"As we stated throughout 2010, our year-to-date loss is primarily due to high charge-offs, declines in real-estate owned (REO) home values, and expenses related to classified assets and the foreclosure processes, all of which are realities we've had to face and deal with to ensure stability for our shareholders moving forward," said James E. Huston, President and CEO. "We believe we have built momentum moving into 2011 through our fourth quarter income that was a result of strong gains on sales of mortgage loans in an environment of low interest rates and increased re-financing."

The Company's net interest margin increased 59 basis points to 3.50% for the year ending December 31, 2010 from 2.91% for the year ending December 31, 2009, and up 16 basis points to 3.75% for the quarter ended December 31, 2010 from 3.59% for the quarter ended September 30, 2010.

"As we begin a new year, we are looking forward…with a focus on ensuring we continue to provide excellent customer service and a wide array of financial products for our customers. Simultaneously, we believe we are concentrating on areas that will provide ongoing opportunities for strength and growth," Huston said.

Review of Financial Performance

Overview:

For the quarter ended December 31, 2010, the Company reported net earnings of $1.0 million, or $0.14 per share compared to a net loss of $11.8 million, or $1.64 per share for the same period a year ago. Net loss for the fiscal year ended December 31, 2010 was $14.6 million, or $2.02 per share, compared to net loss of $11.2 million, or $1.56 per share for the fiscal year ended December 31, 2009.

The following summarizes key activities of the Company during the quarter ended December 31, 2010:

  • Net interest margin improved 16 basis points to 3.75% compared to previous quarter of 3.59%
  • Net interest income plus non-interest income increased $1.4 million, or 17.3%, when compared to the 3rd quarter 2010
  • Provision for loan losses totaled $936,000 while net charge-offs on loans totaled $920,000
  • Non performing loans decreased $5.3 million or 13.5% from September 30, 2010
  • $1.1 million of expense was incurred in the quarter related to real estate owned valuations

Asset Quality:

Management continues to match the directional trends in classified assets and non performing loans to the reserve. Commercial and residential prices have been declining due to oversupply which has resulted in the additional write down of classified assets and properties. As borrowers continue to struggle in the current economy we have continued to focus on our asset quality. In 2010 we have seen a 7.3% decrease from 2009 in non-performing loans and a 13.9% decrease in loans delinquent 60+ days. Charge offs contributed to the overall reduction, but without our continued and proactive efforts to identify the weakening credits and assess their collectability we would not be able to seek resolution of the problem assets. 

A summary of certain key factors follows:

 
(in thousands) 12/31/2010 9/30/2010 12/31/2009
Criticized Loans * $65,841 $63,716 $71,673
Non Performing Loans 33,779 39,073 36,449
Delinquent 60+ days 27,815 28,017 32,296
Loan Loss Reserve 16,870 16,854 16,099
Net charge offs for the quarter 920 10,229 16,322
Loan Loss Reserve / Total Loans 2.46% 2.39% 2.38%

*Includes special mention, substandard, doubtful and loss.

Net Interest Income:

Net interest income was $7.0 million, up 12.6% compared with the prior year and up 3.8% compared with the prior quarter. Net interest margin was 3.75% for the fourth quarter of 2010, compared to 3.20% with the prior year fourth quarter and 3.59% for the third quarter of 2010.

Improved margins are being driven by lower cost of deposits and non-core funding sources coupled with a greater mix of new commercial loan originations.

Non-Interest Income (NII):

Non-interest income was $2.6 million for the fourth quarter of 2010, versus $1.4 million last quarter and $2.4 million for the fourth quarter of 2009. The increase in the fourth quarter is primarily due to gain on sale of mortgage loans and an increase in the valuation of mortgage servicing rights (MSRs).   Mortgage loan sales increased $19.5 million in the fourth quarter 2010 from the previous quarter resulting in increased capitalization in our MSR asset. 

Non-Interest Expense (NIE):

NIE was $7.6 million for the fourth quarter of 2010, versus $7.8 million last quarter and $7.0 million for the fourth quarter of 2009. The increases in 2010 relate to higher costs associated with problem loan workouts, such as fees for legal expenses relating to the resolution of problem assets and the decline in the value of our real estate owned properties coupled with the operating expenses associated with holding such assets prior to sale.

Balance Sheet Review:

Total assets decreased 3.3% to $815.0 million at December 31, 2010, compared with $842.7 million a year earlier, primarily as a result of the decreases in investments and cash offset partially by an increase in loans. 

Loans held for sale decreased $9.9 million from the previous quarter which contributed to our gain on sale and increase in MSR values during the quarter. 

Total loans were $684.7 million at December 31, 2010, compared with $675.1 million in the prior year. The total loan portfolio mix continues to change with a greater percentage representing commercial loans, the growth of which has been a strategic initiative for the Bank. 

Deposit balances were $651.8 million, compared with $659.9 million in the prior year and $647.9 million in the previous quarter. Excluding the planned runoff of public fund and brokered deposits, our core deposit base continues to increase.

Capital:

Camco's tier one capital to average assets ratio increased to 5.98%, up from 5.73% in the third quarter of 2010. The Bank entered into an agreement in July, 2009, with its regulator that required it to maintain an 8% tier one capital level. The board is committed to realizing the 8% capital and has engaged an investment banking firm and is in the process of developing a capital plan that may include balance sheet reduction, issuing common stock, preferred stock, debt or some combination of those issuances, or other financing alternatives that will increase tier one capital.

Provision of Deferred Taxes:

The fourth quarter tax provision of $61,000 reflects the mark to market on our investments available for sale and the continued 100% valuation allowance on the Company's deferred tax asset. As the Company executes plans to return to profitability, future earnings will benefit from tax operating loss carry-forwards. 

About Camco Financial Corporation: Camco Financial Corporation, holding company for Advantage Bank, is a multi-state bank holding company headquartered in Cambridge, Ohio. Advantage Bank and its affiliates offer community banking that includes commercial, business and consumer financial services, internet banking and title insurance services from 26 offices. Additional information about Camco Financial may be found on the Company's web sites:www.camcofinancial.com or www.advantagebank.com.

The Camco Financial Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4639

The words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the Company's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demands for loans in the Company's market area and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Camco Financial Corporation
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and shares outstanding)
             
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Audited)  
  12/31/10 9/30/10 6/30/10 3/31/10 12/31/09  
Assets            
 Cash and Cash Equivalents  29,114  35,328  33,567  28,294  38,153  
 Investments   34,716  39,074  41,138  49,935  58,063  
             
 Loans Held for Sale  2,208  12,143  1,669  1,600  475  
             
 Loans Receivable  684,710  693,387  691,596  699,766  675,121  
 Allowance for Loan Loss  (16,870) (16,854) (15,676) (15,821) (16,099)  
 Loans Receivable, Net  667,840  676,533  675,920  683,945  659,022  
             
 Other Assets 81,088 86,172 87,768 87,705 86,942  
             
Total Assets  $ 814,966  $ 849,250  $ 840,062  $ 851,479  $ 842,655  
             
Liabilities            
 Deposits  651,816  647,937  652,872  649,354  659,902  
 Borrowed Funds  104,464  143,665  119,990  130,243  109,232  
 Other Liabilities 12,583 12,436 10,294 11,002 13,007  
             
Total Liabilities  768,863  804,038  783,156  790,599  782,141  
             
Stockholders' Equity 46,103 45,212 56,906 60,880 60,514  
             
Total Liabilities and Stockholders' Equity  $ 814,966  $ 849,250  $ 840,062  $ 851,479  $ 842,655  
             
             
Stockholders' Equity to Total Assets 5.66% 5.32% 6.77% 7.15% 7.18%  
             
Total Shares Outstanding  7,205,595  7,205,595  7,205,595  7,205,595  7,205,595  
             
Book Value Per Share $6.40 $6.27 $7.90 $8.45 $8.40  
 
Camco Financial Corporation
Condensed Consolidated Statements of Earnings
Year to Date Information
(In thousands, except for per share data and shares outstanding)
     
  12 Months

Ended

12/31/10
12 Months

Ended

12/31/09
  (Unaudited) (Unaudited)
Interest Income:    
 Loans  37,602  40,231
 Mortgage-backed securities  1,645  2,338
 Investment securities  261  747
 Interest-bearing deposits and other  1,313  1,408
 Total Interest Income  40,821  44,724
     
Interest Expense:    
 Deposits   10,575  15,349
 Borrowings  3,859  5,245
 Total Interest Expense 14,434 20,594
Net Interest Income 26,387 24,130
     
Provision for Losses on Loans  18,460  21,792
Net Interest Income After Provision for Loan Losses 7,927 2,338
     
Noninterest Income:    
 Late charges, rent and other  1,652  1,693
 Loan servicing fees  1,269  1,264
 Service charges and other fees on deposits  2,276  2,277
 Gain on sale of loans  1,882  1,271
 Mortgage servicing rights   (593)  703
 Gain (loss) on sale of investment, mbs & fixed assets  1  127
 Income on cash surrender value life insurance  877  926
 Total noninterest income 7,364 8,261
     
Noninterest expense:    
 Employee compensation and benefits  12,935  12,453
 Occupancy and equipment  3,003  3,247
 Federal deposit insurance premium  2,121  2,471
 Data processing  1,127  1,190
 Advertising   358  525
 Franchise taxes  928  1,018
 Other operating   8,860  7,209
 Total noninterest expense 29,332 28,113
     
Earnings (loss) before provision for income taxes (14,041) (17,514)
     
 Provision for income taxes  518  (6,297)
Net Earnings (Loss) (14,559) (11,217)
     
     
Earnings (Loss) Per Share Reported:    
Basic  ($2.02) ($1.56)
Diluted  ($2.02) ($1.56)
     
Shares Outstanding  7,205,595  7,202,444
Diluted Weighted Number of Shares Outstanding  7,205,595  7,202,444
 
Camco Financial Corporation
Condensed Consolidated Statements of Operations
Quarterly Information
(In thousands, except for per share data and shares outstanding)
           
           
  3 Months

Ended

12/31/10
3 Months

Ended 

9/30/10
3 Months

Ended

6/30/10
3 Months

Ended

3/31/10
3 Months

Ended

12/31/09
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income:          
 Loans  9,528  9,513  9,281  9,280  9,670
 Mortgage-backed securities  354  388  428  475  517
 Investment securities  37  54  67  103  88
 Interest-bearing deposits and other  303  337  333  340  341
 Total Interest Income  10,222  10,292  10,109  10,198  10,616
           
Interest Expense:          
 Deposits   2,316  2,570  2,744  2,945  3,309
 Borrowings  898  972  992  997  1,085
 Total Interest Expense 3,214 3,542 3,736 3,942 4,394
Net Interest Income 7,008 6,750 6,373 6,256 6,222
           
Provision for Losses on Loans  936  11,407  5,212  905  19,914
Net Interest Income After Provision for Loan Losses 6,072 (4,657) 1,161 5,351 (13,692)
           
Noninterest Income:          
 Rent and other  418  497  328  409  419
 Loan servicing fees  317  315  320  317  316
 Service charges and other fees on deposits  557  603  598  518  593
 Gain on sale of loans  1,060  332  261  229  291
 Mortgage servicing rights   29  (528)  (124)  30  619
 Gain (loss) on sale of investment, mbs & fixed assets  --   2  (1)  --   (30)
 Income on CSVL (BOLI)  221  221  220  215  216
 Total noninterest income 2,602 1,442 1,602 1,718 2,424
           
Noninterest expense:          
 Employee compensation and benefits  2,814  3,467  3,269  3,385  2,866
 Occupancy and equipment  784  734  743  742  824
 Data processing  285  276  286  280  281
 Advertising   83  105  89  81  110
 Franchise taxes  114  280  269  265  215
 Other operating   3,524  2,949  2,319  2,189  2,672
 Total noninterest expense 7,604 7,811 6,975 6,942 6,968
           
Earnings (loss) before provision for income taxes 1,070 (11,026) (4,212) 127 (18,236)
           
 Provision for income taxes  61  572  (113)  (2)  (6,427)
Net Earnings (loss) 1,009 (11,598) (4,099) 129 (11,809)
           
Earnings (Loss) Per Share:          
Basic  $0.14 ($1.61) ($0.57) $0.02 ($1.64)
Diluted  $0.14 ($1.61) ($0.56) $0.02 ($1.64)
           
Basic Weighted Number of Shares Outstanding  7,205,595  7,205,595  7,205,595  7,205,595  7,205,595
Diluted Weighted Number of Shares Outstanding  7,205,595  7,205,595  7,205,595  7,239,067  7,205,595
 
Camco Financial Corporation
Selected Ratios and Statistics
(In thousands, except for per share data and shares outstanding)
         
  3 Months

Ended

12/31/10
3 Months

Ended

12/31/09
12 Months

Ended

12/31/10
12 Months

Ended

12/31/09
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Return on average equity 8.88% -67.79% -20.78% -15.73%
         
Return on average assets 0.49% -5.37% -1.72% -1.20%
         
Interest rate spread 3.69% 3.19% 3.44% 2.85%
         
Net interest margin 3.75% 3.20% 3.50% 2.91%
         
Yield on earning assets 5.47% 5.46% 5.41% 5.39%
         
Cost of deposits 1.54% 2.02% 1.74% 2.32%
         
Cost of borrowings 2.98% 3.61% 3.11% 3.54%
         
Total cost of interest bearing liabilities 1.78% 2.27% 1.97% 2.54%
         
Noninterest expense to average assets 3.66% 3.17% 3.47% 3.01%
         
Efficiency ratio 79.13% 80.59% 86.91% 86.79%
         
Nonperforming assets to total assets 5.38% 5.47% 5.38% 5.47%
         
Non performing loans to total net loans including loans held for sale 4.92% 5.40% 4.92% 5.40%
         
Allowance for loan losses to total loans 2.46% 2.38% 2.46% 2.38%
         
         
Ratios are based upon the mathematical average of the balances at the end of each month for the quarter and were annualized where appropriate
Camco Financial Corporation
Averages for Quarters Ended
(In thousands, except for per share data and shares outstanding)
             
   
  December 31, 2010 December 31, 2009
  Average

Balance


Interest
Yield/

Rate
Average

Balance


Interest
Yield/

Rate
Interest - Earning Assets:            
 Loans receivable - net (1)  662,229  9,528 5.76%  640,755  9,670 6.10%
 Securities (2)  36,522  391 4.28%  59,640  605 3.84%
 FHLB Stock  29,888  301 4.03%  29,888  339 4.99%
 Other interest bearing accounts  19,489  2 0.04%  47,683  2 0.04%
 Total interest earning assets  748,128  10,222 5.47%  777,966  10,616 5.46%
             
Noninterest-earning assets  82,494      102,158    
Total Average Assets  830,622      880,124    
             
             
Interest-Bearing Liabilities:            
 Deposits  603,392  2,316 1.54%  655,033  3,309 2.02%
 Advances & Borrowings  120,734  898 2.98%  120,273  1,085 3.61%
 Total interest-bearing liabilities  724,126  3,214 1.78%  775,306  4,394 2.27%
             
Noninterest-bearing sources:            
 Noninterest-bearing liabilities  61,038      35,143    
 Shareholders' equity  45,458      69,675    
Total Liabilities and Shareholders' Equity  830,622      880,124    
             
Net Interest margin     3.75%     3.20%
             
Net Interest Income & Spread    7,008 3.69%    6,222 3.19%
             
(1) Includes LHFS but does not include ALLL and Non-Accrual Loans
(2) Includes securities designated as available for sale and held to maturity
CONTACT: James E. Huston, CEO
         Phone:  740-435-2020

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