updated 5/4/2011 4:16:54 PM ET 2011-05-04T20:16:54

CAMBRIDGE, Ohio, May 4, 2011 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the bank holding company for Advantage Bank, today announced first quarter financial results for 2011, reporting net earnings of $652,000 or $0.09 per share for the quarter ended March 31, 2011. These results represent an increase of $523,000, or $0.07 per share over results from the comparable quarter a year ago.

"At the end of 2010, we talked about how we were building momentum to take us into 2011, and as our shareholders can plainly see, we have delivered on that promise during the first quarter of the year," said James E. Huston, President and CEO. "We are focused on profitable operations and have continued to decrease our non-performing loans by more than $9.8 million since March of 2010 through a concentrated effort, but we also restructured our balance sheet by making calculated sales of investments and paying off and pre-paying advances, leading to an overall increase in our Tier 1 capital."

The Company's non-performing loans have decreased by $1.5 million since year-end 2010 and $9.8 million since first quarter 2010. Additionally, the Company's net interest margin remains steady at 3.63% – decreasing 12 basis points from the linked quarter December 2010 and increasing 38 basis points over the previous year first quarter 2010.

"We take our responsibility to our shareholders and customers seriously, and have been fortunate that they understand that recovering from the economic crisis we all faced continues to be a long, difficult journey. We have taken important steps to move Camco Financial Corporation forward through thoughtful and sometimes trying efforts. It hasn't been an easy process, but we're getting there, and the financial results of the first quarter demonstrate that our hard work is paying off." Huston said.

Review of Financial Performance

Overview:

The following items summarize key activities of the Company during the quarter ended March 31, 2011:

  • Total assets decreased $23.4 million during the quarter as sale of investments were used to prepay FHLB borrowings.
  • Core deposits (defined as checking, savings and money market deposits) increased $13.5 million, or 5.5%, when compared to December 31, 2010.
  • Noninterest income increased $1.3 million due to gain on sale of investments when compared to the same quarter in 2010.
  • Noninterest expense increased $485,000, related to REO and other loan expenses when compared to the same quarter in 2010.

Net Interest Margin:

Net interest margin decreased to 3.63% in the current quarter from 3.75% at December 31, 2010. This decrease was primarily due to a decrease in yield on loans receivable coupled with decreased loan balances. This decrease was partially offset by a 7 basis point decrease in the cost of funds. Management expects the Company's net interest margin to remain stable or decrease slightly as we continue to be in an environment of low interest rates and slow economic growth. While the margin did decrease quarter to quarter the stability of our net interest margin for the quarter is notable, especially in this extended low rate environment. We will continue to look for pricing opportunities, further improvement in credit quality, and other ways to maintain our margin going forward.

Net Interest Income:

Net interest income before the provision for loan losses increased $354,000, or 5.7%, to $6.6 million for the quarter ended March 31, 2011, compared to $6.3 million for the same quarter of the prior year. The increase was attributable to an increase in yield on interest earning assets combined with reductions in certificates of deposits, borrowings and the cost of funds.

The Company's yield on earning assets decreased to 5.27% in the current quarter from 5.47% in the linked quarter. Decreased yield resulted from declining loan portfolio, securities and FHLB stock balances. Planned continued runoff in certificates of deposits and the prepayment of borrowings combined with growth in core deposits resulted in a slightly reduced cost of funds. The cost of funds for the quarter ended March 31, 2011 was 1.71% compared to 1.78% for the quarter ended December 31, 2010. The Company anticipates continued declines in certificates of deposit balances over the next few quarters as maturities of single relationship accounts are not renewed. 

Provision for Loan Losses:

A provision for loan losses of $1.0 million was recorded for the quarter ended March 31, 2011, compared to $905,000 for the same period of the prior year and $936,000 for the linked quarter. The allowance for loan and lease loss was strengthened even further in the current quarter, as net charge offs were less than $475,000.  Non- performing assets decreased $1.2 million since December 31, 2010 to $43.0 million at March 31, 2011. The allowance for loan and lease losses to non-performing loans increased to 53.8% at March 31, 2011 from 49.9% at December 31, 2010 and 37.6% at March 31, 2010. 

Noninterest Income:

Noninterest income was $3.0 million for the first quarter of 2011, an increase of $1.3 million when compared to the quarter ended March 31, 2010 and an increase of $428,000 when compared to the linked quarter. In the quarter ended March 31, 2011 there was a gain on sale of investments of $1.3 million. 

Noninterest Expense:

Noninterest expense for the quarter ended March 31, 2011, increased $485,000, or 7.0% , to $7.4 million from the comparable period a year earlier but decreased by $177,000 when compared to the linked quarter. Noninterest expense was higher during the current quarter 2011 compared to the previous 2010 quarter  primarily as a result of expenses related to classified assets and real estate owned. 

Balance Sheet:

Total assets were $791.6 million which is a decrease of $59.9 million, or 7.0% compared to $851.5 million a year earlier, and $23.4 million or 2.9% from the linked quarter.

Cash and cash equivalents increased $32.7 million from the previous quarter. The increase was primarily attributable to the sale of investments and the prepayment of advances as we begin to restructure our balance sheet to rely less on non core funding. Excess cash will be invested in securities which will continue to protect our liquidity position. We will also continue to focus on profitable lending opportunities.  

Asset Quality:

The allowance for loan and lease losses was $17.4 million at March 31, 2011, compared to $16.9 million at December 31, 2010. Loan quality has improved but the economic recovery within our market areas continues to be slow and has caused declines in the underlying value of collateral both in commercial and residential real estate and deterioration in the financial condition of some of our borrowers. These factors have made it difficult to sustain a steady reduction in classified assets and non-performing loans. 

A summary of certain key factors follows:

 

(in thousands) 3/31/2011 12/31/2010 3/31/2010
Criticized Loans* 60,634 65,841 78,607
Non-Performing Loans 32,298 33,779 42,117
Loan Loss Reserve 17,410 16,870 15,821
Loan Loss Reserve / Total Loans 2.61% 2.46% 2.26%
*Includes special mention, substandard, doubtful and loss.

 

Deposits and Borrowings:

Deposits increased $3.8 million, or .6% compared to December 31, 2010. The increase was due to increases of $13.5 million in "core deposits" (defined as checking, savings and money market deposits) partially offset by decreases in certificates of deposit of $9.8 million. Contraction in these balances was planned as the Company works to reduce the level of non core deposits, particularly higher single product certificates of deposits relating to rate sensitive shoppers.

FHLB advances and other borrowings decreased $24.8 million, or 23.7%, to $79.7 million at March 31, 2011, compared to $104.5 million at December 31, 2010, and have decreased by $50.6 million, or 38.8% from March 31, 2010. The planned decrease resulted from maturing and prepayment of FHLB advances being repaid with excess liquidity.

Equity:

Stockholders' equity decreased $214,000, or .5%, to $45.9 million at March 31, 2011, compared to $46.1 million at December 31, 2010. The decrease during the quarter was due primarily to the $1.1 million decrease of accumulated other comprehensive income net of related taxes related to the sale of investments during the first quarter of 2011. This was partially offset by the net earnings of $652,000 for the quarter. Camco's Tier 1 leverage capital ratio increased to 6.18% at March 31, 2011 compared to 5.98% at December 31, 2010.

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 and internet banking from 22 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) (Audited) (Unaudited) (Unaudited) (Unaudited)
  3/31/11 12/31/10 9/30/10 6/30/10 3/31/10
Assets          
Cash and Cash Equivalents  61,777  29,114  35,328  33,567  28,294
Investments   17,206  34,716  39,074  41,138  49,935
           
Loans Held for Sale  1,249  2,208  12,143  1,669  1,600
           
Loans Receivable  665,500  684,710  693,387  691,596  699,766
Allowance for Loan Loss  (17,410) (16,870) (16,854) (15,676) (15,821)
Loans Receivable, Net  648,090  667,840  676,533  675,920  683,945
           
Other Assets 63,245 81,088 86,172 87,768 87,705
           
Total Assets  $ 791,567  $ 814,966  $ 849,250  $ 840,062  $ 851,479
           
Liabilities          
Deposits  655,597  651,816  647,937  652,872  649,354
Borrowed Funds  79,675  104,464  143,665  119,990  130,243
Other Liabilities 10,406 12,583 12,436 10,294 11,002
           
Total Liabilities  745,678  768,863  804,038  783,156  790,599
           
Stockholders' Equity 45,889 46,103 45,212 56,906 60,880
           
Total Liabilities and Stockholders' Equity  $ 791,567  $ 814,966  $ 849,250  $ 840,062  $ 851,479
           
           
Stockholders' Equity to Total Assets 5.80% 5.66% 5.32% 6.77% 7.15%
           
Total Shares Outstanding  7,205,595  7,205,595  7,205,595  7,205,595  7,205,595
           
Book Value Per Share $6.37 $6.40 $6.27 $7.90 $8.45
           
 
Camco Financial Corporation
Condensed Consolidated Statements of Operations
Quarterly Information
(In thousands, except for per share data and shares outstanding)
           
           
  3 Months 3 Months 3 Months 3 Months 3 Months
  Ended Ended Ended Ended Ended
  3/31/11 12/31/10 9/30/10 6/30/10 3/31/10
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income:          
Loans  8,901  9,528  9,513  9,281  9,280
Mortgage-backed securities  316  354  388  428  475
Investment securities  39  37  54  67  103
Interest-bearing deposits and other  346  303  337  333  340
Total Interest Income  9,602  10,222  10,292  10,109  10,198
           
Interest Expense:          
Deposits   2,189  2,316  2,570  2,744  2,945
Borrowings  803  898  972  992  997
Total Interest Expense 2,992 3,214 3,542 3,736 3,942
Net Interest Income 6,610 7,008 6,750 6,373 6,256
           
Provision for Losses on Loans  1,013  936  11,407  5,212  905
Net Interest Income After Provision for Loan Losses 5,597 6,072 (4,657) 1,161 5,351
           
Noninterest Income:          
Rent and other  362  418  497  328  409
Loan servicing fees  307  317  315  320  317
Service charges and other fees on deposits  503  557  603  598  518
Gain on sale of loans  92  1,060  332  261  229
Mortgage servicing rights   271  29  (528)  (124)  30
Gain (loss) on sale of investment, mbs & fixed assets  1,278  --   2  (1)  -- 
Income on CSVL (BOLI)  217  221  221  220  215
Total noninterest income 3,030 2,602 1,442 1,602 1,718
           
Noninterest expense:          
Employee compensation and benefits  3,378  2,814  3,467  3,269  3,385
Occupancy and equipment  761  784  734  743  742
Data processing  284  285  276  286  280
Advertising   86  83  105  89  81
Franchise taxes  170  114  280  269  265
Other operating   2,748  3,524  2,949  2,319  2,189
Total noninterest expense 7,427 7,604 7,811 6,975 6,942
           
Earnings (loss) before provision for income taxes 1,200 1,070 (11,026) (4,212) 127
           
Provision for income taxes  548  61  572  (113)  (2)
Net Earnings (loss) 652 1,009 (11,598) (4,099) 129
           
Earnings (Loss) Per Share:          
Basic  $0.09 $0.14 ($1.61) ($0.57) $0.02
Diluted  $0.09 $0.14 ($1.61) ($0.56) $0.02
           
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  7,205,595  7,239,067
       
       
Camco Financial Corporation      
Selected Ratios and Statistics      
(In thousands, except for per share data and shares outstanding)      
           
  3 Months 3 Months      
  Ended Ended      
  3/31/11 3/31/10      
  (Unaudited) (Unaudited)      
           
Return on average equity 5.65% 0.85%      
           
Return on average assets 0.32% 0.06%      
           
Interest rate spread 3.56% 3.16%      
           
Net interest margin 3.63% 3.25%      
           
Yield on earning assets 5.27% 5.30%      
           
Cost of deposits 1.45% 1.92%      
           
Cost of borrowings 3.30% 3.20%      
           
Total cost of interest bearing liabilities 1.71% 2.14%      
           
Noninterest expense to average assets 3.67% 3.26%      
           
Efficiency ratio 77.04% 87.06%      
           
Nonperforming assets to total assets 5.39% 6.16%      
           
Non performing loans to total net loans including           
loans held for sale 4.85% 6.18%      
           
Allowance for loan losses to total loans 2.61% 2.26%      
           
           
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)
             
             
  March 31, 2011 March 31, 2010
  Average   Yield/ Average   Yield/
  Balance Interest Rate Balance Interest Rate
Interest - Earning Assets:            
Loans receivable - net (1)  640,908  8,901 5.56%  657,081  9,280 5.65%
Securities (2)  29,613  355 4.80%  55,294  578 4.18%
FHLB Stock  14,888  339 9.11%  29,888  339 4.54%
Other interest bearing accounts  43,783  7 0.06%  26,726  1 0.01%
Total interest earning assets  729,192  9,602 5.27%  768,989  10,198 5.30%
             
Noninterest-earning assets  80,613      84,035    
Total Average Assets  809,805      853,024    
             
             
Interest-Bearing Liabilities:            
Deposits  604,208  2,189 1.45%  612,881  2,945 1.92%
Advances & Borrowings  97,342  803 3.30%  124,617  997 3.20%
Total interest-bearing liabilities  701,550  2,992 1.71%  737,498  3,942 2.14%
             
Noninterest-bearing sources:            
Noninterest-bearing liabilities  62,115      54,862    
Shareholders' equity  46,140      60,664    
Total Liabilities and Shareholders' Equity  809,805      853,024    
             
Net Interest margin     3.63%     3.25%
             
Net Interest Income & Spread    6,610 3.56%    6,256 3.16%
             
(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
         John E. Kirksey, CFO
         Phone:  740-435-2020

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