CAMBRIDGE, Ohio, July 25, 2008 (PRIME NEWSWIRE) -- Camco Financial Corporation (Camco) (Nasdaq:CAFI) reported net earnings for the quarter ended June 30, 2008 of $373,000, or $.05 per share, compared to net earnings of $1.3 million, or $.18 per share, for the same quarter in 2007. The decline in earnings in 2008 was primarily attributable to additional provision for losses on loans of $730,000 and a decrease in net interest income of $873,000, each before the effect of federal income taxes.
The following key items summarize the Company's financial results during the second quarter of 2008:
* On May 7, 2008 Camco announced its execution of a merger
agreement with First Place Financial Corp. Completion of that
merger is expected in the fourth quarter 2008;
* Net loans receivable decreased $4.7 million;
* Total deposits increased $279,000;
* Non-performing assets decreased $1.1 million;
* Net charge offs totaled $529,000 compared to $1.1 million in
the first quarter;
* The second quarter cash dividend of $0.075 was declared on
July 10, 2008.
For the six months ended June 30, 2008, Camco reported a net loss of $630,000 compared to $2.9 million of net earnings reported for the first half of 2007. Earnings per share for the six months ended June 30, 2008 and 2007 were $(0.09) and $0.38, respectively. The year to date 2008 net loss of $630,000 reflects to a substantial degree management's analysis and decision to add significant funds to the Bank's loan loss reserves, given the volatile real estate and economic environment. Camco's consolidated assets totaled $1.027 billion, an increase of $4.2 million from December 31, 2007. The increase in total assets was comprised primarily of increases in cash and cash equivalents, which more than doubled to $46.1 million, as net loans receivable, including loans held for sale, decreased $24.3 million from December 31, 2007. In addition, Camco grew $38.9 million in total deposits, offset partially by a $27.6 million decrease in FHLB borrowings, as we continue to execute our strategic plan to grow deposits, improve liquidity and reduce FHLB debt.
President and CEO Richard C. Baylor commented, "We continue to work hard on improving asset quality and were pleased to see a reduction in problem loans, which reduced the requirement for large additions to our loan loss reserves such as had occurred in the first quarter 2008. We anticipate further reduction of non-performing loans in the third quarter of 2008. Our net income, while reduced by the lack of loan growth, also decreased due to a reduction in our margin, as large regional banks have continued to pay above market rates for deposits, which puts competitive pressures on our pricing. We continue to focus on controlling expenses, growing relationship deposits with retail and business customers and reducing non-performing loans. Ohio's economy continues to struggle with job losses related to the auto and manufacturing sectors, but we remain optimistic that better times are ahead. We continue to work on those things we can control and move towards a successful completion of our announced merger with First Place Financial Corp."
Review of Financial Performance
Net Interest Margin: During the second quarter of 2008, the net interest margin decreased to 2.80% from 3.05% in the second quarter of 2007. The net interest spread decreased to 2.65% during the quarter from 2.82% in the second quarter of 2007. The compression in the net interest margin and spread was due to lower volumes of interest earning assets and a lower yield on those assets, offset partially by a lower cost of interest-bearing liabilities. Cost of funds decreased 46 basis points to 3.54% for the current quarter. Rapidly falling interest rates have negatively impacted our net interest margin and our net earnings during 2008, as our loan portfolio yield has re-priced downward faster than our funding costs.
Noninterest Income: For the quarter ended June 30, 2008, total noninterest income increased to $1.8 million from $1.5 million in the same period last year. The increase was primarily due to a $388,000 increase in the valuation of our mortgage servicing rights, which have been volatile during 2007 and 2008.
Noninterest Expense: For the quarter ended June 30, 2008, noninterest expense was primarily unchanged, totaling $6.9 million compared to $6.8 million for the comparable period in 2007. Employee compensation and benefits increased 5.01%, primarily due to lower loan production in the first half of 2008, which reduced the amount of compensation expense deferred. In addition, professional services increased $246,000, which was due to charges relating to the announced merger of First Place Financial and Camco.
Asset Quality: The allowance for loan losses totaled $8.2 million at June 30, 2008 versus $6.6 million at December 31, 2007, representing 1.03% and .82% of loans, respectively. Non-performing loans (loans with three payments or more delinquent plus non accrual loans) totaled $27.2 million and $28.4 million at June 30, 2008, and March 31, 2008, respectively. Non-performing loans as a percentage of loans decreased to 3.44% at June 30, 2008, from 3.56% at March 31, 2008.
Capital and Liquidity: At June 30, 2008, Camco and its subsidiary Advantage Bank each exceeded all regulatory capital requirements to be considered well-capitalized. The Bank has increased balance sheet liquidity in cash and cash equivalents to $46.1 million while maintaining off balance sheet sources that exceed $50.0 million.
Balance Sheet Transformation: Camco continues to execute and manage its long-term strategic plan. This plan encompasses the diversification of the balance sheet primarily through increasing higher yielding commercial, commercial real estate and consumer loan portfolios as well as lower cost transaction-based deposits from retail and business relationship accounts. At June 30, 2008, residential mortgage loans secured by one-to-four family properties fell to 46% of the loan portfolio from 48% at June 30, 2007.
About Camco Financial Corporation: Camco Financial Corporation, holding company of Advantage Bank, is a multi-state financial services holding company headquartered in Cambridge, Ohio. Advantage Bank and its affiliate, Camco Title Agency, offer relationship banking that includes commercial, small business and consumer financial services, internet banking and title insurance services from 28 offices in Ohio, Kentucky and West Virginia.
The Camco Financial Corporation logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4639
Additional information about Camco Financial may be found on the Company's web sites: www.camcofinancial.com or www.advantagebank.com 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)
6/30/08 3/31/08
------- -------
Assets
------
Cash and Cash Equivalents 46,113 45,953
Investments 95,312 94,721
Loans Held for Sale 387 1,429
Loans Receivable 798,760 803,158
Allowance for Loan Loss (8,174) (7,853)
------- -------
Loans Receivable, Net 790,586 795,305
Goodwill 6,683 6,683
Other Assets 88,403 88,126
------- -------
Total Assets $1,027,484 $1,032,217
=========== ===========
Liabilities
-----------
Deposits 731,059 730,780
Borrowed Funds 193,358 194,660
Other Liabilities 17,182 20,314
------- -------
Total Liabilities 941,599 945,754
Stockholders' Equity 85,885 86,463
------- -------
Total Liabilities and Stockholders' Equity $1,027,484 $1,032,217
=========== ===========
Stockholders' Equity to Total Assets 8.36% 8.38%
Total Shares Outstanding 7,155,595 7,155,595
Book Value Per Share $12.00 $12.08
Camco Financial Corporation
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and shares outstanding)
(Unaudited) (Unaudited) (Unaudited)
12/31/07 9/30/07 6/30/07
-------- ------- -------
Assets
------
Cash and Cash Equivalents 23,004 16,950 21,596
Investments 91,688 100,671 102,275
Loans Held for Sale 3,169 2,733 3,134
Loans Receivable 818,725 840,920 837,291
Allowance for Loan Loss (6,623) (6,253) (7,020)
------- ------- -------
Loans Receivable, Net 812,102 834,667 830,271
Goodwill 6,683 6,683 6,683
Other Assets 86,615 85,956 80,702
------- ------- -------
Total Assets $1,023,261 $1,047,660 $1,044,661
=========== =========== ==========
Liabilities
-----------
Deposits 692,184 694,016 682,011
Borrowed Funds 220,981 245,850 259,750
Other Liabilities 21,462 18,955 12,752
------- ------- -------
Total Liabilities 934,627 958,821 954,513
Stockholders' Equity 88,634 88,839 90,148
------- ------- ------
Total Liabilities and
Stockholders' Equity $1,023,261 $1,047,660 $1,044,661
=========== =========== ==========
Stockholders' Equity to
Total Assets 8.66% 8.48% 8.63%
Total Shares Outstanding 7,155,595 7,202,095 7,327,835
Book Value Per Share $12.39 $12.34 $12.30
Camco Financial Corporation
Condensed Consolidated Statements of Earnings
Year to Date Information
(In thousands, except for per share data and shares outstanding)
6 Months 6 Months
Ended Ended
6/30/08 6/30/07
(Unaudited) (Unaudited)
------------ -----------
Interest Income:
Loans 26,191 29,003
Mortgage-backed securities 1,335 1,093
Investment securities 810 1,242
Interest-bearing deposits and other 1,063 1,192
------------ -----------
Total Interest Income 29,399 32,530
------------ -----------
Interest Expense:
Deposits 12,121 12,334
Borrowings 4,332 5,553
------------ -----------
Total Interest Expense 16,453 17,887
------------ -----------
Net Interest Income 12,946 14,643
Provision for Losses on Loans 3,172 315
------------ -----------
Net Interest Income After Provision
for Loan Losses 9,774 14,328
------------ -----------
Noninterest Income:
Late charges, rent and other 679 832
Loan servicing fees 652 695
Service charges and other fees
on deposits 1,179 1,165
Gain on sale of loans 175 157
Mortgage servicing rights (48) (180)
Gain (loss) on sale of investment,
mbs & fixed assets 3 4
Income on cash surrender value
life insurance 492 469
------------ -----------
Total noninterest income 3,132 3,142
------------ -----------
Noninterest expense:
Employee compensation and benefits 6,840 6,504
Occupancy and equipment 1,719 1,743
Data processing 527 570
Advertising 490 660
Franchise taxes 620 555
Other operating 3,829 3,284
------------ -----------
Total noninterest expense 14,025 13,316
------------ -----------
Earnings before provision for
income taxes (1,119) 4,154
Provision for income taxes (489) 1,303
------------ -----------
Net Earnings (630) 2,851
============ ===========
Earnings Per Share Reported:
Basic ($0.09) $0.38
Diluted ($0.09) $0.38
Earnings Per Share Operations:
Basic ($0.09) $0.38
Diluted ($0.09) $0.38
Basic Weighted Number of
Shares Outstanding 7,155,595 7,424,861
Diluted Weighted Number of
Shares Outstanding 7,163,068 7,426,185
Camco Financial Corporation
Condensed Consolidated Statements of Earnings
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
6/30/08 3/31/08 12/31/07 9/30/07 6/30/07
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
-------------------------------------------------------
Interest Income:
Loans 12,667 13,524 14,358 14,595 14,703
Mortgage-backed
securities 701 634 600 552 533
Investment
securities 368 442 514 592 601
Interest-bearing
deposits and
other 579 484 575 559 587
-------------------------------------------------------
Total Interest
Income 14,315 15,084 16,047 16,298 16,424
-------------------------------------------------------
Interest Expense:
Deposits 5,720 6,401 6,558 6,537 6,330
Borrowings 2,129 2,203 2,531 2,907 2,755
-------------------------------------------------------
Total Interest
Expense 7,849 8,604 9,089 9,444 9,085
-------------------------------------------------------
Net Interest
Income 6,466 6,480 6,958 6,854 7,339
Provision for
Losses on
Loans 850 2,322 980 200 120
-------------------------------------------------------
Net Interest
Income After
Provision for
Loan Losses 5,616 4,158 5,978 6,654 7,219
-------------------------------------------------------
Noninterest
Income:
Late charges,
rent and other 327 352 379 353 390
Loan servicing
fees 321 330 345 335 343
Service charges
and other fees
on deposits 598 581 634 642 598
Gain on sale
of loans 57 119 89 107 71
Mortgage
servicing
rights 261 (309) 134 (22) (127)
Gain (loss) on
sale of
investment,
mbs & fixed
assets -- 3 1 (29) (5)
Income on cash
surrender value
life insurance 249 243 240 239 238
-------------------------------------------------------
Total
noninterest
income 1,813 1,319 1,822 1,625 1,508
-------------------------------------------------------
Noninterest expense:
Employee compensation
and benefits 3,271 3,568 3,186 3,527 3,115
Occupancy and
equipment 826 893 829 891 875
Data processing 299 228 299 317 285
Advertising 294 196 280 358 339
Franchise taxes 273 347 273 276 286
Other operating 1,923 1,907 1,882 1,849 1,870
-------------------------------------------------------
Total noninterest
expense 6,886 7,139 6,749 7,218 6,770
-------------------------------------------------------
Earnings before
provision for
income taxes 543 (1,662) 1,051 1,061 1,957
Provision for
income taxes 170 (659) 244 218 610
-------------------------------------------------------
Net earnings 373 (1,003) 807 843 1,347
=======================================================
Earnings Per
Share Reported:
Basic $0.05 ($0.14) $0.11 $0.12 $0.18
Diluted $0.05 ($0.14) $0.11 $0.12 $0.18
Basic Weighted
Number of
Shares
Outstanding 7,155,595 7,155,595 7,183,709 7,278,187 7,392,499
Diluted Weighted
Number of
Shares
Outstanding 7,164,018 7,162,489 7,184,277 7,281,087 7,393,779