CAMBRIDGE, Ohio, Feb. 6, 2009 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the financial holding company for Advantage Bank, reported today a net loss of $13.5 million or $1.89 per share for the quarter ended December 31, 2008, compared to net earnings of $807,000 or $0.11 per share, for the fourth quarter of 2007. Net loss for the full year 2008 totaled $13.1 million, or $1.83 per share, compared to net earnings of $4.5 million, or $0.61 per share in 2007. Assets totaled $1.0 billion at December 31, 2008.
The quarter and full year results were primarily affected by a noncash goodwill impairment charge and increases to the bank's provision for loan loss reserves. President and Chief Executive Officer James E. Huston commented, "Like many financial institutions in our region, the current economic conditions have continued to deteriorate in our markets and have significantly stressed our existing loan portfolios, resulting in our taking an additional loan loss provision of $10.8 million in the fourth quarter. The additional loan loss provision is the result of unemployment levels and declining economic conditions in recent months which have led to decreasing credit quality of our loan portfolio. The continued decline of the financial sector has negatively impacted our stock price, resulting in an evaluation of goodwill and recognition of a $6.7 million impairment charge in the fourth quarter of 2008. The goodwill charge does not affect the corporation's liquidity position nor regulatory capital calculations."
Review of Financial Performance
Net Interest Margin: During the fourth quarter of 2008, the net interest margin decreased 14 basis points to 2.68% from 2.82% in the third quarter of 2008, and for the year decreased 19 basis points from 2.97% to 2.78% at December 31, 2008. Non-performing loans and a decrease in returns on our investment portfolio in the current declining rate environment have contributed to our tightened margin during the fourth quarter and 2008 year. Interest earning assets decreased by $14.5 million from third quarter 2008 totals and $26.9 million from December 31, 2007. The decrease in interest earning assets is related to increased non-performing loans coupled with a decrease in loans receivable caused by lower loan production, which is reflective of tightening credit and underwriting standards coupled with the impaired housing market as new and existing home sales declined to decade lows.
Noninterest Income: For the quarter ended December 31, 2008, total noninterest income decreased $521,000 or 28.9% to $1.3 million compared to $1.8 million in the third quarter primarily due to a $392,000 decrease in the value of the company's mortgage servicing rights resulting from fewer loan sales and continued pay downs on the portfolio.
Noninterest Expense: For the quarter ended December 31, 2008, noninterest expense totaled $13.9 million, an increase of $7.3 million from the third quarter of 2008, primarily due to the impairment charge for goodwill of $6.7 million. Absent the nonrecurring goodwill charge, noninterest expense was $7.2 million, an increase of $634,000 or 9.6% and $471,000 or 7.0% from the quarters ended September 30, 2008 and December 31, 2007, respectively. Real estate owned writedowns, employee costs related to the departure of the former Chief Executive Officer and consulting activities also contributed to the fourth quarter noninterest expense increase.
Asset Quality: Net charge-offs totaled $2.7 million for the fourth quarter 2008 compared to $610,000 for the fourth quarter 2007. Loans secured by 1-4 family properties, multi-family, and land and development contributed to the total. Net chargeoffs totaled $5.7 million for the full year 2008 (including recoveries of $899,000) compared to $2.0 million for all of 2007. During 2008, loans secured by 1-4 family properties, consumer, and commercial comprised 44.6%, 7.2% and 48.2% of the total year charge offs, respectively.
Nonperforming loans increased to $51.1 million and other real estate owned increased to $6.5 million at December 31, 2008 from $24.0 million and $5.0 million at December 31, 2007. Loans secured by 1-4 family properties, consumer, and commercial comprised 34%, 10%, and 56% of nonperforming loans at December 31, 2008, respectively. Loans made with the purpose of non-owner occupied investments and commercial totaled $40.9 million or 81% of non performing loans. Land development loans totaled $15.1 million at December 31, 2008, with $6.5 million of the portfolio classified as nonperforming. Other real estate owned consisted primarily of non-owner occupied investments and commercial real estate, which was $4.0 million or 62% of the other real estate owned. The remaining $2.5 million or 38% of other real estate owned were owner occupied properties.
President and Chief Executive Officer Huston stated, "Our management team continues to be hard at work to proactively identify our existing credit risk exposure throughout all our loan portfolios. The building of the reserve is the appropriate action in the current declining economy. The bank remains well capitalized in relation to all regulatory requirements and while we are not happy with the current financial results, our team remains focused on providing value to our shareholders."
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. Additional information about Camco Financial Corporation may be found on the Company's web sites: http://www.camcofinancial.com and http://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)(Unaudited)
12/31/08 9/30/08 6/30/08 3/31/08 12/31/07
---------- ---------- ---------- ---------- ----------
Assets
------
Cash and
Cash
Equivalents 52,951 44,207 46,113 45,953 23,004
Investments 98,758 100,353 95,312 94,721 91,688
Loans Held
for Sale 2,185 2,828 387 1,429 3,169
Loans
Receivable 772,388 789,113 798,760 803,158 818,725
Allowance
for Loan Loss (15,541) (7,465) (8,174) (7,853) (6,623)
---------- ---------- ---------- ---------- ----------
Loans
Receivable,
Net 756,847 781,648 790,586 795,305 812,102
Goodwill -- 6,683 6,683 6,683 6,683
Other Assets 92,620 90,266 88,403 88,126 86,615
---------- ---------- ---------- ---------- ----------
Total
Assets $1,003,361 $1,025,985 $1,027,484 $1,032,217 $1,023,261
========== ========== ========== ========== ==========
Liabilities
-----------
Deposits 723,956 730,590 731,059 730,780 692,184
Borrowed Funds 183,833 189,866 193,358 194,660 220,981
Other
Liabilities 21,622 18,950 17,182 20,314 21,462
---------- ---------- ---------- ---------- ----------
Total
Liabilities 929,411 939,406 941,599 945,754 934,627
Stockholders'
Equity 73,950 86,579 85,885 86,463 88,634
---------- ---------- ---------- ---------- ----------
Total
Liabilities
and
Stockholders'
Equity $1,003,361 $1,025,985 $1,027,484 $1,032,217 $1,023,261
========== ========== ========== ========== ==========
Stockholders'
Equity to
Total Assets 7.37% 8.44% 8.36% 8.38% 8.66%
Total Shares
Outstanding 7,155,595 7,155,595 7,155,595 7,155,595 7,155,595
Book Value
Per Share $10.33 $12.10 $12.00 $12.08 $12.39
Camco Financial Corporation
Condensed Consolidated Statements of Operations
Year to Date Information
(In thousands, except for per share data and shares outstanding)
12 Months 12 Months
Ended Ended
12/31/08 12/31/07
(Unaudited) (Unaudited)
---------- ----------
Interest Income:
Loans 50,487 57,955
Mortgage-backed securities 2,740 2,247
Investment securities 1,629 2,348
Interest-bearing deposits and other 1,968 2,327
---------- ----------
Total Interest Income 56,824 64,877
---------- ----------
Interest Expense:
Deposits 22,728 25,429
Borrowings 8,246 10,992
---------- ----------
Total Interest Expense 30,974 36,421
---------- ----------
Net Interest Income 25,850 28,456
Provision for Losses on Loans 14,586 1,495
---------- ----------
Net Interest Income After Provision
for Loan Losses 11,264 26,961
---------- ----------
Noninterest Income:
Rent and other 1,271 1,563
Loan servicing fees 1,308 1,375
Service charges and other fees on deposits 2,387 2,441
Gain on sale of loans 364 353
Mortgage servicing rights (114) (68)
Gain (loss) on sale of investment,
mbs & fixed assets 3 (24)
Income on cash surrender value life insurance 1,000 948
---------- ----------
Total noninterest income 6,219 6,588
---------- ----------
Noninterest expense:
Employee compensation and benefits 13,279 13,216
Occupancy and equipment 3,374 3,464
Data processing 1,152 1,186
Advertising 938 1,299
Franchise taxes 1,202 1,104
Other operating 7,258 7,014
Merger / Acquisition 628 --
Goodwill Impairment 6,683 --
---------- ----------
Total noninterest expense 34,514 27,283
---------- ----------
Earnings before provision for income taxes (17,031) 6,266
Provision for income taxes (3,957) 1,765
---------- ----------
Net Earnings (loss) (13,074) 4,501
========== ==========
Earnings (Loss) Per Share Reported:
Basic ($1.83) $0.61
Diluted ($1.83) $0.61
Basic Weighted Number of
Shares Outstanding 7,155,595 7,326,907
Diluted Weighted Number of
Shares Outstanding 7,155,595 7,328,494
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
12/31/08 9/30/08 6/30/08 3/31/08 12/31/07
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
--------- --------- --------- --------- ---------
Interest
Income:
Loans 11,793 12,503 12,667 13,524 14,358
Mortgage-
backed
securities 702 703 701 634 600
Investment
securities 428 391 368 442 514
Interest-
bearing
deposits
and other 395 510 579 484 575
------------------------------------------------------
Total
Interest
Income 13,318 14,107 14,315 15,084 16,047
------------------------------------------------------
Interest
Expense:
Deposits 5,188 5,419 5,720 6,401 6,558
Borrowings 1,892 2,022 2,129 2,203 2,531
------------------------------------------------------
Total
Interest
Expense 7,080 7,441 7,849 8,604 9,089
------------------------------------------------------
Net
Interest
Income 6,238 6,666 6,466 6,480 6,958
Provision
for Losses
on Loans 10,824 590 850 2,322 980
------------------------------------------------------
Net Interest
Income After
Provision for
Loan Losses (4,586) 6,076 5,616 4,158 5,978
------------------------------------------------------
Noninterest
Income:
Rent and other 282 310 327 352 379
Loan servicing
fees 325 332 321 330 345
Service
charges
and other
fees on
deposits 590 618 598 581 634
Gain on sale
of loans 61 127 57 119 89
Mortgage
servicing
rights (229) 163 261 (309) 134
Gain (loss)
on sale of
investment,
mbs & fixed
assets -- -- -- 3 1
Income on cash
surrender
value life
insurance 254 254 249 243 240
------------------------------------------------------
Total non-
interest
income 1,283 1,804 1,813 1,319 1,822
------------------------------------------------------
Noninterest
expense:
Employee
compensation
and benefits 3,289 3,151 3,271 3,568 3,186
Occupancy and
equipment 828 827 826 893 829
Data
processing 332 293 299 228 299
Advertising 219 229 294 196 280
Franchise
taxes 297 285 273 347 273
Merger /
Acquisition 171 196 261 -- --
Other
operating 2,084 1,605 1,662 1,907 1,882
Goodwill
Impairment 6,683 -- -- -- --
------------------------------------------------------
Total non-
interest
expense 13,903 6,586 6,886 7,139 6,749
------------------------------------------------------
Earnings before
provision for
income taxes (17,206) 1,294 543 (1,662) 1,051
Provision for
income taxes (3,693) 225 170 (659) 244
------------------------------------------------------
Reported
Net Income (13,513) 1,069 373 (1,003) 807
------------------------------------------------------
Net Earnings
(loss) (13,513) 1,069 373 (1,003) 807
======================================================
Earnings (Loss)
Per Share
Reported:
Basic ($1.89) $0.15 $0.05 ($0.14) $0.11
Diluted ($1.89) $0.15 $0.05 ($0.14) $0.11
Basic
Weighted
Number of
Shares
Outstanding 7,155,595 7,155,595 7,155,595 7,155,595 7,183,709
Diluted
Weighted
Number of
Shares
Outstanding 7,155,595 7,162,566 7,164,018 7,155,595 7,184,277
Camco Financial Corporation
Selected Ratios and Statistics
Periods Ended December 31, 2008 and 2007
(In thousands, except for per share data and shares outstanding)
3 Months 12 Months 3 Months 12 Months
Ended Ended Ended Ended
12/31/08 12/31/08 12/31/07 12/31/07
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
---------- ---------- ---------- ----------
Return on average equity -65.10% -15.26% 3.63% 4.98%
Return on average assets -5.32% -1.28% 0.31% 0.43%
Interest rate spread 2.49% 2.59% 2.72% 2.74%
Net interest margin 2.68% 2.78% 2.96% 2.97%
Yield on earning assets 5.72% 6.11% 6.82% 6.78%
Cost of deposits 3.01% 3.31% 3.99% 3.90%
Cost of borrowings 4.04% 4.24% 4.41% 4.40%
Total cost of interest
bearing liabilities 3.23% 3.52% 4.10% 4.04%
Noninterest expense to
average assets 5.47% 3.02% 2.60% 4.65%
Efficiency ratio 184.86% 107.62% 76.87% 77.85%
Nonperforming assets to
total assets 5.84% 5.84% 2.84% 2.84%
Non performing loans to
total net loans
including loans held
for sale 6.87% 6.87% 2.94% 2.94%
Allowance for loan losses
to total loans 2.05% 2.05% 0.82% 0.82%
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
December, September and June 2008
(In thousands, except for per share data and shares outstanding)
--------------------------------
December 31, 2008
--------------------------------
Average Yield/
Balance Interest Rate
--------------------------------
Interest - Earning Assets:
Loans held for sale 1,709
Loans receivable - net (1) 743,052 11,793 6.33%
Securities (2) 102,918 1,130 4.39%
FHLB Stock 29,888 370 4.95%
Other interest bearing accounts 52,974 25 0.19%
--------------------------------
Total interest earning assets 930,541 13,318 5.72%
--------------------------------
Noninterest-earning assets 86,376
----------
Total Assets 1,016,917
==========
Interest-Bearing Liabilities:
Deposits 688,361 5,188 3.01%
Advances & Borrowings 187,412 1,892 4.04%
--------------------------------
Total interest-bearing liabilities 875,773 7,080 3.23%
--------------------------------
Noninterest-bearing sources:
Noninterest-bearing liabilities 58,109
Shareholders' equity 83,035
----------
Total Liabilities and
Shareholders' Equity 1,016,917
==========
----------
Net Interest margin 2.68%
==========
---------------------
Net Interest Income & Spread 6,238 2.49%
=====================
--------------------------------
September 30, 2008
--------------------------------
Average Yield/
Balance Interest Rate
--------------------------------
Interest - Earning Assets:
Loans held for sale 1,606
Loans receivable - net (1) 767,800 12,503 6.50%
Securities (2) 98,880 1,094 4.43%
FHLB Stock 29,590 398 5.38%
Other interest bearing accounts 47,129 112 0.95%
--------------------------------
Total interest earning assets 945,005 14,107 5.97%
--------------------------------
Noninterest-earning assets 82,359
----------
Total Assets 1,027,364
==========
Interest-Bearing Liabilities:
Deposits 694,240 5,419 3.12%
Advances & Borrowings 191,592 2,022 4.22%
--------------------------------
Total interest-bearing liabilities 885,832 7,441 3.36%
--------------------------------
Noninterest-bearing sources:
Noninterest-bearing liabilities 55,662
Shareholders' equity 85,870
----------
Total Liabilities and
Shareholders' Equity 1,027,364
==========
----------
Net Interest margin 2.82%
==========
---------------------
Net Interest Income & Spread 6,666 2.61%
=====================
--------------------------------
June 30, 2008
--------------------------------
Average Yield/
Balance Interest Rate
--------------------------------
Interest - Earning Assets:
Loans held for sale 846
Loans receivable - net (1) 769,116 12,667 6.58%
Securities (2) 96,578 1,069 4.43%
FHLB Stock 29,195 393 5.38%
Other interest bearing accounts 29,065 186 2.56%
--------------------------------
Total interest earning assets 924,800 14,315 6.19%
--------------------------------
Noninterest-earning assets 107,134
----------
Total Assets 1,031,934
==========
Interest-Bearing Liabilities:
Deposits 693,014 5,720 3.30%
Advances & Borrowings 193,929 2,129 4.39%
--------------------------------
Total interest-bearing liabilities 886,943 7,849 3.54%
--------------------------------
Noninterest-bearing sources:
Noninterest-bearing liabilities 58,573
Shareholders' equity 86,418
----------
Total Liabilities and
Shareholders' Equity 1,031,934
==========
----------
Net Interest margin 2.80%
==========
---------------------
Net Interest Income & Spread 6,466 2.65%
=====================
(1) Does not include ALLL and Non-Accrual Loans
(2) Includes securities designated as available for sale