CAMBRIDGE, Ohio, July 17, 2009 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the financial services holding company for Advantage Bank, reported today pre tax earnings for the quarter ended June 30, 2009 of $463,000 compared to $157,000 for the quarter ended March 31, 2009 and $543,000 during second quarter 2008. Camco's earnings net of tax for the quarter ended June 30, 2009 were $2,000 compared to $235,000 or $0.03 per share for the quarter ended March 31, 2009 and $373,000 or $0.05 per share during the second quarter 2008. Total assets at June 30, 2009 were $943.2 million compared to $1.0 billion at June 30, 2008, representing a decrease of 5.7%. Earnings were significantly affected by an accrual for industry-wide FDIC special assessment totaling $448,000 and increased federal income taxes of $433,000 related to the surrender of bank owned life insurance, both being nonrecurring in nature.
Jim Huston, President and CEO said, "While our earnings were significantly affected by the nonrecurring charges, we feel good about the improvements in our earnings potential. We have successfully increased our interest margin and our nonperforming assets were generally flat, as we continue to implement new strategies across our organization. During the quarter we decreased our concentration levels in bank owned life insurance, in order to comply with regulatory guidance."
Net Interest Income
Camco's quarterly net interest margin increased 20 basis points from prior quarter and 2 basis points from prior year second quarter. The increase from prior quarter was mainly driven by management's ability to further decrease our funding costs by lowering the interest expense paid on deposits and the paying down of our FHLB advances. The yield on average earnings assets increased 5 basis points from prior quarter and decreased 81 basis points from prior year in comparison to the 26 basis point and 98 basis point decreases in the cost of interest bearing funds during the same periods. Jim Huston stated, "Our Asset/Liability committee has worked hard to ensure we are focused on lowering the cost of our funding sources and reducing our borrowings when advantageous. We expect continued success in this area as we use higher cash levels to pay down borrowings and make high quality loans."
Noninterest Income
Noninterest income for the second quarter 2009 increased 15.2% over the prior quarter. Increases in noninterest income resulted from increased depository fees and the gain recognized on mortgage originations sold on the secondary market and increased loan closings through the Company's title agency subsidiary. The continued secondary market sales strategy has also resulted in increases in the serviced loan portfolio, and combined with the low mortgage rate environment, has resulted in an increase in the value of our mortgage servicing asset. The valuation adjustment accounted for $149,000 of the $299,000 increase in noninterest income, which was slightly offset by a decrease in interest earned on bank owned life insurance due to the mentioned reduction.
Noninterest Expense
Noninterest expense decreased quarter over quarter by $110,000 or 1.6% mainly driven by the reduction in force that was completed at the end of March 2009, as employee related expense decreased $412,000 or 11.9%. The lower employee expenses were completely offset by the recognition of the FDIC's special assessment, which was applicable to all insured financial institutions and contributed to the increase in quarterly expense by $448,000. Finally, we have increased the level of internal controls around the valuation of our real estate owned portfolio to further ensure accurate and timely recognition of changes in property value. These efforts resulted in a $321,000 write down of our $6.0 million portfolio.
Balance Sheet Review
Camco's total assets of $943.2 million decreased 2.5% from prior quarter. Loans outstanding at June 30, 2009 were $711.9 million reflecting a $27.5 million or 3.7% decline during the quarter. The rate of our loan portfolio reduction slowed slightly when compared to the first quarter's 4.3% reduction, mainly driven by increases in mortgage rates and our decision to book a small portion of fixed rate loans to our balance sheet to bolster our earning asset yield. Camco's investment portfolio decreased by 18.2% from prior quarter, due to increased maturities and calls in our bond and mortgage back securities portfolios. Cash and cash equivalents increased $26.1 million or 46.6% from first quarter generated from the call/maturity activity in our investment portfolio and decreases in our loan portfolio. Deposits totaled $711.6 million decreased $1.7 million or 1.2% from prior quarter. Shareholders' equity at June 30, 2009 was $71.9 million compared to $72.3 million at March 31, 2009 resulting from decreases in our unrealized gain in our investment portfolio of $237,000. Camco's equity continues to be up year to date from $71.7 million at December 31, 2008.
Asset Quality
Camco's total nonperforming assets were $64.1 million at June 30, 2009 compared to $63.7 million at March 31, 2009, an increase of $358,000. Throughout the quarter, our Credit Administration unit has continued to implement aggressive strategies to decrease our volume of non-performing assets. Jim Huston, President and CEO said, "Our non performing assets continue to be the focus of our Board of Directors and our management team. Our lending and credit officers have completed a full scope review of the loan portfolios to ensure we fully understand the organization's risk profile. We continue our efforts to work out troubled credits with cooperative borrowers and we are taking all actions available to us in situations in which we need to protect the bank's collateral. While we believe we still have challenges in the future, we are confident that we have identified the level of risk that we must manage."
Foreclosed properties increased during the second quarter 2009 to $14.4 million from $10.7 million at March 31, 2009 and $9.2 million at June 30, 2008, as the legal system remains strained due to current economic conditions and Camco continues working through a prolonged foreclosure process. Sales of foreclosed properties during the second quarter 2009 totaled $1.0 million while newly foreclosed properties totaled $1.1 million. Our nonperforming loans and foreclosed properties remain concentrated in our Cincinnati and Columbus markets.
Net loan charge-offs for the quarter totaled $1.2 million or 0.70% of average loans annualized, an increase from prior quarter's $535,000 or .30% of average loans annualized, as the bank charged off previously identified losses in its loan portfolios. Allocations to loan loss reserve were $790,000 for the quarter ended June 30, 2009 compared to $648,000 for the quarter ended March 31, 2009. Loan loss reserve as a percentage of total loans outstanding at June 30, 2009 was 2.20% an increase of 2 basis points from 2.18% at March 31, 2009. The adequacy of our loan loss reserve is analyzed quarterly and adjusted as necessary with a focus on maintaining appropriate reserves for potential loss.
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)
(Un- (Un- (Un- (Un- (Un-
audited) audited) audited) audited) audited)
6/30/09 3/31/09 12/31/08 9/30/08 6/30/08
------- ------- -------- ------- -------
Assets
------
Cash and Cash
Equivalents 82,126 56,008 52,285 44,207 46,113
Investments 78,162 95,506 98,758 100,353 95,312
Loans Held for
Sale 5,370 4,340 2,185 2,828 387
Loans Receivable 711,943 739,435 772,388 789,113 798,760
Allowance for
Loan Loss (15,466) (15,860) (15,747) (7,465) (8,174)
--------- --------- ---------- ---------- ----------
Loans
Receivable, Net 696,477 723,575 756,641 781,648 790,586
Goodwill -- -- -- 6,683 6,683
Other Assets 81,016 87,460 90,577 90,266 88,403
--------- --------- ---------- ---------- ----------
Total Assets $943,151 $966,889 $1,000,446 $1,025,985 $1,027,484
========= ========= ========== ========== ==========
Liabilities
-----------
Deposits 711,603 720,264 723,956 730,590 731,059
Borrowed Funds 146,436 158,564 183,833 189,866 193,358
Other
Liabilities 13,182 15,799 20,957 18,950 17,182
--------- --------- ---------- ---------- ----------
Total Liabilities 871,221 894,627 928,746 939,406 941,599
Stockholders'
Equity 71,930 72,262 71,700 86,579 85,885
--------- --------- ---------- ---------- ----------
Total Liabilities
and Stock-
holders' Equity $943,151 $966,889 $1,000,446 $1,025,985 $1,027,484
========= ========= ========== ========== ==========
Stockholders'
Equity to
Total Assets 7.63% 7.47% 7.17% 8.44% 8.36%
Total Shares
Outstanding 7,205,596 7,205,596 7,155,595 7,155,595 7,155,595
Book Value Per
Share $9.98 $10.03 $10.02 $12.10 $12.00
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
6/30/09 6/30/08
(Unaudited) (Unaudited)
----------- -----------
Interest Income:
Loans 20,613 26,191
Mortgage-backed securities 1,270 1,335
Investment securities 549 810
Interest-bearing deposits and other 689 1,063
----------- -----------
Total Interest Income 23,121 29,399
----------- -----------
Interest Expense:
Deposits 8,420 12,121
Borrowings 2,971 4,332
----------- -----------
Total Interest Expense 11,391 16,453
----------- -----------
Net Interest Income 11,730 12,946
Provision for Losses on Loans 1,438 3,172
----------- -----------
Net Interest Income After Provision for Loan
Losses 10,292 9,774
----------- -----------
Noninterest Income:
Late charges, rent and other 982 679
Loan servicing fees 632 652
Service charges and other fees on deposits 1,071 1,179
Gain on sale of loans 773 175
Mortgage servicing rights 269 (48)
Gain (loss) on sale of investment, mbs
& fixed assets 4 3
Income on cash surrender value life
insurance 494 492
----------- -----------
Total noninterest income 4,225 3,132
----------- -----------
Noninterest expense:
Employee compensation and benefits 6,540 6,840
Occupancy and equipment 1,543 1,719
Data processing 614 527
Advertising 297 490
Franchise taxes 582 620
Other operating 4,321 3,829
----------- -----------
Total noninterest expense 13,897 14,025
----------- -----------
Earnings before provision for income taxes 620 (1,119)
Provision for income taxes 383 (489)
----------- -----------
Reported Net Income 237 (630)
----------- -----------
Earnings Per Share Operations:
Basic $0.03 ($0.09)
Diluted $0.03 ($0.09)
Basic Weighted Number of Shares
Outstanding 7,199,241 7,155,595
Diluted Weighted Number of Shares
Outstanding 7,200,079 7,155,595
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
6/30/09 3/31/09 12/31/08 9/30/08 6/30/08
(Un- (Un- (Un- (Un- (Un-
audited) audited) audited) audited) audited)
--------- --------- --------- --------- ---------
Interest Income:
Loans 10,046 10,567 11,752 12,503 12,667
Mortgage-backed
securities 606 664 702 703 701
Investment
securities 238 311 428 391 368
Interest-bearing
deposits and other 344 345 395 510 579
-------------------------------------------------
Total Interest
Income 11,234 11,887 13,277 14,107 14,315
-------------------------------------------------
Interest Expense:
Deposits 3,948 4,473 5,188 5,419 5,720
Borrowings 1,402 1,569 1,892 2,022 2,129
-------------------------------------------------
Total Interest
Expense 5,350 6,042 7,080 7,441 7,849
-------------------------------------------------
Net Interest Income 5,884 5,845 6,197 6,666 6,466
Provision for Losses
on Loans 790 648 11,031 590 850
-------------------------------------------------
Net Interest Income
After Provision for
Loan Losses 5,094 5,197 (4,834) 6,076 5,616
-------------------------------------------------
Noninterest Income:
Rent and other 521 461 282 310 327
Loan servicing fees 316 316 325 332 321
Service charges and
other fees on
deposits 570 501 590 618 598
Gain on sale of
loans 404 369 61 127 57
Mortgage servicing
rights 209 60 (2,740) 163 261
Gain (loss) on sale
of investment, mbs
& fixed assets 4 -- -- -- --
Income on CSVL
(BOLI) 238 256 254 254 249
-------------------------------------------------
Total noninterest
income 2,262 1,963 (1,228) 1,804 1,813
-------------------------------------------------
Noninterest expense:
Employee
compensation and
benefits 3,064 3,476 3,289 3,151 3,271
Occupancy and
equipment 761 782 828 827 826
Data processing 307 307 332 293 299
Advertising 125 172 219 229 294
Franchise taxes 314 268 297 285 273
Merger /
Acquisition -- -- 171 196 261
Other operating 2,322 1,998 2,734 1,605 1,662
Goodwill Impairment -- -- 6,683 -- --
-------------------------------------------------
Total noninterest
expense 6,893 7,003 14,553 6,586 6,886
-------------------------------------------------
Earnings before
provision for
income taxes 463 157 (20,615) 1,294 543
Provision for
income taxes 461 (78) (4,852) 225 170
-------------------------------------------------
Net Earnings (loss) 2 235 (15,763) 1,069 373
=================================================
Earnings (Loss) Per
Share Reported:
Basic $0.00 $0.03 ($2.20) $0.15 $0.05
Diluted $0.00 $0.03 ($2.20) $0.15 $0.05
Basic Weighted
Number of Shares
Outstanding 7,205,595 7,192,817 7,155,595 7,155,595 7,155,595
Diluted Weighted
Number of Shares
Outstanding 7,211,674 7,192,817 7,155,595 7,162,566 7,164,018
Camco Financial Corporation
Selected Ratios and Statistics
Periods Ended June 30, 2009 and 2008
(In thousands, except for per share data and shares outstanding)
3 Months 6 Months 3 Months 6 Months
Ended Ended Ended Ended
6/30/09 6/30/09 6/30/08 6/30/08
(Un- (Un- (Un- (Un-
audited) audited) audited) audited)
-------- -------- -------- --------
Return on average equity 0.01% 0.66% 1.73% -1.44%
Return on average assets 0.00% 0.05% 0.14% -0.12%
Interest rate spread 2.82% 2.66% 2.65% 2.63%
Net interest margin 2.82% 2.71% 2.80% 2.80%
Yield on earning assets 5.38% 5.34% 6.19% 6.36%
Cost of deposits 2.32% 2.68% 3.30% 3.55%
Cost of borrowings 3.64% 3.57% 4.39% 4.35%
Total cost of interest bearing
liabilities 2.56% 2.46% 3.54% 3.73%
Noninterest expense to average
assets 2.87% 2.86% 2.67% 3.20%
Efficiency ratio 84.62% 87.10% 83.17% 87.23%
Nonperforming assets to total
assets 6.79% 6.79% 3.19% 3.19%
Non performing loans to total
net loans including loans
held for sale 8.28% 8.28% 3.44% 3.44%
Allowance for loan losses to
total loans 2.22% 2.22% 1.03% 1.03%
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
June 30, 2009 and 2008
(In thousands, except for per share data and shares outstanding)
--------------------------------------------------
June 30, 2009 June 30, 2008
--------------------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
--------------------------------------------------
Interest - Earning
Assets:
Loans receivable
- net(1) 671,688 10,046 5.98% 769,962 12,667 6.58%
Securities(2) 86,386 844 3.91% 96,578 1,069 4.43%
FHLB Stock 29,888 332 4.44% 29,195 393 5.38%
Other interest
bearing accounts 47,217 12 0.10% 29,065 186 2.56%
--------------------------------------------------
Total interest
earning assets 835,179 11,234 5.38% 924,800 14,315 6.19%
--------------------------------------------------
Noninterest-
earning
assets 124,573 107,134
------- ---------
Total Average
Assets 959,752 1,031,934
======= =========
Interest-Bearing
Liabilities:
Deposits 680,782 3,948 2.32% 693,014 5,720 3.30%
Advances &
Borrowings 154,066 1,402 3.64% 193,929 2,129 4.39%
--------------------------------------------------
Total interest-
bearing
liabilities 834,848 5,350 2.56% 886,943 7,849 3.54%
--------------------------------------------------
Noninterest-
bearing
sources:
Noninterest-
bearing
liabilities 52,671 58,573
Shareholders'
equity 72,233 86,418
------- ---------
Total Liabilities
and Shareholders'
Equity 959,752 1,031,934
======= =========
------ ------
Net Interest margin 2.82% 2.80%
====== ======
Net Interest Income --------------- ---------------
& Spread 5,884 2.82% 6,466 2.65%
=============== ===============
(1) Includes LHFS but does not include ALLL and Non-Accrual Loans
(2) Includes securities designated as available for sale