CAMBRIDGE, Ohio, Oct. 23, 2009 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the financial services holding company for Advantage Bank, reported today earnings for the quarter ended September 30, 2009 of $355,000 or $0.05 per share compared to a net income of $2,000 for the quarter ended June 30, 2009 and net income of $1.1 million or $0.15 per share during the third quarter of 2008. Total assets at September 30, 2009 were $891.4 million compared to $1.0 billion at December 31, 2008, representing a decrease of 10.9%.
The following summarizes key highlights of the Company during the quarter ended September 30, 2009:
* Non performing loans decreased $6.2 million during the third quarter reflective of improvement in certain credits, charge off of uncollectable balances and the movement of certain collateral into the company's portfolio * Real estate owned increased $3.0 million as the Company gained control over properties to allow for remarketing * Provision for loan losses was $440,000 compared to $790,000 during the quarter ended June 30, 2009, a decrease based on management's belief that provisions have adequately been provided for our loss positions * Total loans and investments decreased and excess cash was used to decrease reliance on non-core funding sources, as advances and other borrowings were reduced by $12.6 million * Deposit products were expanded introducing a no penalty early withdrawal certificate of deposit option, which is expected to generate additional deposits
Jim Huston, President and CEO, said, "We are pleased with the third quarter earnings and our ability to remain profitable during the first 3 quarters of 2009 as we continue to work through our action plans to improve asset quality and our capital position. Our staff and management team remain committed to the goals we set this year and we strongly believe that we will continue to make progress through year end."
Net Interest Income
Our quarterly net interest margin increased 25 basis points from both prior quarter and prior year third quarter. This increase was driven by improvements in our nonperforming loans and the lowering of our funding costs by decreasing the deposit base and paying down FHLB borrowings and other non-core funding sources. Net interest income for the quarter increased 5.0% from the prior quarter and decreased 7.3% from the third quarter of 2008. The yield on average earning assets increased 8 basis points from prior quarter and decreased 51 basis points from the 2008 third quarter in comparison to the 12 basis point increase and 68 basis point decrease in the cost of interest bearing funds during the same periods. We expect some normalization in the next quarter, however the positive trend in the margin should continue.
Noninterest Income
Noninterest income for the third quarter 2009 decreased $650,000 or 28.7%. The decrease was primarily driven by a reduction in loan production, which lowered fee income to Camco Title Agency; a lower gain on sale for sold loans; and a higher net amortization on our mortgage servicing rights, all of which accounted for a reduction of $820,000 of non interest income. This reduction was offset by the fixed asset sale of a previously closed branch (Erlanger, Kentucky) and increased quarterly service charges, which equated to a $193,000 increase from the prior quarter.
Noninterest Expense
Noninterest expense for the quarter increased $356,000 from the prior quarter and $663,000 over the 2008 third quarter. The increase in noninterest expense from the prior quarter was primarily related to the recognition of loss in the real estate owned portfolio as management continues to closely monitor property values and increases in FDIC insurance premiums and assessments.
Balance Sheet Review
Camco's total assets of $891.4 million at September 30, 2009 reflect a decrease of 10.9% from December 31, 2008. Loans outstanding at September 30, 2009 were $696.9 million reflecting a 2.1% decline during the quarter and a 9.8% decline from December 31, 2008. Camco's investment portfolio decreased by 19.3% from prior quarter, and 36.1% from December 31, 2008 primarily due to the low interest rate environment and the resulting loan prepayments and investment calls. Cash and cash equivalents decreased $23.9 million from prior quarter and increased $6.0 million from December 31, 2008, reflective of management's strategy to reduce its dependence on higher cost and rate sensitive deposits using excess cash and maturities in its investment portfolio to fund the deposit reduction. Jim Huston, President and CEO, said, "We made a decision early this year that it was important for us to restructure our balance sheet with a focus on community banking and serving the areas in which we exist. Part of that strategy resulted in a reduction of brokered deposits which increase interest expense, and a reduction of public entity deposits, which require us to pledge our investment portfolio, all resulting in an increased focus on relationship banking and building the Bank's foundation on core customer deposits."
Asset Quality
Nonperforming loans continue to be a significant focus as balances in this area improved during the third quarter 2009. Camco's total nonperforming loans were $51.9 million at September 30, 2009 compared to $58.1 million at June 30, 2009 and $57.7 million at March 31, 2009. Throughout the quarter, our Credit Administration unit has continued to implement aggressive strategies to decrease our non-performing loan balances. Jim Huston said, "Our non performing loans continue to be the focus of our Board of Directors and our management team. We are pleased to see the results of our efforts to address asset quality within our loan portfolios. We believe that we have identified the existing asset quality issues throughout the organization and we are placing our efforts on mitigating our risk going forward. We understand the existing economic conditions in our markets and we will continue to see credits that are affected by these conditions; however, our risk identification processes have improved and we are identifying problem loans earlier."
Foreclosed properties decreased to $14.2 million at September 30, 2009 from $14.4 million at June 30, 2009 and increased from $13.2 million at March 31, 2009, as the legal system remains strained due to current economic conditions and an increased rate of bankruptcy filings. Sales of foreclosed properties during the third quarter 2009 totaled $1.2 million while new foreclosed properties totaled $4.1 million.
Net loans charged-off for the quarter totaled $3.4 million or 2.09% of average loans annualized. Allocations to loan loss reserve were $440,000 for the quarter ended September 30, 2009 compared to $790,000 for the quarter ended June 30, 2009 and $648,000 for the quarter ended March 31, 2009. Our loan loss reserve as a percentage of total loans outstanding at September 30, 2009 was 1.82%, a decrease of 39 basis points from 2.22% at June 30, 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)
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
9/30/09 6/30/09 3/31/09 12/31/08 9/30/08
---------- ---------- ---------- ---------- ----------
Assets
------
Cash and
Cash Equi-
valents 58,244 82,126 56,008 52,285 44,207
Investments 63,100 78,162 95,506 98,758 100,353
Loans Held
for Sale 2,186 5,370 4,340 2,185 2,828
Loans
Receivable 696,931 711,943 739,435 772,388 789,113
Allowance
for Loan
Loss (12,505) (15,466) (15,860) (15,747) (7,465)
---------- ---------- ---------- ---------- ----------
Loans
Receivable,
Net 684,426 696,477 723,575 756,641 781,648
Goodwill -- -- -- -- 6,683
Other
Assets 83,466 81,016 87,460 90,577 90,266
---------- ---------- ---------- ---------- ----------
Total
Assets $ 891,422 $ 943,151 $ 966,889 $1,000,446 $1,025,985
========== ========== ========== ========== ==========
Liabilities
-----------
Deposits 670,391 711,603 720,264 723,956 730,590
Borrowed
Funds 133,880 146,436 158,564 183,833 189,866
Other Lia-
bilities 14,552 13,182 15,799 20,957 18,950
---------- ---------- ---------- ---------- ----------
Total
Liabilities 818,823 871,221 894,627 928,746 939,406
Stock-
holders'
Equity 72,599 71,930 72,262 71,700 86,579
---------- ---------- ---------- ---------- ----------
Total Liabi-
lities and
Stock-
holders'
Equity $ 891,422 $ 943,151 $ 966,889 $1,000,446 $1,025,985
========== ========== ========== ========== ===========
Stock-
holders'
Equity to
Total
Assets 8.14% 7.63% 7.47% 7.17% 8.44%
Total
Shares Out-
standing 7,205,596 7,205,596 7,205,596 7,155,595 7,155,595
Book Value
Per Share $10.08 $9.98 $10.03 $10.02 $12.10
Camco Financial Corporation
Condensed Consolidated Statements of Earnings
Year to Date Information
(In thousands, except for per share data and shares outstanding)
9 Months 9 Months
Ended Ended
9/30/09 9/30/08
(Unaudited) (Unaudited)
--------- ---------
Interest Income:
Loans 30,560 38,694
Mortgage-backed securities 1,821 2,038
Investment securities 660 1,201
Interest-bearing deposits and other 1,067 1,573
--------- ---------
Total Interest Income 34,108 43,506
--------- ---------
Interest Expense:
Deposits 12,039 17,539
Borrowings 4,161 6,355
--------- ---------
Total Interest Expense 16,200 23,894
--------- ---------
Net Interest Income 17,908 19,612
Provision for Losses on Loans 1,877 3,762
--------- ---------
Net Interest Income After Provision for
Loan Losses 16,031 15,850
--------- ---------
Noninterest Income:
Late charges, rent and other 1,274 990
Loan servicing fees 948 984
Service charges and other fees on deposits 1,684 1,797
Gain on sale of loans 980 302
Mortgage servicing rights 84 115
Gain (loss) on sale of investment,
mbs & fixed assets 156 3
Income on cash surrender value life
insurance 710 746
Total noninterest income 5,836 4,937
--------- ---------
Noninterest expense:
Employee compensation and benefits 9,587 9,990
Occupancy and equipment 2,423 2,546
Federal deposit insurance premium 1,771 317
Data processing 908 820
Advertising 415 719
Franchise taxes 803 905
Other operating 5,238 5,315
--------- ---------
Total noninterest expense 21,145 20,612
--------- ---------
Earnings before provision for inome taxes 722 175
Provision for income taxes 131 (264)
--------- ---------
Reported Net Income 591 439
--------- ---------
Earnings Per Share Operations:
Basic $0.08 $0.06
Diluted $0.08 $0.06
Basic Weighted Number of
Shares Outstanding 7,201,383 7,155,595
Diluted Weighted Number of
Shares Outstanding 7,202,220 7,162,896
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
9/30/09 6/30/09 3/31/09 12/31/08 9/30/08
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
---------- ---------- ---------- ---------- ----------
Interest
Income:
Loans 9,948 10,046 10,567 11,752 12,503
Mortgage-
backed
securities 551 606 664 702 703
Investment
securities 110 238 311 428 391
Interest-
bearing
deposits
and other 378 344 345 395 510
----------------------------------------------------------
Total
Interest
Income 10,987 11,234 11,887 13,277 14,107
----------------------------------------------------------
Interest
Expense:
Deposits 3,619 3,948 4,473 5,188 5,419
Borrowings 1,189 1,402 1,569 1,892 2,022
----------------------------------------------------------
Total
Interest
Expense 4,808 5,350 6,042 7,080 7,441
----------------------------------------------------------
Net
Interest
Income 6,179 5,884 5,845 6,197 6,666
Provision
for Losses
on Loans 440 790 648 11,031 590
----------------------------------------------------------
Net
Interest
Income
After
Provision
for loan
losses 5,739 5,094 5,197 (4,834) 6,076
----------------------------------------------------------
Noninterest
Income:
Rent and
other 292 521 461 282 310
Loan
servicing
fees 316 316 316 325 332
Service
charges
and other
fees on
deposits 613 570 501 590 618
Gain on
sale of
loans 207 404 369 61 127
Mortgage
servicing
rights (185) 209 60 (2,740) 163
Gain (loss)
on sale of
investment,
mbs &
fixed
assets 153 4 -- -- --
Income on
CSVL (BOLI) 216 238 256 254 254
----------------------------------------------------------
Total non-
interest
income 1,612 2,262 1,963 (1,228) 1,804
----------------------------------------------------------
Noninterest expense:
Employee
compensa-
tion and
benefits 3,047 3,064 3,476 3,289 3,151
Occupancy
and
equipment 880 761 782 828 827
Data
processing 295 307 307 332 293
Advertising 118 125 172 219 229
Franchise
taxes 221 314 268 297 285
Merger /
Acquisition -- -- -- 171 196
Other
operating 2,688 2,322 1,998 2,734 1,605
Goodwill
Impairment -- -- -- 6,683 --
----------------------------------------------------------
Total non-
interest
expense 7,249 6,893 7,003 14,553 6,586
----------------------------------------------------------
Earnings
before
provision
for income
taxes 102 463 157 (20,615) 1,294
Provision
for
income
taxes (253) 461 (78) (4,852) 225
----------------------------------------------------------
Net Earnings
(loss) 355 2 235 (15,763) 1,069
==========================================================
Earnings
(Loss) Per
Share
Reported:
Basic $0.05 $0.00 $0.03 ($2.20) $0.15
Diluted $0.05 $0.00 $0.03 ($2.20) $0.15
Basic
Weighted
Number of
Shares
Outstanding 7,205,595 7,205,595 7,192,817 7,155,595 7,155,595
Diluted
Weighted
Number of
Shares
Outstanding 7,206,474 7,211,674 7,192,817 7,155,595 7,162,566
Camco Financial Corporation
Selected Ratios and Statistics
Periods Ended September 30, 2009 and 2008
(In thousands, except for per share data and shares outstanding)
3 Months 9 Months 3 Months 9 Months
Ended Ended Ended Ended
9/30/09 9/30/09 9/30/08 9/30/08
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
--------- --------- --------- ---------
Return on average equity 1.97% 1.09% 4.98% 0.67%
Return on average assets 0.16% 0.08% 0.42% 0.06%
Interest rate spread 2.78% 2.68% 2.61% 2.62%
Net interest margin 3.07% 2.82% 2.82% 2.81%
Yield on earning assets 5.46% 5.38% 5.97% 6.23%
Cost of deposits 2.51% 2.50% 3.12% 3.41%
Cost of borrowings 3.40% 3.51% 4.22% 4.31%
Total cost of interest
bearing liabilities 2.68% 2.70% 3.36% 3.61%
Noninterest expense to
average assets 3.17% 2.96% 2.56% 3.10%
Efficiency ratio 93.04% 89.05% 77.76% 83.96%
Nonperforming assets to
total assets 6.82% 6.82% 3.27% 3.27%
Non performing loans to
total net loans
including loans held
for sale 7.47% 7.47% 3.49% 3.49%
Allowance for loan
losses to total loans 1.79% 1.79% 0.95% 0.95%
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
September 30, 2009 and 2008
(In thousands, except for per share data and shares outstanding)
------------------------------------------------
Sept 30, 2009 Sept 30, 2008
------------------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------------------------------------------------
Interest - Earning
Assets:
Loans receivable
- net (1) 651,796 9,948 6.10% 769,406 12,503 6.50%
Securities (2) 68,825 661 3.84% 98,880 1,094 4.43%
FHLB Stock 29,888 373 4.99% 29,590 398 5.38%
Other interest
bearing accounts 54,206 5 0.04% 47,129 112 0.95%
------------------------------------------------
Total interest
earning assets 804,715 10,987 5.46% 945,005 14,107 5.97%
------------------------------------------------
Noninterest-earning
assets 110,207 82,359
------- ---------
Total Average Assets 914,922 1,027,364
======= =========
Interest-Bearing
Liabilities:
Deposits 577,546 3,619 2.51% 694,240 5,419 3.12%
Advances &
Borrowings 139,882 1,189 3.40% 191,592 2,022 4.22%
------------------------------------------------
Total interest-
bearing
liabilities 717,428 4,808 2.68% 885,832 7,441 3.36%
------------------------------------------------
Noninterest-bearing
sources:
Noninterest-bearing
liabilities 125,315 55,662
Shareholders'
equity 72,179 85,870
------- ---------
Total Liabilities
and Shareholders'
Equity 914,922 1,027,364
======= =========
----- -----
Net Interest margin 3.07% 2.82%
===== =====
------------- -------------
Net Interest Income
& Spread 6,179 2.78% 6,666 2.61%
============= =============
(1) Includes LHFS but does not include ALLL and Non-Accrual Loans
(2) Includes securities designated as available for sale