Camco Financial Announces Positive Results, Earnings for the First Half of 2010

CAMBRIDGE, Ohio, Aug. 6, 2010 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the financial services holding company for Advantage Bank, reported positive results for the second time this year, with net earnings of $348,000 for the first half of 2010, compared to $237,000 net earnings reported for the first half of 2009.

"At the end of last year, we committed to our employees, customers, shareholders and local community that we would make the difficult and necessary decisions to get us back on track in 2010," said James E. Huston, president and CEO. "Despite continued difficult economic times throughout our region and nationwide, we have shown that we are willing to take the incremental steps necessary to fulfill that promise with an increase in net earnings and earnings per share over 2009."

Net earnings for the quarter ended June 30, 2010, were $219,000, or $0.03 per share, compared to net earnings of $2,000, or $0.00 per share, for the same quarter in 2009. Earnings per share for the six months ended June 30, 2010 and 2009, were $0.05 and $0.03, respectively. Assets totaled $844.4 million at June 30, 2010.

"We have chosen to diligently focus on our classified assets, and we have seen a decrease of $6.3 million since March 2010," said Huston. "Additionally, while loans declined slightly in the second quarter, total loans have increased $17.7 million since December, driven by $65.0 million in commercial loan originations. Total delinquencies have decreased by $2.1 million since December as well. Our attention to these critical areas of our business is paying off, and we will make every effort to continue this trend."

"We continue to focus on smart growth strategies, including adding high quality commercial loans to our portfolio, which is benefitting our net interest margin as well," said Huston. Net interest margin increased to 3.32% for the first half of 2010, from 2.91% as of December 31, 2009. "And, while we did see a dip in our total deposits to date by $7 million, this was primarily due to the decrease in wholesale certificates of deposit."

"The first half of 2010 has shown that we continue our focus, determination and a willingness to work hard. We are excited at the opportunities we have for continuing this trend for the remainder of the year. However, to accomplish this, we must continue to be committed to making good business decisions each and every day. Our customers, shareholders and employees don't just expect it - they deserve it," said Huston.

Review of Financial Performance

Net Interest Margin: During the second quarter of 2010, net interest margin increased to 3.39% from 3.25% in the first quarter of 2010. The increase in the net interest margin of 14 basis points was primarily the result of a higher yield on earning assets as the Company's asset mix shifted further to loans due to the maturity of some investment securities. Cost of funds also contributed with a decrease of 11 basis points to 2.03%, which reflects continued re-pricing of certificates of deposit at the current lower interest rates.

Noninterest Income: For the quarter ended June 30, 2010, total noninterest income decreased to $1.6 million from $2.3 million for the same period last year. Total noninterest income declined $116,000 from the first quarter of 2010. This decrease was primarily due to decreases in rent and other, which was due to decreased production at Camco Title coupled with decreased insurance fees related to products that are no longer offered.   Additionally, the value of our mortgage servicing rights decreased in the second quarter of 2010 due to the current lower rate environment, which affected our seasoned portfolios. 

For the quarter ended June 30, 2010, $16.2 million of loans were sold with a total gain of $261,000, compared to $42.5 million sold in the second quarter of 2009, for a gain of $404,000. Continued low interest rates and a slowdown in housing sales have caused a reduction in loan applications.

Noninterest Expense: For the quarter ended June 30, 2010, noninterest expense totaled $6.98 million, compared to $6.89 million for the comparable period in 2009, an increase of 1.19%. The increase was primarily due to increased employee compensation, professional services and loan and deposit expenses. These increases were offset partially by decreases in all other expenses. The year-over-year increase of $20,000 is primarily due to increased professional services.  

Asset Quality: Total delinquencies have decreased year-to-date, and classified assets decreased in the second quarter of 2010. Our nonperforming loans as a percentage of loans decreased to 6.15% at June 30, 2010, from 8.1% at June 30, 2009 and 6.18% at March 31, 2010. At June 30, 2010, nonperforming loans totaled $42.6 million compared to $42.1 million at March 31, 2010.   The allowance for loan losses as a percentage of loans decreased to 1.64% at June 30, 2010, driven primarily by specific loan charge-offs.  

About Camco Financial Corporation: Camco Financial Corporation, holding company for Advantage Bank, is a multi-state financial holding company headquartered in Cambridge, Ohio. Advantage Bank and its affiliates offer community banking that includes commercial, business and consumer financial services, internet banking and title insurance services from 26 offices. Additional information about Camco Financial may be found on the Company's web sites: www.camcofinancial.com or www.advantagebank.com.

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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.