CAMBRIDGE, Ohio, Oct. 25, 2012 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the bank holding company for Advantage Bank, today announced third quarter financial results for 2012, reporting net earnings of $484,000 or $0.07 per share for the quarter ended September 30, 2012. These results represent an increase of $321,000 or $0.05 per share over results from the comparable quarter a year ago. Year-to-date results reflect net earnings of $1.4 million or $0.19 per share for the nine months ended September 30, 2012 representing an increase of $2.0 million or $.28 per share over the same nine month period last year.
"Progress in restoring solid profitability has continued over this past quarter," said James E. Huston, President and CEO. "Our efforts to reduce classified assets and grow core deposits continue to show favorable results."
Classified loans decreased by $4.6 million in the third quarter of 2012, while core deposits increased by $4.9 million over the same period. These efforts, along with increases in Net Interest Income and Noninterest Income, along with decreases in Noninterest Expenses have resulted in increased net earnings.
"We are also currently executing a rights offering of common shares of up to $10 million for existing shareholders that was launched on September 24," said Huston. "This rights offering to existing shareholders will expire on October 31, with the possibility of a public phase after that time that could extend to December 31, 2012." Additional details regarding the rights offering can be found in the prospectus filed on September 26, 2012 with the Securities and Exchange Commission.
Review of Financial Performance
Overview:
The following items summarize key activities of the Company during the quarter ended September 30, 2012:
- Total assets decreased $12.7 million, or 1.7%, during the quarter, which reflects increased liquid assets from loan pay downs being used to reduce higher cost, single-service CD deposits and borrowed funds.
- Core deposits (defined as checking, savings and money market deposits) increased $4.9 million, or 1.6%, when compared to June 30, 2012.
- Net Interest Income increased by $72,000, or 1.2% compared to the linked quarter, driven by a reduction in funding costs.
- Noninterest income increased $172,000, or 10.2%, from the previous quarter, driven by higher gain on sale of residential mortgage loans and related revenue.
- Noninterest expense decreased $87,000, or 1.2%, compared to the linked quarter, driven by lower staffing and data processing costs, offset somewhat by higher professional fees related to the rights offering.
- Classified loans (which includes substandard, doubtful, and loss) decreased by $4.6 million, or 12.4%, in the third quarter.
Net Interest Margin:
Net interest margin increased to 3.49% in the current quarter compared to 3.33% for the quarter ended June 30, 2012, driven by lower cost of funds. The margin has decreased from 3.73% for the same period a year ago, driven by a reduction in the bank's yield on earning assets in this low rate environment. Management expects the Company's net interest margin to decrease slightly as we continue to be in an environment of low interest rates and slow economic growth. We will continue to look for pricing opportunities, further improvement in credit quality, and other balance sheet changes to maintain our margin going forward.
Net Interest Income:
Net interest income before the provision for loan losses increased $72,000, or 1.2%, compared to the prior quarter, to $6.0 million for the quarter ended September 30, 2012. The increase was attributable to reductions in the cost of deposits and borrowed funds.
The Company's yield on earning assets increased slightly to 4.52% in the current quarter from 4.47% in the linked quarter. The overall revenue decreased, however, due to declining loan portfolio and total earning asset balances. Planned continued runoff in certificates of deposits and borrowings combined with growth in core deposits resulted in a reduced cost of funds. The cost of funds for the quarter ended September 30, 2012 was 1.12% compared to 1.25% for the quarter ended June 30, 2012. The Company anticipates continued declines in certificates of deposit balances over the next few quarters as maturities of single relationship accounts are not renewed.
Provision for Loan Losses:
A provision for loan losses of $457,000 was recorded for the quarter ended September 30, 2012, compared to $228,000 for the same period of the prior year and $137,000 for the linked quarter. The Company continues to maintain a strong allowance for loan and lease losses while improving the quality of the loan portfolio. Classified loans (which includes substandard, doubtful, and loss) decreased $4.6 million, or 12.4%, since June 30, 2012 to $32.6 million. The classified loans balance also decreased $14.5 million, or 30.8%, from the year-ago quarter ended September 30, 2011.
Noninterest Income:
Noninterest income was $1.9 million for the third quarter of 2012, which represents an increase of $710,000 when compared to the quarter ended September 30, 2011 and an increase of $172,000 when compared to the linked quarter. This increased income was driven primarily by an increase in gain on sale of residential mortgage loans and related revenue.
Noninterest Expense:
Noninterest expense for the quarter ended September 30, 2012, decreased $263,000, or 3.6%, to $6.9 million from the comparable period a year earlier and decreased by $87,000, or 1.2%, when compared to the linked quarter. Noninterest expense was lower during the current quarter 2012 compared to the previous 2011 quarter primarily as a result of expenses related to classified assets and real estate owned. The decrease compared to the linked quarter was the result of lower staffing and data processing costs, offset somewhat by higher professional fees related to the rights offering and write-down of REO properties.
Balance Sheet:
Total assets were $754.2 million, which is a decrease of $12.7 million, or 1.7% compared to $766.9 million in the linked quarter, and a decrease of $37.8 million or 4.8% compared to $792.0 million in the same quarter a year ago.
This decrease was primarily attributable to the use of increased liquid assets from loan pay downs to reduce single-service CD deposits and borrowed funds as we continue to restructure our balance sheet to rely less on non-core funding. We continue to focus on profitable lending opportunities and investments as a means of employing our excess cash, as well.
Loan Quality:
The allowance for loan and lease losses was $14.5 million at September 30, 2012, compared to $14.2 million at June 30, 2012. The Company has maintained this strong reserve while loan quality continues to improve and has resulted in a steady reduction in classified assets and non-performing loans.
A summary of certain key factors follows:
| (in thousands) | 9/30/2012 | 6/30/2012 | 3/31/2012 |
| Classified Loans* | $32,649 | $37,275 | $40,444 |
| Non-Performing Loans | 22,787 | 23,653 | 24,354 |
| Loan Loss Reserve | 14,508 | 14,185 | 14,954 |
| Loan Loss Reserve / Total Loans | 2.44% | 2.31% | 2.37% |
| *Includes substandard, doubtful and loss (including homogeneous loans). | |||
Deposits and Borrowings:
Core deposits (defined as checking, savings, and money market deposits) increased by $4.9 million, or 1.6% compared to June 30, 2012. Total deposits decreased $8.2 million, or 1.3% during this period. The decrease was due to a reduction in certificates of deposit of $13.1 million, or 4.0%. Contraction in these balances was planned as the Company works to reduce the level of non-core deposits, particularly higher single product certificates of deposits related to rate sensitive shoppers.
FHLB advances and other borrowings decreased $4.7 million, or 6.8%, compared to the linked quarter, and have decreased by $47.4 million, or 42.4% from September 30, 2011. This planned decrease resulted mostly from continued repayment of FHLB advances with excess liquidity.
Equity:
Stockholders' equity increased $646,000, or 1.4%, to $47.4 million at September 30, 2012, compared to $46.8 million at June 30, 2012. Net earnings of $484,000 for the quarter were the main driver of the increase.
About Camco Financial Corporation: Camco Financial Corporation, holding company for Advantage Bank, is a multi-state bank holding company headquartered in Cambridge, Ohio. Advantage Bank and its affiliates offer community banking that includes commercial, business and consumer financial services and internet banking from 22 offices. Additional information about Camco Financial may be found on the Company's web sites:www.camcofinancial.com or www.advantagebank.com.
The Camco Financial Corporation logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4639
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of the securities under the securities laws of such state. The rights offering will be made only by means of a prospectus, copies of which were to all record date stockholders. You may obtain a copy of the prospectus for free by visiting EDGAR on the SEC Website at www.sec.gov. Alternatively, Camco Financial or ParaCap Group, LLC, financial advisor and information agent, will arrange to send to you the prospectus if you request by calling (866) 404-2951.
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) | |
| 9/30/12 | 6/30/12 | 3/31/12 | 12/31/11 | 9/30/11 | |
| Assets | |||||
| Cash and Cash Equivalents | 26,920 | 28,160 | 40,431 | 38,374 | 69,707 |
| Investments | 80,648 | 75,347 | 62,834 | 20,928 | 14,489 |
| Loans Held for Sale | 6,341 | 2,532 | 5,583 | 8,090 | 10,445 |
| Loans Receivable | 594,030 | 613,790 | 630,124 | 653,709 | 652,403 |
| Allowance for Loan Loss | (14,508) | (14,185) | (14,954) | (14,532) | (17,615) |
| Loans Receivable, Net | 579,522 | 599,605 | 615,170 | 639,177 | 634,788 |
| Other Assets | 60,811 | 61,272 | 62,149 | 60,449 | 62,577 |
| Total Assets | $ 754,242 | $ 766,916 | $ 786,167 | $ 767,018 | $ 792,006 |
| Liabilities | |||||
| Deposits | 630,304 | 638,516 | 650,853 | 629,259 | 624,327 |
| Borrowed Funds | 64,466 | 69,200 | 77,929 | 80,285 | 111,858 |
| Other Liabilities | 12,050 | 12,424 | 11,276 | 11,869 | 11,117 |
| Total Liabilities | 706,820 | 720,140 | 740,058 | 721,413 | 747,302 |
| Stockholders' Equity | 47,422 | 46,776 | 46,109 | 45,605 | 44,704 |
| Total Liabilities and Stockholders' Equity | $ 754,242 | $ 766,916 | $ 786,167 | $ 767,018 | $ 792,006 |
| Stockholders' Equity to Total Assets | 6.29% | 6.10% | 5.87% | 5.95% | 5.64% |
| Total Shares Outstanding | 7,465,563 | 7,468,087 | 7,468,087 | 7,205,595 | 7,205,595 |
| Book Value Per Share | $6.35 | $6.26 | $6.17 | $6.33 | $6.20 |
| 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 | |
| 9/30/12 | 9/30/11 | |
| (Unaudited) | (Unaudited) | |
| Interest Income: | ||
| Loans | 23,434 | 26,455 |
| Mortgage-backed securities | 48 | 359 |
| Investment securities | 302 | 152 |
| Interest-bearing deposits and other | 330 | 602 |
| Total Interest Income | 24,114 | 27,568 |
| Interest Expense: | ||
| Deposits | 4,191 | 5,841 |
| Borrowings | 1,836 | 2,215 |
| Total Interest Expense | 6,027 | 8,056 |
| Net Interest Income | 18,087 | 19,512 |
| Provision for Losses on Loans | 1,599 | 3,038 |
| Net Interest Income After Provision for Loan Losses | 16,488 | 16,474 |
| Noninterest Income: | ||
| Late charges, rent and other | 872 | 901 |
| Loan servicing fees | 849 | 905 |
| Service charges and other fees on deposits | 1,513 | 1,580 |
| Gain on sale of loans | 1,714 | (26) |
| Mortgage servicing rights | (78) | (213) |
| Gain (loss) on sale of investment, mbs & fixed assets | (2) | 1,282 |
| Income on cash surrender value life insurance | 642 | 659 |
| Total noninterest income | 5,510 | 5,088 |
| Noninterest expense: | ||
| Employee compensation and benefits | 9,392 | 9,565 |
| Occupancy and equipment | 2,192 | 2,219 |
| FDIC premium and other insurances | 1,380 | 1,541 |
| Data processing | 821 | 834 |
| Advertising | 296 | 277 |
| Franchise taxes | 583 | 514 |
| Other operating | 6,033 | 6,718 |
| Total noninterest expense | 20,697 | 21,668 |
| Earnings (loss) before provision for income taxes | 1,301 | (106) |
| Provision for income taxes | (78) | 542 |
| Reported Net Income | 1,379 | (648) |
| Net Earnings (Loss) | 1,379 | (648) |
| Earnings (Loss) Per Share: | ||
| Basic | $0.19 | ($0.09) |
| Diluted | $0.19 | ($0.09) |
| Earnings Per Share Operations: | ||
| Basic | $0.19 | ($0.09) |
| Diluted | $0.19 | ($0.09) |
| Basic Weighted Number of | ||
| Shares Outstanding | 7,385,423 | 7,205,595 |
| Diluted Weighted Number of | ||
| Shares Outstanding | 7,387,589 | 7,205,595 |
| 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 | |
| 9/30/12 | 6/30/12 | 3/31/12 | 12/31/11 | 9/30/11 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Interest Income: | |||||
| Loans | 7,522 | 7,699 | 8,213 | 8,501 | 8,715 |
| Mortgage-backed securities | 15 | 17 | 16 | 17 | 19 |
| Investment securities | 116 | 115 | 71 | 50 | 53 |
| Interest-bearing deposits and other | 112 | 105 | 113 | 101 | 99 |
| Total Interest Income | 7,765 | 7,936 | 8,413 | 8,669 | 8,886 |
| Interest Expense: | |||||
| Deposits | 1,235 | 1,405 | 1,551 | 1,640 | 1,734 |
| Borrowings | 545 | 618 | 673 | 678 | 686 |
| Total Interest Expense | 1,780 | 2,023 | 2,224 | 2,318 | 2,420 |
| Net Interest Income | 5,985 | 5,913 | 6,189 | 6,351 | 6,466 |
| Provision for Losses on Loans | 457 | 137 | 1,005 | (759) | 228 |
| Net Interest Income After Provision for Loan Losses | 5,528 | 5,776 | 5,184 | 7,110 | 6,238 |
| Noninterest Income: | |||||
| Rent and other | 321 | 223 | 328 | 202 | 336 |
| Loan servicing fees | 283 | 285 | 281 | 290 | 300 |
| Service charges and other fees on deposits | 515 | 508 | 490 | 530 | 548 |
| Gain on sale of loans | 633 | 517 | 564 | 377 | 85 |
| Mortgage servicing rights | (117) | (63) | 102 | (365) | (352) |
| Gain (loss) on sale of investment, mbs & fixed assets | -- | 1 | (3) | -- | 2 |
| Income on CSVL (BOLI) | 216 | 208 | 218 | 221 | 222 |
| Total noninterest income | 1,851 | 1,679 | 1,980 | 1,255 | 1,141 |
| Noninterest expense: | |||||
| Employee compensation and benefits | 2,996 | 3,249 | 3,147 | 2,772 | 3,034 |
| Occupancy and equipment | 725 | 756 | 711 | 721 | 767 |
| Data processing | 250 | 285 | 286 | 277 | 273 |
| Advertising | 101 | 108 | 87 | 86 | 95 |
| Franchise taxes | 199 | 201 | 183 | 154 | 166 |
| Other operating | 2,677 | 2,436 | 2,300 | 3,491 | 2,876 |
| Total noninterest expense | 6,948 | 7,035 | 6,714 | 7,501 | 7,211 |
| Earnings (loss) before provision for income taxes | 431 | 420 | 450 | 864 | 168 |
| Provision for income taxes | (53) | (62) | 37 | 2 | 5 |
| Net Earnings (loss) | 484 | 482 | 413 | 862 | 163 |
| Earnings (Loss) Per Share: | |||||
| Basic | $0.07 | $0.06 | $0.06 | $0.12 | $0.02 |
| Diluted | $0.07 | $0.06 | $0.06 | $0.12 | $0.02 |
| Basic Weighted Number of | |||||
| Shares Outstanding | 7,467,255 | 7,468,090 | 7,220,018 | 7,205,595 | 7,205,595 |
| Diluted Weighted Number of | |||||
| Shares Outstanding | 7,473,123 | 7,481,854 | 7,220,130 | 7,205,595 | 7,205,595 |
| Camco Financial Corporation | ||||
| Selected Ratios and Statistics | ||||
| (In thousands, except for per share data and shares outstanding) | ||||
| 3 Months | 3 Months | 9 Months | 9 Months | |
| Ended | Ended | Ended | Ended | |
| 9/30/12 | 9/30/11 | 9/30/12 | 9/30/11 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Return on average equity | 4.12% | 1.46% | 3.96% | -1.90% |
| Return on average assets | 0.25% | 0.08% | 0.24% | -0.11% |
| Interest rate spread | 3.40% | 3.66% | 3.34% | 3.59% |
| Net interest margin | 3.49% | 3.73% | 3.45% | 3.66% |
| Yield on earning assets | 4.52% | 5.12% | 4.59% | 5.17% |
| Cost of deposits | 0.87% | 1.21% | 0.98% | 1.32% |
| Cost of borrowings | 3.16% | 3.07% | 3.32% | 3.26% |
| Total cost of interest bearing liabilities | 1.12% | 1.46% | 1.25% | 1.58% |
| Noninterest expense to average assets | 3.64% | 3.76% | 3.58% | 3.69% |
| Efficiency ratio | 88.67% | 94.82% | 87.71% | 88.16% |
| Nonperforming assets to total assets | 4.60% | 4.84% | 4.60% | 4.84% |
| Non performing loans to total net loans including loans held for sale | 3.80% | 3.89% | 3.80% | 3.89% |
| Allowance for loan losses to total loans including loans held for sale | 2.42% | 2.66% | 2.42% | 2.66% |
| 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 | ||||||
| (In thousands, except for per share data and shares outstanding) | ||||||
| September 30, 2012 | September 30, 2011 | |||||
| Average | Yield/ | Average | Yield/ | |||
| Balance | Interest | Rate | Balance | Interest | Rate | |
| Interest - Earning Assets: | ||||||
| Loans receivable - net (1) | 583,587 | 7,522 | 5.16% | 635,662 | 8,715 | 5.48% |
| Securities (2) | 78,729 | 131 | 0.67% | 15,216 | 72 | 1.89% |
| FHLB Stock | 9,888 | 104 | 4.21% | 9,888 | 98 | 3.96% |
| Other interest bearing accounts | 14,605 | 8 | 0.22% | 33,218 | 1 | 0.01% |
| Total interest earning assets | 686,809 | 7,765 | 4.52% | 693,984 | 8,886 | 5.12% |
| Noninterest-earning assets | 75,685 | 77,419 | ||||
| Total Average Assets | 762,494 | 771,403 | ||||
| Interest-Bearing Liabilities: | ||||||
| Deposits | 565,020 | 1,235 | 0.87% | 574,338 | 1,734 | 1.21% |
| Advances & Borrowings | 68,908 | 545 | 3.16% | 89,295 | 686 | 3.07% |
| Total interest-bearing liabilities | 633,928 | 1,780 | 1.12% | 663,633 | 2,420 | 1.46% |
| Noninterest-bearing sources: | ||||||
| Noninterest-bearing liabilities | 81,527 | 63,155 | ||||
| Shareholders' equity | 47,039 | 44,615 | ||||
| Total Liabilities and Shareholders' Equity | 762,494 | 771,403 | ||||
| Net Interest margin | 3.49% | 3.73% | ||||
| Net Interest Income & Spread | 5,985 | 3.40% | 6,466 | 3.66% | ||
| (1) Includes LHFS but does not include ALLL and Non-Accrual Loans | ||||||
| (2) Includes securities designated as available for sale and held to maturity | ||||||