CAMBRIDGE, Ohio, March 29, 2012 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the bank holding company for Advantage Bank, today announced fourth quarter and year-end financial results for 2011, reporting net earnings of $862,000 or $0.12 per share for the quarter ended December 31, 2011 and $214,000 or $.03 per share for the year ended December 31, 2011. These year-end results compare favorably to a net loss of $14.6 million or ($2.02) per share for the year ended December 31, 2010.
"We are very pleased to report positive earnings results as this marks another step in restoring the financial strength of our company," commented James E. Huston, President and CEO. "We have clearly made great strides improving in the areas that have had the largest impact on our profitability" commented Huston. "Although disappointed that we needed to continue to charge down our other real estate owned during the fourth quarter based on continued deterioration of real estate values, we also believe these decisions better position your company to propel forward with greater velocity in 2012."
And while the level of earnings is not yet where we would like to see them, these positive results did include decreasing the company's classified loans by $13.5 million since year end 2010. At the same time, core deposits (defined as checking, savings and money-market deposits) increased $36.8 million, or 14.9%, when compared to December 31, 2010. Also, as industry margins have been compressing, we were successful in improving our net interest margin to 3.66% compared to 3.50% year over year but have seen some tightening of margin over the past few quarters.
Mr. Huston continued, "While we continue to make progress in managing our classified loans and reducing our delinquencies, we are also focused on making banking easier and more convenient for our customers. This is evidenced by our launch of online statements during the fourth quarter of 2011. We are also reviewing additional initiatives to improve quality products and services in a manner that is the most effective for our customers."
Review of Financial Performance
Overview:
For the fiscal year ended December 31, 2011, the Company reported net earnings of $214,000, or $0.03 per share, compared to a net loss of $14.6 million, or ($2.02) per share for the fiscal year ended December 31, 2010.
The following items summarize key activities of the Company during the fiscal year and quarter ended December 31, 2011:
-
Total assets decreased $47.9 million from a year ago December 31, which reflects cash derived from pay-downs and maturities of loans and investments being used to pay down higher cost brokered, public, and single-service CD deposits and borrowed funds.
-
Core deposits (defined as checking, savings and money market deposits) increased $36.8 million, or 14.9%, when compared to December 31, 2010.
-
Net interest margin decreased by 0.06% from the linked quarter primarily due to lower yield on earning assets. The cost of funds continued to decrease by .04% from the linked quarter.
-
Noninterest income increased $70,000 from the linked quarter, driven by higher gain on sale of loans.
-
Noninterest expense increased $246,000 compared to the linked quarter due to expenses related to real estate owned.
-
Classified loans (which includes substandard, doubtful, and loss) decreased by $6.1 million in the fourth quarter compared to the linked quarter.
- Other Real Estate Owned was charged down an additional $1.1 million in fourth quarter 2011 based on continued deterioration of real estate values.
Net Interest Margin:
Net interest margin decreased to 3.67% in the current quarter compared to 3.73% for the quarter ended September 30, 2011. The margin has also decreased from 3.75% 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 stabilize or 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 ways to maintain our margin going forward.
Net Interest Income:
Net interest income before the provision for loan losses decreased $115,000, or 1.8%, compared to the prior quarter, to $6.4 million for the quarter ended December 31, 2011. The decrease was attributable to reductions in yield on earning assets in this low rate environment.
The Company's yield on earning assets decreased to 5.01% in the current quarter compared to 5.12% in the linked quarter. The cost of funds for the quarter ended December 31, 2011 was 1.42% compared to 1.46% for the quarter ended September 30, 2011. Planned continued runoff in certificates of deposits and borrowings resulted in this reduced cost of funds while being able to grow less costly core deposits which are normally lower costs of funds. The Company anticipates continued declines in certificates of deposit balances over the next few quarters as it expects that some maturities of single product relationship accounts will not be renewed.
Provision Expense and Allowance for Loan Losses:
The allowance for loan and lease losses was $14.5 million at December 31, 2011, compared to $17.6 million at September 30, 2011. The allowance for loan and lease losses was strengthened in previous quarters, and with the continued improvement in the level of classified and non-performing loans along with the reduction of loans with specific reserves, was able to be reduced in the 4th quarter of 2011. Classified loans (which includes substandard, doubtful, and loss) decreased $6.1 million from the linked quarter and $13.0 million from the year ago quarter. Non-performing loans of $24.9 million at December 31, 2011 decreased $794,000 since September 30, 2011 and $8.9 million compared to December 31, 2010. Non-performing loans as a percentage of total loans has decreased to 3.77% compared to 4.92% at December 31, 2010. The allowance for loan and lease losses as a percentage of non-performing loans was 58.3% at December 31, 2011 compared to 49.9% at December 31, 2010.
Noninterest Income:
Noninterest income was $1.3 million for the fourth quarter of 2011, which represents an increase of $70,000, or 5.9%, when compared to the linked quarter. Noninterest income for fiscal year ended December 31, 2011 was $6.5 million, which is a decrease of $866,000, or 11.8%, from fiscal year ended December 31, 2010. The increased income in the current quarter over the linked quarter was driven by an increase in gain on sale of loans. The decreased income from fiscal year 2010 was primarily driven by a decrease in title company fee income resulting from the liquidation of the Company's title company on March 31, 2011, with the combined gain on sale of loans and investments remaining relatively flat.
Noninterest Expense:
Noninterest expense for the quarter ended December 31, 2011, decreased $103,000, or 1.4%, to $7.5 million from the comparable period a year earlier and increased by $246,000, or 3.4%, when compared to the linked quarter. This higher noninterest expense during the current quarter is driven by higher expenses related to real estate owned.
Balance Sheet:
Total assets were $767.0 million, which is a decrease of $47.9 million, or 5.9% compared to $815.0 million a year earlier. The decrease was primarily attributable to using cash derived from pay-downs and maturities of loans and investments to reduce brokered, public, and single-service CD deposits, as well as to pay down borrowed funds, as we continue to restructure our balance sheet to rely less on non-core funding. We also continue to focus on profitable and prudent lending opportunities as a means of employing any excess cash.
Asset Quality:
Loan quality has improved although the economic recovery within our market areas continues to be slow and has caused declines in the underlying value of collateral both in commercial and residential real estate as well as deterioration in the financial condition of some of our borrowers. These factors will continue to make it challenging to sustain a steady reduction in classified assets and non-performing loans.
A summary of certain key factors follows:
| (in thousands) | 12/31/2011 | 9/30/2011 (1) | 12/31/2010 |
| Classified Loans* | 40,642 | 47,167 | 53,992 |
| Non-Performing Loans | 24,918 | 25,712 | 33,779 |
| Loan Loss Reserve | 14,532 | 17,615 | 16,870 |
| Loan Loss Reserve / Total Loans | 2.22% | 2.66% | 2.46% |
*Includes substandard, doubtful and loss (including homogeneous loans).
(1) As restated February 3, 2012
Deposits and Borrowings:
Core deposits (defined as checking, savings, and money market deposits) increased by $36.8 million, or 14.9% compared to December 31, 2010. Total deposits decreased $22.6 million, or 3.5% during 2011. The decrease was due to a reduction in brokered, public, and certificates of deposit of $59.3 million. Contraction in these balances was planned as the Company works to reduce the level of non-core deposits, particularly higher single product certificates of deposit related to rate sensitive shoppers.
FHLB advances and other borrowings have decreased by $24.2 million, or 23.1% from December 31, 2010. The planned decrease resulted from continued repayment and prepayment of FHLB advances with excess liquidity.
Equity:
Stockholders' equity decreased $498,000, or 1.1%, to $45.6 million at December 31, 2011, compared to $46.1 million at December 31, 2010. Camco's Tier 1 leverage capital ratio increased to 6.59% in 4th Quarter 2011 compared to 5.98% in 4th Quarter 2010.
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
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) | (Audited) | |
| Assets | 12/31/11 | 9/30/11 | 6/30/11 | 3/31/11 | 12/31/10 |
| Cash and Cash Equivalents | 38,374 | 69,707 | 42,382 | 61,777 | 29,114 |
| Investments | 20,928 | 14,489 | 14,584 | 17,206 | 34,716 |
| Loans Held for Sale | 8,090 | 10,445 | 3,699 | 1,249 | 2,208 |
| Loans Receivable | 653,709 | 652,403 | 658,034 | 665,500 | 684,710 |
| Allowance for Loan Loss | (14,532) | (17,615) | (18,351) | (17,410) | (16,870) |
| Loans Receivable, Net | 639,177 | 634,788 | 639,683 | 648,090 | 667,840 |
| Other Assets | 60,449 | 62,577 | 65,578 | 63,245 | 81,088 |
| Total Assets | $ 767,018 | $ 792,006 | $ 765,926 | $ 791,567 | $ 814,966 |
| Liabilities | |||||
| Deposits | 629,259 | 624,327 | 631,647 | 655,597 | 651,816 |
| Borrowed Funds | 80,285 | 111,858 | 80,480 | 79,675 | 104,464 |
| Other Liabilities | 11,869 | 11,117 | 9,304 | 10,406 | 12,583 |
| Total Liabilities | 721,413 | 747,302 | 721,431 | 745,678 | 768,863 |
| Stockholders' Equity | 45,605 | 44,704 | 44,495 | 45,889 | 46,103 |
| Total Liabilities and Stockholders' Equity | $ 767,018 | $ 792,006 | $ 765,926 | $ 791,567 | $ 814,966 |
| Stockholders' Equity to Total Assets | 5.95% | 5.64% | 5.81% | 5.80% | 5.66% |
| Total Shares Outstanding | 7,205,595 | 7,205,595 | 7,205,595 | 7,205,595 | 7,205,595 |
| Book Value Per Share | $6.33 | $6.20 | $6.18 | $6.37 | $6.40 |
| Camco Financial Corporation | ||
| Condensed Consolidated Statements of Earnings | ||
| Year to Date Information | ||
| (In thousands, except for per share data and shares outstanding) | ||
| 12 Months | 12 Months | |
| Ended | Ended | |
| 12/31/11 | 12/31/10 | |
| (Unaudited) | (Unaudited) | |
| Interest Income: | ||
| Loans | 34,956 | 37,602 |
| Mortgage-backed securities | 376 | 1,645 |
| Investment securities | 202 | 261 |
| Interest-bearing deposits and other | 703 | 1,313 |
| Total Interest Income | 36,237 | 40,821 |
| Interest Expense: | ||
| Deposits | 7,481 | 10,575 |
| Borrowings | 2,893 | 3,859 |
| Total Interest Expense | 10,374 | 14,434 |
| Net Interest Income | 25,863 | 26,387 |
| Provision for Losses on Loans | 2,279 | 18,460 |
| Net Interest Income After Provision for Loan Losses | 23,584 | 7,927 |
| Noninterest Income: | ||
| Late charges, rent and other | 1,103 | 1,652 |
| Loan servicing fees | 1,195 | 1,269 |
| Service charges and other fees on deposits | 2,110 | 2,276 |
| Gain on sale of loans | 506 | 1,882 |
| Mortgage servicing rights | (578) | (593) |
| Gain (loss) on sale of investment, mbs & fixed assets | 1,282 | 1 |
| Income on cash surrender value life insurance | 880 | 877 |
| Total noninterest income | 6,498 | 7,364 |
| Noninterest expense: | ||
| Employee compensation and benefits | 12,337 | 12,935 |
| Occupancy and equipment | 2,940 | 3,003 |
| FDIC premium and other insurances | 1,986 | 2,260 |
| Data processing | 1,111 | 1,127 |
| Advertising | 363 | 358 |
| Franchise taxes | 668 | 928 |
| Other operating | 9,919 | 8,721 |
| Total noninterest expense | 29,324 | 29,332 |
| Earnings (loss) before provision for income taxes | 758 | (14,041) |
| Provision for income taxes | 544 | 518 |
| Net Earnings (Loss) | 214 | (14,559) |
| Earnings (Loss) Per Share: | ||
| Basic | $0.03 | ($2.02) |
| Diluted | $0.03 | ($2.02) |
| Basic Weighted Number of | ||
| Shares Outstanding | 7,205,595 | 7,205,595 |
| Diluted Weighted Number of | ||
| Shares Outstanding | 7,205,595 | 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 | |
| 12/31/11 | 9/30/11 | 6/30/11 | 3/31/11 | 12/31/10 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Interest Income: | |||||
| Loans | 8,501 | 8,715 | 8,839 | 8,901 | 9,528 |
| Mortgage-backed securities | 17 | 19 | 24 | 316 | 354 |
| Investment securities | 50 | 53 | 60 | 39 | 37 |
| Interest-bearing deposits and other | 101 | 99 | 157 | 346 | 303 |
| Total Interest Income | 8,669 | 8,886 | 9,080 | 9,602 | 10,222 |
| Interest Expense: | |||||
| Deposits | 1,640 | 1,734 | 1,918 | 2,189 | 2,316 |
| Borrowings | 678 | 686 | 726 | 803 | 898 |
| Total Interest Expense | 2,318 | 2,420 | 2,644 | 2,992 | 3,214 |
| Net Interest Income | 6,351 | 6,466 | 6,436 | 6,610 | 7,008 |
| Provision for Losses on Loans | (759) | 228 | 1,797 | 1,013 | 936 |
| Net Interest Income After Provision for Loan Losses | 7,110 | 6,238 | 4,639 | 5,597 | 6,072 |
| Noninterest Income: | |||||
| Rent and other | 202 | 336 | 203 | 362 | 418 |
| Loan servicing fees | 290 | 300 | 298 | 307 | 317 |
| Service charges and other fees on deposits | 530 | 548 | 529 | 503 | 557 |
| Gain on sale of loans | 377 | 129 | (92) | 92 | 1,060 |
| Mortgage servicing rights | (365) | (352) | (132) | 271 | 29 |
| Gain (loss) on sale of investment, mbs & fixed assets | -- | 2 | 2 | 1,278 | -- |
| Income on CSVL (BOLI) | 221 | 222 | 220 | 217 | 221 |
| Total noninterest income | 1,255 | 1,185 | 1,028 | 3,030 | 2,602 |
| Noninterest expense: | |||||
| Employee compensation and benefits | 2,772 | 3,034 | 3,153 | 3,378 | 2,814 |
| Occupancy and equipment | 721 | 767 | 691 | 761 | 784 |
| Data processing | 277 | 273 | 277 | 284 | 285 |
| Advertising | 86 | 95 | 96 | 86 | 83 |
| Franchise taxes | 154 | 166 | 178 | 170 | 114 |
| Other operating | 3,491 | 2,920 | 2,746 | 2,748 | 3,524 |
| Total noninterest expense | 7,501 | 7,255 | 7,141 | 7,427 | 7,604 |
| Earnings (loss) before provision for income taxes | 864 | 168 | (1,474) | 1,200 | 1,070 |
| Provision for income taxes | 2 | 5 | (11) | 548 | 61 |
| Net Earnings (loss) | 862 | 163 | (1,463) | 652 | 1,009 |
| Earnings (Loss) Per Share: | |||||
| Basic | $0.12 | $0.02 | ($0.20) | $0.09 | $0.14 |
| Diluted | $0.12 | $0.02 | ($0.20) | $0.09 | $0.14 |
| Basic Weighted Number of | |||||
| Shares Outstanding | 7,205,595 | 7,205,595 | 7,205,595 | 7,205,595 | 7,205,595 |
| Diluted Weighted Number of | |||||
| Shares Outstanding | 7,205,595 | 7,205,595 | 7,205,595 | 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 | 12 Months | 12 Months | |
| Ended | Ended | Ended | Ended | |
| 12/31/11 | 12/31/10 | 12/31/11 | 12/31/10 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Return on average equity | 7.67% | 8.88% | 0.47% | -20.78% |
| Return on average assets | 0.45% | 0.49% | 0.03% | -1.72% |
| Interest rate spread | 3.59% | 3.69% | 3.58% | 3.44% |
| Net interest margin | 3.67% | 3.75% | 3.66% | 3.50% |
| Yield on earning assets | 5.01% | 5.47% | 5.12% | 5.41% |
| Cost of deposits | 1.16% | 1.54% | 1.28% | 1.74% |
| Cost of borrowings | 3.12% | 2.98% | 3.30% | 3.11% |
| Total cost of interest bearing liabilities | 1.42% | 1.78% | 1.54% | 1.97% |
| Noninterest expense to average assets | 3.90% | 3.75% | 3.65% | 3.47% |
| Efficiency ratio | 99.62% | 90.62% | 88.22% | 86.91% |
| Nonperforming assets to total assets | 4.67% | 4.67% | 4.78% | 5.38% |
| Non performing loans to total net loans including | 3.77% | 4.92% | 3.77% | 4.92% |
| loans held for sale | ||||
| Allowance for loan losses to total loans | 2.22% | 2.46% | 2.22% | 2.46% |
| 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) | ||||||
| December 31, 2011 | December 31, 2010 | |||||
| Average | Yield/ | Average | Yield/ | |||
| Balance | Interest | Rate | Balance | Interest | Rate | |
| Interest - Earning Assets: | ||||||
| Loans receivable - net (1) | 635,582 | 8,501 | 5.35% | 662,229 | 9,528 | 5.76% |
| Securities (2) | 17,789 | 67 | 1.51% | 36,522 | 391 | 4.28% |
| FHLB Stock | 9,888 | 99 | 4.00% | 29,888 | 301 | 4.03% |
| Other interest bearing accounts | 29,552 | 2 | 0.03% | 19,489 | 2 | 0.04% |
| Total interest earning assets | 692,811 | 8,669 | 5.01% | 748,128 | 10,222 | 5.47% |
| Noninterest-earning assets | 77,343 | 82,494 | ||||
| Total Average Assets | 770,154 | 830,622 | ||||
| Interest-Bearing Liabilities: | ||||||
| Deposits | 565,477 | 1,640 | 1.16% | 603,392 | 2,316 | 1.54% |
| Advances & Borrowings | 86,817 | 678 | 3.12% | 120,734 | 898 | 2.98% |
| Total interest-bearing liabilities | 652,294 | 2,318 | 1.42% | 724,126 | 3,214 | 1.78% |
| Noninterest-bearing sources: | ||||||
| Noninterest-bearing liabilities | 72,912 | 61,038 | ||||
| Shareholders' equity | 44,948 | 45,458 | ||||
| Total Liabilities and Shareholders' Equity | 770,154 | 830,622 | ||||
| Net Interest margin | 3.67% | 3.75% | ||||
| Net Interest Income & Spread | 6,351 | 3.59% | 7,008 | 3.69% | ||
| (1) Includes LHFS but does not include ALLL and Non-Accrual Loans | ||||||
| (2) Includes securities designated as available for sale and held to maturity | ||||||