Attached files

file filename
8-K - FORM 8-K FILING DOCUMENT - CAMCO FINANCIAL CORPdocument.htm

EXHIBIT 99

Camco Financial Announces Third Quarter 2011 Earnings

CAMBRIDGE, Ohio, Oct. 28, 2011 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the bank holding company for Advantage Bank, today announced third quarter financial results for 2011, reporting net earnings of $163,000 or $0.02 per share for the quarter ended September 30, 2011. These results represent an improvement of $11.8 million or $1.63 per share over results from the comparable quarter a year ago. Year-to-date results reflect net earnings of $952,000 or $0.13 per share for the nine months ended September 30, 2011.

"These results mark a fourth consecutive quarter with positive earnings, as we continue to improve the overall profitability of the company," said James E. Huston, President and CEO. "Our commitment and perseverance to generating profitable results is paying off. We are weathering the economic storm plaguing our nation by continuing to decrease non-performing loans and by increasing core deposits."

The Company's classified loans decreased $504,000 in the third quarter 2011 and $8.2 million since year-end 2010. Core deposits (defined as checking, savings and money-market deposits) increased $5.9 million, or 2.2%, when compared to June 30, 2011 and $29.3 million, or 11.8% since December 31, 2010.

Huston continued, "We are cognizant of the time and effort it takes to effect change and we are continuously looking for new opportunities for growth. One example of this is our recent partnership with Stratos Wealth Partners to provide wealth and financial advisory services under the name Advantage Wealth Partners. This alliance allows us to position ourselves as the local provider of choice for financial solutions."

Review of Financial Performance

Overview:

The following items summarize key activities of the Company during the quarter ended September 30, 2011:

  • Total assets decreased $55.6 million from the same quarter a year ago, which reflects cash and cash equivalents 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 $5.9 million, or 2.2%, when compared to June 30, 2011.
  • Net Interest Margin increased by 0.12% from the linked quarter primarily due to lower cost of funds.
  • Noninterest income increased $157,000 from the linked quarter, largely driven by higher gain on sale of loans and higher loan fees. 
  • Noninterest expense increased $114,000 compared to the linked quarter due to additional expenses related to real estate owned as we continue to work through some older troubled credits. 
  • Classified loans (which includes substandard, doubtful, and loss) decreased by $504,000 in the third quarter.

Net Interest Margin:

Net interest margin increased to 3.73% in the current quarter compared to 3.61% for the quarter ended June 30, 2011. The margin has also increased from 3.59% for the same period a year ago, driven by a reduction in the bank's cost of funds. 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. The improvement in our net interest margin for the quarter is notable, especially in this extended low rate environment. 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 increased $30,000, or 0.5%, to $6.5 million for the quarter ended September 30, 2011, compared to the prior quarter. The increase was attributable to reductions in certificates of deposits, borrowings and the cost of funds.

The Company's yield on earning assets was relatively stable at 5.12% in the current quarter compared to 5.09% in the linked quarter. The cost of funds for the quarter ended September 30, 2011 was 1.46% compared to 1.57% for the quarter ended June 30, 2011. Planned continued runoff in certificates of deposits and borrowings combined with growth in core deposits resulted in this reduced cost 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 $16.0 million at September 30, 2011, compared to $16.8 million at June 30, 2011. A provision for loan losses of $228,000 was recorded for the quarter ended September 30, 2011, compared to $11.4 million for the same period of the prior year and $197,000 for the linked quarter. The allowance for loan and lease losses was strengthened in previous quarters, with relatively little additional provision required in the current quarter.  In addition, the successful resolution of a large classified loan resulted in the release of the related specific reserve for previously expected losses on that loan, which reduced the amount of provision expense required. Non-performing assets decreased $2.0 million since June 30, 2011 to $38.5 million at September 30, 2011. The allowance for loan and lease losses as a percentage of non-performing loans was 61.7% at September 30, 2011 compared to 49.6% at September 30, 2010. 

Noninterest Income:

Noninterest income was $1.2 million for the third quarter of 2011, which represents a decrease of $257,000 when compared to the quarter ended September 30, 2010 and an increase of $157,000 when compared to the linked quarter. The increased income in the current quarter over the linked quarter was driven by an increase in gain on sale of loans, higher loan fees, and additional income from the renegotiation of a vendor contract. 

Noninterest Expense:

Noninterest expense for the quarter ended September 30, 2011, decreased $556,000, or 7.1% , to $7.3 million from the comparable period a year earlier and increased by $114,000 when compared to the linked quarter. Noninterest expense was lower during the current quarter 2011 compared to the previous 2010 quarter  primarily as a result of lower staffing expense. The increase compared to the linked quarter was the result of additional expenses related to real estate owned. 

Balance Sheet:

Total assets were $793.6 million, which is a decrease of $55.6 million, or 6.6% compared to $849.3 million a year earlier. The decrease was primarily attributable to using cash and cash equivalents to reduce brokered, public, and single-service CD deposits, as well as 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 lending opportunities as a means of employing any excess cash.  

Asset Quality:

Loan quality has improved but 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 have made it difficult to sustain a steady reduction in classified assets and non-performing loans. 

A summary of certain key factors follows:
 

(in thousands) 9/30/2011 6/30/2011 3/31/2011
Classified Loans* 47,167 47,671 50,878
Non-Performing Loans 25,950 26,069 32,298
Loan Loss Reserve 16,015 16,751 17,410
Loan Loss Reserve / Total Loans 2.45% 2.55% 2.61%

*Includes substandard, doubtful and loss (including homogeneous loans).

Deposits and Borrowings:

Core deposits (defined as checking, savings, and money market deposits) increased by $5.9 million, or 2.2% compared to June 30, 2011. Total deposits decreased $7.3 million, or 1.2% during this period. The decrease was due to a reduction in brokered, public, and certificates of deposit of $16.2 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 deposits relating to rate sensitive shoppers.

FHLB advances and other borrowings have decreased by $31.8 million, or 22.1% from September 30, 2010. The planned decrease from the year ago quarter resulted from continued repayment and prepayment of FHLB advances with excess liquidity.

Equity:

Stockholders' equity increased $209,000, or 0.5%, to $46.3 million at September 30, 2011, compared to $46.1 million at June 30, 2011. Net earnings of $163,000 for the quarter was the main driver of the increase. Camco's Tier 1 leverage capital ratio increased to 6.59% in 3rd Quarter 2011 compared to 6.49% in 2nd Quarter, 2011.

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) (Audited) (Unaudited)  
  9/30/11 6/30/11 3/31/11 12/31/10 9/30/10  
Assets            
 Cash and Cash Equivalents  69,707  42,382  61,777  29,114  35,328  
 Investments   14,489  14,584  17,206  34,716  39,074  
             
 Loans Held for Sale  10,445  3,699  1,249  2,208  12,143  
             
 Loans Receivable  652,403  658,034  665,500  684,710  693,387  
 Allowance for Loan Loss  (16,015) (16,751) (17,410) (16,870) (16,854)  
 Loans Receivable, Net  636,388  641,283  648,090  667,840  676,533  
             
 Other Assets 62,577 65,578 63,245 81,088 86,172  
             
Total Assets  $ 793,606  $ 767,526  $ 791,567  $ 814,966  $ 849,250  
             
Liabilities            
 Deposits  624,327  631,647  655,597  651,816  647,937  
 Borrowed Funds  111,858  80,480  79,675  104,464  143,665  
 Other Liabilities 11,117 9,304 10,406 12,583 12,436  
             
Total Liabilities  747,302  721,431  745,678  768,863  804,038  
             
Stockholders' Equity 46,304 46,095 45,889 46,103 45,212  
             
Total Liabilities and Stockholders' Equity  $ 793,606  $ 767,526  $ 791,567  $ 814,966  $ 849,250  
             
             
Stockholders' Equity to Total Assets 5.83% 6.01% 5.80% 5.66% 5.32%  
             
Total Shares Outstanding  7,205,595  7,205,595  7,205,595  7,205,595  7,205,595  
             
Book Value Per Share $6.43 $6.40 $6.37 $6.40 $6.27  
 
 
 
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
  9/30/11 9/30/10
  (Unaudited) (Unaudited)
Interest Income:    
 Loans  26,455  28,074
 Mortgage-backed securities  359  1,291
 Investment securities  152  224
 Interest-bearing deposits and other  602  1,010
 Total Interest Income  27,568  30,599
     
Interest Expense:    
 Deposits   5,841  8,259
 Borrowings  2,215  2,961
 Total Interest Expense 8,056 11,220
Net Interest Income 19,512 19,379
     
Provision for Losses on Loans  1,438  17,524
Net Interest Income After Provision for Loan Losses 18,074 1,855
     
Noninterest Income:    
 Late charges, rent and other  901  1,234
 Loan servicing fees  905  952
 Service charges and other fees on deposits  1,580  1,719
 Gain on sale of loans  129  822
 Mortgage servicing rights   (213)  (622)
 Gain (loss) on sale of investment, mbs & fixed assets  1,282  1
 Income on cash surrender value life insurance  659  656
 Total noninterest income 5,243 4,762
     
Noninterest expense:    
 Employee compensation and benefits  9,565  10,121
 Occupancy and equipment  2,219  2,219
 FDIC premium and other insurances  1,541  1,574
 Data processing  834  842
 Advertising   277  275
 Franchise taxes  514  814
 Other operating   6,873  5,883
 Total noninterest expense 21,823 21,728
     
Earnings (loss) before provision for inome taxes 1,494 (15,111)
     
 Provision for income taxes  542  457
     
Net Earnings (Loss) 952 (15,568)
     
Earnings (Loss) Per Share:    
Basic  $0.13 ($2.16)
Diluted  $0.13 ($2.16)
     
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
  9/30/11 6/30/11 3/31/11 12/31/10 9/30/10
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income:          
 Loans  8,715  8,839  8,901  9,528  9,513
 Mortgage-backed securities  19  24  316  354  388
 Investment securities  53  60  39  37  54
 Interest-bearing deposits and other  99  157  346  303  337
 Total Interest Income  8,886  9,080  9,602  10,222  10,292
           
Interest Expense:          
 Deposits   1,734  1,918  2,189  2,316  2,570
 Borrowings  686  726  803  898  972
 Total Interest Expense 2,420 2,644 2,992 3,214 3,542
Net Interest Income 6,466 6,436 6,610 7,008 6,750
           
Provision for Losses on Loans  228  197  1,013  936  11,407
Net Interest Income After Provision for Loan Losses 6,238 6,239 5,597 6,072 (4,657)
           
Noninterest Income:          
 Rent and other  336  203  362  418  497
 Loan servicing fees  300  298  307  317  315
 Service charges and other fees on deposits  548  529  503  557  603
 Gain on sale of loans  129  (92)  92  1,060  332
 Mortgage servicing rights   (352)  (132)  271  29  (528)
 Gain (loss) on sale of investment, mbs & fixed assets  2  2  1,278  --   2
 Income on CSVL (BOLI)  222  220  217  221  221
 Total noninterest income 1,185 1,028 3,030 2,602 1,442
           
Noninterest expense:          
 Employee compensation and benefits  3,034  3,153  3,378  2,814  3,467
 Occupancy and equipment  767  691  761  784  734
 Data processing  273  277  284  285  276
 Advertising   95  96  86  83  105
 Franchise taxes  166  178  170  114  280
 Other operating   2,920  2,746  2,748  3,524  2,949
 Total noninterest expense 7,255 7,141 7,427 7,604 7,811
           
Earnings (loss) before provision for income taxes 168 126 1,200 1,070 (11,026)
           
 Provision for income taxes  5  (11)  548  61  572
Net Earnings (loss) 163 137 652 1,009 (11,598)
           
Earnings (Loss) Per Share:          
Basic  $0.02 $0.02 $0.09 $0.14 ($1.61)
Diluted  $0.02 $0.02 $0.09 $0.14 ($1.61)
           
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 9 Months 9 Months
  Ended Ended Ended Ended
  9/30/11 9/30/10 9/30/11 9/30/10
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Return on average equity 1.41% -85.94% 2.75% -35.75%
         
Return on average assets 0.08% -5.48% 0.16% -2.44%
         
Interest rate spread 3.66% 3.55% 3.59% 3.35%
         
Net interest margin 3.73% 3.59% 3.66% 3.41%
         
Yield on earning assets 5.12% 5.47% 5.17% 5.38%
         
Cost of deposits 1.21% 1.69% 1.32% 1.80%
         
Cost of borrowings 3.07% 3.00% 3.26% 3.11%
         
Total cost of interest bearing liabilities 1.46% 1.92% 1.58% 2.03%
         
Noninterest expense to average assets 3.75% 3.69% 3.69% 3.40%
         
Efficiency ratio 94.82% 95.35% 88.16% 90.00%
         
Nonperforming assets to total assets 4.83% 5.25% 4.83% 5.25%
         
Non performing loans to total net loans including  3.88% 4.94% 3.88% 4.94%
 loans held for sale        
         
Allowance for loan losses to total loans 2.45% 2.39% 2.45% 2.39%
         
         
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, 2011     September 30, 2010  
  Average   Yield/ Average 0 Yield/
  Balance Interest Rate Balance Interest Rate
Interest - Earning Assets:            
 Loans receivable - net (1)  635,662  8,715 5.48%  661,778  9,513 5.75%
 Securities (2)  15,216  72 1.89%  40,154  442 4.40%
 FHLB Stock  9,888  98 3.96%  29,888  335 4.48%
 Other interest bearing accounts  33,218  1 0.01%  21,301  2 0.04%
 Total interest earning assets  693,984  8,886 5.12%  753,121  10,292 5.47%
             
Noninterest-earning assets  79,019      94,118    
Total Average Assets  773,003      847,239    
             
             
Interest-Bearing Liabilities:            
 Deposits  574,338  1,734 1.21%  608,661  2,570 1.69%
 Advances & Borrowings  89,295  686 3.07%  129,429  972 3.00%
 Total interest-bearing liabilities  663,633  2,420 1.46%  738,090  3,542 1.92%
             
Noninterest-bearing sources:            
 Noninterest-bearing liabilities  63,155      55,165    
 Shareholders' equity  46,215      53,984    
Total Liabilities and Shareholders' Equity  773,003      847,239    
             
Net Interest margin     3.73%     3.59%
             
Net Interest Income & Spread    6,466 3.66%    6,750 3.55%
             
(1) Includes LHFS but does not include ALLL and Non-Accrual Loans          
(2) Includes securities designated as available for sale and held to maturity          
CONTACT: James E. Huston, CEO
         John E. Kirksey, CFO
         Phone:  740-435-2020