CAMBRIDGE, Ohio, Oct. 29, 2010 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the financial services holding company for Advantage Bank, announced third quarter financial results and adjusted second quarter financial results. Third quarter results ($11.6 million loss), and the revised second quarter results ($4.1 million loss) reflect a deterioration in the underlying collateral value of certain commercial and residential credits driven by the weak real estate market. The Company's year-to-date loss through September 30, 2010 is $15.6 million ($2.16 per share). The Company previously disclosed that it would be restating its second quarter financials in a Form 8-K that was filed with the Securities and Exchange Commission on October 27, 2010.

"While it is difficult to share this news, it is important to realize that we are not immune to the continued tough economic conditions and we are being upfront about the challenges we are facing," said James E. Huston, President and CEO. "This is part of the process of weathering the financial storms that we have all experienced over the last several years. We believe this difficult step will provide the necessary and critical foundation going forward."

"For example, our loan volume during third quarter 2010 was among the best quarters we have experienced since the beginning of the recession. We had $32 million in residential originations as of the end of third quarter, representing a 60 percent increase over second quarter and a 79 percent increase over the same quarter 2009," stated Mr. Huston.

Huston continued, "Lower mortgage rates have led to strong mortgage origination volume and increased gain on sale margins. In addition to traditional refinances, we have seen growth in this category based on specialty Fannie Mae and Freddie Mac refinance programs that assist borrowers who have experienced a decrease in their home equity."

"The Commercial Banking Division continues to be a key revenue driver in 2010 with approximately $102 million in new loan facilities, $550,000 in new origination fees and a significant amount of new commercial deposit relationships. We believe that some of the key attributes of the new commercial business include the opportunity to provide financial services to high net worth individuals, lower leverage real estate projects and high credit quality operating companies. The Commercial Banking Division continues to be focused on relationship banking, credit quality and the interest rate margin," Huston said.

"Like every individual and organization across the country, we have been impacted by the continuing tepid growth in the economy. We are disappointed by the results this quarter – and the need to restate last quarter. We know that this impacts not only our bottom line, but those of our shareholders as well. We are taking the necessary steps so that we are poised for profitability going forward," Huston said.

Review of Financial Performance

Overview:

The third quarter 2010 net loss of $(11.6) million compares to net income of $355,000 in the third quarter of 2009. Earnings per share were $(1.61), compared with $.05 in the third quarter of 2009. Third quarter results compare to a net loss of $(4.1) million in the restated second quarter of 2010. The losses in the second and third quarter of 2010 are driven principally by the provision for loan losses of $5.2 million and $11.4 million, respectively.

Asset Quality:

Loan quality has been impacted by the sluggish economic recovery within our market areas which has caused declines in the underlying value of collateral both in commercial and residential real estate and 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. The second quarter 2010 adjustment to the provision reflects management's decision to better match the directional trends in classified assets and non performing loans to the reserve as of June 30, 2010. The bulk of the third quarter provision is driven by recent appraisal information on less than ten large commercial credits and the write down of properties brought in through foreclosure.

A summary of certain key factors follows:

(in thousands) 9/30/2010 6/30/2010 12/31/2009
Criticized Assets * 63,716 71,554 71,673
Non Performing Loans 39,073 42,643 36,449
Delinquent 60+ days 28,017 34,407 32,296
Loan Loss Reserve 16,854 15,676 16,099
Loan Loss Reserve / Total Loans 2.39% 2.26% 2.38%
       
*Includes special mention, substandard, doubtful and loss.
** As restated 

Net Interest Income:

Net interest income was $6.8 million, up 9.2 percent compared with the prior year and up 5.9 percent compared with the prior quarter. Net interest margin was 3.59 percent, compared to 3.07 percent with the prior year and 3.40 percent compared with the prior quarter.

Improved margins are being driven by lower cost of deposits and non-core funding sources coupled with a greater mix of new commercial loan originations.

Non-Interest Income (NII):

Non-interest income was $1.4 million, down 10.6 percent compared with the prior year and down 10.0 percent compared to the prior quarter. The decrease in the third quarter, in part, reflects the impact on the valuation of mortgage servicing rights of faster prepayment assumptions related to the low rate environment. However, mortgage loan sales to Freddie Mac and Fannie Mae have been strong. Residential originations in the third quarter were $32 million, up 79 percent over the prior year, and up 60 percent over the prior quarter. Margins have also widened; gains on sale of loans were $332,000 compared to $207,000 in the prior year, and up $71,000 compared to the prior quarter.

Non-Interest Expense (NIE):

NIE was $7.8 million, compared with $7.2 million in the prior year and $7.0 million in the prior quarter. The increase in the third quarter relates to higher loan production, operating expenses associated with real estate owned, and legal expenses relating to the resolution of problem assets.

Balance Sheet Review:

Total assets were $849.3 million at September 30, 2010, compared with $891.4 million in the prior year and $840.1 million at June 30, 2010.

Total loans were $693.4 million at September 30, 2010, compared with $696.9 million in the prior year and $691.6 million at June 30, 2010. The total loan portfolio mix has changed with a greater percentage representing commercial loans, the growth of which has been a strategic initiative for the Bank. Commercial loan balances at September 30, 2010, were $320.0 million, compared with $261.1 million at September 30, 2009 and $302.5 million at June 30, 2010.

Deposit balances were $647.9 million, compared with $670.4 million in the prior year and $652.9 million at June 30, 2010. Excluding the planned runoff of public fund and brokered deposits, our deposit base has increased from $596.8 million to $626.8 million, or 5.03 percent since September 30, 2009. Deposits in the Greater Cincinnati market have been particularly strong increasing by more than $10.8 million since September 30, 2009. 

Provision of Deferred Taxes:

The third quarter tax provision of $572,000 reflects a 100 percent valuation allowance on the Company's deferred tax asset. As the Company executes plans to return to profitability, future earnings will benefit from operating loss carry-forwards. 

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.

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)
  9/30/10 6/30/10 3/31/10 12/31/09 9/30/09
Assets          
 Cash and Cash Equivalents  35,328  33,567  28,294  38,153  58,244
 Investments   39,074  41,138  49,935  58,063  63,100
           
 Loans Held for Sale  12,143  1,669  1,600  475  2,186
           
 Loans Receivable  693,387  691,596  699,766  675,121  696,931
 Allowance for Loan Loss  (16,854) (15,676) (15,821) (16,099) (12,505)
 Loans Receivable, Net  676,533  675,920  683,945  659,022  684,426
           
 Other Assets 86,172 87,768 87,705 86,942 83,466
           
Total Assets  $ 849,250  $ 840,062  $ 851,479  $ 842,655  $ 891,422
           
Liabilities          
 Deposits  647,937  652,872  649,354  659,902  670,391
 Borrowed Funds  143,665  119,990  130,243  109,232  133,880
 Other Liabilities 12,436 10,294 11,002 13,007 14,552
           
Total Liabilities  804,038  783,156  790,599  782,141  818,823
           
Stockholders' Equity 45,212 56,906 60,880 60,514 72,599
           
Total Liabilities and Stockholders' Equity  $ 849,250  $ 840,062  $ 851,479  $ 842,655  $ 891,422
           
           
Stockholders' Equity to Total Assets 5.32% 6.77% 7.15% 7.18% 8.14%
           
Total Shares Outstanding  7,205,595  7,205,595  7,205,595  7,205,595  7,205,595
           
Book Value Per Share $6.27 $7.90 $8.45 $8.40 $10.08
 
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
  9/30/10 9/30/09
  (Unaudited) (Unaudited)
Interest Income:    
 Loans  28,074  30,560
 Mortgage-backed securities  1,291  1,821
 Investment securities  224  660
 Interest-bearing deposits and other  1,010  1,067
 Total Interest Income  30,599  34,108
     
Interest Expense:    
 Deposits   8,259  12,039
 Borrowings  2,961  4,161
 Total Interest Expense 11,220 16,200
Net Interest Income 19,379 17,908
     
Provision for Losses on Loans  17,524  1,877
Net Interest Income After Provision for Loan Losses 1,855 16,031
     
Noninterest Income:    
 Late charges, rent and other  1,234  1,274
 Loan servicing fees  952  948
 Service charges and other fees on deposits  1,719  1,684
 Gain on sale of loans  822  980
 Mortgage servicing rights   (622)  84
 Gain (loss) on sale of investment, mbs & fixed assets  1  156
 Income on cash surrender value life insurance  656  710
 Total noninterest income 4,762 5,836
     
Noninterest expense:    
 Employee compensation and benefits  10,121  9,587
 Occupancy and equipment  2,219  2,423
 Federal deposit insurance premium  1,574  1,771
 Data processing  842  908
 Advertising   275  415
 Franchise taxes  814  803
 Other operating   5,883  5,238
 Total noninterest expense 21,728 21,145
     
Earnings (loss) before provision for income taxes (15,111) 722
     
 Provision for income taxes  457  131
Reported Net Income (15,568) 591
     
     
Net Earnings (Loss) (15,568) 591
     
Earnings (Loss) Per Share Reported:  
Basic  ($2.16) $0.08
Diluted  ($2.16) $0.08
     
Shares Outstanding  7,205,595  7,201,383
Diluted Weighted Number of     
Shares Outstanding  7,205,595  7,202,220
 
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
  9/30/10 6/30/10 3/31/10 12/31/09 9/30/09
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income:          
 Loans  9,513  9,281  9,280  9,670  9,948
 Mortgage-backed securities  388  428  475  517  551
 Investment securities  54  67  103  88  110
 Interest-bearing deposits and other  337  333  340  341  378
 Total Interest Income  10,292  10,109  10,198  10,616  10,987
           
Interest Expense:          
 Deposits   2,570  2,744  2,945  3,309  3,619
 Borrowings  972  992  997  1,085  1,189
 Total Interest Expense 3,542 3,736 3,942 4,394 4,808
Net Interest Income 6,750 6,373 6,256 6,222 6,179
           
Provision for Losses on Loans  11,407  5,212  905  19,914  440
Net Interest Income After Provision for Loan Losses (4,657) 1,161 5,351 (13,692) 5,739
           
Noninterest Income:          
 Rent and other  497  328  409  419  292
 Loan servicing fees  315  320  317  316  316
 Service charges and other fees on deposits  603  598  518  593  613
 Gain on sale of loans  332  261  229  291  207
 Mortgage servicing rights   (528)  (124)  30  619  (185)
 Gain (loss) on sale of investment, mbs & fixed assets  2  (1)  --   (30)  153
 Income on CSVL (BOLI)  221  220  215  216  216
 Total noninterest income 1,442 1,602 1,718 2,424 1,612
           
Noninterest expense:          
 Employee compensation and benefits  3,467  3,269  3,385  2,866  3,047
 Occupancy and equipment  734  743  742  824  880
 Data processing  276  286  280  281  295
 Advertising   105  89  81  110  118
 Franchise taxes  280  269  265  215  221
 Other operating   2,949  2,319  2,189  2,672  2,688
 Total noninterest expense 7,811 6,975 6,942 6,968 7,249
           
Earnings (loss) before provision for income taxes (11,026) (4,212) 127 (18,236) 102
           
 Provision for income taxes  572  (113)  (2)  (6,427)  (253)
Net Earnings (loss) (11,598) (4,099) 129 (11,809) 355
           
Earnings (Loss) Per Share:          
Basic  ($1.61) ($0.57) $0.02 ($1.64) $0.05
Diluted  ($1.61) ($0.56) $0.02 ($1.64) $0.05
           
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  7,239,067  7,205,595  7,206,474
 
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
  9/30/10 9/30/09 9/30/10 9/30/09
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Return on average equity -85.94% 1.97% -36.75% 1.09%
         
Return on average assets -5.48% 0.16% -2.44% 0.08%
         
Interest rate spread 3.55% 2.78% 3.35% 2.68%
         
Net interest margin 3.59% 3.07% 3.41% 2.82%
         
Yield on earning assets 5.47% 5.46% 5.38% 5.38%
         
Cost of deposits 1.69% 2.51% 1.80% 2.50%
         
Cost of borrowings 3.00% 3.40% 3.11% 3.51%
         
Total cost of interest bearing liabilities 1.92% 2.68% 2.03% 2.70%
         
Noninterest expense to average assets 3.69% 3.17% 3.40% 2.96%
         
Efficiency ratio 95.35% 93.04% 90.00% 89.05%
         
Nonperforming assets to total assets 5.25% 6.82% 5.25% 6.82%
         
Non performing loans to total net loans including         
 loans held for sale 4.94% 7.47% 4.94% 7.47%
         
Allowance for loan losses to total loans 2.39% 1.79% 2.39% 1.79%
         
         
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, 2010 September 30, 2009
  Average   Yield/ Average   Yield/
  Balance Interest Rate Balance Interest Rate
Interest - Earning Assets:            
 Loans receivable - net (1)  661,778  9,513 5.75%  651,796  9,948 6.10%
 Securities (2)  40,154  442 4.40%  68,825  661 3.84%
 FHLB Stock  29,888  335 4.48%  29,888  373 4.99%
 Other interest bearing accounts  21,301  2 0.04%  54,206  5 0.04%
 Total interest earning assets  753,121  10,292 5.47%  804,715  10,987 5.46%
             
Noninterest-earning assets  94,118      110,207    
Total Average Assets  847,239      914,922    
             
             
Interest-Bearing Liabilities:            
 Deposits  608,661  2,570 1.69%  577,546  3,619 2.51%
 Advances & Borrowings  129,429  972 3.00%  139,882  1,189 3.40%
 Total interest-bearing liabilities  738,090  3,542 1.92%  717,428  4,808 2.68%
             
Noninterest-bearing sources:            
 Noninterest-bearing liabilities  55,165      125,315    
 Shareholders' equity  53,984      72,179    
Total Liabilities and Shareholders' Equity  847,239      914,922    
             
Net Interest margin     3.59%     3.07%
             
Net Interest Income & Spread    6,750 3.55%    6,179 2.78%
             
(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:  Camco Financial Corporation          James E. Huston, CEO          740-435-2027

company logo

More from Press Releases

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

NFL Pushes for Regulation Following Supreme Court's Sports Gambling Ruling

21st Century Fox Scoops Up Local News Stations

21st Century Fox Scoops Up Local News Stations

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Walmart CEO: 'We Are Transforming Globally' With Flipkart

Three-Part FREE Webinar Series

Three-Part FREE Webinar Series

March 24 Full-Day Course Offering: Professional Approach to Trading SPX

March 24 Full-Day Course Offering: Professional Approach to Trading SPX