Camco Financial Announces Fourth Quarter And Full-Year 2012 Earnings

CAMBRIDGE, Ohio, Jan. 31, 2013 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the bank holding company for Advantage Bank, today announced financial results for the three months and twelve months ended December 31, 2012. Net earnings increased to $2.8 million or $0.26 per diluted share for the fourth quarter 2012 from $0.9 million or $.12 per diluted share for the same period of the prior year. For the full-year 2012, net earnings were $4.2 million or $0.50 per diluted share compared with $0.2 million or $0.03 per diluted share for 2011.

Jim Huston, President and CEO, commented, "Our fourth quarter and full-year 2012 financial statements reflect solid achievements in key areas that further strengthened our balance sheet. In addition to our solid operating results, we successfully completed a $10.0 million rights and public offering in November, 2012. Those two factors enabled us to end the year 2012 with approximately $60.0 million in stockholders' equity. This represents Tier 1 equity of 8.42% of total assets compared to 6.56% at December 31, 2011. We continue to implement plans to improve our long-term performance through rigorous attention to net interest margin coupled with opportunities to increase noninterest income while also reducing noninterest expense. We exited 2012 stronger than we entered the year and anticipate attaining further progress in 2013."

Review of Financial Performance

Overview:

The following items summarize key achievements of the Company during the fourth quarter and fiscal year 2012:

Fourth Quarter 2012
  • The Company successfully raised $10.0 million of capital through a shareholder rights and public offering in November 2012, which resulted in the issuance of 5.7 million shares of common stock.
  • Net interest margin decreased 0.04% from the linked quarter, principally due to lower yield on earning assets.
  • Noninterest income increased $0.6 million from the linked quarter and $1.2 million from the fourth quarter 2011, driven by higher gain on sale of loans and higher loan fee income, along with improvement in the value of mortgage servicing rights, offset partially by decreased gain on sale of investments.
  • Noninterest expense decreased $0.6 million compared to the same quarter ended December 31, 2011, primarily due to lower expenses related to real estate owned.
  • Classified loans (which includes substandard, doubtful, and loss) at December 31, 2012 were $3.4 million below the linked quarter.
  • A charge-off of $0.6 million for Other Real Estate Owned was recorded due to deterioration of real estate values.

Full-Year 2012
  • Core deposits (defined as checking, savings, and money market deposits) increased $39.1 million, or 13.8%, in 2012 compared to the same date of the prior year.
  • Net interest margin decreased 0.25% to 3.41% for the full-year 2012 compared to a year ago, primarily due to lower yield on earning assets. Cost of funds for the full-year 2012 was 33 basis points below 2011.
  • Classified loans at December 31, 2012 were $11.6 million below the same date of the prior year.
  • Tier 1 equity at December 31, 2012 was 8.42% compared to 6.56% at December 31, 2011, an increase of 186 basis points.
  • Noninterest income increased $1.5 million compared to a year ago, driven by higher gain on sale of loans and higher loan fee income, along with improvement in the value of mortgage servicing rights, offset partially by decreased gain on sale of investments.
  • Noninterest expense decreased $1.7 million compared to 2011, primarily due to lower expenses related to real estate owned.

Net Interest Margin:

Net interest margin decreased to 3.36% for the fourth quarter 2012 compared to 3.49% for the third quarter 2012. For the full-year 2012, net interest margin decreased 0.25% from 3.66% for 2011, 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 remain relatively stable during this period of low interest rates and slow economic growth, but will continue to seek opportunities for more favorable pricing, further improvement in credit quality, and other ways to maintain net interest margin going forward.

Net Interest Income:

Net interest income before the provision for loan losses decreased $0.2 million, or 3.0%, to $5.8 million for the fourth quarter 2012 compared to the linked quarter. 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 4.35% in the fourth quarter 2012 compared to 4.52% in the linked quarter. The cost of funds was similar for the quarter ended December 31, 2012 at 1.10% compared to 1.12% for the linked quarter 2012 and 1.42% for the fourth quarter 2011. Favorable growth in core deposits partially offset planned run-off in certificates of deposits and borrowings.

Provision Expense and Allowance for Loan Losses:

The allowance for loan and lease losses was $12.1 million at December 31, 2012, compared to $14.5 million at December 31, 2011. Factors contributing to this year-over-year improvement included lower classified and non-performing loans, and overall improvement in credit quality. Classified loans (which includes substandard, doubtful, and loss) decreased $3.4 million, or 11%, from the linked quarter in 2012 and $11.6 million, or 28.7%, compared to December 31, 2011. Non-performing loans of $19.6 million at December 31, 2012 were $3.2 million, or 14.0%, below September 30, 2012 and $5.3 million, or 21.3%, lower than December 31, 2011. Non-performing loans as a percentage of total loans (including loans held for sale) has decreased to 3.42% at December 21, 2012, compared to 3.77% on the same date of the prior year. The allowance for loan and lease losses as a percentage of non-performing loans was 62.0% at December 31, 2012 compared to 58.3% at December 31, 2011. 

Noninterest Income:

Noninterest income was $2.5 million for the fourth quarter 2012, an increase of $0.6 million, or 34.5%, compared to the linked quarter. Noninterest income for the full-year 2012 was $8.0 million, an increase of $1.5 million, or 23.1%, above the full-year 2011. The increase in noninterest income in the fourth quarter 2012 over the linked quarter and full-year year 2011 was primarily driven by higher gain on sale of residential mortgage loan production and improvement in the value of mortgage servicing rights.   

Noninterest Expense:

Noninterest expense for the quarter ended December 31, 2012, decreased $0.6 million, or 7.4%, to $6.9 million from the same period of 2011 and was similar compared to the linked quarter. The decrease in noninterest expense compared to the fourth quarter 2011was driven by lower expenses related to real estate owned. 

Balance Sheet:

Total assets were $764.3 million at December 31, 2012, compared to $767.0 million on the same date in 2011. The quality of the balance sheet continued to improve during 2012 as the Company increased equity capital by $14.1 million and core deposits by $39.1 million, while reducing higher-cost certificates of deposit and borrowings by $57.2 million. These achievements resulted from the Company's focus on strengthening the balance sheet, including a reduction in non-core funding.   

Asset Quality:

Loan quality improved throughout 2012 even though the economic recovery within the Company's markets continues to be sluggish, contributing to declines in the underlying value of collateral of commercial and residential real estate plus deterioration in the financial condition of some borrowers. 

A summary of certain key factors follows:
       
(in thousands) 12/31/2012 9/30/2012 12/31/2011
Classified Loans* $ 28,995 $ 32,413 $ 40,641
Non-Performing Loans $ 19,594 $ 22,787 $ 24,918
Loan Loss Reserve $ 12,147 $ 14,508 $ 14,532
Loan Loss Reserve / Total Loans 2.12% 2.44% 2.20%
       
*Includes substandard, doubtful and loss (including homogeneous loans).

Deposits and Borrowings:

Core deposits (defined as checking, savings, and money market deposits) were $39.1 million, or 13.8%, higher on December 31, 2012, compared to the same date of the prior year. Total deposits were $627.2 million at December 31, 2012, which is slightly lower compared to the same date in 2011. This slight year-over-year decrease in total deposits was due to a reduction in certificates of deposit of $41.1 million.   The Company plans to continue to reduce non-core deposits, particularly higher single product certificates of deposit related to rate-sensitive customers.

FHLB advances and other borrowings were $16.1 million, or 20.0%, lower at December 31, 2012 compared to December 31, 2011. This planned decrease resulted from further repayment and restructuring of FHLB advances with excess liquidity, as well as a reduction in the amount of repurchase agreements.

Equity:

Stockholders' equity increased $14.1 million, or 31.0%, during 2012 to $59.7 million at December 31, 2012, compared to $45.6 million at December 31, 2011. This was due to the improvement in net earnings throughout 2012 and the successful completion of a shareholder rights offering and public offering in November 2012 that resulted in $10.0 million of additional equity capital. Camco's Tier 1 leverage capital ratio was 8.42% at December 31, 2012 compared to 6.56% on the same date in 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) (Unaudited) (Unaudited)
  12/31/12 9/30/12 6/30/12 3/31/12 12/31/11
Assets          
Cash and Cash Equivalents  58,379  26,920  28,160  40,431  38,374
Investments  86,201  80,648  75,347  62,834  20,928
           
Loans Held for Sale  6,544  6,341  2,532  5,583  8,090
           
Loans Receivable  566,722  594,030  613,790  630,124  653,709
Allowance for Loan Loss (12,147) (14,508) (14,185) (14,954) (14,532)
Loans Receivable, Net  554,575  579,522  599,605  615,170  639,177
           
Other Assets 58,560 60,811 61,272 62,149 60,449
           
Total Assets  $ 764,259  $ 754,242  $ 766,916  $ 786,167  $ 767,018
           
Liabilities          
Deposits  627,224  630,304  638,516  650,853  629,259
Borrowed Funds  64,219  64,466  69,200  77,929  80,285
Other Liabilities 13,089 12,050 12,424 11,276 11,869
           
Total Liabilities  704,532  706,820  720,140  740,058  721,413
           
Stockholders' Equity 59,727 47,422 46,776 46,109 45,605
           
Total Liabilities and Stockholders' Equity  $ 764,259  $ 754,242  $ 766,916  $ 786,167  $ 767,018
           
           
Stockholders' Equity to Total Assets 7.82% 6.29% 6.10% 5.87% 5.95%
           
Total Shares Outstanding  13,233,036  7,465,563  7,468,087  7,468,087  7,205,595
           
Book Value Per Share $ 4.51 $ 6.35 $ 6.26 $ 6.17 $ 6.33
 
 
 
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
  12/31/12 12/31/11
  (Unaudited) (Unaudited)
Interest Income:    
Loans  30,674  34,956
Mortgage-backed securities  63  376
Investment securities  421  202
Interest-bearing deposits and other  465  703
Total Interest Income  31,623  36,237
     
Interest Expense:    
Deposits  5,319  7,481
Borrowings  2,413  2,893
Total Interest Expense  7,732 10,374
Net Interest Income  23,891 25,863
     
Provision for Losses on Loans  144  2,279
Net Interest Income After Provision for Loan Losses  23,747 23,584
     
Noninterest Income:    
Late charges, rent and other  1,356  1,103
Loan servicing fees  1,133  1,195
Service charges and other fees on deposits  2,041  2,110
Gain on sale of loans  2,484  506
Mortgage servicing rights  (18)  (578)
Gain (loss) on sale of investment, mbs & fixed assets  124  1,282
Income on cash surrender value life insurance  879  880
Total noninterest income  7,999 6,498
     
Noninterest expense:    
Employee compensation and benefits  12,600  12,337
Occupancy and equipment  2,964  2,940
FDIC premium and other insurances  1,816  1,986
Data processing  1,147  1,111
Advertising  373  363
Franchise taxes  765  668
Other operating  7,976  9,919
Total noninterest expense  27,641 29,324
     
Earnings (loss) before provision for income taxes  4,105 758
     
Provision for income taxes  (58)  544
Reported Net Income  4,163 214
     
     
Net Earnings (Loss)  4,163 214
     
Earnings (Loss) Per Share:    
Basic $ 0.50 $ 0.03
Diluted $ 0.50 $ 0.03
Earnings Per Share Operations:    
Basic $ 0.50 $ 0.03
Diluted $ 0.50 $ 0.03
     
Basic Weighted Number of Shares Outstanding  8,260,865  7,205,595
Diluted Weighted Number of Shares Outstanding  8,261,396  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
  12/31/12 9/30/12 6/30/12 3/31/12 12/31/11
  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income:          
Loans  7,240  7,522  7,699  8,213  8,501
Mortgage-backed securities  15  15  17  16  17
Investment securities  119  116  115  71  50
Interest-bearing deposits and other  135  112  105  113  101
Total Interest Income  7,509  7,765  7,936  8,413  8,669
           
Interest Expense:          
Deposits  1,128  1,235  1,405  1,551  1,640
Borrowings  577  545  618  673  678
Total Interest Expense  1,705  1,780 2,023 2,224 2,318
Net Interest Income  5,804  5,985 5,913 6,189 6,351
           
Provision for Losses on Loans  (1,455)  457  137  1,005  (759)
Net Interest Income After Provision for Loan Losses  7,259  5,528 5,776 5,184 7,110
           
Noninterest Income:          
Rent and other  484  321  223  328  202
Loan servicing fees  284  283  285  281  290
Service charges and other fees on deposits  528  515  508  490  530
Gain on sale of loans  770  633  517  564  377
Mortgage servicing rights  60  (117)  (63)  102  (365)
Gain (loss) on sale of investment, mbs & fixed assets  126  --   1  (3)  -- 
Income on CSVL (BOLI)  237  216  208  218  221
Total noninterest income  2,489  1,851 1,679 1,980 1,255
           
Noninterest expense:          
Employee compensation and benefits  3,208  2,996  3,249  3,147  2,772
Occupancy and equipment  772  725  756  711  721
Data processing  326  250  285  286  277
Advertising  77  101  108  87  86
Franchise taxes  182  199  201  183  154
Other operating  2,379  2,677  2,436  2,300  3,491
Total noninterest expense  6,944  6,948 7,035 6,714 7,501
           
Earnings (loss) before provision for income taxes  2,804  431 420 450 864
           
Provision for income taxes  20  (53)  (62)  37  2
Net Earnings (loss)  2,784  484 482 413 862
           
Earnings (Loss) Per Share:          
Basic $ 0.26 $ 0.07 $ 0.06 $ 0.06 $ 0.12
Diluted $ 0.26 $ 0.07 $ 0.06 $ 0.06 $ 0.12
           
Basic Weighted Number of Shares Outstanding  10,806,051  7,467,255  7,468,090  7,220,018  7,205,595
Diluted Weighted Number of Shares Outstanding  10,806,269  7,473,123  7,481,854  7,220,130  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
  12/31/12 12/31/11 12/31/12 12/31/11
  (Unaudited) (Unaudited) (Unaudited) (Unaudited)
         
Return on average equity 20.61% 7.67% 8.56% 0.47%
         
Return on average assets 1.46% 0.45% 0.54% 0.03%
         
Interest rate spread 3.25% 3.59% 3.30% 3.58%
         
Net interest margin 3.36% 3.67% 3.41% 3.66%
         
Yield on earning assets 4.35% 5.01% 4.51% 5.12%
         
Cost of deposits 0.81% 1.16% 0.94% 1.28%
         
Cost of borrowings 3.58% 3.12% 3.37% 3.30%
         
Total cost of interest bearing liabilities 1.10% 1.42% 1.21% 1.54%
         
Noninterest expense to average assets 3.64% 3.90% 3.59% 3.75%
         
Efficiency ratio 83.73% 98.62% 86.68% 90.62%
         
Nonperforming assets to total assets 3.95% 4.67% 3.95% 4.67%
         
Non performing loans to total net loans including loans held for sale 3.42% 3.77% 3.42% 3.77%
         
Allowance for loan losses to total loans including loans held for sale 2.12% 2.20% 2.12% 2.20%
         
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, 2012 December 31, 2011        
  Average   Yield/ Average   Yield/
  Balance Interest Rate Balance Interest Rate
Interest - Earning Assets:            
Loans receivable - net (1)  566,769  7,240 5.11%  635,582  8,501 5.35%
Securities (2)  81,900  134 0.65%  17,789  67 1.51%
FHLB Stock  9,888  118 4.77%  9,888  99 4.00%
Other interest bearing accounts  32,604  17 0.21%  29,552  2 0.03%
Total interest earning assets  691,161  7,509 4.35%  692,811  8,669 5.01%
             
Noninterest-earning assets  71,508      77,343    
Total Average Assets  762,669      770,154    
             
             
Interest-Bearing Liabilities:            
Deposits  557,585  1,128 0.81%  565,477  1,640 1.16%
Advances & Borrowings  64,503  577 3.58%  86,817  678 3.12%
Total interest-bearing liabilities  622,088  1,705 1.10%  652,294  2,318 1.42%
             
Noninterest-bearing sources:            
Noninterest-bearing liabilities  86,556      72,912    
Shareholders' equity  54,025      44,948    
Total Liabilities and Shareholders' Equity  762,669      770,154    
             
Net Interest margin     3.36%     3.67%
             
Net Interest Income & Spread    5,804 3.25%    6,351 3.59%
             
(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

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