CAMBRIDGE, Ohio, May 4, 2011 (GLOBE NEWSWIRE) -- Camco Financial Corporation (Nasdaq:CAFI), the bank holding company for Advantage Bank, today announced first quarter financial results for 2011, reporting net earnings of $652,000 or $0.09 per share for the quarter ended March 31, 2011. These results represent an increase of $523,000, or $0.07 per share over results from the comparable quarter a year ago.
"At the end of 2010, we talked about how we were building momentum to take us into 2011, and as our shareholders can plainly see, we have delivered on that promise during the first quarter of the year," said James E. Huston, President and CEO. "We are focused on profitable operations and have continued to decrease our non-performing loans by more than $9.8 million since March of 2010 through a concentrated effort, but we also restructured our balance sheet by making calculated sales of investments and paying off and pre-paying advances, leading to an overall increase in our Tier 1 capital."
The Company's non-performing loans have decreased by $1.5 million since year-end 2010 and $9.8 million since first quarter 2010. Additionally, the Company's net interest margin remains steady at 3.63% – decreasing 12 basis points from the linked quarter December 2010 and increasing 38 basis points over the previous year first quarter 2010.
"We take our responsibility to our shareholders and customers seriously, and have been fortunate that they understand that recovering from the economic crisis we all faced continues to be a long, difficult journey. We have taken important steps to move Camco Financial Corporation forward through thoughtful and sometimes trying efforts. It hasn't been an easy process, but we're getting there, and the financial results of the first quarter demonstrate that our hard work is paying off." Huston said.
Review of Financial Performance
Overview:
The following items summarize key activities of the Company during the quarter ended March 31, 2011:
- Total assets decreased $23.4 million during the quarter as sale of investments were used to prepay FHLB borrowings.
- Core deposits (defined as checking, savings and money market deposits) increased $13.5 million, or 5.5%, when compared to December 31, 2010.
- Noninterest income increased $1.3 million due to gain on sale of investments when compared to the same quarter in 2010.
- Noninterest expense increased $485,000, related to REO and other loan expenses when compared to the same quarter in 2010.
Net Interest Margin:
Net interest margin decreased to 3.63% in the current quarter from 3.75% at December 31, 2010. This decrease was primarily due to a decrease in yield on loans receivable coupled with decreased loan balances. This decrease was partially offset by a 7 basis point decrease in the cost of funds. Management expects the Company's net interest margin to remain stable or decrease slightly as we continue to be in an environment of low interest rates and slow economic growth. While the margin did decrease quarter to quarter the stability of 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 $354,000, or 5.7%, to $6.6 million for the quarter ended March 31, 2011, compared to $6.3 million for the same quarter of the prior year. The increase was attributable to an increase in yield on interest earning assets combined with reductions in certificates of deposits, borrowings and the cost of funds.
The Company's yield on earning assets decreased to 5.27% in the current quarter from 5.47% in the linked quarter. Decreased yield resulted from declining loan portfolio, securities and FHLB stock balances. Planned continued runoff in certificates of deposits and the prepayment of borrowings combined with growth in core deposits resulted in a slightly reduced cost of funds. The cost of funds for the quarter ended March 31, 2011 was 1.71% compared to 1.78% for the quarter ended December 31, 2010. 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 $1.0 million was recorded for the quarter ended March 31, 2011, compared to $905,000 for the same period of the prior year and $936,000 for the linked quarter. The allowance for loan and lease loss was strengthened even further in the current quarter, as net charge offs were less than $475,000. Non- performing assets decreased $1.2 million since December 31, 2010 to $43.0 million at March 31, 2011. The allowance for loan and lease losses to non-performing loans increased to 53.8% at March 31, 2011 from 49.9% at December 31, 2010 and 37.6% at March 31, 2010.
Noninterest Income:
Noninterest income was $3.0 million for the first quarter of 2011, an increase of $1.3 million when compared to the quarter ended March 31, 2010 and an increase of $428,000 when compared to the linked quarter. In the quarter ended March 31, 2011 there was a gain on sale of investments of $1.3 million.
Noninterest Expense:
Noninterest expense for the quarter ended March 31, 2011, increased $485,000, or 7.0% , to $7.4 million from the comparable period a year earlier but decreased by $177,000 when compared to the linked quarter. Noninterest expense was higher during the current quarter 2011 compared to the previous 2010 quarter primarily as a result of expenses related to classified assets and real estate owned.
Balance Sheet:
Total assets were $791.6 million which is a decrease of $59.9 million, or 7.0% compared to $851.5 million a year earlier, and $23.4 million or 2.9% from the linked quarter.
Cash and cash equivalents increased $32.7 million from the previous quarter. The increase was primarily attributable to the sale of investments and the prepayment of advances as we begin to restructure our balance sheet to rely less on non core funding. Excess cash will be invested in securities which will continue to protect our liquidity position. We will also continue to focus on profitable lending opportunities.
Asset Quality:
The allowance for loan and lease losses was $17.4 million at March 31, 2011, compared to $16.9 million at December 31, 2010. 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 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.
A summary of certain key factors follows:
| (in thousands) | 3/31/2011 | 12/31/2010 | 3/31/2010 |
| Criticized Loans* | 60,634 | 65,841 | 78,607 |
| Non-Performing Loans | 32,298 | 33,779 | 42,117 |
| Loan Loss Reserve | 17,410 | 16,870 | 15,821 |
| Loan Loss Reserve / Total Loans | 2.61% | 2.46% | 2.26% |
| *Includes special mention, substandard, doubtful and loss. | |||
Deposits and Borrowings:
Deposits increased $3.8 million, or .6% compared to December 31, 2010. The increase was due to increases of $13.5 million in "core deposits" (defined as checking, savings and money market deposits) partially offset by decreases in certificates of deposit of $9.8 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 decreased $24.8 million, or 23.7%, to $79.7 million at March 31, 2011, compared to $104.5 million at December 31, 2010, and have decreased by $50.6 million, or 38.8% from March 31, 2010. The planned decrease resulted from maturing and prepayment of FHLB advances being repaid with excess liquidity.
Equity:
Stockholders' equity decreased $214,000, or .5%, to $45.9 million at March 31, 2011, compared to $46.1 million at December 31, 2010. The decrease during the quarter was due primarily to the $1.1 million decrease of accumulated other comprehensive income net of related taxes related to the sale of investments during the first quarter of 2011. This was partially offset by the net earnings of $652,000 for the quarter. Camco's Tier 1 leverage capital ratio increased to 6.18% at March 31, 2011 compared to 5.98% at December 31, 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) | (Audited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| 3/31/11 | 12/31/10 | 9/30/10 | 6/30/10 | 3/31/10 | |
| Assets | |||||
| Cash and Cash Equivalents | 61,777 | 29,114 | 35,328 | 33,567 | 28,294 |
| Investments | 17,206 | 34,716 | 39,074 | 41,138 | 49,935 |
| Loans Held for Sale | 1,249 | 2,208 | 12,143 | 1,669 | 1,600 |
| Loans Receivable | 665,500 | 684,710 | 693,387 | 691,596 | 699,766 |
| Allowance for Loan Loss | (17,410) | (16,870) | (16,854) | (15,676) | (15,821) |
| Loans Receivable, Net | 648,090 | 667,840 | 676,533 | 675,920 | 683,945 |
| Other Assets | 63,245 | 81,088 | 86,172 | 87,768 | 87,705 |
| Total Assets | $ 791,567 | $ 814,966 | $ 849,250 | $ 840,062 | $ 851,479 |
| Liabilities | |||||
| Deposits | 655,597 | 651,816 | 647,937 | 652,872 | 649,354 |
| Borrowed Funds | 79,675 | 104,464 | 143,665 | 119,990 | 130,243 |
| Other Liabilities | 10,406 | 12,583 | 12,436 | 10,294 | 11,002 |
| Total Liabilities | 745,678 | 768,863 | 804,038 | 783,156 | 790,599 |
| Stockholders' Equity | 45,889 | 46,103 | 45,212 | 56,906 | 60,880 |
| Total Liabilities and Stockholders' Equity | $ 791,567 | $ 814,966 | $ 849,250 | $ 840,062 | $ 851,479 |
| Stockholders' Equity to Total Assets | 5.80% | 5.66% | 5.32% | 6.77% | 7.15% |
| Total Shares Outstanding | 7,205,595 | 7,205,595 | 7,205,595 | 7,205,595 | 7,205,595 |
| Book Value Per Share | $6.37 | $6.40 | $6.27 | $7.90 | $8.45 |
| 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 | |
| 3/31/11 | 12/31/10 | 9/30/10 | 6/30/10 | 3/31/10 | |
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |
| Interest Income: | |||||
| Loans | 8,901 | 9,528 | 9,513 | 9,281 | 9,280 |
| Mortgage-backed securities | 316 | 354 | 388 | 428 | 475 |
| Investment securities | 39 | 37 | 54 | 67 | 103 |
| Interest-bearing deposits and other | 346 | 303 | 337 | 333 | 340 |
| Total Interest Income | 9,602 | 10,222 | 10,292 | 10,109 | 10,198 |
| Interest Expense: | |||||
| Deposits | 2,189 | 2,316 | 2,570 | 2,744 | 2,945 |
| Borrowings | 803 | 898 | 972 | 992 | 997 |
| Total Interest Expense | 2,992 | 3,214 | 3,542 | 3,736 | 3,942 |
| Net Interest Income | 6,610 | 7,008 | 6,750 | 6,373 | 6,256 |
| Provision for Losses on Loans | 1,013 | 936 | 11,407 | 5,212 | 905 |
| Net Interest Income After Provision for Loan Losses | 5,597 | 6,072 | (4,657) | 1,161 | 5,351 |
| Noninterest Income: | |||||
| Rent and other | 362 | 418 | 497 | 328 | 409 |
| Loan servicing fees | 307 | 317 | 315 | 320 | 317 |
| Service charges and other fees on deposits | 503 | 557 | 603 | 598 | 518 |
| Gain on sale of loans | 92 | 1,060 | 332 | 261 | 229 |
| Mortgage servicing rights | 271 | 29 | (528) | (124) | 30 |
| Gain (loss) on sale of investment, mbs & fixed assets | 1,278 | -- | 2 | (1) | -- |
| Income on CSVL (BOLI) | 217 | 221 | 221 | 220 | 215 |
| Total noninterest income | 3,030 | 2,602 | 1,442 | 1,602 | 1,718 |
| Noninterest expense: | |||||
| Employee compensation and benefits | 3,378 | 2,814 | 3,467 | 3,269 | 3,385 |
| Occupancy and equipment | 761 | 784 | 734 | 743 | 742 |
| Data processing | 284 | 285 | 276 | 286 | 280 |
| Advertising | 86 | 83 | 105 | 89 | 81 |
| Franchise taxes | 170 | 114 | 280 | 269 | 265 |
| Other operating | 2,748 | 3,524 | 2,949 | 2,319 | 2,189 |
| Total noninterest expense | 7,427 | 7,604 | 7,811 | 6,975 | 6,942 |
| Earnings (loss) before provision for income taxes | 1,200 | 1,070 | (11,026) | (4,212) | 127 |
| Provision for income taxes | 548 | 61 | 572 | (113) | (2) |
| Net Earnings (loss) | 652 | 1,009 | (11,598) | (4,099) | 129 |
| Earnings (Loss) Per Share: | |||||
| Basic | $0.09 | $0.14 | ($1.61) | ($0.57) | $0.02 |
| Diluted | $0.09 | $0.14 | ($1.61) | ($0.56) | $0.02 |
| 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 | 7,239,067 |
| Camco Financial Corporation | |||||
| Selected Ratios and Statistics | |||||
| (In thousands, except for per share data and shares outstanding) | |||||
| 3 Months | 3 Months | ||||
| Ended | Ended | ||||
| 3/31/11 | 3/31/10 | ||||
| (Unaudited) | (Unaudited) | ||||
| Return on average equity | 5.65% | 0.85% | |||
| Return on average assets | 0.32% | 0.06% | |||
| Interest rate spread | 3.56% | 3.16% | |||
| Net interest margin | 3.63% | 3.25% | |||
| Yield on earning assets | 5.27% | 5.30% | |||
| Cost of deposits | 1.45% | 1.92% | |||
| Cost of borrowings | 3.30% | 3.20% | |||
| Total cost of interest bearing liabilities | 1.71% | 2.14% | |||
| Noninterest expense to average assets | 3.67% | 3.26% | |||
| Efficiency ratio | 77.04% | 87.06% | |||
| Nonperforming assets to total assets | 5.39% | 6.16% | |||
| Non performing loans to total net loans including | |||||
| loans held for sale | 4.85% | 6.18% | |||
| Allowance for loan losses to total loans | 2.61% | 2.26% | |||
| 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) | ||||||
| March 31, 2011 | March 31, 2010 | |||||
| Average | Yield/ | Average | Yield/ | |||
| Balance | Interest | Rate | Balance | Interest | Rate | |
| Interest - Earning Assets: | ||||||
| Loans receivable - net (1) | 640,908 | 8,901 | 5.56% | 657,081 | 9,280 | 5.65% |
| Securities (2) | 29,613 | 355 | 4.80% | 55,294 | 578 | 4.18% |
| FHLB Stock | 14,888 | 339 | 9.11% | 29,888 | 339 | 4.54% |
| Other interest bearing accounts | 43,783 | 7 | 0.06% | 26,726 | 1 | 0.01% |
| Total interest earning assets | 729,192 | 9,602 | 5.27% | 768,989 | 10,198 | 5.30% |
| Noninterest-earning assets | 80,613 | 84,035 | ||||
| Total Average Assets | 809,805 | 853,024 | ||||
| Interest-Bearing Liabilities: | ||||||
| Deposits | 604,208 | 2,189 | 1.45% | 612,881 | 2,945 | 1.92% |
| Advances & Borrowings | 97,342 | 803 | 3.30% | 124,617 | 997 | 3.20% |
| Total interest-bearing liabilities | 701,550 | 2,992 | 1.71% | 737,498 | 3,942 | 2.14% |
| Noninterest-bearing sources: | ||||||
| Noninterest-bearing liabilities | 62,115 | 54,862 | ||||
| Shareholders' equity | 46,140 | 60,664 | ||||
| Total Liabilities and Shareholders' Equity | 809,805 | 853,024 | ||||
| Net Interest margin | 3.63% | 3.25% | ||||
| Net Interest Income & Spread | 6,610 | 3.56% | 6,256 | 3.16% | ||
| (1) Includes LHFS but does not include ALLL and Non-Accrual Loans | ||||||
| (2) Includes securities designated as available for sale and held to maturity | ||||||