Camco Financial Announces Second Quarter 2012 Earnings
CAMBRIDGE, Ohio, Jul 27, 2012 (Menafn - GlobeNewswire via COMTEX) --Camco Financial Corporation CAFI, the bank holding company for Advantage Bank, today announced second quarter financial results for 2012, reporting net earnings of 482,000 or 0.06 per share for the quarter ended June 30, 2012. These results represent an increase of 1.9 million or 0.26 per share over results from the comparable quarter a year ago. Year-to-date results reflect net earnings of 895,000 or 0.12 per share for the six months ended June 30, 2012.
"We are pleased that the efforts we have focused on over the past few years are paying off," said James E. Huston, President and CEO. "We continue to focus on our core strategies that are leading to decreased troubled assets and adding high quality loans to our portfolio funded through low cost deposits."
Classified loans decreased by 3.2 million in the second quarter of 2012, while core deposits increased by 1.2 million over the same period.
"In addition to the positive momentum that has been created, we have also recently announced our intent to conduct a rights offering of common shares of up to 10 million for existing shareholders" said Huston. "This rights offering will raise additional capital for our bank, which we expect to make us a stronger financial institution. Additional details regarding the rights offering can be found in the Form S-1 that we recently filed publically with the Securities and Exchange Commission. Raising this additional capital, combined with the improvements in our loan portfolio and financial results, should continue to lead to favorable performance," Huston concluded.
Review of Financial Performance
Overview:
The following items summarize key activities of the Company during the quarter ended June 30, 2012:
--Total assets decreased 19.3 million during the quarter, which reflects
cash and cash equivalents used to pay down higher cost single-service CD
deposits.
--Core deposits (defined as checking, savings and money market deposits)
increased 1.2 million, or 0.4%, when compared to March 31, 2012.
--Noninterest income decreased 301,000 from the previous quarter, driven
by lower value of mortgage servicing rights due to higher prepayment
speeds resulting from lower long-term rates, lower amount of prepayment
penalties from fewer early loan payoffs, and slightly lower gain on sale
of residential mortgage loans.
--Noninterest expense increased 321,000 compared to the linked quarter,
driven by higher costs related to the bank's real estate owned portfolio
and slightly higher staffing costs.
--Classified loans (which includes substandard, doubtful, and loss)
decreased by 3.2 million in the second quarter.
Net Interest Margin:
Net interest margin decreased to 3.33% in the current quarter compared to 3.50% for the quarter ended March 31, 2012. The margin has also decreased from 3.61% 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 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 balance sheet changes to maintain our margin going forward.
Net Interest Income:
Net interest income before the provision for loan losses decreased 276,000, or 4.5% compared to the prior quarter, to 5.9 million for the quarter ended June 30, 2012. 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 4.47% in the current quarter from 4.76% in the linked quarter. The decreased overall revenue resulted from declining loan portfolio balances, along with changes in the composition of investment balances resulting in a lower average investment yield. Planned continued runoff in certificates of deposits and borrowings combined with growth in core deposits resulted in a reduced cost of funds. The cost of funds for the quarter ended June 30, 2012 was 1.25% compared to 1.36% for the quarter ended March 31, 2012. The Company anticipates continued declines in certificates of deposit balances over the next few quarters as some maturities of single relationship accounts are not renewed.
Provision for Loan Losses:
A provision for loan losses of 137,000 was recorded for the quarter ended June 30, 2012, compared to 1.8 million for the same period of the prior year and 1.0 million for the linked quarter. The allowance for loan and lease loss was strengthened in previous quarters, with relatively little additional provision required in the current quarter. Classified loans (which includes substandard, doubtful, and loss) decreased 3.2 million since March 31, 2012 to 37.3 million at June 30, 2012. The classified loans balance also decreased 10.4 million, or 21.8%, from the year-ago quarter ended June 30, 2011.
Noninterest Income:
Noninterest income was 1.7 million for the second quarter of 2012, which represents an increase of 651,000 when compared to the quarter ended June 30, 2011 and a decrease of 301,000 when compared to the linked quarter. The increased income in the current quarter from the year-ago quarter was driven by an increase in gain on sale of residential mortgage loans. The decrease from the linked quarter was driven by lower value of mortgage servicing rights due to higher prepayment speeds resulting from lower long-term rates, lower amount of prepayment penalties from fewer early loan payoffs, and slightly lower gain on sale of residential mortgage loans.
Noninterest Expense:
Noninterest expense for the quarter ended June 30, 2012, decreased 106,000, or 1.5%, to 7.0 million from the comparable period a year earlier and increased by 321,000, or 4.8%, when compared to the linked quarter. Noninterest expense was lower during the current quarter 2012 compared to the previous 2011 quarter primarily as a result of expenses related to classified assets and real estate owned. The increase compared to the linked quarter was the result of higher expenses related to real estate owned.
Balance Sheet:
Total assets were 766.9 million, which is a decrease of 19.3 million, or 2.5% compared to 786.2 million in the linked quarter, and a slight increase of 990,000 or 0.1% compared to 765.9 million in the same quarter a year ago.
Cash and cash equivalents decreased 12.3 million from the previous quarter. The decrease was primarily attributable to the reduction of single-service CD deposits and borrowed funds as we continue to restructure our balance sheet to rely less on non core funding. We continue to focus on profitable lending opportunities and investments as a means of employing our excess cash, as well.
Asset Quality:
The allowance for loan and lease losses was 14.2 million at June 30, 2012, compared to 15.0 million at March 31, 2012. Loan quality continues to improve and has resulted in a steady reduction in classified assets and non-performing loans.
A summary of certain key factors follows:
-----------------------------------------------------
(in thousands)6/30/20123/31/201212/31/2011
-----------------------------------------------------
Classified Loans*37,27540,44441,029
-----------------------------------------------------
Non-Performing Loans23,65324,35424,918
-----------------------------------------------------
Loan Loss Reserve14,18514,95414,532
-----------------------------------------------------
Loan Loss Reserve / Total
Loans2.31%2.37%2.22%
-----------------------------------------------------
*Includes substandard, doubtful and loss (including homogeneous loans).
Deposits and Borrowings:
Core deposits (defined as checking, savings, and money market deposits) increased by 1.2 million, or 0.4% compared to March 31, 2012. Total deposits decreased 12.3 million, or 1.9% during this period. The decrease was due to a reduction in certificates of deposit of 13.5 million, or 3.9%. 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 related to rate sensitive shoppers.
FHLB advances and other borrowings decreased 8.7 million, or 11.2%, compared to the linked quarter, and have decreased by 11.3 million, or 14.0% from June 30, 2011. The planned decrease from the year ago quarter resulted mostly from continued repayment of FHLB advances with excess liquidity.
Equity:
Stockholders' equity increased 667,000, or 1.4%, to 46.8 million at June 30, 2012, compared to 46.1 million at March 31, 2012. Net earnings of 482,000 for the quarter were the main driver of the increase. Camco's Tier 1 leverage capital ratio increased to 6.71% at end of 2nd Quarter 2012 compared to 6.47% at end of 1st Quarter, 2012.
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
This press release shall not constitute an offer to sell or a solicitation of an offer to buy the securities, nor shall there be any offer, solicitation or sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification of the securities under the securities laws of such state.
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)
6/30/123/31/1212/31/119/30/116/30/11
-------------------------------------------------------
Assets
Cash and Cash
Equivalents28,16040,43138,37469,70742,382
Investments75,34762,83420,92814,48914,584
Loans Held for Sale2,5325,5838,09010,4453,699
Loans Receivable613,790630,124653,709652,403658,034
Allowance for Loan Loss(14,185)(14,954)(14,532)(17,615)(18,351)
-------------------------------------------------------
Loans Receivable, Net599,605615,170639,177634,788639,683
Other Assets61,27262,14960,44962,57765,578
-------------------------------------------------------
Total Assets 766,916 786,167 767,018 792,006 765,926
=======================================================
Liabilities
Deposits638,516650,853629,259624,327631,647
Borrowed Funds69,20077,92980,285111,85880,480
Other Liabilities12,42411,27611,86911,1179,304
-------------------------------------------------------
Total Liabilities720,140740,058721,413747,302721,431
Stockholders' Equity46,77646,10945,60544,70444,495
-------------------------------------------------------
Total Liabilities and
Stockholders' Equity 766,916 786,167 767,018 792,006 765,926
=======================================================
Stockholders' Equity to
Total Assets6.10%5.87%5.95%5.64%5.81%
Total Shares Outstanding7,468,0877,468,0877,205,5957,205,5957,205,595
Book Value Per Share6.266.176.336.206.18
Camco Financial Corporation
Condensed Consolidated Statements of Earnings
Year to Date Information
(In thousands, except for per share data and shares
outstanding)
6 Months6 Months
EndedEnded
6/30/126/30/11
(Unaudited)(Unaudited)
----------------------
Interest Income:
Loans15,91217,740
Mortgage-backed securities33340
Investment securities18699
Interest-bearing deposits
and other218503
----------------------
Total Interest Income16,34918,682
----------------------
Interest Expense:
Deposits2,9564,107
Borrowings1,2911,529
----------------------
Total Interest Expense4,2475,636
----------------------
Net Interest Income12,10213,046
Provision for Losses on
Loans1,1422,810
----------------------
Net Interest Income After
Provision for Loan Losses10,96010,236
----------------------
Noninterest Income:
Late charges, rent and
other551565
Loan servicing fees566605
Service charges and other
fees on deposits9981,032
Gain on sale of loans1,081--
Mortgage servicing rights39139
Gain (loss) on sale of
investment, mbs & fixed
assets(2)1,280
Income on cash surrender
value life insurance426437
----------------------
Total noninterest income3,6594,058
----------------------
Noninterest expense:
Employee compensation and
benefits6,3966,531
Occupancy and equipment1,4671,452
FDIC premium and other
insurances9231,097
Data processing571561
Advertising195182
Franchise taxes384348
Other operating3,8134,397
----------------------
Total noninterest
expense13,74914,568
----------------------
Earnings (loss) before
provision for inome taxes870(274)
Provision for income taxes(25)537
----------------------
Reported Net Income895(811)
----------------------
Net Earnings (Loss)895(811)
======================
Earnings (Loss) Per Share:
Basic0.12(0.11)
Diluted0.12(0.11)
Earnings Per Share
Operations:
Basic0.12(0.11)
Diluted0.12(0.11)
Basic Weighted Number of
Shares Outstanding7,344,0527,205,595
Diluted Weighted Number of
Shares Outstanding7,344,6247,205,623
Camco Financial Corporation
Condensed Consolidated Statements of Operations
Quarterly Information
(In thousands, except for per share data and shares outstanding)
3 Months3 Months3 Months3 Months3 Months
EndedEndedEndedEndedEnded
6/30/123/31/1212/31/119/30/116/30/11
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
-------------------------------------------------------
Interest Income:
Loans7,6998,2138,5018,7158,839
Mortgage-backed securities1716171924
Investment securities11571505360
Interest-bearing deposits
and other10511310199157
-------------------------------------------------------
Total Interest Income7,9368,4138,6698,8869,080
-------------------------------------------------------
Interest Expense:
Deposits1,4051,5511,6401,7341,918
Borrowings618673678686726
-------------------------------------------------------
Total Interest Expense2,0232,2242,3182,4202,644
-------------------------------------------------------
Net Interest Income5,9136,1896,3516,4666,436
Provision for Losses on
Loans1371,005(759)2281,797
-------------------------------------------------------
Net Interest Income After
Provision for Loan Losses5,7765,1847,1106,2384,639
-------------------------------------------------------
Noninterest Income:
Rent and other223328202336203
Loan servicing fees285281290300298
Service charges and other
fees on deposits508490530548529
Gain on sale of loans517564377129(92)
Mortgage servicing rights(63)102(365)(352)(132)
Gain (loss) on sale of
investment, mbs & fixed
assets1(3)--22
Income on CSVL (BOLI)208218221222220
-------------------------------------------------------
Total noninterest income1,6791,9801,2551,1851,028
-------------------------------------------------------
Noninterest expense:
Employee compensation and
benefits3,2493,1472,7723,0343,153
Occupancy and equipment756711721767691
Data processing285286277273277
Advertising10887869596
Franchise taxes201183154166178
Other operating2,4362,3003,4912,9202,746
-------------------------------------------------------
Total noninterest
expense7,0356,7147,5017,2557,141
-------------------------------------------------------
Earnings (loss) before
provision for income taxes420450864168(1,474)
Provision for income taxes(62)3725(11)
-------------------------------------------------------
Net Earnings (loss)482413862163(1,463)
=======================================================
Earnings (Loss) Per Share:
Basic0.060.060.120.02(0.20)
Diluted0.060.060.120.02(0.20)
Basic Weighted Number of
Shares Outstanding7,468,0907,220,0187,205,5957,205,5957,205,595
Diluted Weighted Number of
Shares Outstanding7,481,8547,220,1307,205,5957,205,5957,205,595
Camco Financial Corporation
Selected Ratios and Statistics
(In thousands, except for per share data and shares outstanding)
3 Months3 Months6 Months6 Months
EndedEndedEndedEnded
6/30/126/30/116/30/126/30/11
(Unaudited)(Unaudited)(Unaudited)(Unaudited)
--------------------------------------------
Return on average equity4.16%-12.83%3.89%-3.52%
Return on average assets0.25%-0.75%0.23%-0.20%
Interest rate spread3.22%3.52%3.31%3.55%
Net interest margin3.33%3.61%3.42%3.62%
Yield on earning assets4.47%5.09%4.62%5.19%
Cost of deposits0.98%1.29%1.03%1.37%
Cost of borrowings3.37%3.64%3.41%3.40%
Total cost of interest bearing
liabilities1.25%1.57%1.31%1.64%
Noninterest expense to average
assets3.61%3.66%3.55%3.66%
Efficiency ratio92.66%95.67%87.23%85.17%
Nonperforming assets to total
assets4.64%5.26%4.64%5.26%
Non performing loans to total net
loans including loans held for
sale3.84%3.95%3.84%3.95%
Allowance for loan losses to total
loans2.31%2.77%2.31%2.77%
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)
------------------------------------------------------
June 30, 2012June 30, 2011
----------------------------------------------------
AverageYield/AverageYield/
BalanceInterestRateBalanceInterestRate
--------------------------------------------
Interest - Earning Assets:
Loans receivable - net (1)599,5827,6995.14%631,4968,8395.60%
Securities (2)71,9161320.73%16,437842.04%
FHLB Stock9,8881044.21%9,8881546.23%
Other interest bearing accounts28,46810.01%55,11630.02%
--------------------------------------------
Total interest earning assets709,8547,9364.47%712,9379,0805.09%
--------------------------------------------
Noninterest-earning assets68,97367,405
----------------
Total Average Assets778,827780,742
================
Interest-Bearing Liabilities:
Deposits576,4101,4050.98%595,0211,9181.29%
Advances & Borrowings73,3076183.37%79,8627263.64%
--------------------------------------------
Total interest-bearing
liabilities649,7172,0231.25%674,8832,6441.57%
--------------------------------------------
Noninterest-bearing sources:
Noninterest-bearing liabilities82,76459,846
Shareholders' equity46,34645,613
----------------
Total Liabilities and
Shareholders' Equity778,827780,342
================
------------
Net Interest margin3.33%3.61%
============
----------------------------
Net Interest Income & Spread5,9133.22%6,4363.52%
============================
(1) Includes LHFS but does not include ALLL and Non-Accrual Loans
(2) Includes securities designated as available for sale and held to maturity
This news release was distributed by GlobeNewswire, www.globenewswire.com
SOURCE: Camco Financial Corporation
(Logo:http://media.primezone.com/cache/8930/int/5173.jpg)
CONTACT: James E. Huston, CEO
John E. Kirksey, CFO
Phone:740-435-2020
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