Camco Financial Announces Strong Second Quarter 2005 Earnings Growth.CAMBRIDGE, Ohio Cambridge is a city in the U.S. state of Ohio and the county seat of Guernsey CountyGR6. The municipality is located in southeastern Ohio and is in the Appalachian Plateau of the Appalachian Mountains. -- (Nasdaq:CAFI CAFI Canadian Agriculture and Food International CAFI Conférence des Alpes franco-italiennes (French) CAFI Computer-Aided Fault Isolation CAFI Commanders Annual Facility Inspection ) - Camco Financial Corporation (Camco) reported net earnings for the quarter ended June June: see month. 30, 2005 of $2.04 million or $.27 per share as compared with net earnings of $1.53 million or $.21 per share for the same quarter in 2004, an increase of 29%. For the 6 months ended June 30, 2005 Camco reported net earnings of $4.26 million compared to $2.57 million of net earnings reported for the same 6 month period in 2004. Basic earnings per share for the 6 months ended June 30, 2005 were $.56 compared to $.35 for the same 6 month period in 2004, an increase of 60%. Camco recently announced a quarterly dividend of $.145 which was payable July July: see month. 15, 2005. This dividend represents an annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. yield of 4.26% on Camco's June 30th quarter-end market value. President & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. Richard Ri·chard , Joseph Henri Maurice Known as "Rocket." 1921-2000. Canadian hockey player. A right wing for the Montreal Canadiens (1942-1960), he led his team to eight Stanley Cup championships and was the first player to score 50 goals in a C. Baylor Bay·lor , Elgin Born 1934. American basketball player. He was a forward for the Minneapolis and Los Angeles Lakers from 1958 to 1971 and ranks among the all-time National Basketball Association leaders in points and per-game scoring average. commented, "We continue to see significant progress from our efforts to restructure the composition of our balance sheet to be more commercial bank-like. At the end of the second quarter commercial and consumer loans represented 44% of our loan portfolio, versus 36% one year ago. We are encouraged to see our annualized return on average equity for the six months ended June 30, 2005 at 9.45% which is in excess of the average of all publicly traded Ohio banks." Mr. Baylor continued, "For the six months ended June 30, 2005 our net interest margin increased to 2.95% from 2.47% compared to the six months ended June 30, 2004. The average yield on our earning assets Earning Assets Any income-earning asset owned by a company. Notes: These assets are generally interest-bearing accounts, bonds, and securities available for sale. See also: Asset, Asset Valuation, Earnings, Net Interest Margin continues to increase as we execute To run a program, which causes the computer to carry out its instructions. See executable code, instruction and EXE file. execute - execution our strategic plan to shift the composition of our loan portfolio. Overall, the yield on our interest earning assets has increased 30 basis points from last year's second quarter, and the cost of interest bearing liabilities has decreased 22 basis points. We continue to focus on including higher margin producing and interest rate sensitive commercial and consumer loans. And as opportunities present themselves, we are recruiting seasoned lenders in the markets we serve to further our portfolio goals." Review of Significant Areas: Net Interest Margin: During the second quarter of 2005, as short-term interest rates Short-term interest rates Interest rates on loan contracts-or debt instruments such as Treasury bills, bank certificates of deposit or commerical paper-having maturities of less than one year. Often called money market rates. continued rising, the net interest margin improved to 2.97% in the second quarter 2005 from 2.93% in the first quarter of 2005. This improvement was made possible through Camco's emphasis on growing the commercial, commercial real estate and consumer loan portfolios and the ability to effectively manage overall cost of funds Cost of Funds The interest rate paid on an outstanding loan. Notes: Money isn't free! Cost of funds is the cost of borrowing money. See also: Interest Rate Cost of funds Interest rate associated with borrowing money. . Non-Interest Income: For the 6 months ended June 30, 2005 total non-interest income increased 3.1% to $3.34 million from $3.24 million for the same period last year. Core non-interest income, which is net of gain on sale of assets and mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. rights, increased 12.5% to $2.93 million from $2.60 million. Of this increase, $150,000 was due to "Extended Overdraft A check that is drawn on an account containing less money than the amount stated on the check. The term overdraft is also used in reference to the condition that exists when vouchers " fee income, which did not exist in the second quarter of 2004. For the six months ended June 30, 2005, $33.2 million of loans were sold with a total gain of $349,000 as compared to $57.7 million sold in the second quarter of 2004 for a gain of $490,000. Although less volume overall was originated and sold, the profit margin increased on the sales from .85% to 1.05%. The amount of loans sold in the first six months of 2005 was 57.5% of the prior year's production due to rising interest rates, and a higher percentage of adjustable rate Adjustable rate Applies mainly to convertible securities. Refers to interest rate or dividend that is adjusted periodically, usually according to a standard market rate outside the control of the bank or savings institution, such as that prevailing on Treasury bonds or notes. loans being originated and retained in the bank's portfolio. Mortgage servicing rights had a positive impact in the six months ended June 30, 2005 of $9,000 versus the six months ended June 30, 2004, which had a negative adjustment of $73,000. Even though loan sales were down 42.5% to $33.2 million versus $57.7 million, the prepayment Prepayment 1. The payment of a debt obligation prior to its due date. 2. The excess payment over a scheduled debt repayment amount. Notes: 1. Examples include deferred expenses such as rent and early loan repayments. 2. on the portfolio slowed. The overall value of mortgage servicing rights increased to 1.26% from 1.15% as a percent of loans serviced, primarily due to a lower risk of prepayment resulting from increasing interest rates. Operating Expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. : For the six months ended June 30, 2005, operating expenses were $11.38 million compared to $11.36 million for the comparable period in 2004, or an increase of .1%. As a percentage of average assets, operating expenses decreased slightly to 2.14% from 2.17%. Asset Quality: Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. as a percentage of loans decreased 20% from 1.39% at March 31, 2005 to 1.11% at June 30, 2005. The allowance for loan losses as a percentage of loans decreased slightly from 79 basis points at March 31, 2005 to 78 basis points at June 30, 2005. At June 30, 2005, total non-performing loans were $9.4 million, of which approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 52% were single family residential loans. Strategic Vision: Camco continues to execute and manage its long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. strategic plan. This plan encompasses the diversification Diversification A risk management technique that mixes a wide variety of investments within a portfolio. It is designed to minimize the impact of any one security on overall portfolio performance. Notes: Diversification is possibly the greatest way to reduce the risk. of the balance sheet primarily through increasing commercial, commercial real estate and consumer loan portfolios as well as transaction-based deposits. Critical to the strategy is the future growth of the balance sheet and the corresponding increase in net interest income. Complimentary revenue sources to enhance the net interest income are being actively pursued while management remains vigilant to contain operating expenses in this transitional period. Growth is being developed by opening new branch offices in existing or adjacent markets versus acquisitions, with our newest banking center in Vienna Vienna, city and province, Austria Vienna (vēĕn`ə), Ger. Wien, city and province (1991 pop. 1,539,848), 160 sq mi (414 sq km), capital and largest city of Austria and administrative seat of Lower Austria, NE Austria, on , West Va., opening in July 2005, representing that effort. Camco Financial Corporation, holding company for Advantage Bank, is a multi-state financial holding company headquartered in Cambridge, Ohio with assets of $1.07 billion. Advantage Bank and its affiliates offer community banking, mortgage banking, internet banking and title services from 31 offices in 23 communities in Ohio, Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. and West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. . Additional information about Camco Financial may be found on Camco's web site: www.advantagebank.com. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and 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 regulatory agency Independent government commission charged by the legislature with setting and enforcing standards for specific industries in the private sector. The concept was invented by the U.S. , 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 ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. that may be made to any forward-looking statements to reflect events or circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date of such statements or to reflect the occurrence of anticipated or unanticipated events. Financials Attached.
Camco Financial Corporation
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and shares outstanding)
(Unaudited) (Unaudited) Audited (Unaudited) (Unaudited)
6/30/05 3/31/05 12/31/04 9/30/04 6/30/04
----------- ---------- --------- ----------- ----------
Assets
------
Cash and Cash
Equivalents 36,778 39,795 $42,894 $45,291 $38,192
Investments 113,517 109,179 108,429 117,370 124,694
Loans Held for
Sale 3,441 4,616 2,837 4,386 4,805
Loans Receivable 847,731 843,777 840,305 898,355 838,699
Allowance for
Loan Loss (6,540) (6,637) (6,476) (6,398) (5,528)
---------- ---------- ---------- ---------- -----------
Loans
Receivable,
Net 841,191 837,140 833,829 891,957 833,171
Goodwill 6,683 6,683 6,736 7,023 2,953
Other Assets 67,747 67,221 71,098 68,078 64,902
---------- ---------- ---------- ---------- -----------
Total Assets $1,069,357 $1,064,634 $1,065,823 $1,134,105 $1,068,717
========== ========== ========== ========== ===========
Liabilities
-----------
Deposits 669,283 674,853 $667,778 $728,918 $677,567
Borrowed Funds 298,295 289,302 295,310 291,719 289,712
Other
Liabilities 11,123 10,900 13,414 16,441 9,715
---------- ---------- ---------- ---------- -----------
Total
Liabilities 978,701 975,055 976,502 1,037,078 976,994
Stockholders
Equity 90,656 89,579 89,321 97,027 91,723
---------- ---------- ---------- ---------- -----------
Total
Liabilities
and
Stockholders'
Equity $1,069,357 $1,064,634 $1,065,823 $1,134,105 $1,068,717
========== ========== ========== ========== ===========
Stockholders'
Equity to
Total Assets 8.48% 8.41% 8.38% 8.56% 8.58%
Total Shares
Outstanding 7,643,746 7,678,747 7,663,153 7,640,505 7,358,888
Book Value Per
Share $11.86 $11.67 $11.66 $12.70 $12.46
Camco Financial Corporation
Condensed Consolidated Statements of Earnings
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
6/30/05 3/31/05 12/31/04 9/30/04 6/30/04
(Unaudited)(Unaudited)(Unaudited)(Unaudited)(Unaudited)
---------- ---------- ---------- ---------- -----------
Interest Income:
Loans $12,311 $11,962 $12,188 $11,860 $11,469
Mortgage-
backed
securities 742 751 785 833 791
Investment
securities 257 185 178 209 203
Interest-
bearing
deposits and
other 651 607 610 571 522
-------------------------------------------------------
Total
Interest
Income 13,961 13,505 13,761 13,473 12,985
-------------------------------------------------------
Interest Expense:
Deposits 3,786 3,503 3,723 3,570 3,303
Borrowings 2,646 2,634 3,355 3,497 3,406
-------------------------------------------------------
Total
Interest
Expense 6,432 6,137 7,078 7,067 6,709
-------------------------------------------------------
Net Interest
Income 7,529 7,368 6,683 6,406 6,276
Provision for
Losses on
Loans 360 240 855 255 255
-------------------------------------------------------
Net Interest
Income After
Provision for
Loan Losses 7,169 7,128 5,828 6,151 6,021
-------------------------------------------------------
Noninterest Income
Late charges,
rent and
other 715 745 585 623 600
Loan servicing
fees 371 378 381 373 379
Service charges
and other fees
on deposits 386 334 404 407 327
Gain on sale
of loans 179 170 140 189 214
Valuation of
mortgage
servicing
rights - net (42) 51 269 206 29
Gain on sale
of investment,
mbs & fixed
assets 0 19 6,653 10 23
Gain on sale
of real estate
acq'd through
foreclosure 25 9 123 106 131
-------------------------------------------------------
Total
noninterest
income 1,634 1,706 8,555 1,914 1,703
-------------------------------------------------------
Non interest expense
Employee
compensation
and benefits 2,811 2,964 2,655 2,763 2,672
Occupancy and
equipment 763 797 821 867 828
Data processing 347 331 331 320 325
Advertising 303 229 225 387 181
Franchise taxes 67 79 201 283 294
Other operating 1,519 1,165 1,317 1,307 1,194
FHLB prepayment
penalty (1) 0 0 18,879 0 0
-------------------------------------------------------
Total
noninterest
expense 5,810 5,565 24,429 5,927 5,494
-------------------------------------------------------
Net Income -
Before Income
Tax 2,993 3,269 (10,046) 2,138 2,230
Provision for
income taxes 953 1,051 (3,476) 670 698
-------------------------------------------------------
Reported Net
Income 2,040 2,218 (6,570) 1,468 1,532
-------------------------------------------------------
Adjusted for
non-recurring
items
Sale of branches 0 0 (4,024)
FHLB Prepayment
costs (net
of tax) 0 0 12,460 0 0
-------------------------------------------------------
Net Earnings
from Operations 2,040 2,218 1,866 1,468 1,532
=======================================================
Earnings Per
Share Reported:
Basic $0.27 $0.29 ($0.89) $0.20 $0.21
Diluted $0.27 $0.29 N/A $0.19 $0.21
Earnings Per Share
Operations:
Basic $0.27 $0.29 $0.24 $0.20 $0.21
Diluted $0.27 $0.29 $0.24 $0.19 $0.21
Basic Weighted
Number of Shares
Outstanding 7,660,120 7,677,795 7,645,005 7,513,890 7,357,635
Diluted Weighted
Number of Shares
Outstanding 7,681,186 7,711,433 7,684,500 7,559,916 7,403,929
Camco Financial Corporation
Selected Ratios and Statistics
Periods Ended June 30, 2005 and 2004
(In thousands, except for per share data and shares outstanding)
6 Months 6 Months 3 Months 3 Months
Ended Ended Ended Ended
6/30/05 6/30/04 6/30/05 6/30/04
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Reported:
Return on Average Equity 9.45% 5.52% 9.05% 6.59%
Return on Average Assets 0.80% 0.49% 0.77% 0.58%
Interest Rate Spread 2.75% 2.23% 2.76% 2.24%
Net Interest Margin 2.95% 2.47% 2.97% 2.47%
Yield on earning assets 5.44% 5.14% 5.51% 5.11%
Cost of deposits 2.26% 2.05% 2.34% 2.03%
Cost of funds 3.62% 4.93% 3.66% 4.81%
Total cost of interest
bearing liabilities 2.69% 2.91% 2.75% 2.87%
Noninterest expense/
average assets 2.14% 2.17% 2.18% 2.07%
Efficiency Ratio 62.37% 72.91% 63.41% 68.86%
Non performing assets
to total assets 1.09% 1.32% 1.20% 1.32%
Non performing loans to
total net loans
including loans held
for sale 1.11% 1.39% 1.27% 1.39%
Allowance for loan
losses to total loans 0.78% 0.66% 0.78% 0.66%
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
June 2005, March 2005 and December 2004
(In thousands, except for per share data and shares outstanding)
Average Table - Quarter Ended
-------------------------------------------------
Jun 30, 2005 Mar 31, 2005
------------------------ ------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
------------------------ ------------------------
Interest - Earning
Assets:
Loans held for sale 4,078 4,006
Loans receivable -
net 839,894 12,311 5.83% 836,569 11,962 5.69%
Mortgage-backed
securities 78,766 742 3.77% 82,381 751 3.65%
Investment
securities 30,723 257 3.35% 24,369 185 3.04%
Interest-bearing
deposits and other 59,353 651 4.39% 60,050 607 4.04%
------------------------ ------------------------
Total interest
earning assets 1,012,814 13,961 5.51% 1,007,375 13,505 5.36%
------------------------ ------------------------
Noninterest-earning
assets 52,489 56,173
---------- ----------
Total Assets 1,065,303 1,063,548
========== ==========
Interest-Bearing
Liabilities:
Deposits 646,923 3,786 2.34% 642,359 3,503 2.18%
Advances 289,058 2,646 3.66% 293,551 2,634 3.59%
------------------------ ------------------------
Total interest-
bearing
liabilities 935,981 6,432 2.75% 935,910 6,137 2.62%
------------------------ ------------------------
Noninterest-bearing
sources:
Noninterest-bearing
liabilities 39,123 37,710
Shareholders'
equity 90,199 89,928
---------- ----------
Total Liabilities
and Shareholders'
Equity 1,065,303 1,063,548
========== ==========
-------------- --------------
Net Interest Income &
Margin 7,529 2.97% 7,368 2.93%
============== ==============
Average Table - Quarter Ended
-----------------------------
Dec 31, 2004
-------------------------
Average Yield/
Balance Interest Rate
-------------------------
Interest - Earning Assets:
Loans held for sale 4,326
Loans receivable - net 869,716 12,188 5.58%
Mortgage-backed securities 87,825 785 3.58%
Investment securities 24,655 178 2.89%
Interest-bearing deposits and other 61,389 610 3.97%
-------------------------
Total interest earning assets 1,047,911 13,761 5.25%
-------------------------
Noninterest-earning assets 55,825
----------
Total Assets 1,103,736
==========
Interest-Bearing Liabilities:
Deposits 690,919 3,723 2.16%
Advances 278,873 3,355 4.81%
-------------------------
Total interest-bearing liabilities 969,792 7,078 2.92%
-------------------------
Noninterest-bearing sources:
Noninterest-bearing liabilities 38,163
Shareholders' equity 95,781
----------
Total Liabilities and Shareholders' Equity 1,103,736
==========
---------------
Net Interest Income & Margin 6,683 2.55%
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