Camco Financial Announces Fourth Quarter and Full-Year 2012 Earnings

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 periodof 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 decreasedto 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      58,379     26,920     28,160     40,431     38,374 Equivalents Investments        86,201     80,648     75,347     62,834     20,928                                                                Loans Held for     6,544      6,341      2,532      5,583      8,090 Sale                                                                Loans Receivable   566,722    594,030    613,790    630,124    653,709 Allowance for Loan (12,147)    (14,508)    (14,185)    (14,954)    (14,532) Loss Loans Receivable,  554,575    579,522    599,605    615,170    639,177 Net                                                                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'      59,727      47,422      46,776      46,109      45,605 Equity                                                                Total Liabilities and Stockholders'  $764,259  $754,242  $766,916  $786,167  $767,018 Equity                                                                                                                               Stockholders' Equity to Total    7.82%       6.29%       6.10%       5.87%       5.95% Assets                                                                Total Shares       13,233,036 7,465,563  7,468,087  7,468,087  7,205,595 Outstanding                                                                Book Value Per     $ 4.51      $ 6.35      $ 6.26      $ 6.17      $ 6.33 Share     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    15         15         17         16         17 securities Investment         119        116        115        71         50 securities Interest-bearing   135        112        105        113        101 deposits and other Total Interest     7,509      7,765      7,936      8,413      8,669 Income                                                                Interest Expense:                                               Deposits           1,128      1,235      1,405      1,551      1,640 Borrowings         577        545        618        673        678 Total Interest     1,705      1,780      2,023       2,224       2,318 Expense Net Interest       5,804      5,985      5,913       6,189       6,351 Income                                                                Provision for      (1,455)    457        137        1,005      (759) Losses on Loans Net Interest Income After       7,259      5,528      5,776       5,184       7,110 Provision for Loan Losses                                                                Noninterest                                                     Income: Rent and other     484        321        223        328        202 Loan servicing     284        283        285        281        290 fees Service charges and other fees on  528        515        508        490        530 deposits Gain on sale of    770        633        517        564        377 loans Mortgage servicing 60         (117)      (63)       102        (365) rights Gain (loss) on sale of            126        --        1          (3)        -- investment, mbs & fixed assets Income on CSVL     237        216        208        218        221 (BOLI) Total noninterest  2,489      1,851      1,679       1,980       1,255 income                                                                Noninterest                                                     expense: Employee compensation and   3,208      2,996      3,249      3,147      2,772 benefits Occupancy and      772        725        756        711        721 equipment 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  6,944      6,948      7,035       6,714       7,501 expense                                                                Earnings (loss) before provision   2,804      431        420         450         864 for income taxes                                                                Provision for      20         (53)       (62)       37         2 income taxes Net Earnings       2,784      484        482         413         862 (loss)                                                                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   10,806,051 7,467,255  7,468,090  7,220,018  7,205,595 Outstanding Diluted Weighted Number of Shares   10,806,269 7,473,123  7,481,854  7,220,130  7,205,595 Outstanding     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       20.61%        7.67%         8.56%         0.47% equity                                                                Return on average       1.46%         0.45%         0.54%         0.03% assets                                                                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  1.10%         1.42%         1.21%         1.54% bearing liabilities                                                                Noninterest expense to  3.64%         3.90%         3.59%         3.75% average assets                                                                Efficiency ratio        83.73%        98.62%        86.68%        90.62%                                                                Nonperforming assets to 3.95%         4.67%         3.95%         4.67% total assets                                                                Non performing loans to total net loans         3.42%         3.77%         3.42%         3.77% including loans held for sale                                                                Allowance for loan losses to total loans   2.12%         2.20%         2.12%         2.20% including loans held for sale                                                                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 -  566,769 7,240   5.11%  635,582 8,501   5.35% net (1) 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      32,604  17      0.21%  29,552  2       0.03% bearing accounts Total interest      691,161 7,509   4.35%  692,811 8,669   5.01% earning assets                                                           Noninterest-earning 71,508                77,343           assets Total Average       762,669               770,154          Assets                                                                                                                     Interest-Bearing                                           Liabilities: Deposits            557,585 1,128   0.81%  565,477 1,640   1.16% Advances &          64,503  577     3.58%  86,817  678     3.12% Borrowings Total interest-bearing    622,088 1,705   1.10%  652,294 2,318   1.42% liabilities                                                           Noninterest-bearing                                        sources: Noninterest-bearing 86,556                72,912           liabilities Shareholders'       54,025                44,948           equity Total Liabilities and Shareholders'   762,669               770,154          Equity                                                           Net Interest margin                 3.36%                  3.67%                                                           Net Interest Income         5,804   3.25%          6,351   3.59% & Spread                                                           (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  company logo