Camco Financial Announces Fourth Quarter 2013 Earnings

Camco Financial Announces Fourth Quarter 2013 Earnings

CAMBRIDGE, Ohio, Jan. 29, 2014 (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,
2013.

Net earnings were $7.8 million or $0.53 per diluted share, for the twelve
months ended December 31, 2013, compared to $4.2 million, or $0.50 per diluted
share, the prior year. There were 14.7 million and 8.3 million diluted
weighted shares outstanding for 2013 and 2012, respectively. Net interest
income after provision for losses on loans was $23.5 million for the full-year
2013 versus $23.7 million the prior year. The 2013 results primarily benefited
from recognition of deferred tax assets and to a lesser extent the valuation
of mortgage servicing rights, which were partially offset by expenses related
to growth initiatives and lower gain on sale of residential mortgage loans
compared to 2012.

Net earnings were $0.5 million, or $0.03 per diluted share, for the three
months ended December 31, 2013, versus $2.8 million, or $0.26 per diluted
share, for the same period in 2012. Net interest income after provision for
losses on loans was $6.5 million for the fourth quarter of 2013 compared to
$7.3 million the prior year. The remaining year-over-year difference in net
earnings was primarily attributable to the higher provision for income taxes
and lower gain on sales of loans. Additionally, there were $0.6 million of
merger expenses in the fourth quarter 2013 versus zero merger expenses the
prior year.

James E. Huston, President and CEO, said, "Our full-year 2013 financial
results represent the highest amount of net earnings since 2005 and also
reflect the progress we have achieved during the past several years to return
Advantage Bank to a sound financial position. During this period credit
quality has significantly improved, noninterest income is more diversified and
our balance sheet is much stronger. Underscoring these achievements, on
November 1, 2013, we announced the termination of the consent order by federal
and state regulators related to Advantage Bank."

Mr. Huston continued, "The decline in net earnings for the fourth quarter of
2013 compared to a year ago was primarily due to the lower reduction of loan
loss reserve, market conditions that adversely impacted gain on sale of loans
and valuation of mortgage servicing rights, and a higher provision for income
taxes. Our operating results included an increase in net interest income for
the fourth quarter of 2013 versus the linked quarter and the fourth quarter of
2012. Our credit quality continued to improve during the fourth quarter
compared to those same periods as reflected in the further decline in
classified assets and nonperforming loans. Looking forward, we are working
diligently to complete our merger with Huntington Bancshares, Inc., which is
expected to close in the 1^st Quarter of 2014."

Review of Financial Performance

Overview:

The following items summarize key aspects of the Company's performance during
the fourth quarter ended December 31, 2013, compared to the same period in
2012:

  *Total deposits were $602.5 million at December 31, 2013 compared to $627.2
    million at year-end 2012 due to a decline in certificates of deposit,
    especially for single product customers.
  *Net interest income increased slightly to $5.9 million due to higher loan
    balances and lower cost of funds.
  *Noninterest income was $1.4 million versus $2.5 million principally due to
    lower spreads related to gain on sale of residential mortgage loans and a
    decline in the valuation of mortgage servicing rights.
  *Noninterest expense declined slightly to $6.7 million from $6.9 million
    primarily due to lower REO and classified assets expenses attributable to
    improved credit quality and lower FDIC premiums and other insurance
    expense, partially offset by expenses related to growth initiatives and
    other operating expenses, including merger expenses.
  *Classified assets (which include substandard, doubtful, loss, and real
    estate owned) were $23.9 million at December 31, 2013, compared to $38.8
    on the same date in 2012.

Net Interest Margin:

Net interest margin was 3.33% for the fourth quarter of 2013 compared to 3.36%
for the same period in 2012. The slight decrease was principally due to the
lower yield on earning assets related to the low interest rate environment.
The Company continues to pursue favorable risk-adjusted pricing opportunities,
maintain strong credit quality, and other balance sheet actions to enhance net
interest margin.

Net Interest Income:

Net interest income before the provision for loan losses was $5.9 million for
the fourth quarter of 2013 compared to $5.8 million for the same period a year
ago. The increase was primarily due to an increase in loans receivable and
lower cost of funds compared to the same period last year.

The yield on earning assets was 4.04% for the fourth quarter of 2013 compared
to 4.35% a year ago. This decrease was primarily attributable to the low
interest rate environment. The restructuring of $25 million of FHLB advances
in the third quarter of 2013 resulted in a reduction in the cost of funds and
also helped to mitigate the impact of lower yield on earning assets. Total
cost of interest bearing liabilities, expressed as a percentage, was 0.83%
versus 1.10% for the same period the prior year.

Provision Expense, Credit Quality, and Allowance for Loan Losses:

The allowance for loan and lease losses was $8.3 million at December 31, 2013,
compared to $12.1 million on the same date in 2012. This year-over-year
decrease was due to further improvement in asset quality throughout 2013 that
resulted in a recovery of provision of $0.6 million for loan losses in the
fourth quarter of 2013 compared to a recovery of $1.5 million for the fourth
quarter of 2012.

The Company maintains a strong allowance for loan and lease losses and remains
committed to further improvement in asset quality. Total delinquent loans were
$12.4 million at December 31, 2013, a 33% decrease compared to the same date
last year. Classified loans (which include substandard, doubtful, and loss)
were $19.6 million at year-end 2013, or 32% below the amount at December 31,
2012. Non-performing loans were $13.3 million at December 31, 2013, or 32%
below the amount on the same date of the prior year. Non-performing loans as a
percentage of total loans (including loans held for sale) were 2.12% at
December 31, 2013, compared to 3.42% at December 31, 2012.

The allowance for loan and lease losses, expressed as a percentage of
non-performing loans, was 62.0% at December 31, 2013 and 2012.

Noninterest Income:

Noninterest income was $1.4 million for the fourth quarter of 2013 versus $2.5
million for the same period of the prior year. This decrease was principally
due to lower volume and spreads related to gain on sale of residential
mortgage loans ($0.5 million) and a decline in the value of mortgage servicing
rights ($0.2 million) compared to the fourth quarter of 2012.

Noninterest Expense:

Noninterest expense decreased to $6.7 million for the fourth quarter of 2013
from $6.9 million for the same period a year ago. This decline was primarily
due to lower REO and classified asset expenses ($0.7 million) attributable to
improved credit quality, lower FDIC premiums and other insurance expense ($0.2
million), partially offset by expenses related to growth initiatives and other
operating expenses, including merger expenses.

Balance Sheet:

Total assets were $774.4 million at December 31, 2013, compared to $764.3
million on the same date last year, principally due to the increase in
stockholders' equity that resulted from $7.8 million of net earnings for the
full-year 2013, the exercise of common stock warrants from the November 2012
rights offering ($2.2 million) and stock options. The Company continues to
focus on pursuing lending opportunities and investments that employ cash
efficiently and profitably.

Asset Quality:

There was further improvement in asset quality during the fourth quarter of
2013 compared to the same period in 2012. Classified loans were $19.6 million
and nonperforming assets were $23.9 million at December 31, 2013, which
represented a decline of 32% and 38%, respectively, versus the same date in
2012.

Nonperforming assets to total assets were 2.38% at December 31, 2013, versus
3.95% on the same date in 2012. The allowance for loan losses to total loans
including loans held for sale was 1.32% at year-end 2013 compared to 2.12% at
December 31, 2012.

The following table provides a comparison of changes in key factors for the
fourth quarter of 2013 compared to the same period in 2012:

                                                               
(Dollars in thousands)     12/31/2013 9/30/2013 6/30/2013 3/31/2013 12/31/2012
Classified Loans*          $ 19,645   $ 22,492  $ 25,063  $ 27,160  $ 29,184
Non-Performing Loans       $ 13,342   $ 14,860  $ 15,695  $ 18,647  $ 19,594
Loan Loss Reserve          $8,276    $9,671   $ 10,556  $ 11,532  $ 12,147
Loan Loss Reserve/Total    1.32%      1.64%     1.84%     2.06%     2.12%
Loans
*Includes substandard, doubtful and loss (including homogenous loans)

Deposits and Borrowings:

Total deposits were $602.5 million at December 31, 2013, versus $627.2 million
on the same date in 2012.The decrease was primarily due to a decline in
certificates of deposit ($27.6 million), especially for single product
customers.The Company remains committed to reducing the level of historically
rate sensitive higher yielding single product certificates of deposit.

FHLB advances and other borrowings were $88.8 million at December 31, 2013,
compared to $64.2 million on the same date of the prior year.This increase
was principally due to higher customer repurchase agreements and borrowings on
the FHLB cash advance line to fund earning assets on a short-term basis.

Equity:

Stockholders' equity was $70.2 million at December 31, 2013, compared to $59.7
million at year-end 2012.The increase was attributable to net earnings during
the past year, proceeds from the exercise of warrants related to the November
2012 rights offering and stock options. Stockholders' equity at December 31,
2013 was 9.07% of total assets compared to 7.82% on the same date last year.

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 offers 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 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.

Important Information for Investors and Stockholders

In connection with the proposed merger transaction, Huntington filed with the
Securities and Exchange Commission a Registration Statement on Form S-4 that
included a Proxy Statement of the Company, and a Prospectus of Huntington, as
well as other relevant documents concerning the proposed transaction.
Stockholders are urged to read the Registration Statement and the Proxy
Statement/Prospectus regarding the proposed merger and any other relevant
documents filed with the SEC, as well as any amendments or supplements to
those documents, because they contain important information. A free copy of
the Proxy Statement/Prospectus, as well as other filings containing
information about Huntington and Camco Financial, may be obtained at the SEC's
Internet site (http://www.sec.gov). You will also be able to obtain these
documents, free of charge, from Huntington at www.Huntington.com under the tab
"Investor Relations" and then under the heading "Publications and Filings",
from Huntington Investor Relations at 800-576-5007, and from the Company by
accessing Camco Financial's website at https://www.advantagebankonline.com
under the tab "Investor Relations" and then under the heading "SEC Filings",
or from Camco Financial Investor Relations at 740-435-2020.

Huntington and the Company and certain of their directors and executive
officers may be deemed to be participants in the solicitation of proxies from
the stockholders of Camco Financial in connection with the proposed merger.
Information about the directors and executive officers of Huntington is set
forth in the proxy statement for Huntington's 2013 annual meeting of
shareholders, as filed with the SEC on Schedule 14A on March 7, 2013.
Information about the directors and executive officers of Camco Financial is
set forth in the proxy statement for the Company's 2013 annual meeting of
stockholders, as filed with the SEC on a Schedule 14A on April 19, 2013.
Additional information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be obtained by
reading the Proxy Statement/Prospectus regarding the proposed merger. Free
copies of this document may be obtained as described in the preceding
paragraph.


Camco Financial Corporation
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and shares outstanding)
                                                              
                  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
                  12/31/13    9/30/13     6/30/13     3/31/13     12/31/12
Assets                                                         
Cash and Cash      $8,451    $17,185   $27,125   $118,212  $58,379
Equivalents
Investments        84,856     101,936    103,529    39,432     86,201
                                                              
Loans Held for     592        1,831      2,697      3,824      6,544
Sale
                                                              
Loans Receivable   627,876    586,674    571,470    555,180    566,722
Allowance for Loan (8,276)    (9,671)    (10,556)   (11,532)   (12,147)
Loss
Loans Receivable,  619,600    577,003    560,914    543,648    554,575
Net
                                                              
Other Assets       60,887     62,644     62,514     58,246     58,560
                                                              
Total Assets       $774,386  $760,599  $756,779  $763,362  $764,259
                                                              
Liabilities                                                    
Deposits           $602,494  $609,012  $614,623  $626,741  $627,224
Borrowed Funds     88,773     71,408     65,788     63,981     64,219
Other Liabilities  12,871     12,899     10,432     11,929     13,089
                                                              
Total Liabilities  $704,138  $693,319  $690,843  $702,651  $704,532
                                                              
Stockholders'      $70,248   $67,280   $65,936   $60,711   $59,727
Equity
                                                              
Total Liabilities
and Stockholders'  $774,386  $760,599  $756,779  $763,362  $764,259
Equity
                                                              
                                                              
Stockholders'
Equity to Total    9.07%       8.85%       8.71%       7.95%       7.82%
Assets
                                                              
Total Shares
Outstanding (at    14,691,428 13,603,438 13,549,082 13,529,287 13,233,036
period end)
                                                              
Book Value Per     $4.78     $4.95     $4.87     $4.49     $4.51
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
                                                   12/31/2013  12/31/12
                                                   (Unaudited) (Unaudited)
Interest Income:                                               
Loans                                               $26,769   $30,674
Investment securities                               662        484
Interest-bearing deposits and other                 480        465
Total Interest Income                               $27,911   $31,623
                                                              
Interest Expense:                                              
Deposits                                            $3,888    $5,319
Borrowings                                          1,624      2,413
Total Interest Expense                              $5,512    $7,732
                                                              
Net Interest Income                                 $22,399   $23,891
                                                              
Provision for Losses on Loans                       $(1,109)  $144
Net Interest Income After Provision for Loan Losses $23,508   $23,747
                                                              
Noninterest Income:                                            
Late charges, rent and other                        $942      $1,356
Loan servicing fees                                 1,122      1,133
Service charges and other fees on deposits          1,989      2,041
Gain on sale of loans                               1,764      2,484
Mortgage servicing rights                           720        (18)
Gain on sale of investments & fixed assets          46         124
Income on cash surrender value life insurance       847        879
Total noninterest income                            $7,430    $7,999
                                                              
Noninterest expense:                                           
Employee compensation and benefits                  $14,189   $12,600
Occupancy and equipment                             2,897      2,964
FDIC premium and other insurances                   1,501      1,816
Data processing                                     1,824      1,975
Advertising                                         515        373
Franchise taxes                                     872        765
Other operating                                     6,275      7,148
Total noninterest expense                           $28,073   $27,641
                                                              
Earnings before provision for inome taxes           2,865      4,105
                                                              
Provision for income taxes                          $(4,974)  $(58)
Net Earnings                                        $7,839    $4,163
                                                              
Earnings Per Share:                                            
Basic                                               $0.57     $0.50
Diluted                                             $0.53     $0.50
                                                              
Basic Weighted Number of Shares Outstanding         13,701,884 8,260,865
Diluted Weighted Number of Shares Outstanding       14,686,223 8,261,396


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
                  12/31/13    9/30/13     6/30/13     3/31/13     12/31/12
                  (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Interest Income:                                               
Loans              $6,864    $6,724    $6,591    $6,590    $7,240
Investment         179        194        170        119        134
securities
Interest-bearing   101        108        122        149        135
deposits and other
Total Interest     $7,144    $7,026    $6,883    $6,858    $7,509
Income
                                                              
Interest Expense:                                              
Deposits           $876      $979      $1,000    $1,033    $1,128
Borrowings         383        386        429        426        577
Total Interest     1,259      1,365      1,429      1,459      1,705
Expense
                                                              
Net Interest       $5,885    $5,661    $5,454    $5,399    $5,804
Income
                                                              
Provision for      (600)      (609)      --        100        (1,455)
Losses on Loans
Net Interest
Income After       $6,485    $6,270    $5,454    $5,299    $7,259
Provision for Loan
Losses
                                                              
Noninterest                                                    
Income:
Late charges, rent $250      $223      $168      $301      $484
and other
Loan servicing     286        287        273        276        284
fees
Service charges
and other fees on  509        501        517        462        528
deposits
Gain on sale of    278        251        546        689        770
loans
Mortgage servicing (141)      405        351        105        60
rights
Gain on sale of
investments &      (8)        --        (7)        61         126
fixed assets
Income on CSVL     214        214        211        208        237
(BOLI)
Total noninterest  $1,388    $1,881    $2,059    $2,102    $2,489
income
                                                              
Noninterest                                                    
expense:
Employee
compensation and   $3,385    $3,777    $3,518    $3,509    $3,208
benefits
Occupancy and      715        718        719        745        772
equipment
FDIC premium and   191        428        441        441        436
other insurances
Data processing    288        261        277        283        326
Advertising        110        133        128        144        77
Franchise taxes    197        218        227        230        182
Other operating    1,799      1,718      1,978      1,495      1,943
Total noninterest  $6,685    $7,253    $7,288    $6,847    $6,944
expense
                                                              
Earnings before
provision for      $1,188    $898      $225      $554      $2,804
income taxes
                                                              
Provision for      $729      $171      $(5,929)  $55       $20
income taxes
Net Earnings       $459      $727      $6,154    $499      $2,784
                                                              
Earnings Per                                                   
Share:
Basic              $0.03     $0.05     $0.45     $0.04     $0.26
Diluted            $0.03     $0.05     $0.42     $0.03     $0.26
                                                              
Basic Weighted
Number of Shares   14,282,790 13,583,511 13,545,861 13,386,828 10,806,051
Outstanding
Diluted Weighted
Number of Shares   15,580,837 15,027,666 14,718,045 14,392,077 10,806,269
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
                       12/31/2013    12/31/2012    12/31/13      12/31/12
                       (Unaudited)   (Unaudited)   (Unaudited)   (Unaudited)
                                                              
Return on average       2.66%         20.61%        12.19%        8.56%
equity
                                                              
Return on average       0.24%         1.46%         1.03%         0.54%
assets
                                                              
Interest rate spread    3.21%         3.25%         3.08%         3.30%
                                                              
Net interest margin     3.33%         3.36%         3.20%         3.41%
                                                              
Yield on earning assets 4.04%         4.35%         3.99%         4.51%
                                                              
Cost of deposits        0.67%         0.81%         0.72%         0.94%
                                                              
Cost of borrowings      1.97%         3.58%         2.35%         3.37%
                                                              
Total cost of interest  0.83%         1.10%         0.91%         1.21%
bearing liabilities
                                                              
Noninterest expense to  3.48%         3.64%         3.68%         3.59%
average assets
                                                              
Efficiency ratio        91.92%        83.73%        94.11%        86.68%
                                                              
Nonperforming assets to 2.38%         3.95%         2.38%         3.95%
total assets
                                                              
Non performing loans to
total net loans         2.12%         3.42%         2.12%         3.42%
including loans held
for sale
                                                              
Allowance for loan
losses to total loans   1.32%         2.12%         1.32%         2.12%
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, 2013          December 31, 2012
                        Average            Yield/ Average            Yield/
                        Balance    Interest Rate   Balance    Interest Rate
Interest - Earning                                                 
Assets:
Loans receivable - net   $599,290 $6,864 4.58%  $566,769 $7,240 5.11%
(1)
Securities (2)           91,309    179     0.78%  81,900    134     0.65%
FHLB Stock               9,888     100     4.05%  9,888     118     4.77%
Other interest bearing   6,841     1       0.06%  32,604    17      0.21%
accounts
Total interest earning   $707,328 $7,144 4.04%  $691,161 $7,509 4.35%
assets
                                                                  
Noninterest-earning      $60,583                $71,508          
assets
Total Average Assets     $767,911               $762,669         
                                                                  
                                                                  
Interest-Bearing                                                   
Liabilities:
Deposits                 $525,780 $876   0.67%  $557,585 1,128   0.81%
Advances & Borrowings    77,902    383     1.97%  64,503    577     3.58%
Total interest-bearing   $603,682 $1,259 0.83%  $622,088 $1,705 1.10%
liabilities
                                                                  
Noninterest-bearing                                                
sources:
Noninterest-bearing      95,296                  86,556            
liabilities
Shareholders' equity     68,933                  54,025            
Total Liabilities and    $767,911               $762,669         
Shareholders' Equity
                                                                  
Net Interest margin                        3.33%                    3.36%
                                                                  
Net Interest Income &              $5,885 3.21%            $5,804 3.25%
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
 
Press spacebar to pause and continue. Press esc to stop.