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 period of 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 decreased to 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 Equivalents | 58,379 | 26,920 | 28,160 | 40,431 | 38,374 |
| Investments | 86,201 | 80,648 | 75,347 | 62,834 | 20,928 |
| Loans Held for Sale | 6,544 | 6,341 | 2,532 | 5,583 | 8,090 |
| Loans Receivable | 566,722 | 594,030 | 613,790 | 630,124 | 653,709 |
| Allowance for Loan Loss | (12,147) | (14,508) | (14,185) | (14,954) | (14,532) |
| Loans Receivable, Net | 554,575 | 579,522 | 599,605 | 615,170 | 639,177 |
| 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' Equity | 59,727 | 47,422 | 46,776 | 46,109 | 45,605 |
| Total Liabilities and Stockholders' Equity | $ 764,259 | $ 754,242 | $ 766,916 | $ 786,167 | $ 767,018 |
| Stockholders' Equity to Total Assets | 7.82% | 6.29% | 6.10% | 5.87% | 5.95% |
| Total Shares Outstanding | 13,233,036 | 7,465,563 | 7,468,087 | 7,468,087 | 7,205,595 |
| Book Value Per Share | $ 4.51 | $ 6.35 | $ 6.26 | $ 6.17 | $ 6.33 |
| 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 securities | 15 | 15 | 17 | 16 | 17 |
| Investment securities | 119 | 116 | 115 | 71 | 50 |
| Interest-bearing deposits and other | 135 | 112 | 105 | 113 | 101 |
| Total Interest Income | 7,509 | 7,765 | 7,936 | 8,413 | 8,669 |
| Interest Expense: | |||||
| Deposits | 1,128 | 1,235 | 1,405 | 1,551 | 1,640 |
| Borrowings | 577 | 545 | 618 | 673 | 678 |
| Total Interest Expense | 1,705 | 1,780 | 2,023 | 2,224 | 2,318 |
| Net Interest Income | 5,804 | 5,985 | 5,913 | 6,189 | 6,351 |
| Provision for Losses on Loans | (1,455) | 457 | 137 | 1,005 | (759) |
| Net Interest Income After Provision for Loan Losses | 7,259 | 5,528 | 5,776 | 5,184 | 7,110 |
| Noninterest Income: | |||||
| Rent and other | 484 | 321 | 223 | 328 | 202 |
| Loan servicing fees | 284 | 283 | 285 | 281 | 290 |
| Service charges and other fees on deposits | 528 | 515 | 508 | 490 | 530 |
| Gain on sale of loans | 770 | 633 | 517 | 564 | 377 |
| Mortgage servicing rights | 60 | (117) | (63) | 102 | (365) |
| Gain (loss) on sale of investment, mbs & fixed assets | 126 | -- | 1 | (3) | -- |
| Income on CSVL (BOLI) | 237 | 216 | 208 | 218 | 221 |
| Total noninterest income | 2,489 | 1,851 | 1,679 | 1,980 | 1,255 |
| Noninterest expense: | |||||
| Employee compensation and benefits | 3,208 | 2,996 | 3,249 | 3,147 | 2,772 |
| Occupancy and equipment | 772 | 725 | 756 | 711 | 721 |
| 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 expense | 6,944 | 6,948 | 7,035 | 6,714 | 7,501 |
| Earnings (loss) before provision for income taxes | 2,804 | 431 | 420 | 450 | 864 |
| Provision for income taxes | 20 | (53) | (62) | 37 | 2 |
| Net Earnings (loss) | 2,784 | 484 | 482 | 413 | 862 |
| 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 Outstanding | 10,806,051 | 7,467,255 | 7,468,090 | 7,220,018 | 7,205,595 |
| Diluted Weighted Number of Shares Outstanding | 10,806,269 | 7,473,123 | 7,481,854 | 7,220,130 | 7,205,595 |
| 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 equity | 20.61% | 7.67% | 8.56% | 0.47% |
| Return on average assets | 1.46% | 0.45% | 0.54% | 0.03% |
| 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 bearing liabilities | 1.10% | 1.42% | 1.21% | 1.54% |
| Noninterest expense to average assets | 3.64% | 3.90% | 3.59% | 3.75% |
| Efficiency ratio | 83.73% | 98.62% | 86.68% | 90.62% |
| Nonperforming assets to total assets | 3.95% | 4.67% | 3.95% | 4.67% |
| Non performing loans to total net loans including loans held for sale | 3.42% | 3.77% | 3.42% | 3.77% |
| Allowance for loan losses to total loans including loans held for sale | 2.12% | 2.20% | 2.12% | 2.20% |
| 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 - net (1) | 566,769 | 7,240 | 5.11% | 635,582 | 8,501 | 5.35% | ||||||
| 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 bearing accounts | 32,604 | 17 | 0.21% | 29,552 | 2 | 0.03% | ||||||
| Total interest earning assets | 691,161 | 7,509 | 4.35% | 692,811 | 8,669 | 5.01% | ||||||
| Noninterest-earning assets | 71,508 | 77,343 | ||||||||||
| Total Average Assets | 762,669 | 770,154 | ||||||||||
| Interest-Bearing Liabilities: | ||||||||||||
| Deposits | 557,585 | 1,128 | 0.81% | 565,477 | 1,640 | 1.16% | ||||||
| Advances & Borrowings | 64,503 | 577 | 3.58% | 86,817 | 678 | 3.12% | ||||||
| Total interest-bearing liabilities | 622,088 | 1,705 | 1.10% | 652,294 | 2,318 | 1.42% | ||||||
| Noninterest-bearing sources: | ||||||||||||
| Noninterest-bearing liabilities | 86,556 | 72,912 | ||||||||||
| Shareholders' equity | 54,025 | 44,948 | ||||||||||
| Total Liabilities and Shareholders' Equity | 762,669 | 770,154 | ||||||||||
| Net Interest margin | 3.36% | 3.67% | ||||||||||
| Net Interest Income & Spread | 5,804 | 3.25% | 6,351 | 3.59% | ||||||||
| (1) Includes LHFS but does not include ALLL and Non-Accrual Loans | ||||||||||||
| (2) Includes securities designated as available for sale and held to maturity | ||||||||||||