-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Pn/A41VAg9UPsXr6BmNCTDtoI+I3Qtcg4ZKbyUMb7f7ppfWe6owodlLaPr+uyp4w MI+KoTOQ7Npxz2JWtJK7Eg== 0000950152-05-000481.txt : 20050126 0000950152-05-000481.hdr.sgml : 20050126 20050126093459 ACCESSION NUMBER: 0000950152-05-000481 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20050121 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20050126 DATE AS OF CHANGE: 20050126 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMCO FINANCIAL CORP CENTRAL INDEX KEY: 0000016614 STANDARD INDUSTRIAL CLASSIFICATION: SAVINGS INSTITUTIONS, NOT FEDERALLY CHARTERED [6036] IRS NUMBER: 510110823 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25196 FILM NUMBER: 05548545 BUSINESS ADDRESS: STREET 1: 6901 GLENN HIGHWAY CITY: CAMBRIDGE STATE: OH ZIP: 43725 BUSINESS PHONE: 7404325641 8-K 1 l11625ae8vk.txt CAMCO FINANCIAL CORPORATION 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): January 21, 2005 CAMCO FINANCIAL CORPORATION ----------------------------------------------------- (Exact name of registrant as specified in its charter) DELAWARE 0-25196 51-0110823 - ------------------------------- ------------------- ---------------------- (State or other jurisdiction of (Commission File No.) (IRS Employer I.D. No.) incorporation) 6901 Glenn Highway, Cambridge, Ohio 43725 -------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (740) 435-2020 Not Applicable ------------------------------------------------------------ (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) 1 SECTION 2 - FINANCIAL INFORMATION Item 2.02 Results of Operations and Financial Condition. On January 21, 2005, Camco Financial Corporation ("Camco") issued a press release regarding its earnings for the quarter ended December 31, 2004. The press release is attached as Exhibit 99 hereto and is incorporated herein by reference. The press release includes one or more non-GAAP financial measures within the meaning of Regulation G. With respect to each, Camco has disclosed the most directly comparable financial measure calculated and presented in accordance with GAAP and reconciled the differences between the non-GAAP financial measure and the most comparable financial measure presented in accordance with GAAP. Camco believes that the presentation of the non-GAAP financial measures in the press release assists management and investors to compare results period-to-period in a more meaningful and consistent manner and provides a better measure of results for Camco's ongoing operations. SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS Item 9.01 Financial Statements and Exhibits. (a) Financial statements of business acquired. Not applicable. (b) Pro forma financial information. Not applicable. (c) Exhibits.
Exhibit No. Description - ---------- --------------------------------------------- 99 Press Release of Camco dated January 21, 2005
2 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CAMCO FINANCIAL CORPORATION By: /s/ Mark A. Severson ------------------------------------ Mark A. Severson Chief Financial Officer Date: January 25, 2005 3 EX-99 2 l11625aexv99.txt EXHIBIT 99 EXHIBIT 99 NEWS RELEASE RELEASE DATE: JANUARY 21, 2005 RELEASE TIME: 4:30 P.M. CAMCO FINANCIAL ANNOUNCES FOURTH QUARTER 2004 RESULTS CAMBRIDGE, OHIO (NASDAQ: CAFI) - The net cost of restructuring certain borrowings resulted in Camco Financial Corporation ("Camco") reporting a net loss for the quarter ended December 31, 2004 of $6.6 million or a loss of $.86 per share as compared with net earnings of $588,000 or $.09 per share for the same quarter in 2003. The quarter ended December 31, 2004 included the restructuring of a significant portion of Camco's Federal Home Loan Bank (FHLB) borrowings amounting to a net loss of $1.63 per share. In addition, the quarter ended December 31, 2004 included the sale of the Ashland, Kentucky division amounting to a net gain of $.53 per share. Similar to the fourth quarter of 2004, the quarter ended December 31, 2003 included expenses associated with the restructuring of a portion of Camco's FHLB borrowings amounting to $.11 per share. Excluding the impact of these extraordinary items, net earnings from operations for the quarter ended December 31, 2004 were $1.9 million or $.24 per share as compared with $1.4 million or $.20 per share for the same quarter in 2003, or an increase of 29%. When comparing the fourth quarter 2004 with the third quarter of 2004, net income from operations increased 27% from $1.5 million, or $.20 per share, as compared to $1.9 million or $.24 per share. For the year ended December 31, 2004, Camco reported a net loss of $2.5 million compared with net earnings of $6.9 million for the year ended 2003. The loss per share for 2004 was $.34 versus earnings per share of $.92 for 2003. Excluding the impact of the restructuring of FHLB borrowings in 2004 and 2003 and the sale of the Ashland division in 2004, Camco's net earnings for the year ended December 31, 2004 were $5.9 million or $.79 per diluted share as compared with $7.7 million or $1.03 per share for 2003. Camco's President & CEO, Richard C. Baylor commented, "2004 was a major transition year for Camco. The year brought significant change to the structure of our balance sheet through the acquisition of London Financial in August, which included the adoption of a State of Ohio commercial bank charter for Advantage Bank. We also completed the sale of our Ashland division in December and a major restructuring of our FHLB advances near the end of the year. In addition, the composition of our loan portfolio continues to change dramatically as we transition to more commercial and consumer lending production. We saw our percentage of commercial and consumer lending production as a percent of our total loan production increase from 26% in 2003 to 51% in 2004. We have also seen our commercial real estate production increase to $120 million in 2004, which is a substantial increase over last year. Our focus continues on this line of business through the recruiting of seasoned commercial lenders in the markets we serve. For the first time, our production of commercial and consumer lending exceeded our production of residential mortgage loans. We produced a total of $208 million in commercial and consumer loans while at the same time we produced $201 million in residential mortgage loans in 2004. The effect of this transition has been an improvement in the net interest margin. Our short-term goal is to transition our loan portfolio to 30% commercial and commercial real estate and 20% consumer with the NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com remaining 50% being residential. Currently, our loan portfolio is 28% commercial and commercial real estate, 14% consumer and 58% residential. At the end of 2003, these ratios were 19%, 14% and 67%, respectively." Mr. Baylor continued, "We continue to execute our strategic plan to effectively transition our balance sheet composition through the funding of higher yielding commercial, commercial real estate, and consumer loans with lower cost transaction-based deposit accounts, thereby producing higher net interest margins. With rates moving upward in 2004, we were pleased to maintain our certificates of deposit as a percentage of total deposits at 54%, which was the same ratio at the end of 2003. At the same time we were able to maintain our total cost of deposits at 2.10% in 2004." REVIEW OF SIGNIFICANT AREAS: NET INTEREST MARGIN - In 2005 as short-term interest rates appear poised to increase, management expects the net interest margin to continue improving. This improvement is predicated on Camco's continued emphasis on growth in the commercial, commercial real estate and consumer loan portfolios; effective cost of funds management, emphasizing lower cost, transaction - based, deposit accounts; and the beneficial effects of the significant restructuring of FHLB borrowings that occurred at the end of 2004. For fiscal 2004, the net interest margin increased to 2.49% from 2.34% for 2003. On a linked quarter basis, the net interest margin increased from 2.44% for the third quarter 2004 to 2.55% for the fourth quarter 2004. This increase was due primarily to the beneficial impact of our asset sensitive balance sheet in a rising rate environment, the transition in the loan portfolio composition, and the diligent management of our cost of funding. NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com In December of 2004, $144 million in FHLB borrowings having a weighted average rate of 6.25% and weighted average term of 5.61 years were restructured. The prepayment penalty net of related tax benefit was $12.5 million. The FHLB borrowings were replaced with a structured FHLB borrowing, having maturities extending to 5 years with a weighted average cost of 3.59%. Management anticipates the impact from the FHLB restructuring to increase the net interest margin in 2005 by approximately 31 basis points. NON-INTEREST INCOME - For the year ended December 31, 2004, non-interest income was $13.7 million versus $11.4 million for the same period last year. Non-interest income for 2004 included the sale of our Ashland, Kentucky banking division which resulted in a pretax gain of $6.1 million. Excluding the sale of the Ashland banking division, non-interest income would have decreased from $11.4 million in 2003 to $7.6 million in 2004. This decrease of $3.8 million was primarily attributable to a smaller gain on the sale of loans, as a result of fewer loans being sold into the secondary market, as well as a reduction in title agency revenue, all due to lower residential loan production levels. $118 million in loans were sold in the secondary market in 2004 versus $279 million in loans sold in 2003, with the gain on these sales being $819,000 versus $3.6 million, respectively. Due to lower production levels, the title agency revenue was down approximately $818,000 in 2004. The value of mortgage servicing rights increased $402,000 in 2004 versus an increase of $543,000 in 2003. At year-end 2004, Camco serviced $576 million of residential loans for others, slightly more than the $570 million serviced at the end of 2003. NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com OPERATING EXPENSES - For the year ended December 31, 2004, operating expenses were $41.7 million versus $23.7 million for 2003. If expenses were adjusted in 2004 and 2003 for FHLB restructuring prepayment fees, operating expenses would be $22.8 million and $22.4 million, respectively, which represents a 2% increase. The primary reason for this small increase in core operating expenses was a reduction in employee compensation and benefits from $14 million to $13 million. The reduction in employee compensation and benefits was primarily due to lower incentives and commissions on reduced loan production from prior year levels. The reduction to compensation expense related to direct loan origination costs has decreased substantially due to the drop in residential loan production, as this offset to expense decreased from $3.5 million in 2003 to $2.2 million in 2004 or approximately 37%. Occupancy and equipment expenses have decreased from $3.8 million in 2003 to $3.4 million in 2004, a decrease of approximately 10% as management utilized current infrastructure more efficiently and continued to capitalize on past investments in technology. ASSET QUALITY - Non-performing loans as a percentage of loans decreased from 1.69% at December 31, 2003 to 1.17% at December 31, 2004. The allowance for loan losses as a percentage of loans has increased from 71 basis points at December 31, 2003 to 78 basis points at December 31, 2004. Significant resources have been devoted to a continuing reduction of non-performing assets. At December 31, 2004, approximately 66% of all non-performing loans were single family home loans. STRATEGIC VISION - Camco continues to actively execute and manage it's long-term strategic plan. This plan encompasses the diversification 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 growth NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com of the balance sheet and the corresponding increase in net interest margin. Complementary revenue sources to enhance the net interest margin are being actively pursued while management remains vigilant to contain operating expenses in this transitional period. 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 30 offices in 23 communities in Ohio, Kentucky and West Virginia. NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com 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" 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. FINANCIALS ATTACHED. Camco Financial Corporation Condensed Consolidated Statements of Financial Condition (In thousands, except for per share data and shares outstanding)
(Unaudited) (Unaudited) (Unaudited) (Unaudited) Audited 12/31/04 9/30/04 6/30/04 3/31/04 12/31/03 ----------- ----------- ----------- ----------- ----------- Assets Cash and Cash Equivalents $ 42,894 $ 45,291 $ 38,192 $ 38,761 $ 53,711 Investments 108,429 117,370 124,694 129,573 113,758 Loans Held for Sale 2,837 4,386 4,805 8,908 5,457 Loans Receivable 840,305 898,355 838,699 817,252 805,266 Allowance for Loan Loss (6,476) (6,398) (5,528) (5,460) (5,641) ----------- ----------- ----------- ----------- ----------- Loans Receivable, Net 833,829 891,957 833,171 811,792 799,625 Goodwill 6,736 7,023 2,953 2,953 2,953 Other Assets 71,039 68,078 64,902 65,036 63,647 ----------- ----------- ----------- ----------- ----------- Total Assets $ 1,065,764 $ 1,134,105 $ 1,068,717 $ 1,057,023 $ 1,039,151 =========== =========== =========== =========== =========== Liabilities Deposits $ 667,778 $ 728,918 $ 677,567 $ 669,046 $ 671,274 Borrowed Funds 295,310 291,719 289,712 283,280 262,735 Other Liabilities 13,355 16,440 9,715 11,704 12,599 ----------- ----------- ----------- ----------- ----------- Total Liabilities 976,443 1,037,077 976,994 964,030 946,608 Stockholders Equity 89,321 97,028 91,723 92,993 92,543 ----------- ----------- ----------- ----------- ----------- Total Liabilities and Stockholders' Equity $ 1,065,764 $ 1,134,105 $ 1,068,717 $ 1,057,023 $ 1,039,151 =========== =========== =========== =========== =========== Stockholders' Equity to Total Assets 8.38% 8.56% 8.58% 8.80% 8.91% Total Shares Outstanding 7,663,153 7,640,505 7,358,888 7,352,151 7,332,423 Book Value Per Share $ 11.66 $ 12.70 $ 12.46 $ 12.65 $ 12.62
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 12/31/04 9/30/04 6/30/04 3/31/04 12/31/03 (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) ----------- ----------- ----------- ----------- ----------- Interest Income: Loans $12,188 $11,860 $11,469 $ 11,415 $11,485 Mortgage- backed securities $ 785 $ 833 $ 791 $ 607 $ 664 Investment securities $ 178 $ 209 $ 203 $ 182 $ 251 Interest- bearing deposits and other $ 610 $ 571 $ 522 $ 525 $ 522 ------- ------- ------- -------- ------- Total Interest Income 13,761 13,473 12,985 12,729 12,922 ------- ------- ------- -------- ------- Interest Expense: Deposits 3,723 3,570 3,303 3,349 3,577 Borrowings 3,355 3,497 3,406 3,309 3,705 ------- ------- ------- -------- ------- Total Interest Expense 7,078 7,067 6,709 6,658 7,282 ------- ------- ------- -------- ------- Net Interest Income 6,683 6,406 6,276 6,071 5,640 Provision for Losses on Loans 855 255 255 255 516 ------- ------- ------- -------- ------- Net Interest Income After Provision for Loan Losses 5,828 6,151 6,021 5,816 5,124 ------- ------- ------- -------- ------- Noninterest Income Late charges, rent and other 585 623 600 640 620 Loan servicing fees 381 373 379 386 392 Service charges and other fees on deposits 404 407 327 272 279 Gain on sale of loans 140 189 29 276 350 Valuation of mortgage servicing rights - net 269 206 214 (102) 355 Gain on sale of investment, mbs & fixed assets 6,653 106 134 (13) 66 Gain on sale of real estate acq'd
through foreclosure 123 10 20 77 123 ------- ------- ------- -------- ------- Total noninterest income 8,555 1,914 1,703 1,536 2,185 ------- ------- ------- -------- ------- Non interest expense Employee compensation and benefits 2,655 2,763 2,672 2,996 2,338 Occupancy and equipment 821 867 828 874 991 Data processing 331 320 325 342 337 Advertising 225 387 181 254 209 Franchise taxes 201 283 294 214 211 Other operating(1) 1,317 1,307 1,194 1,190 1,128 FHLB prepayment penalty 18,879 0 0 0 1,292 ------- ------- ------- -------- ------- Total noninterest expense 24,429 5,927 5,494 5,870 6,506 ------- ------- ------- -------- ------- Net Income - Before Income Tax (10,046) 2,138 2,230 1,482 803 Provision for income taxes (3,476) 670 698 448 215 ------- ------- ------- -------- ------- Reported Net Income (6,570) 1,468 1,532 1,034 588 ------- ------- ------- -------- ------- Adjusted for non-recurring items Sale of branches and (4,024) Prepayment costs (net of tax) 12,460 0 0 0 853 ------- ------- ------- -------- ------- Net Earnings from Operations 1,866 1,468 1,532 1,034 1,441 ======= ======= ======= ======== ======= Earnings Per Share Reported: Basic ($0.86) $0.20 $0.21 $0.14 $0.09 Diluted ($0.85) $0.19 $0.21 $0.14 $0.09 Earnings Per Share Operations: Basic $0.24 $0.20 $0.21 $0.14 $0.20 Diluted $0.24 $0.19 $0.21 $0.14 $0.19
Basic Weighted Number of Shares Outstanding 7,645,005 7,513,890 7,357,635 7,345,340 7,355,576 Diluted Weighted Number of Shares Outstanding 7,684,500 7,559,916 7,403,929 7,414,616 7,440,603
(1) December 2004 and 2003 includes FHLB prepayment fees of $18,879 and $1,292 respectively Camco Financial Corporation Selected Ratios and Statistics Periods Ended December 31, 2004 and 2003 (In thousands, except for per share data and shares outstanding)
12 Months 12 Months 3 Months 3 Months Ended Ended Ended Ended 12/31/04 12/31/03 12/31/04 12/31/03 (Unaudited) (Unaudited) (Unaudited) (Unaudited) --------- --------- --------- --------- Reported: Return on Average Equity -2.70% 7.17% -6.86% 2.52% Return on Average Assets -0.24% 0.65% -0.60% 0.23% Interest Rate Spread 2.26% 2.06% 2.33% 2.04% Net Interest Margin 2.49% 2.34% 2.55% 2.30% Yield on earning assets 5.17% 5.43% 5.25% 5.24% Cost of deposits 2.09% 2.46% 2.16% 2.23% Cost of funds 4.89% 5.56% 4.81% 5.53% Noninterest expense/average assets 3.89% 2.23% 8.83% 2.51% Efficiency Ratio 111.18% 67.61% 160.32% 83.14% Non performing assets to total assets 1.14% 1.45% 1.14% 1.45% Non performing loans to total net loans including lhfs 1.17% 1.69% 1.17% 1.69% Allowance for loan losses to total loans 0.78% 0.71% 0.78% 0.71% Operations: Return on Average Equity 6.23% 7.38% 7.63% 5.93% Return on Average Assets 0.55% 0.65% 0.68% 0.53%
Camco Financial Corporation Averages for Quarters Ended December and September 2004 (In thousands, except for per share data and shares outstanding)
Average Table - Quarter Ended -------------------------------------------------------- Dec 31, 2004 Sept 30, 2004 -------------------------------------------------------- Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate --------- -------- ------ ------- -------- ------ Interest - Earning Assets: Loans held for sale 4,326 5,150 Loans receivable - net 869,716 12,188 5.58% 863,595 11,860 5.46% Mortgage-backed securities 87,825 785 3.58% 93,121 833 3.58% Investment securities 24,655 178 2.89% 27,358 209 3.06% Interest-bearing deposits and other 61,389 610 3.97% 62,477 571 3.66% --------- ------ ---- --------- ------ ---- Total interest earning assets 1,047,911 13,761 5.25% 1,051,701 13,473 5.12% --------- ------ ---- --------- ------ ---- Noninterest-earning assets 55,825 51,629 --------- --------- Total Assets 1,103,736 1,103,330 ========= ========= Interest-Bearing Liabilities: Deposits 690,919 3,723 2.16% 681,633 3,570 2.09% Advances 278,873 3,355 4.81% 291,898 3,497 4.79% --------- ------ ---- --------- ------ ---- Total interest- bearing liabilities 969,792 7,078 2.92% 973,531 7,067 2.90% --------- ------ ---- --------- ------ ---- Noninterest-bearing sources: Noninterest-bearing liabilities 38,163 32,771 Shareholders' equity 95,781 97,028 --------- --------- Total Liabilities and Shareholders' Equity 1,103,736 1,103,330 ========= ========= Net Interest Income & Margin 6,683 2.55% 6,406 2.44% ===== ==== ===== ====
Contact: Camco Financial Corporation Richard C. Baylor, 740-435-2040 Mark A. Severson, 740-435-2055 -----END PRIVACY-ENHANCED MESSAGE-----