EX-99 2 l13577aexv99.txt EXHIBIT 99 [CAMCO FINANCIAL CORPORATION LOGO] 6901 Glenn Highway Cambridge, OH 43725-9757 Phone: 740-435-2020 Fax: 740-432-2743 [Private Fax] EXHIBIT 99 NEWS RELEASE RELEASE DATE: APRIL 22, 2005 RELEASE TIME: 4:00 P.M. CAMCO FINANCIAL ANNOUNCES STRONG FIRST QUARTER 2005 EARNINGS GROWTH CAMBRIDGE, OHIO (NASDAQ: CAFI) - Camco Financial Corporation ("Camco") reported net earnings for the quarter ended March 31, 2005 of $2.2 million or $.29 per share as compared with net earnings of $1.03 million or $.14 per share for the same quarter in 2004, an increase of 107%. On a quarter to quarter basis, comparing the first quarter of 2005 with the fourth quarter of 2004, net earnings from operations increased 19% to $2.2 million or $.29 per share as compared to $1.9 million or $.24 per share. Net earnings from operations for the fourth quarter of 2004 excluded the impact of the restructuring of Federal Home Loan Bank borrowings and the sale of the Ashland, Kentucky division, which resulted in a net reduction of $1.10 per share. Camco recently announced a quarterly dividend of $.145 which was payable April 15, 2005. This dividend represents an annualized yield of 4.15% on Camco's March 31 quarter-end market value. President & CEO Richard C. Baylor commented, "We are beginning to see significant progress resulting from our efforts to restructure the composition of our balance sheet to be more commercial bank-like along with the deliberate efforts to NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com stay on course with our strategic plan initiatives that call for less residential loan assets and more lower cost checking accounts. We were encouraged to see our annualized return on average equity for the 1st quarter 2005 increase to 9.87% which is in excess of Ohio bank peer groups and approximates the national average for publicly traded banks." Mr. Baylor continued, "We saw our net interest margin increase to 2.93% from 2.46% in the first quarter of 2004. We continue to see the average yield on our earning assets increase as we continue the shift in the composition of our loan portfolio. At the end of the first quarter 2005, the percentage of residential loans continued to drop to a current level of 57% from 65% a year ago. At the same time our commercial portfolio is at 28% compared to 21% a year ago. Overall, the yield on our earning assets increased 21 basis points from last year's first quarter. Additionally, the cost of interest bearing liabilities decreased 31 basis points, primarily due to the beneficial effects of the significant restructuring of FHLB borrowings that occurred at the end of 2004. We are encouraged as we continue our focus of changing the composition of our loan portfolio to include higher margin producing commercial and consumer rate sensitive loans. As opportunities present themselves, we are recruiting seasoned commercial lenders in the markets we serve." Review of significant areas: NET INTEREST MARGIN: During the first quarter of 2005, as short-term interest rates rose, management saw the net interest margin continue to improve. This improvement is predicated on NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com 5 Camco's continued emphasis on growth in the commercial, commercial real estate and consumer loan portfolios and effective cost of funds management, emphasizing lower cost, transaction-based, deposit accounts. For the first quarter 2005, the net interest margin increased to 2.93% from 2.46% for the first quarter 2004. On a quarter to quarter basis, the net interest margin increased from 2.55% for the fourth quarter 2004 to 2.93% for the first quarter 2005. This significant increase was due primarily to the restructuring of our FHLB advances in the fourth quarter of 2004 and an increase in the yield on earning assets. NON-INTEREST INCOME: For the quarter ended March 31, 2005, non-interest income increased 11.1% to $1.7 million from $1.5 million for the first quarter of 2004. Core non-interest income, which is net of the gain on sale and mortgage servicing rights, increased 12.4% to $1.5 million in the first quarter 2005 from $1.3 million in the first quarter 2004. During the first quarter 2005, $14.4 million of loans were sold with a total gain of $170,000, as compared to $26.5 million sold in the first quarter of 2004 for a gain of $276,000. Although less volume overall was originated and sold, the profit margin increased on the sales from 1.04% to 1.18%. The amount of loans sold in the first quarter was 46% below the amount sold in the first quarter 2004 due to rising interest rates and a higher percentage of loans being originated as adjustable rate mortgages. Mortgage servicing rights had a positive impact in the first quarter 2005 of $51,000 versus the first quarter of 2004, which had a negative adjustment of $102,000. The NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com 6 increase in the value of mortgage servicing rights is a result of the continuing slow-down in prepayments. OPERATING EXPENSES: For the first quarter ended March 31, 2005, operating expenses were $5.6 million compared to $5.9 million for the first quarter of 2004. As a percentage of average assets, general and administrative expenses decreased to 2.09% from 2.28%. This was a decrease of 5.2%. The main drivers of this decrease were lower Ohio franchise tax provisions due to the London Financial acquisition, which is a one time savings that will only occur in 2005, and lower depreciation when compared to the prior period. ASSET QUALITY: Non-performing loans as a percentage of loans increased from 1.17% at December 31, 2004 to 1.28% at March 31, 2005. The allowance for loan losses as a percentage of loans increased slightly from 78 basis points at December 31, 2004 to 79 basis points at March 31, 2005. At March 31, 2005, approximately 58% of all non-performing loans were single family home loans. STRATEGIC VISION: Camco continues to 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 NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com 7 transaction-based deposits. Critical to the strategy is the future growth of the balance sheet and the correspondent increase in net interest margin. Complimentary 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. Additional information about Camco Financial may be found on Campo'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. NASDAQ: CAFI - EMAIL: camco@camco.cc - www.camcofinancial.com 8 CAMCO FINANCIAL CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (IN THOUSANDS, EXCEPT FOR PER SHARE DATA AND SHARES OUTSTANDING)
(UNAUDITED) AUDITED (UNAUDITED) (UNAUDITED) (UNAUDITED) 3/31/05 12/31/04 9/30/04 6/30/04 3/31/04 ------- -------- ------- ------- ------- ASSETS Cash and Cash Equivalents 39,795 $ 42,894 $ 45,291 $ 38,192 $ 38,761 Investments 109,179 108,429 117,370 124,694 129,573 Loans Held for Sale 4,616 2,837 4,386 4,805 8,908 Loans Receivable 843,777 840,305 898,355 838,699 817,252 Allowance for Loan Loss (6,637) (6,476) (6,398) (5,528) (5,460) ----------- ----------- ----------- ----------- ----------- Loans Receivable, Net 837,140 833,829 891,957 833,171 811,792 Goodwill 6,683 6,736 7,023 2,953 2,953 Other Assets 67,221 71,098 68,078 64,902 65,036 ----------- ----------- ----------- ----------- ----------- TOTAL ASSETS $ 1,064,634 $ 1,065,823 $ 1,134,105 $ 1,068,717 $ 1,057,023 =========== =========== =========== =========== =========== LIABILITIES Deposits 674,853 $ 667,778 $ 728,918 $ 677,567 $ 669,046 Borrowed Funds 289,302 295,310 291,719 289,712 283,280 Other Liabilities 10,900 13,414 16,440 9,715 11,704 ----------- ----------- ----------- ----------- ----------- TOTAL LIABILITIES 975,055 976,502 1,037,077 976,994 964,030 STOCKHOLDERS EQUITY 89,579 89,321 97,028 91,723 92,993 ----------- ----------- ----------- ----------- ----------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 1,064,634 $ 1,065,823 $ 1,134,105 $ 1,068,717 $ 1,057,023 =========== =========== =========== =========== =========== STOCKHOLDERS' EQUITY TO TOTAL ASSETS 8.41% 8.38% 8.56% 8.58% 8.80% TOTAL SHARES OUTSTANDING 7,678,747 7,663,153 7,640,505 7,358,888 7,352,151 BOOK VALUE PER SHARE $ 11.67 $ 11.66 $ 12.70 $ 12.46 $ 12.65
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 3/31/05 12/31/04 9/30/04 6/30/04 3/31/04 (UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED (UNAUDITED) ------------ ----------- ----------- ---------- ----------- INTEREST INCOME: LOANS $ 11,962 $ 12,188 $ 11,860 $ 11,469 $ 11,415 MORTGAGE-BACKED SECURITIES $ 751 $ 785 $ 833 $ 791 $ 607 INVESTMENT SECURITIES $ 185 $ 178 $ 209 $ 203 $ 182 INTEREST-BEARING DEPOSITS AND OTHER $ 607 $ 610 $ 571 $ 522 $ 525 ----------- ----------- ----------- ----------- ----------- TOTAL INTEREST INCOME 13,505 13,761 13,473 12,985 12,729 ----------- ----------- ----------- ----------- ----------- INTEREST EXPENSE: DEPOSITS 3,503 3,723 3,570 3,303 3,349 BORROWINGS 2,634 3,355 3,497 3,406 3,309 ----------- ----------- ----------- ----------- ----------- TOTAL INTEREST EXPENSE 6,137 7,078 7,067 6,709 6,658 ----------- ----------- ----------- ----------- ----------- NET INTEREST INCOME 7,368 6,683 6,406 6,276 6,071 PROVISION FOR LOSSES ON LOANS 240 855 255 255 255 ----------- ----------- ----------- ----------- ----------- NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 7,128 5,828 6,151 6,021 5,816 ----------- ----------- ----------- ----------- ----------- NONINTEREST INCOME LATE CHARGES, RENT AND OTHER 745 585 623 600 640 LOAN SERVICING FEES 378 381 373 379 386 SERVICE CHARGES AND OTHER FEES ON DEPOSITS 334 404 407 327 272 GAIN ON SALE OF LOANS 170 140 189 29 276 VALUATION OF MORTGAGE SERVICING RIGHTS - NET 51 269 206 214 (102) GAIN ON SALE OF INVESTMENT, MBS & FIXED ASSETS 19 6,653 106 134 (13) GAIN ON SALE OF REAL ESTATE ACQ'D THROUGH FORECLOSURE 9 123 10 20 77 ----------- ----------- ----------- ----------- ----------- TOTAL NONINTEREST INCOME 1,706 8,555 1,914 1,703 1,536 ----------- ----------- ----------- ----------- ----------- NON INTEREST EXPENSE EMPLOYEE COMPENSATION AND BENEFITS 2,964 2,655 2,763 2,672 2,996 OCCUPANCY AND EQUIPMENT 797 821 867 828 874 DATA PROCESSING 331 331 320 325 342 ADVERTISING 229 225 387 181 254 FRANCHISE TAXES 79 201 283 294 214 OTHER OPERATING 1,165 1,317 1,307 1,194 1,190 FHLB PREPAYMENT PENALTY (1) 0 18,879 0 0 0 ----------- ----------- ----------- ----------- ----------- TOTAL NONINTEREST EXPENSE 5,565 24,429 5,927 5,494 5,870 ----------- ----------- ----------- ----------- ----------- NET INCOME - BEFORE INCOME TAX 3,269 (10,046) 2,138 2,230 1,482 PROVISION FOR INCOME TAXES 1,051 (3,476) 670 698 448 ----------- ----------- ----------- ----------- ----------- REPORTED NET INCOME 2,218 (6,570) 1,468 1,532 1,034 ----------- ----------- ----------- ----------- ----------- ADJUSTED FOR NON-RECURRING ITEMS SALE OF BRANCHES AND 0 (4,024) PREPAYMENT COSTS (NET OF TAX) 0 12,460 0 0 0 ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- NET EARNINGS FROM OPERATIONS 2,218 1,866 1,468 1,532 1,034 =========== =========== =========== =========== =========== EARNINGS PER SHARE REPORTED: BASIC $ 0.29 ($ 0.89) $ 0.20 $ 0.21 $ 0.14 DILUTED $ 0.29 N/A $ 0.19 $ 0.21 $ 0.14 EARNINGS PER SHARE OPERATIONS: BASIC $ 0.29 $ 0.24 $ 0.20 $ 0.21 $ 0.14 DILUTED $ 0.29 $ 0.24 $ 0.19 $ 0.21 $ 0.14 BASIC WEIGHTED NUMBER OF SHARES OUTSTANDING 7,677,795 7,645,005 7,513,890 7,357,635 7,345,340 DILUTED WEIGHTED NUMBER OF SHARES OUTSTANDING 7,711,433 7,684,500 7,559,916 7,403,929 7,414,616
(1) DECEMBER 2004 INCLUDES FHLB PREPAYMENT FEES OF $18,879 CAMCO FINANCIAL CORPORATION SELECTED RATIOS AND STATISTICS PERIODS ENDED MARCH 31, 2005 AND 2004 (IN THOUSANDS, EXCEPT FOR PER SHARE DATA AND SHARES OUTSTANDING)
3 MONTHS 3 MONTHS ENDED ENDED 3/31/05 3/31/04 (UNAUDITED) (UNAUDITED) ----------- ----------- REPORTED: RETURN ON AVERAGE EQUITY 9.87% 4.45% RETURN ON AVERAGE ASSETS 0.83% 0.40% INTEREST RATE SPREAD 2.74% 2.22% NET INTEREST MARGIN 2.93% 2.46% YIELD ON EARNING ASSETS 5.36% 5.15% COST OF DEPOSITS 2.18% 2.08% COST OF FUNDS 3.59% 5.01% NONINTEREST EXPENSE/AVERAGE ASSETS 2.09% 2.27% EFFICIENCY RATIO 61.33% 77.17% NON PERFORMING ASSETS TO TOTAL ASSETS 1.21% 1.46% NON PERFORMING LOANS TO TOTAL NET LOANS INCLUDING LOANS HELD FOR SALE 1.28% 1.55% ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS 0.79% 0.67%
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 MARCH 2005 AND DECEMBER 2004 (IN THOUSANDS, EXCEPT FOR PER SHARE DATA AND SHARES OUTSTANDING)
AVERAGE TABLE - QUARTER ENDED ------------------------------------------------------------------------------------- MAR 31, 2005 DEC 31, 2004 ------------------------------------------------------------------------------------- Average Yield/ Average Yield/ Balance Interest Rate Balance Interest Rate ------------------------------------------------------------------------------------- INTEREST - EARNING ASSETS: Loans held for sale 4,006 4,326 Loans receivable - net 836,569 11,962 5.69% 869,716 12,188 5.58% Mortgage-backed securities 82,381 751 3.65% 87,825 785 3.58% Investment securities 24,369 185 3.04% 24,655 178 2.89% Interest-bearing deposits and other 60,050 607 4.04% 61,389 610 3.97% --------- ------ ---- --------- ------ ---- Total interest earning assets 1,007,375 13,505 5.36% 1,047,911 13,761 5.25% --------- ------ ---- --------- ------ ---- Noninterest-earning assets 56,173 55,825 --------- --------- TOTAL ASSETS 1,063,548 1,103,736 ========= ========= INTEREST-BEARING LIABILITIES: Deposits 642,359 3,503 2.18% 690,919 3,723 2.16% Advances 293,551 2,634 3.59% 278,873 3,355 4.81% --------- ----- ---- --------- ----- ---- Total interest-bearing liabilities 935,910 6,137 2.62% 969,792 7,078 2.92% --------- ----- ---- --------- ----- ---- Noninterest-bearing sources: Noninterest-bearing liabilities 37,710 38,163 Shareholders' equity 89,928 95,781 --------- --------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,063,548 1,103,736 ========= ========= ----- ---- ----- ---- NET INTEREST INCOME & MARGIN 7,368 2.93% 6,683 2.55% ===== ==== ===== ====