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): July 28, 2006

CAMCO FINANCIAL CORPORATION

(Exact name of registrant as specified in its charter)

DELAWARE	0-25196	51-0110823
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer I.D. No.)

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))

Section 2 – Financial Information

Item 2.02 Results of Operations and Financial Condition.

     On July 28, 2006, Camco Financial Corporation (“Camco”) issued a press release regarding its earnings for the quarter ended June 30, 2006. 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 July 28, 2006

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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: August 1, 2006

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EX-99

EXHIBIT 99

NEWS RELEASE

Release Date: July 28, 2006

Camco Financial Announces Second Quarter 2006 Earnings

Cambridge, Ohio (Nasdaq: CAFI) — Camco Financial Corporation (Camco) reported net earnings for the quarter ended June 30, 2006 of $1.82 million or $.24 per share as compared with net earnings of $2.04 million or $.27 per share for the same quarter in 2005.

For the 6 months ended June 30, 2006 Camco reported net earnings of $3.49 million compared to $4.26 million of net earnings reported for the same 6 month period in 2005. Basic earnings per share for the 6 months ended June 30, 2006 were $.46 compared to $.56 for the same 6 month period in 2005.

Camco recently announced a quarterly dividend of $.15 per share which was paid July 21, 2006. This dividend represents an annualized yield of 4.33% on Camco’s June 30^th quarter-end stock price.

President & CEO Richard C. Baylor commented, “Over the last two years the Federal Reserve Bank has boosted short-term interest rates seventeen times in an effort to tighten the money supply and head off inflation. While few bankers or economists disagree with the Federal Reserve’s policy, it has led to a challenging environment for all banks. After five consecutive quarters of year over year growth in net income from

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operations, our net income was down in each of the first two quarters of 2006 compared to the same periods in 2005.”

Mr. Baylor continued, “At the end of June we find ourselves with an inverted yield curve which means that narrowing interest margins and strong competition for core deposits are situations that are not likely to improve in the near term. Because of our disciplined approach, we are not willing to grow at the expense of the bottom line due to irrational pricing on loans and deposits. We continue to take the long-term view and invest prudently in the future by means of adding talented people to the lending and deposit sales areas of the bank.”

Review of Significant Areas:

Net Interest Margin: During the second quarter of 2006, as short-term interest rates continued rising, the net interest margin decreased to 2.91% in the second quarter 2006 from 3.06% in the first quarter of 2006. The decrease of 15 basis points is the result of the cost of interest bearing liabilities increasing faster than the yield on interest earning assets. The cost of interest bearing deposits increased 33 basis points in the second quarter 2006 verses the first quarter 2006, reflecting the intense competition for deposits in our markets.

Non-Interest Income: For the quarter ended June 30, 2006, total non-interest income decreased 10.34% to $1.47 million from $1.63 million for the same period last year. Total non-interest income, net of both gain on sale of loans and mortgage servicing rights, increased 2.6% to $1.51 million from $1.47 million.

NASDAQ: CAFI • EMAIL: camco@camco.cc • www.camcofinancial.com

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For the quarter ended June 30, 2006, $15.7 million of loans were sold with a total gain of $81,000 as compared to $18.8 million sold in the second quarter of 2005 for a gain of $179,000. This reduction in gain on sale of loans is the result of two factors. First, the profit margin decreased on the sales from .95% to .52%. Second, the amount of loans sold in the second quarter of 2006 was 16.5% less than the second quarter of 2005 because continued rising interest rates caused a higher amount of adjustable rate loans to be originated and retained in the portfolio.

Operating Expenses: For the quarter ended June 30, 2006, operating expenses were $5.94 million compared to $5.81 million for the comparable period in 2005, or an increase of 2.29%. As a percentage of average assets, operating expenses increased to 2.23% from 2.18%.

Asset Quality: Non-performing loans as a percentage of loans increased to 1.85% at June 30, 2006 from 1.11% at June 30, 2005. The allowance for loan losses as a percentage of loans increased to 90 basis points at June 30, 2006 from 78 basis points at June 30, 2005, reflecting management’s continued efforts to grow the loan loss reserve albeit at the expense of current period earnings. At June 30, 2006, total non-performing loans were $15.7 million, of which 50% were single family residential loans. The bank’s net charge-off’s as a percentage of loans for YTD 2006 was .01% versus .10% for the same period in 2005.

Strategic Vision: Camco continues to execute and manage its 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 this strategy is the future growth of

NASDAQ: CAFI • EMAIL: camco@camco.cc • www.camcofinancial.com

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the balance sheet and the corresponding increase in net interest income. Complementary revenue sources to enhance the net interest income are being actively pursued while management remains vigilant to contain operating expenses in this transitional period. Growth is being developed by opening new branch offices in existing or adjacent markets versus acquisitions, with two new banking centers opening during the 3rd and 4th quarter, 2006. A new banking center in Mason, Ohio, a northeastern suburb of Cincinnati, and a second banking center, in London, Ohio, a community just west of Columbus; demonstrate our targeted approach to developing our banking centers in growth markets.

Camco Financial Corporation, holding company for Advantage Bank, is a multi-state financial holding company headquartered in Cambridge, Ohio. Advantage Bank and its affiliates offer community banking that includes commercial, business and consumer financial services, internet banking and title insurance services from 29 offices in 22 communities in Ohio, Kentucky and West Virginia.

NASDAQ: CAFI • EMAIL: camco@camco.cc • www.camcofinancial.com

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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.

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Camco Financial Corporation
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and Shares Outstanding)

	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05
Assets
Cash and Cash Equivalents	$	32,938		$	29,861		$	33,085		$	34,274		$	36,778
Investments		114,586			109,460			113,690			113,206			113,517
Loans Held for Sale		2,115			3,325			1,968			5,317			3,441
Loans Receivable		852,921			847,426			853,701			856,468			847,731
Allowance for Loan Loss		(7,639	)		(7,321	)		(6,959	)		(6,642	)		(6,540	)
Loans Receivable, Net		845,282			840,105			846,742			849,826			841,191
Goodwill		6,683			6,683			6,683			6,683			6,683
Other Assets		72,069			68,996			69,080			68,014			67,747
Total Assets	$	1,073,673		$	1,058,430		$	1,071,248		$	1,077,320		$	1,069,357
Liabilities
Deposits		681,905			676,376			660,242			669,908			669,283
Borrowed Funds		290,441			280,280			307,223			305,211			298,295
Other Liabilities		11,224			11,543			13,020			11,835			11,123
Total Liabilities		983,570			968,199			980,485			986,954			978,701
Stockholders Equity		90,103			90,231			90,763			90,366			90,656
Total Liabilities and Stockholders’ Equity	$	1,073,673		$	1,058,430		$	1,071,248		$	1,077,320		$	1,069,357
Stockholders’ Equity to		8.39	%		8.52	%		8.47	%		8.39	%		8.48	%
Total Assets
Total Shares Outstanding		7,488,813			7,536,713			7,578,713			7,621,385			7,643,746
Book Value Per Share	$	12.03		$	11.97		$	11.98		$	11.86		$	11.86

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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
	6/30/06			3/31/06			12/31/05			9/30/05			6/30/05
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Interest Income:
Loans	$	13,491		$	13,249		$	13,163		$	12,729		$	12,311
Mortgage-backed securities		608			633			655			679			742
Investment securities		539			480			466			358			257
Interest-bearing deposits and other		825			790			873			689			651
Total Interest Income		15,463			15,152			15,157			14,455			13,961
Interest Expense:
Deposits		5,108			4,424			4,136			4,009			3,786
Borrowings		2,900			2,949			2,922			2,893			2,646
Total Interest Expense		8,008			7,373			7,058			6,902			6,432
Net Interest Income		7,455			7,779			8,099			7,553			7,529
Provision for Losses on Loans		360			360			520			360			360
Net Interest Income After Provision for Loan Losses		7,095			7,419			7,579			7,193			7,169
Noninterest Income
Late charges, rent and other		726			462			550			818			715
Loan servicing fees		353			360			363			368			371
Service charges and other fees on deposits		431			352			393			370			386
Gain on sale of loans		80			99			119			215			179
Mortgage servicing rights		(46	)		(22	)		287			(276	)		(42	)
Gain on sale of investment, mbs & fixed assets		1			—			36			66			0
Gain on sale of real estate acq’d through foreclosure		(80	)		55			(39	)		(18	)		25
Total noninterest income		1,465			1,306			1,709			1,543			1,634
Non interest expense
Employee compensation and benefits		3,016			3,249			2,932			3,008			2,811
Occupancy and equipment		780			780			711			780			763
Data processing		333			393			373			317			347
Advertising		220			303			341			345			303
Franchise taxes		228			246			50			71			67
Other operating		1,366			1,291			1,237			1,214			1,519
Total noninterest expense		5,943			6,262			5,644			5,735			5,810
Net Income — Before Income Tax		2,617			2,463			3,644			3,001			2,993
Provision for income taxes		802			784			1,174			963			953
Net Earnings from Operations		1,815			1,679			2,470			2,038			2,040
Earnings Per Share Reported:
Basic	$	0.24		$	0.22		$	0.32		$	0.27		$	0.27
Diluted	$	0.24		$	0.22		$	0.32		$	0.27		$	0.27
Basic Weighted Number of Shares Outstanding		7,521,529			7,563,452			7,610,499			7,632,132			7,660,120
Diluted Weighted Number of Shares Outstanding		7,524,787			7,567,170			7,614,127			7,638,147			7,681,186

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Camco Financial Corporation
Selected Ratios and Statistics
Periods Ended June 30, 2006 and 2005
(In thousands, except for per share data and shares outstanding)

	6 Months			6 Months			3 Months			3 Months
	Ended			Ended			Ended			Ended
	6/30/06			6/30/05			6/30/06			6/30/05
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Reported:
Return on Average Equity		7.69	%		9.45	%		8.02	%		9.05	%
Return on Average Assets		0.65	%		0.80	%		0.68	%		0.77	%
Interest Rate Spread		2.70	%		2.75	%		2.63	%		2.76	%
Net Interest Margin		2.95	%		2.95	%		2.91	%		2.97	%
Yield on earning assets		5.99	%		5.44	%		6.04	%		5.51	%
Cost of deposits		2.98	%		2.26	%		3.14	%		2.34	%
Cost of funds		3.95	%		3.62	%		4.03	%		3.66	%
Total cost of interest bearing liabilities		3.29	%		2.69	%		3.41	%		2.75	%
Noninterest expense/average assets		2.29	%		2.14	%		2.23	%		2.18	%
Efficiency Ratio		67.79	%		62.37	%		66.63	%		63.41	%
Non performing assets to total assets		1.65	%		1.09	%		1.65	%		1.09	%
Non performing loans to total net loans including loans held for sale		1.85	%		1.11	%		1.85	%		1.11	%
Allowance for loan losses to total loans		0.90	%		0.78	%		0.90	%		0.78	%

Ratios are based upon the mathematical average of the balances at the end of each month for the quarter and were annualized where appropriate

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Camco Financial Corporation
Averages for Quarters Ended
June and March 2006, and December 2005
(In thousands, except for per share data and shares outstanding)

	Average Table - Quarter Ended
	Jun 30, 2006							Mar 31, 2006							Dec 31, 2005
	Average				Yield/			Average				Yield/			Average				Yield/
	Balance		Interest		Rate			Balance		Interest		Rate			Balance		Interest		Rate
Interest — Earning Assets:
Loans held for sale		2,502							2,550							3,197
Loans receivable — net		844,175		13,491		6.37	%		843,007		13,249		6.27	%		846,361		13,163		6.20	%
Mortgage-backed securities		59,196		608		4.11	%		62,981		633		4.02	%		67,372		655		3.89	%
Investment securities		53,131		539		4.06	%		48,795		480		3.93	%		47,013		466		3.96	%
Interest-bearing deposits and other		64,911		825		5.08	%		60,304		790		5.24	%		59,556		873		5.86	%
Total interest earning assets		1,023,915		15,463		6.04	%		1,017,637		15,152		5.96	%		1,023,499		15,157		5.92	%
Noninterest-earning assets		44,369							46,471							46,927
Total Assets		1,068,284							1,064,108							1,070,426
Interest-Bearing Liabilities:
Deposits		650,664		5,108		3.14	%		630,346		4,424		2.81	%		632,190		4,136		2.62	%
Advances		287,924		2,900		4.03	%		300,930		2,949		3.92	%		303,310		2,922		3.85	%
Total interest-bearing liabilities		938,588		8,008		3.41	%		931,276		7,373		3.17	%		935,500		7,058		3.02	%
Noninterest-bearing sources:
Noninterest-bearing liabilities		39,190							41,834							43,910
Shareholders’ equity		90,506							90,998							91,016
Total Liabilities and Shareholders’ Equity		1,068,284							1,064,108							1,070,426
Net Interest Income & Margin				7,455		2.91	%				7,779		3.06	%				8,099		3.17	%

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