10-Q 1 camco10q_33101.txt CAMCO FINANCIAL 10Q FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 ---------------------------------------------- OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to _______________ Commission File Number 0-25196 CAMCO FINANCIAL CORPORATION ------------------------------------------------------------------------------ (Exact name of registrant as specified in its charter) Delaware 51-0110823 ------------------------------- -------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 6901 Glenn Highway, Cambridge, Ohio 43725 ------------------------------------------------------------------------------ (Address of principal executive office) Registrant's telephone number, including area code: (740) 435-2020 Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of May 11, 2001, the latest practicable date, 6,952,926.5 shares of the registrant's common stock, $1.00 par value, were issued and outstanding. Page 1 of 15 pages Camco Financial Corporation INDEX Page PART I - FINANCIAL INFORMATION Consolidated Statements of Financial Condition 3 Consolidated Statements of Earnings 4 Consolidated Statements of Comprehensive Income 5 Consolidated Statements of Cash Flows 6 Notes to Consolidated Financial Statements 8 Management's Discussion and Analysis of Financial Condition and Results of Operations 11 Quantitative and Qualitative Disclosures about Market Risk 13 PART II - OTHER INFORMATION 14 SIGNATURES 15 2 Camco Financial Corporation
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (In thousands, except share data) March 31, December 31, ASSETS 2001 2000 Cash and due from banks $ 17,266 $ 19,153 Interest-bearing deposits in other financial institutions 19,654 4,916 --------- --------- Cash and cash equivalents 36,920 24,069 Investment securities available for sale - at market 272 309 Investment securities held to maturity - at cost, approximate market value of $9,428 and $16,617 as of March 31, 2001 and December 31, 2000 9,368 16,672 Mortgage-backed securities available for sale - at market 9,413 9,850 Mortgage-backed securities held to maturity - at cost, approximate market value of $5,192 and $5,247 as of March 31, 2001 and December 31, 2000 5,149 5,273 Loans held for sale - at lower of cost or market 7,458 4,235 Loans receivable - net 912,759 926,437 Office premises and equipment - net 13,503 13,845 Real estate acquired through foreclosure 800 583 Federal Home Loan Bank stock - at cost 19,786 19,339 Accrued interest receivable on loans 5,635 5,611 Accrued interest receivable on mortgage-backed securities 107 111 Accrued interest receivable on investment securities and interest-bearing deposits 157 256 Prepaid expenses and other assets 2,133 1,439 Cash surrender value of life insurance 6,069 5,999 Goodwill and other intangible assets 3,066 3,103 Prepaid federal income taxes - 725 --------- --------- Total assets $1,032,595 $1,037,856 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $ 649,381 $ 632,288 Advances from the Federal Home Loan Bank 290,921 313,471 Advances by borrowers for taxes and insurance 2,720 4,382 Accounts payable and accrued liabilities 5,304 5,328 Dividends payable 834 832 Accrued federal income taxes 362 - Deferred federal income taxes 2,823 2,805 --------- --------- Total liabilities 952,345 959,106 Stockholders' equity Preferred stock - $1 par value; authorized 100,000 shares; no shares outstanding - - Common stock - $1 par value; authorized 14,900,000 shares, 7,078,946 and 7,057,917 shares issued at March 31, 2001 and December 31, 2000, respectively 7,079 7,058 Additional paid-in capital 41,718 41,551 Retained earnings - substantially restricted 32,854 31,553 Less 126,019 shares of treasury stock - at cost (1,416) (1,416) Accumulated comprehensive income, unrealized gains on securities designated as available for sale, net of related tax effects 15 4 --------- --------- Total stockholders' equity 80,250 78,750 --------- --------- Total liabilities and stockholders' equity $1,032,595 $1,037,856 ========= =========
3 Camco Financial Corporation
CONSOLIDATED STATEMENTS OF EARNINGS For the three months ended March 31, (In thousands, except per share data) 2001 2000 Interest income Loans $18,416 $16,669 Mortgage-backed securities 255 289 Investment securities 242 276 Interest-bearing deposits and other 527 424 ------ ------ Total interest income 19,440 17,658 Interest expense Deposits 8,072 6,402 Borrowings 4,676 4,692 ------ ------ Total interest expense 12,748 11,094 ------ ------ Net interest income 6,692 6,564 Provision for losses on loans 156 137 ------ ------ Net interest income after provision for losses on loans 6,536 6,427 Other income Late charges, rent and other 579 469 Loan servicing fees (costs) (20) 294 Service charges and other fees on deposits 213 162 Gain on sale of loans 625 157 Gain (loss) on sale of office premises and equipment (1) 5 Gain on sale of real estate acquired through foreclosure 11 33 ------ ------ Total other income 1,407 1,120 General, administrative and other expense Employee compensation and benefits 2,122 2,457 Occupancy and equipment 779 732 Federal deposit insurance premiums 30 29 Data processing 350 282 Advertising 174 189 Franchise taxes 278 291 Amortization of goodwill 37 40 Other operating 947 911 ------ ------ Total general, administrative and other expense 4,717 4,931 ------ ------ Earnings before federal income taxes 3,226 2,616 Federal income taxes Current 1,081 570 Deferred 9 312 ------ ------ Total federal income taxes 1,090 882 ------ ------ NET EARNINGS $ 2,136 $ 1,734 ====== ====== BASIC EARNINGS PER SHARE $.31 $.25 === === DILUTED EARNINGS PER SHARE $.30 $.25 === ===
4 Camco Financial Corporation
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the three months ended March 31, (In thousands) 2001 2000 Net earnings $2,136 $1,734 Other comprehensive income (loss), net of tax: Unrealized holding gains (losses) during the period, net of taxes (benefits) of $6 and $(7) in 2001 and 2000, respectively 11 (13) ----- ----- Comprehensive income $2,147 $1,721 ===== ===== Accumulated comprehensive income (loss) $ 15 $ (137) ===== =====
5 Camco Financial Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS For the three months ended March 31, (In thousands) 2001 2000 Cash flows from operating activities: Net earnings for the period $ 2,136 $ 1,734 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Amortization of deferred loan origination fees (373) (73) Amortization of premiums and discounts on investment and mortgage-backed securities - net 12 5 Amortization of goodwill 37 40 Depreciation and amortization 390 288 Amortization of purchase accounting adjustments, net 155 10 Provision for losses on loans 156 137 Gain on sale of real estate acquired through foreclosure (11) (33) (Gain) loss on sale of office premises and equipment 1 (5) Federal Home Loan Bank stock dividends (347) (289) Gain on sale of loans (300) (64) Loans originated for sale in the secondary market (25,291) (14,397) Proceeds from sale of loans in the secondary market 22,368 12,857 Increase (decrease) in cash, net of acquisition of Westwood Homestead Financial Corporation, due to changes in: Accrued interest receivable - loans (24) (331) Accrued interest receivable - mortgage-backed securities 4 3 Accrued interest receivable - investments 99 (7) Prepaid expenses and other assets 5 (1,524) Accrued interest and other liabilities (22) 556 Federal income taxes Current 362 196 Deferred 9 312 ------ ------ Net cash used in operating activities (634) (585) Cash flows provided by (used in) investing activities: Proceeds from maturities of investment securities 10,300 - Principal repayments on mortgage-backed securities 631 660 Purchases of investment securities (2,995) (750) Loan principal repayments 53,742 31,153 Loan disbursements (39,429) (66,380) Purchases of loans (1,167) - Additions to office premises and equipment (49) (259) Additions to real estate acquired through foreclosure (81) (2) Proceeds from sale of real estate acquired through foreclosure 517 464 Purchase of Federal Home Loan Bank stock (100) (853) Net increase in cash surrender value of life insurance (70) (66) Purchase of Westwood Homestead Financial Corporation - net - (1,879) ------ ------ Net cash provided by (used in) investing activities 21,299 (37,912) ------ ------ Net cash provided by (used in) operating and investing activities (balance carried forward) 20,665 (38,497) ------ ------
6 Camco Financial Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) For the three months ended March 31, (In thousands) 2001 2000 Net cash provided by (used in) operating and investing activities (balance brought forward) $20,665 $(38,497) Cash flows provided by (used in) financing activities: Net increase in deposits 17,093 19,992 Proceeds from Federal Home Loan Bank advances 22,750 54,800 Repayment of Federal Home Loan Bank advances (45,348) (32,045) Dividends paid on common stock (835) (832) Proceeds from exercise of stock options 188 8 Decrease in advances by borrowers for taxes and insurance (1,662) (1,503) ------ ------- Net cash provided by (used in) financing activities (7,814) 40,420 ------ ------- Increase in cash and cash equivalents 12,851 1,923 Cash and cash equivalents at beginning of period 24,069 16,954 ------ ------- Cash and cash equivalents at end of period $36,920 $ 18,877 ====== ======= Supplemental disclosure of cash flow information: Cash paid during the period for: Interest on deposits and borrowings $12,860 $ 10,962 ====== ======= Income taxes $ 511 $ 175 ====== ======= Supplemental disclosure of noncash investing activities: Unrealized gains (losses) on securities designated as available for sale, net of related tax effects $ 11 $ (13) ====== ======= Recognition of mortgage servicing rights in accordance with SFAS No. 125 $ 325 $ 93 ====== ======= Transfers from mortgage loans to real estate acquired through foreclosure $ 666 $ 321 ====== ======= Liabilities assumed, stock and cash paid in acquisition of Westwood Homestead Financial Corporation $ - $159,698 Less: fair value of assets received - 159,698 ------ ------- Amount assigned to goodwill $ - $ - ====== =======
7 Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Basis of Presentation The accompanying unaudited consolidated financial statements were prepared in accordance with instructions for Form 10-Q and, therefore, do not include information or footnotes necessary for a complete presentation of financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States of America. Accordingly, these financial statements should be read in conjunction with the consolidated financial statements and notes thereto of Camco Financial Corporation ("Camco" or the "Corporation") included in Camco's Annual Report on Form 10-K for the year ended December 31, 2000. However, all adjustments (consisting only of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of the consolidated financial statements, have been included. The results of operations for the three-month period ended March 31, 2001, are not necessarily indicative of the results which may be expected for the entire year. In January 2000, the Corporation acquired Westwood Homestead Financial Corporation ("Westwood Financial") utilizing the purchase method of accounting (the "Merger"). Westwood Financial was dissolved upon consummation of the Merger and Westwood Financial's banking subsidiary, Westwood Homestead Savings Bank, continued operations as a wholly-owned subsidiary of the Corporation. Camco paid $11.1 million in cash and issued 1,304,875 of its common shares in connection with the Merger. 2. Principles of Consolidation The accompanying consolidated financial statements include the accounts of Camco and its six wholly-owned subsidiaries: Cambridge Savings Bank ("Cambridge Savings"), Marietta Savings Bank ("Marietta Savings"), First Federal Savings Bank of Washington Court House ("First Federal"), First Federal Bank for Savings ("First Savings"), Westwood Homestead Savings Bank ("Westwood") (collectively hereinafter "the Banks") and Camco Title Insurance Agency, Inc., as well as two second tier subsidiaries, Camco Mortgage Corporation and WestMar Mortgage Company. All significant intercompany balances and transactions have been eliminated. 3. Earnings Per Share Basic earnings per share for the three-month periods ended March 31, 2001 and 2000, is computed based on 6,942,012 and 6,864,553 weighted-average shares outstanding, respectively. Diluted earnings per share is computed taking into consideration common shares outstanding and dilutive potential common shares to be issued under the Corporation's stock option plans. Weighted-average common shares deemed outstanding for purposes of computing diluted earnings per share totaled 7,017,900 and 6,905,051 for the three-month periods ended March 31, 2001 and 2000, respectively. 8 Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) 3. Earnings Per Share (continued) There were 75,888 and 40,498 incremental shares related to the assumed exercise of stock options included in the computation of diluted earnings per share for the three-month periods ended March 31, 2001 and 2000, respectively. Options to purchase 322,152 and 176,059 shares of common stock with weighted-average exercise prices of $12.97 and $11.67 were outstanding at March 31, 2001 and 2000, respectively, but were excluded from the computation of common share equivalents because the exercise prices were greater than the average market price of the common shares. 4. Effects of Recent Accounting Pronouncements In June 1998, the Financial Accounting Standards Board (the "FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities," which requires entities to recognize all derivatives in their financial statements as either assets or liabilities measured at fair value. SFAS No. 133 also specifies new methods of accounting for hedging transactions, prescribes the items and transactions that may be hedged, and specifies detailed criteria to be met to qualify for hedge accounting. The definition of a derivative financial instrument is complex, but in general, it is an instrument with one or more underlyings, such as an interest rate or foreign exchange rate, that is applied to a notional amount, such as an amount of currency, to determine the settlement amount(s). It generally requires no significant initial investment and can be settled net or by delivery of an asset that is readily convertible to cash. SFAS No. 133 applies to derivatives embedded in other contracts, unless the underlying of the embedded derivative is clearly and closely related to the host contract. SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal years beginning after June 15, 2000. On adoption, entities are permitted to transfer held-to-maturity debt securities to the available-for-sale or trading category without calling into question their intent to hold other debt securities to maturity in the future. Management adopted SFAS No. 133 effective January 1, 2001, as required, without material impact on the Corporation's financial position or results of operations. In September 2000, the FASB issued SFAS No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities", which revises the standards for accounting for securitizations and other transfers of financial assets and collateral and requires certain disclosures, but carries over most of the provisions of SFAS No. 125 without reconsideration. SFAS No. 140 is effective for transfers and servicing of financial assets and extinguishments of liabilities occurring after March 31, 2001. The Statement is effective for recognition and reclassification of collateral and for disclosures relating to securitization transactions and collateral for fiscal years ending after December 15, 2000. SFAS No. 140 is not expected to have a material effect on the Corporation's financial position or results of operations. 9 Camco Financial Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the three-month periods ended March 31, 2001 and 2000 General Camco's profitability depends primarily on the level of its net interest income, which is the difference between interest income on interest-earning assets, principally loans, mortgage-backed securities and investment securities, and interest expense on deposit accounts and borrowings. In recent years, Camco's net earnings have been heavily influenced by the level of other income, including gains on sale of loans, loan servicing fees, and other fees. Camco's operations are also influenced by the level of general, administrative and other expenses, including employee compensation and benefits, occupancy and equipment and data processing, as well as various other operating expense categories, including federal income tax expense. Discussion of Financial Condition Changes from December 31, 2000 to March 31, 2001 At March 31, 2001, Camco's consolidated assets totaled $1.0 billion, a decrease of $5.3 million, or .5%, from the December 31, 2000 total. This decrease consisted primarily of a decrease in loans receivable and investment securities, partially offset by an increase in interest-bearing deposits. Cash and interest-bearing deposits in other financial institutions totaled $36.9 million at March 31, 2001, an increase of $12.9 million, or 53.4%, over December 31, 2000 levels. Investment securities totaled $9.6 million at March 31, 2001, a decrease of $7.3 million, or 43.2%, from the total at December 31, 2000. Investment securities purchases totaled $3.0 million, while maturities amounted to $10.3 million during the three-month period ended March 31, 2001. Mortgage-backed securities totaled $14.6 million at March 31, 2001, a decrease of $561,000, or 3.7%, from December 31, 2000, due primarily to principal repayments totaling $631,000. Loans receivable, including loans held for sale, decreased by $10.5 million, or 1.1%, during the three months ended March 31, 2001, to a total of $920.2 million. The decrease resulted primarily from principal repayments of $53.7 million and loan sales of $22.1 million, which were partially offset by loan disbursements, including purchased loans, which totaled $65.9 million. The volume of loans originated and purchased during the 2001 three-month period was less than that of the 2000 period by $14.9 million, or 18.4%, while the volume of loan sales increased by $9.3 million year to year. 10 Camco Financial Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) For the three-month periods ended March 31, 2001 and 2000 Discussion of Financial Condition Changes from December 31, 2000 to March 31, 2001 (continued) As interest rates in the economy have declined over the first quarter of 2001, consumer preference has shifted to long-term fixed-rate mortgage loans to fund home purchases and to refinance current loans. Camco's loan production in this lower interest rate environment has clearly shifted to fixed-rate mortgage loans and Camco will continue its asset/liability management strategy of selling low yielding long-term fixed-rate loans. Nonperforming loans (90 days or more delinquent plus nonaccrual loans) totaled $5.8 million and $4.7 million at March 31, 2001 and December 31, 2000, respectively, constituting .63% and .51% of total net loans, including loans held for sale, at those dates. At March 31, 2001, nonperforming loans consisted primarily of one- to four-family residential properties which management believes are adequately collateralized. The consolidated allowance for loan losses totaled $3.0 million and $2.9 million at March 31, 2001 and December 31, 2000, respectively, representing 52.3% and 61.5% of nonperforming loans, respectively, at those dates. Although management believes that its allowance for loan losses is adequate based upon the available facts and circumstances at March 31, 2001, there can be no assurance that additions to such allowance will not be necessary in future periods, which could adversely affect Camco's results of operations. Deposits totaled $649.4 million at March 31, 2001, an increase of $17.1 million, or 2.7%, over December 31, 2000 levels. The increase resulted primarily from management's continuing efforts to achieve growth in deposits through marketing and pricing strategies. Advances from the Federal Home Loan Bank ("FHLB") decreased by $22.6 million, or 7.2%, to a total of $290.9 million at March 31, 2001. The proceeds from deposit growth, coupled with excess repayments on loans receivable, were used to repay FHLB borrowings during the period. The Banks are required to maintain minimum regulatory capital pursuant to federal regulations. At March 31, 2001, each of the Banks' regulatory capital exceeded all regulatory capital requirements. Comparison of Results of Operations for the Three Months Ended March 31, 2001 and 2000 General Camco's net earnings for the three months ended March 31, 2001 totaled $2.1 million, an increase of $402,000, or 23.2%, over the $1.7 million of net earnings reported in the comparable 2000 period. The increase in earnings was primarily attributable to a $128,000 increase in net interest income, an increase of $287,000 in other income and a decrease in general, administrative and other expense of $214,000, which were partially offset by a $19,000 increase in the provision for losses on loans and an increase in the provision for federal income taxes of $208,000. 11 Camco Financial Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) For the three-month periods ended March 31, 2001 and 2000 Comparison of Results of Operations for the Three Months Ended March 31, 2001 and 2000 (continued) Net Interest Income Total interest income for the three months ended March 31, 2001, amounted to $19.4 million, an increase of $1.8 million, or 10.1%, over the three-month period ended March 31, 2000, generally reflecting the effects of growth in average interest-earning assets outstanding of approximately $84.5 million, or 9.3%. Interest income on loans and mortgage-backed securities totaled $18.7 million for the three months ended March 31, 2001, an increase of $1.7 million, or 10.1%, over the comparable 2000 period. The increase resulted primarily from a $78.5 million, or 9.1%, increase in the average balance outstanding year to year. Interest income on investment securities and other interest-earning assets increased by $69,000, or 9.9%, due primarily to a $5.9 million, or 14.4%, increase in the average balance outstanding year to year. Interest expense on deposits increased by $1.7 million, or 26.1%, to a total of $8.1 million for the three months ended March 31, 2001, due primarily to an $83.6 million, or 15.2%, increase in average deposits outstanding over the prior year. Interest expense on borrowings totaled $4.7 million for the three months ended March 31, 2001, a decrease of $16,000, or 0.3%, from the 2000 three-month period. The decrease resulted primarily from a $7.7 million, or 2.5%, decrease in the average balance outstanding year to year. As a result of the foregoing changes in interest income and interest expense, net interest income increased by $128,000, or 2.0%, to a total of $6.7 million for the three months ended March 31, 2001. The interest rate spread decreased to approximately 2.42% for the three months ended March 31, 2001, from 2.65% for the 2000 period, while the net interest margin decreased to approximately 2.70% in 2001, compared to 2.90% in 2000. Provision for Losses on Loans A provision for losses on loans is charged to earnings to bring the total allowance for loan losses to a level considered appropriate by management based on historical experience, the volume and type of lending conducted by the Banks, the status of past due principal and interest payments, general economic conditions, particularly as such conditions relate to the Banks' market areas and other factors related to the collectibility of the Banks' loan portfolios. Management elected to record a provision for losses on loans totaling $156,000 for the three months ended March 31, 2001, an increase of $19,000, or 13.9%, over the comparable period in 2000. The current period provision generally reflects the overall growth in the loan portfolio year to year, as well as the increase in the level of nonperforming loans during the first quarter of fiscal 2001. There can be no assurance that the allowance for loan losses will be adequate to cover losses on nonperforming loans in the future. 12 Camco Financial Corporation MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED) For the three month periods ended March 31, 2001 and 2000 Comparison of Results of Operations for the Three Months Ended March 31, 2001 and 2000 (continued) Other Income Other income totaled $1.4 million for the three months ended March 31, 2001, an increase of $287,000, or 25.6%, over the comparable 2000 period. The increase in other income was primarily attributable to a $468,000, or 298.1%, increase in gains on sale of loans, an increase of $110,000, or 23.5%, in late charges, rent and other and a $51,000, or 31.5%, increase in service charges and fees on deposits, which were partially offset by a decrease of $314,000, or 106.8%, in loan servicing fees and a $22,000 decrease in gain on sale of real estate owned. The increase in gain on sale of loans was due to the increase in sales volume as a result of the demand for fixed-rate loans in the declining interest rate environment. The decrease in loan servicing fees was primarily due to an increase in the level of amortization of mortgage servicing rights. Such amortization is based, among other factors, upon the repayment of loans receivable, which increased by $22.6 million, or 72.5%, over the comparable period. General, Administrative and Other Expense General, administrative and other expense totaled $4.7 million for the three months ended March 31, 2001, a decrease of $214,000, or 4.3%, from the comparable period in 2000. The decrease was due to a decrease of $335,000, or 13.6%, in employee compensation and benefits, which was partially offset by an increase in occupancy and equipment of $47,000, or 6.4%, and a $68,000, or 24.1%, increase in data processing. The decrease in employee compensation and benefits was primarily attributable to employee retirements, attrition, and the closing of non-profitable loan production offices. Data processing expense increased over the comparable 2000 period due to costs relating to implementation of an internal wide area network and continued growth. Federal Income Taxes The provision for federal income taxes totaled $1.1 million for the three months ended March 31, 2001, an increase of $208,000, or 23.6%, over the three months ended September 30, 2000. This increase was primarily attributable to a $610,000, or 23.3%, increase in pre-tax earnings. The Corporation's effective tax rate amounted to 33.8% and 33.7% for the three-month periods ended March 31, 2001 and 2000, respectively. Quantitative and Qualitative Disclosures about Market Risk There has been no material change in the Corporation's market risk since the Corporation's Form 10-K filed with the Securities and Exchange Commission for the year ended December 31, 2000. 13 Camco Financial Corporation PART II ITEM 1. Legal Proceedings Not applicable ITEM 2. Changes in Securities and Use of Proceeds None ITEM 3. Defaults Upon Senior Securities Not applicable ITEM 4. Submission of Matters to a Vote of Security Holders None ITEM 5. Other Information Not applicable ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits: None. (b) Reports on Form 8-K: Camco filed a Form 8-K on February 1, 2001 to report Camco's plans to merge its five wholly - owned banking subsidiaries. 14 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. Date: May 14, 2001 By: /s/Richard C. Baylor -------------------- -------------------------- Richard C. Baylor Chief Executive Officer Date: May 14, 2001 By: /s/Kristina K. Tipton -------------------- -------------------------- Kristina K. Tipton Assistant Controller 15