-----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, OXP0IHQMar+uiupVPV3946DRcLOgIt3wBVfLidPxPuG0QSCLS1Zp+KLTH9mxtSB/ NjNaiYl4EM1sRQagtJXenQ== 0001046386-02-000039.txt : 20020415 0001046386-02-000039.hdr.sgml : 20020415 ACCESSION NUMBER: 0001046386-02-000039 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20011231 FILED AS OF DATE: 20020405 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: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-25196 FILM NUMBER: 02602705 BUSINESS ADDRESS: STREET 1: 6901 GLENN HIGHWAY CITY: CAMBRIDGE STATE: OH ZIP: 43725 BUSINESS PHONE: 7404325641 10-K/A 1 camco10ka_40502.txt CAMCO FINANCIAL CORPORATION (10-K/A) SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 1 [ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 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 incorporation or organization) Identification Number) 6901 Glenn Highway, Cambridge, Ohio 43725 ------------------------------------------------------------------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (740) 435-2020 Securities registered pursuant to Section 12(b) of the Act: None None - ------------------------------- ------------------------------------- (Title of Each Class) (Name of exchange on which registered) Securities registered pursuant to Section 12(g) of the Act: Common Stock, $1 par value per share ----------------------------------------------------- (Title of Class) Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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_____ Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the voting stock held by non-affiliates of the registrant, computed by reference to the last sale reported as of March 21, 2002, was $103.9 million. (The exclusion from such amount of the market value of the shares owned by any person shall not be deemed an admission by the registrant that such person is an affiliate of the registrant.) The registrant's revenues for the fiscal year ended December 31, 2001, were $81.5 million. 7,964,119 shares of the registrant's common stock were outstanding on March 21, 2002. DOCUMENTS INCORPORATED BY REFERENCE: Part III of Form 10-K: Portions of the Proxy Statement for the 2002 Annual Meeting of Stockholders -1- PART II Item 8. Financial Statements and Supplementary Data. Report of Independent Certified Public Accountants Board of Directors Camco Financial Corporation We have audited the accompanying consolidated statements of financial condition of Camco Financial Corporation as of December 31, 2001 and 2000, and the related consolidated statements of earnings, comprehensive income, stockholders' equity and cash flows for each of the years in the three year period ended December 31, 2001. These consolidated financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Camco Financial Corporation as of December 31, 2001 and 2000, and the consolidated results of its operations and its cash flows for each of the years in the three year period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States of America. /s/GRANT THORNTON LLP Cincinnati, Ohio February 22, 2002 -2- Camco Financial Corporation
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION December 31, (In thousands, except share data) ASSETS 2001 2000 Cash and due from banks $ 15,665 $ 19,153 Interest-bearing deposits in other financial institutions 89,299 4,916 --------- --------- Cash and cash equivalents 104,964 24,069 Investment securities available for sale - at market 305 309 Investment securities held to maturity - at cost, approximate market value of $19,083 and $16,617 as of December 31, 2001 and 2000, respectively 18,872 16,672 Mortgage-backed securities available for sale - at market 6,975 9,850 Mortgage-backed securities held to maturity - at cost, approximate market value of $30,744 and $5,247 as of December 31, 2001 and 2000, respectively 30,765 5,273 Loans held for sale - at lower of cost or market 21,445 4,235 Loans receivable - net 850,001 926,437 Office premises and equipment - net 14,849 13,845 Real estate acquired through foreclosure 2,151 583 Federal Home Loan Bank stock - at cost 22,481 19,339 Accrued interest receivable 5,769 5,978 Prepaid expenses and other assets 4,779 1,439 Cash surrender value of life insurance 15,751 5,999 Goodwill - net of accumulated amortization 2,953 3,103 Prepaid federal income taxes 592 725 --------- --------- Total assets $1,102,652 $1,037,856 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY Deposits $ 730,075 $ 632,288 Advances from the Federal Home Loan Bank 258,850 313,471 Advances by borrowers for taxes and insurance 3,860 4,382 Accounts payable and accrued liabilities 10,975 5,328 Dividends payable 962 832 Deferred federal income taxes 2,759 2,805 --------- --------- Total liabilities 1,007,481 959,106 Commitments - - Stockholders' equity Preferred stock - $1 par value; authorized 100,000 shares; no shares outstanding - - Common stock - $1 par value; authorized 14,900,000 shares; 8,137,039 and 7,057,917 shares issued at December 31, 2001 and 2000, respectively 8,137 7,058 Additional paid-in capital 51,722 41,551 Retained earnings - substantially restricted 36,621 31,553 Accumulated comprehensive income - unrealized gains on securities designated as available for sale, net of related tax effects 107 4 Less 126,019 shares of treasury stock - at cost (1,416) (1,416) --------- --------- Total stockholders' equity 95,171 78,750 --------- --------- Total liabilities and stockholders' equity $1,102,652 $1,037,856 ========= =========
The accompanying notes are an integral part of these statements. -3- Camco Financial Corporation
CONSOLIDATED STATEMENTS OF EARNINGS For the year ended December 31, (In thousands, except per share data) 2001 2000 1999 Interest income Loans $69,461 $71,524 $47,904 Mortgage-backed securities 1,059 1,120 759 Investment securities 696 1,141 896 Interest-bearing deposits and other 3,156 1,886 1,534 ------ ------ ------ Total interest income 74,372 75,671 51,093 Interest expense Deposits 31,324 28,869 19,119 Borrowings 17,109 20,740 10,788 ------ ------ ------ Total interest expense 48,433 49,609 29,907 ------ ------ ------ Net interest income 25,939 26,062 21,186 Provision for losses on loans 759 568 247 ------ ------ ------ Net interest income after provision for losses on loans 25,180 25,494 20,939 Other income (expense) Late charges, rent and other 3,112 2,046 2,133 Loan servicing fees (costs) (1,421) 665 706 Service charges and other fees on deposits 838 733 574 Gain on sale of loans 4,532 2,058 1,761 Loss on sale of investment and mortgage-backed securities - (37) - Gain on sale of real estate acquired through foreclosure 62 56 20 Gain (loss) on sale of premises and equipment 30 15 (4) ------ ------ ------ Total other income 7,153 5,536 5,190 General, administrative and other expense Employee compensation and benefits 7,887 8,948 7,926 Occupancy and equipment 3,172 3,064 2,464 Federal deposit insurance premiums 123 117 263 Data processing 1,345 1,337 835 Advertising 705 720 645 Franchise taxes 1,118 1,059 844 Amortization of goodwill 150 150 150 Other operating 4,448 4,135 3,986 Restructuring charges related to charter consolidation 950 - - ------ ------ ------ Total general, administrative and other expense 19,898 19,530 17,113 ------ ------ ------ Earnings before federal income taxes 12,435 11,500 9,016 Federal income taxes Current 2,715 2,102 2,518 Deferred 1,176 1,746 558 ------ ------ ------ Total federal income taxes 3,891 3,848 3,076 ------ ------ ------ NET EARNINGS $ 8,544 $ 7,652 $ 5,940 ====== ====== ====== EARNINGS PER SHARE Basic $1.20 $1.11 $1.04 ==== ==== ==== Diluted $1.19 $1.10 $1.02 ==== ==== ====
The accompanying notes are an integral part of these statements. -4- Camco Financial Corporation
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the year ended December 31, (In thousands) 2001 2000 1999 Net earnings $8,544 $7,652 $5,940 Other comprehensive income (loss), net of tax: Unrealized holding gains (losses) on securities during the period, net of taxes (benefits) of $53, $54 and $(113) in 2001, 2000 and 1999, respectively 103 104 (220) Reclassification adjustment for realized gains included in earnings, net of tax benefits of $13 for the year ended December 31, 2000 - 24 - ----- ----- ----- Comprehensive income $8,647 $7,780 $5,720 ===== ===== ===== Accumulated comprehensive income (loss) $ 107 $ 4 $ (124) ===== ===== =====
The accompanying notes are an integral part of these statements. -5- Camco Financial Corporation
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY For the years ended December 31, 2001, 2000 and 1999 (In thousands, except per share data) Unrealized gains (losses) on securities Additional designated Total Common paid-in Retained as available Treasury stockholders' stock capital earnings for sale stock equity Balance at January 1, 1999 $5,480 $27,053 $27,628 $ 96 $ (118) $60,139 Cash dividends declared - $0.4614 per share - - (2,770) - - (2,770) Stock dividend (5%) including cash in lieu of fractional shares 272 3,298 (3,593) - - (23) Net earnings for the year ended December 31, 1999 - - 5,940 - - 5,940 Purchase of treasury shares - - - - (457) (457) Unrealized losses on securities designated as available for sale, net of related tax effects - - - (220) - (220) ----- ------ ------ --- ------ ------ Balance at December 31, 1999 5,752 30,351 27,205 (124) (575) 62,609 Stock options exercised 1 7 - - - 8 Cash dividends declared - $0.48 per share - - (3,327) - - (3,327) Purchase of Westwood Homestead Financial Corporation 1,305 11,193 23 - (841) 11,680 Net earnings for the year ended December 31, 2000 - - 7,652 - - 7,652 Unrealized gains on securities designated as available for sale, net of related tax effects - - - 128 - 128 ----- ------ ------ --- ------ ------ Balance at December 31, 2000 7,058 41,551 31,553 4 (1,416) 78,750 Stock options exercised 116 1,146 - - - 1,262 Cash dividends declared - $0.48 per share - - (3,476) - - (3,476) Net earnings for the year ended December 31, 2001 - - 8,544 - - 8,544 Purchase of Columbia Financial of Kentucky, Inc. 963 9,025 - - - 9,988 Unrealized gains on securities designated as available for sale, net of related tax effects - - - 103 - 103 ----- ------ ------ --- ------ ------ Balance at December 31, 2001 $8,137 $51,722 $36,621 $107 $(1,416) $95,171 ===== ====== ====== === ====== ======
The accompanying notes are an integral part of these statements. -6- Camco Financial Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS For the year ended December 31, (In thousands) 2001 2000 1999 Cash flows from operating activities: Net earnings for the year $ 8,544 $ 7,652 $ 5,940 Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: Amortization of goodwill 150 150 150 Amortization of premiums and discounts on investment and mortgage-backed securities - net 87 19 (5) Depreciation and amortization 1,655 1,610 983 Amortization of purchase accounting adjustments - net 303 13 88 Provision for losses on loans 759 568 247 Amortization of deferred loan origination fees (683) (374) (361) Gain on sale of real estate acquired through foreclosure (62) (56) (20) Loss on sale of investments and mortgage-backed securities designated as available for sale - 37 - (Gain) loss on sale of office premises and equipment (30) (15) 4 Federal Home Loan Bank stock dividends (1,367) (1,320) (754) Gain on sale of loans (2,194) (905) (461) Loans originated for sale in the secondary market (312,847) (120,503) (89,956) Proceeds from sale of mortgage loans in the secondary market 297,831 120,356 97,353 Increase (decrease) in cash, net of acquisition of Westwood Homestead Financial Corporation and Columbia Financial of Kentucky, Inc., due to changes in: Accrued interest receivable 893 (972) (354) Prepaid expenses and other assets (2,921) (437) (480) Accounts payable and other liabilities 2,432 2,230 327 Federal income taxes Current (248) (1,009) (221) Deferred 1,176 1,746 558 ------- ------- ------- Net cash provided by (used in) operating activities (6,522) 8,790 13,038 Cash flows provided by (used in) investing activities: Proceeds from maturities of investment securities 19,480 1,040 6,008 Proceeds from sale of mortgage-backed securities designated as available for sale - 5,045 - Purchase of investment securities designated as available for sale - (17) (22) Purchase of investment securities designated as held to maturity (10,495) (840) (10,896) Purchase of mortgage-backed securities designated as available for sale - (5,087) (5,080) Purchase of mortgage-backed securities designated as held to maturity (15,228) - (1,992) Principal repayments on mortgage-backed securities 4,865 2,608 2,844 Loan disbursements (126,582) (237,956) (335,287) Purchases of loans (2,527) (3,552) (24,358) Principal repayments on loans 271,195 176,055 173,960 Purchase of office premises and equipment - net (1,711) (1,675) (2,095) Proceeds from sale of office premises and equipment 119 35 - Proceeds from sale of real estate acquired through foreclosure 1,806 505 1,191 Purchase of Federal Home Loan Bank stock (100) (2,077) (5,601) Proceeds from redemption of Federal Home Loan Bank stock - 504 - Additions to real estate acquired through foreclosure (60) (25) (153) Purchase of life insurance (9,445) (80) (250) Net increase in cash surrender value of life insurance (307) (262) (246) Purchase of Westwood Homestead Financial Corporation - (1,879) - Purchase of Columbia Financial of Kentucky, Inc. (3,000) - - ------- ------- ------- Net cash provided by (used in) investing activities 128,010 (67,658) (201,977) ------- ------- ------- Net cash provided by (used in) operating and investing activities (balance carried forward) 121,488 (58,868) (188,939) ------- ------- -------
-7- Camco Financial Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED) For the year ended December 31, (In thousands) 2001 2000 1999 Net cash provided by (used in) operating and investing activities (balance brought forward) $121,488 $(58,868) $(188,939) Cash flows provided by (used in) financing activities: Net increase in deposits 16,716 70,185 18,560 Proceeds from Federal Home Loan Bank advances 50,451 243,178 229,466 Repayment of Federal Home Loan Bank advances (105,072) (244,123) (75,823) Dividends paid on common stock (3,346) (3,327) (2,550) Proceeds from exercise of stock options 1,262 8 - Purchase of treasury shares - - (457) Increase (decrease) in advances by borrowers for taxes and insurance (604) 62 882 ------- ------- -------- Net cash provided by (used in) financing activities (40,593) 65,983 170,078 ------- ------- -------- Net increase (decrease) in cash and cash equivalents 80,895 7,115 (18,861) Cash and cash equivalents at beginning of year 24,069 16,954 35,815 ------- ------- -------- Cash and cash equivalents at end of year $104,964 $ 24,069 $ 16,954 ======= ======= ======== Supplemental disclosure of cash flow information: Cash paid during the year for: Interest on deposits and borrowings $ 48,792 $ 48,952 $ 29,457 ======= ======= ======== Income taxes $ 3,528 $ 3,430 $ 2,927 ======= ======= ======== Supplemental disclosure of noncash investing activities: Transfers from mortgage loans to real estate acquired through foreclosure $ 3,208 $ 1,432 $ 1,220 ======= ======= ======== Issuance of mortgage loans upon sale of real estate acquired through foreclosure $ 1,182 $ 703 $ 761 ======= ======= ======== Unrealized gains (losses) on securities designated as available for sale, net of related tax effects $ 103 $ 128 $ (220) ======= ======= ======== Recognition of mortgage servicing rights in accordance with SFAS No. 140 $ 2,338 $ 1,153 $ 1,300 ======= ======= ======== Supplemental disclosure of noncash financing activities: Dividends declared but unpaid $ 962 $ 832 $ 832 ======= ======= ======== Fair value of assets received in acquisition of: Westwood Homestead Financial Corporation $ - $159,698 $ - ======= ======= ======== Columbia Financial of Kentucky, Inc. $110,422 $ - $ - ======= ======= ========
The accompanying notes are an integral part of these statements. -8- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES During 2001, the Boards of Directors of Camco Financial Corporation ("Camco" or the "Corporation") and its wholly-owned subsidiaries, Cambridge Savings Bank ("Cambridge Savings"), Marietta Savings Bank ("Marietta Savings"), First Savings Bank of Washington Court House ("First Bank"), First Bank for Savings ("First Savings") and Westwood Homestead Savings Bank ("Westwood Homestead"), approved a business plan whereby the subsidiary banks consolidated charters and operations into one state savings bank charter under the name Advantage Bank. The combining of charters and operations resulted in the Corporation incurring a one-time after-tax restructuring charge totaling $627,000. Hereinafter, the consolidated financial statements use the terms "Advantage" or the "Bank" to describe all of the preexisting individual financial institutions owned by the Corporation. During 2001, Camco's Board of Directors approved a business combination, that was completed in November 2001, whereby Columbia Financial of Kentucky, Inc., ("Columbia Financial") the parent of Columbia Federal Savings Bank, ("Columbia Federal") was merged into Camco. Following the merger, Columbia Federal became a division of Advantage. The business combination was accounted for using the purchase method of accounting. Accordingly, the consolidated financial statements herein include the accounts of Columbia Federal from the November 15, 2001 consummation date through December 31, 2001. During 1999, Camco's Board of Directors approved a business combination, which was completed in January 2000, whereby Westwood Homestead Financial Corporation ("WHFC"), the parent of Westwood Homestead, was merged into Camco and Westwood Homestead became a wholly-owned subsidiary of the Corporation. The business combination was accounted for using the purchase method of accounting. Accordingly, the 2000 consolidated financial statements herein include the accounts of Westwood Homestead from the January 6, 2000 acquisition date through December 31, 2000. The business activities of Camco are limited primarily to holding the common stock of the Bank and Camco Title Insurance Agency ("Camco Title") and two second tier subsidiaries, Camco Mortgage Corporation and WestMar Mortgage Company. The Corporation's results of operations are economically dependent upon the results of Advantage's operations. Advantage conducts a general banking business within Ohio, West Virginia and northern Kentucky which consists of attracting deposits from the general public and applying those funds to the origination of loans for residential, consumer and nonresidential purposes. Advantage's profitability is significantly dependent on net interest income, which is the difference between interest income generated from interest-earning assets (i.e. loans and investments) and the interest expense paid on interest-bearing liabilities (i.e. customer deposits and borrowed funds). Net interest income is affected by the relative amounts of interest-earning assets and interest-bearing liabilities and the interest received or paid on these balances. The level of interest rates paid or received by Advantage can be significantly influenced by a number of factors, such as governmental monetary policy, that are outside of management's control. The consolidated financial information presented herein has been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and general accounting practices within the financial services industry. In preparing financial statements in accordance with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and revenues and expenses during the reporting period. Actual results could differ from such estimates. -9- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) The following is a summary of the Corporation's significant accounting policies which have been consistently applied in the preparation of the accompanying consolidated financial statements. 1. Principles of Consolidation The consolidated financial statements include the accounts of the Corporation and its wholly-owned and second tier subsidiaries. All significant intercompany balances and transactions have been eliminated. 2. Interest Rate Risk The earnings of the Corporation are primarily dependent upon net interest income, which is determined by 1) the difference between yields earned on interest-earning assets and rates paid on interest-bearing liabilities (interest rate spread) and 2) the relative amounts of interest-earning assets and interest-bearing liabilities outstanding. The Corporation's interest rate spread is affected by regulatory, economic and competitive factors that influence interest rates, loan demand and deposit flows. The Corporation is vulnerable to an increase in interest rates to the extent that interest-bearing liabilities mature or reprice more rapidly than interest-earning assets. At December 31, 2001, 2000 and 1999, the Corporation had net interest-earning assets of approximately $1.1 billion, $993.0 million and $776.3 million, with weighted-average effective yields of 6.63%, 7.92% and 7.39%, respectively, and net interest-bearing liabilities of approximately $988.9 million, $945.8 million and $740.9 million, with weighted-average effective interest rates of 4.59%, 5.53% and 4.81%, respectively. To minimize the effect of adverse changes in interest rates on its results of operations, the Corporation has implemented an asset and liability management plan that emphasizes increasing the interest rate sensitivity and shortening the maturities of its interest-earning assets and extending the maturities of its interest-bearing liabilities. Although the Corporation has undertaken a variety of strategies to minimize its exposure to interest rate risk, its primary emphasis has been on the origination and purchase of adjustable rate loans. 3. Investment Securities and Mortgage-Backed Securities The Corporation accounts for investment and mortgage-backed securities in accordance with Statement of Financial Accounting Standards ("SFAS") No. 115 "Accounting for Certain Investments in Debt and Equity Securities." SFAS No. 115 requires that investments be categorized as held-to-maturity, trading, or available for sale. Securities classified as held-to-maturity are carried at cost only if the Corporation has the positive intent and ability to hold these securities to maturity. Trading securities and securities available for sale are carried at fair value with resulting unrealized gains or losses recorded to operations or stockholders' equity, respectively. Investment and mortgage-backed securities are classified as held-to-maturity or available for sale upon acquisition. Realized gains and losses on sales of securities are recognized using the specific identification method. -10- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 4. Loans Receivable Loans held in portfolio are stated at the principal amount outstanding, adjusted for deferred loan origination fees and costs, capitalized mortgage servicing rights and the allowance for loan losses. Interest is accrued as earned unless the collectibility of the loan is in doubt. Uncollectible interest on loans that are contractually past due is charged off, or an allowance is established based on management's periodic evaluation. The allowance is established by a charge to interest income equal to all interest previously accrued, and income is subsequently recognized only to the extent that cash payments are received until, in management's judgment, the borrower's ability to make periodic interest and principal payments has returned to normal, in which case the loan is returned to accrual status. Loans held for sale are carried at the lower of cost (less principal payments received) or fair value (market value), calculated on an aggregate basis. At December 31, 2001, Advantage Bank recorded an unrealized loss of $28,000 on loans held for sale. At December 31, 2000, loans held for sale were carried at cost. The Corporation accounts for mortgage servicing rights in accordance with SFAS No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," which requires that the Corporation recognize, as separate assets, rights to service mortgage loans for others, regardless of how those servicing rights are acquired. An institution that acquires mortgage servicing rights through either the purchase or origination of mortgage loans and sells those loans with servicing rights retained must allocate some of the cost of the loans to the mortgage servicing rights. SFAS No. 140 requires that capitalized mortgage servicing rights and capitalized excess servicing receivables be assessed for impairment. Impairment is measured based on fair value. The mortgage servicing rights recorded by the Bank, calculated in accordance with the provisions of SFAS No. 140, were segregated into pools for valuation purposes, using as pooling criteria the loan term and coupon rate. Once pooled, each grouping of loans was evaluated on a discounted earnings basis to determine the present value of future earnings that a purchaser could expect to realize from each portfolio. Earnings were projected from a variety of sources including loan servicing fees, interest earned on float, net interest earned on escrows, miscellaneous income, and costs to service the loans. The present value of future earnings is the "economic" value for the pool, i.e., the net realizable present value to an acquirer of the acquired servicing. The Corporation recorded amortization related to mortgage servicing rights totaling approximately $1.5 million, $602,000 and $516,000, for the years ended December 31, 2001, 2000 and 1999, respectively. Additionally, the Corporation recorded an impairment charge on mortgage servicing rights totaling $1.3 million in 2001. The carrying value of the Corporation's mortgage servicing rights, which approximated their fair value, totaled approximately $4.7 million and $5.2 million at December 31, 2001 and 2000, respectively. At December 31, 2001 and 2000, the Bank was servicing mortgage loans of approximately $535.5 million and $475.6 million, respectively, that have been sold to the Federal Home Loan Mortgage Corporation and other investors. -11- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 5. Loan Origination and Commitment Fees The Corporation accounts for loan origination fees and costs in accordance with SFAS No. 91, "Accounting for Nonrefundable Fees and Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of Leases." Pursuant to the provisions of SFAS No. 91, all loan origination fees received, net of certain direct origination costs, are deferred on a loan-by-loan basis and amortized to interest income using the interest method, giving effect to actual loan prepayments. Additionally, SFAS No. 91 generally limits the definition of loan origination costs to the direct costs attributable to originating a loan, i.e., principally actual personnel costs. Fees received for loan commitments are deferred and amortized over the life of the related loan using the interest method. 6. Allowance for Loan Losses It is the Corporation's policy to provide valuation allowances for estimated losses on loans based upon past loss experience, current trends in the level of delinquent and problem loans, adverse situations that may affect the borrower's ability to repay, the estimated value of any underlying collateral and current economic conditions in the Bank's primary market areas. When the collection of a loan becomes doubtful, or otherwise troubled, the Corporation records a charge-off equal to the difference between the fair value of the property securing the loan and the loan's carrying value. Such provision is based on management's estimate of the fair value of the underlying collateral, taking into consideration the current and currently anticipated future operating or sales conditions. As a result, such estimates are particularly susceptible to changes that could result in a material adjustment to results of operations in the near term. Recovery of the carrying value of such loans is dependent to a great extent on economic, operating, and other conditions that may be beyond the Corporation's control. The Corporation accounts for impaired loans in accordance with SFAS No. 114, "Accounting by Creditors for Impairment of a Loan." SFAS No. 114 requires that impaired loans be measured based upon the present value of expected future cash flows discounted at the loan's effective interest rate or, as an alternative, at the loan's observable market price or fair value of the collateral. A loan is defined under SFAS No. 114 as impaired when, based on current information and events, it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement. In applying the provisions of SFAS No. 114, the Corporation considers its investment in one- to four-family residential loans and consumer installment loans to be homogeneous and therefore excluded from separate identification for evaluation of impairment. With respect to the Corporation's investment in multi-family and nonresidential loans, and its evaluation of any impairment thereon, such loans are generally collateral-dependent and as a result are carried as a practical expedient at the lower of cost or fair value. It is the Corporation's policy to charge off unsecured credits that are more than ninety days delinquent. Similarly, collateral-dependent loans which are more than ninety days delinquent are considered to constitute more than a minimum delay in repayment and are evaluated for impairment under SFAS No. 114 at that time. -12- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 6. Allowance for Loan Losses (continued) At December 31, 2001 and 2000, the Corporation had no loans that would be defined as impaired under SFAS No. 114. 7. Real Estate Acquired Through Foreclosure Real estate acquired through foreclosure is carried at the lower of the loan's unpaid principal balance (cost) or fair value less estimated selling expenses at the date of acquisition. Real estate loss provisions are recorded if the fair value of the property subsequently declines below the amount determined at the recording date. In determining the lower of cost or fair value at acquisition, costs relating to development and improvement of property are capitalized. Costs relating to holding real estate acquired through foreclosure, net of rental income, are charged against earnings as incurred. 8. Office Premises and Equipment Office premises and equipment are carried at cost and include expenditures which extend the useful lives of existing assets. Maintenance, repairs and minor renewals are expensed as incurred. For financial reporting, depreciation and amortization are provided on the straight-line method over the useful lives of the assets, estimated to be ten to fifty years for buildings and improvements and three to twenty-five years for furniture, fixtures and equipment. An accelerated depreciation method is used for tax reporting purposes. 9. Goodwill Goodwill resulting from the acquisition of First Savings totaled approximately $3.7 million, and has been amortized over a twenty-five year period using the straight-line method. It is management's policy to periodically evaluate the carrying value of intangible assets in relation to the continuing earnings capacity of the acquired assets and assumed liabilities. In June 2001, the Financial Accounting Standards Board issued SFAS No. 142 "Goodwill and Intangible Assets," which prescribes accounting for all purchased goodwill and intangible assets. Pursuant to SFAS No. 142, acquired goodwill is not amortized, but is tested for impairment at the reporting unit level annually and whenever an impairment indicator arises. All goodwill should be assigned to reporting units that are expected to benefit from the goodwill. Goodwill impairment should be tested with a two-step approach. First, the fair value of the reporting unit should be compared to its carrying value, including goodwill. If the reporting unit's carrying value exceeds its fair value, then any goodwill impairment should be measured as the excess of the goodwill's carrying value over its implied fair value. The implied fair value of goodwill should be calculated in the same manner as goodwill is calculated for a business combination, using the reporting unit's fair value as the "purchase price." Therefore, the goodwill's implied fair value will be the excess of the "purchase price" over the amounts allocated to assets, including unrecognized intangible assets, and liabilities of the reporting unit. Goodwill impairment losses should be reported in the income statement as a separate line item within operations, except for such losses included in the calculation of a gain or loss from discontinued operations. -13- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 9. Goodwill (continued) An acquired intangible asset, other than goodwill, should be amortized over its useful economic life. The useful life of an intangible asset is indefinite if it extends beyond the foreseeable horizon. If an asset's life is indefinite, the asset should not be amortized until the life is determined to be finite. Intangible assets being amortized should be tested for impairment. Intangible assets not being amortized should be tested for impairment annually and whenever there are indicators of impairment, by comparing the asset's fair value to its carrying amount. SFAS No. 142 is effective for fiscal years beginning after December 15, 2001, or January 1, 2002 as to the Corporation. Adoption of SFAS No. 142 is expected to result in the elimination of annual goodwill amortization totaling approximately $150,000 beginning in 2002. 10. Federal Income Taxes The Corporation accounts for federal income taxes in accordance with SFAS No. 109, "Accounting for Income Taxes." In accordance with SFAS No. 109, a deferred tax liability or deferred tax asset is computed by applying the current statutory tax rates to net taxable or deductible temporary differences between the tax basis of an asset or liability and its reported amount in the financial statements that will result in taxable or deductible amounts in future periods. Deferred tax assets are recorded only to the extent that the amount of net deductible temporary differences or carryforward attributes may be utilized against current period earnings, carried back against prior years' earnings, offset against taxable temporary differences reversing in future periods, or utilized to the extent of management's estimate of future taxable income. A valuation allowance is provided for deferred tax assets to the extent that the value of net deductible temporary differences and carryforward attributes exceeds management's estimates of taxes payable on future taxable income. Deferred tax liabilities are provided on the total amount of net temporary differences taxable in the future. Deferral of income taxes results primarily from different methods of accounting for deferred loan origination fees and costs, mortgage servicing rights, Federal Home Loan Bank stock dividends, deferred compensation, the general loan loss allowance and the percentage of earnings bad debt deductions. A temporary difference is also recognized for depreciation expense computed using accelerated methods for federal income tax purposes. -14- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 11. Earnings Per Share Basic earnings per common share is computed based upon the weighted-average number of common shares outstanding during the year. Diluted earnings per common share is computed including the dilutive effect of additional potential common shares issuable under stock option. The computations were as follows for the years ended December 31:
2001 2000 1999 Weighted-average common shares outstanding (basic) 7,096,960 6,915,154 5,730,829 Dilutive effect of assumed exercise of stock options 100,132 42,277 103,562 --------- --------- --------- Weighted-average common shares outstanding (diluted) 7,197,092 6,957,431 5,834,391 ========= ========= =========
Options to purchase 176,714, 435,295 and 65,416 shares of common stock at weighted-average exercise prices of $13.11, $12.15 and $14.94 were outstanding at December 31, 2001, 2000 and 1999, respectively, but were excluded from the computation of diluted earnings per share for those years because the exercise price was greater than the average market price of the common shares. 12. Fair Value of Financial Instruments SFAS No. 107, "Disclosures about Fair Value of Financial Instruments," requires disclosure of fair value information about financial instruments, whether or not recognized in the consolidated statement of financial condition, for which it is practicable to estimate that value. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. In that regard, the derived fair value estimates cannot be substantiated by comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. SFAS No. 107 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Corporation. The following methods and assumptions were used by the Corporation in estimating its fair value disclosures for financial instruments. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts. Cash and Cash Equivalents: The carrying amount reported in the consolidated statements of financial condition for cash and cash equivalents is deemed to approximate fair value. -15- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 12. Fair Value of Financial Instruments (continued) Investment Securities and Mortgage-backed Securities: Fair values for investment securities and mortgage-backed securities are based on quoted market prices and dealer quotes. Loans receivable: The loan portfolio has been segregated into categories with similar characteristics, such as one- to four-family residential real estate, multi-family residential real estate, installment and other. These loan categories were further delineated into fixed-rate and adjustable-rate loans. The fair values for the resultant loan categories were computed via discounted cash flow analysis, using current interest rates offered for loans with similar terms to borrowers of similar credit quality. Federal Home Loan Bank stock: The carrying amount presented in the consolidated statements of financial condition is deemed to approximate fair value. Deposits: The fair values of deposits with no stated maturity, such as money market demand deposits, savings and NOW accounts, are deemed to equal the amount payable on demand as of December 31, 2001 and 2000. The fair value of fixed-rate certificates of deposit is based on the discounted value of contractual cash flows. The discount rate is estimated using the rates currently offered for deposits of similar remaining maturities. Advances from the Federal Home Loan Bank: The fair value of these advances is estimated using the rates currently offered for similar advances of similar remaining maturities or, when available, quoted market prices. Advances by Borrowers for Taxes and Insurance: The carrying amount of advances by borrowers for taxes and insurance is deemed to approximate fair value. Commitments to extend credit: For fixed-rate and adjustable-rate loan commitments, the fair value estimate considers the difference between current levels of interest rates and committed rates. At December 31, 2001 and 2000, the difference between the fair value and notional amount of loan commitments was not material. -16- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) 12. Fair Value of Financial Instruments (continued) Based on the foregoing methods and assumptions, the carrying value and fair value of the Corporation's financial instruments are as follows:
December 31, 2001 2000 Carrying Fair Carrying Fair value value value value (In thousands) Financial assets Cash and cash equivalents $ 104,964 $ 104,964 $ 24,069 $ 24,069 Investment securities 19,177 19,388 16,981 16,926 Mortgage-backed securities 37,740 37,719 15,123 15,097 Loans receivable 871,446 879,776 930,672 934,055 Federal Home Loan Bank stock 22,481 22,481 19,339 19,339 --------- --------- --------- --------- $1,055,808 $1,064,328 $1,006,184 $1,009,486 ========= ========= ========= ========= Financial liabilities Deposits $ 730,075 $ 743,329 $ 632,288 $ 639,892 Advances from the Federal Home Loan Bank 258,850 281,638 313,471 307,013 Advances by borrowers for taxes and insurance 3,860 3,860 4,382 4,382 --------- --------- --------- --------- $ 992,785 $1,028,827 $ 950,141 $ 951,287 ========= ========= ========= =========
13. Cash and Cash Equivalents Cash and cash equivalents consist of cash and due from banks and interest-bearing deposits in other financial institutions with original maturities of three months or less. 14. Advertising Advertising costs are expensed when incurred. 15. Reclassifications Certain prior year amounts have been reclassified to conform to the 2001 consolidated financial statement presentation. -17- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE B - INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of investment securities at December 31, 2001 and 2000 are as follows:
2001 Gross Gross Estimated Amortized unrealized unrealized fair cost gains losses value (In thousands) Held to maturity: U.S. Government agency obligations $18,682 $243 $ 34 $18,891 Municipal bonds 190 2 - 192 ------ --- --- ------ Total investment securities held to maturity 18,872 245 34 19,083 Available for sale: Corporate equity securities 245 89 29 305 ------ --- --- ------ Total investment securities $19,117 $334 $ 63 $19,388 ====== === === ====== 2000 Gross Gross Estimated Amortized unrealized unrealized fair cost gains losses value (In thousands) Held to maturity: U.S. Government agency obligations $16,482 $ 16 $ 71 $16,427 Municipal bonds 190 - - 190 ------ --- --- ------ Total investment securities held to maturity 16,672 16 71 16,617 Available for sale: Corporate equity securities 245 104 40 309 ------ --- --- ------ Total investment securities $16,917 $120 $111 $16,926 ====== === === ======
-18- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE B - INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES (continued) The amortized cost and estimated fair value of investment securities at December 31, 2001 (including securities designated as available for sale) by contractual term to maturity are shown below.
Estimated Amortized fair cost value (In thousands) Due in one year or less $ 1,100 $ 1,132 Due after one year through five years 16,867 17,073 Due after five years 905 878 ------ ------ Total investment securities 18,872 19,083 Corporate equity securities 245 305 ------ ------ Total $19,117 $19,388 ====== ======
The amortized cost, gross unrealized gains, gross unrealized losses and estimated fair values of mortgage-backed securities at December 31, 2001 and 2000, are as follows:
2001 Gross Gross Estimated Amortized unrealized unrealized fair cost gains losses value (In thousands) Held to maturity: FNMA $17,632 $ 96 $119 $17,609 FHLMC 11,069 51 38 11,082 GNMA 2,052 22 37 2,037 CMOs 3 - - 3 Other 9 4 - 13 ------ --- --- ------ Total mortgage-backed securities held to maturity 30,765 173 194 30,744 Available for sale: FHLMC 2,553 46 - 2,599 FNMA 1,250 16 - 1,266 GNMA 3,069 41 - 3,110 ------ --- --- ------ Total mortgage-backed securities available for sale 6,872 103 - 6,975 ------ --- --- ------ Total mortgage-backed securities $37,637 $276 $194 $37,719 ====== === === ======
-19- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE B - INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES (continued)
2000 Gross Gross Estimated Amortized unrealized unrealized fair cost gains losses value (In thousands) Held to maturity: FNMA $ 3,633 $ 27 $ 31 $ 3,629 FHLMC 1,537 15 49 1,503 GNMA 83 6 - 89 CMOs 9 - - 9 Other 11 6 - 17 ------ --- --- ------ Total mortgage-backed securities held to maturity 5,273 54 80 5,247 Available for sale: FHLMC 3,898 20 15 3,903 FNMA 1,695 - 18 1,677 GNMA 4,315 9 54 4,270 ------ --- --- ------ Total mortgage-backed securities available for sale 9,908 29 87 9,850 ------ --- --- ------ Total mortgage-backed securities $15,181 $ 83 $167 $15,097 ====== === === ======
The amortized cost of mortgage-backed securities, including those designated as available for sale at December 31, 2001, by contractual terms to maturity, are shown below. Expected maturities will differ from contractual maturities because borrowers may generally prepay obligations without prepayment penalties. Amortized cost (In thousands) Due within one year or less $ 115 Due after one year through five years 8,592 Due after five years through ten years 7,979 Due after ten years 20,951 ------ $37,637 ====== -20- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE C - LOANS RECEIVABLE Loans receivable at December 31 consist of the following:
2001 2000 (In thousands) Conventional real estate loans: Existing residential properties $683,611 $760,593 Nonresidential real estate 70,239 54,722 Construction 42,666 56,039 Developed building lots 5,908 5,640 Education loans 1,198 1,459 Consumer and other loans 67,918 71,719 ------- ------- Total 871,540 950,172 Less: Undisbursed portion of loans in process 15,343 19,911 Unamortized yield adjustments 1,940 918 Allowance for loan losses 4,256 2,906 ------- ------- Loans receivable - net $850,001 $926,437 ======= =======
As depicted above, the Corporation's lending efforts have historically focused on loans secured by existing residential properties, which comprise approximately $683.6 million, or 80%, of the total loan portfolio at December 31, 2001 and approximately $760.6 million, or 82%, of the total loan portfolio at December 31, 2000. Generally, such loans have been underwritten on the basis of no more than an 80% loan-to-value ratio, which has historically provided the Corporation with adequate collateral coverage in the event of default. Nevertheless, the Corporation, as with any lending institution, is subject to the risk that residential real estate values could deteriorate in its primary lending areas within Ohio, West Virginia, and northern Kentucky, thereby impairing collateral values. However, management believes that residential real estate values in the Corporation's primary lending areas are presently stable. The Bank, in the ordinary course of business, has granted loans to certain of its directors, executive officers, and their associates. Such loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than normal risk of collectibility. The aggregate dollar amount of these loans totaled approximately $1.6 million and $3.3 million at December 31, 2001 and 2000, respectively. -21- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE D - ALLOWANCE FOR LOAN LOSSES Activity in the allowance for loan losses is summarized as follows for the years ended December 31:
2001 2000 1999 (In thousands) Balance at beginning of year $2,906 $1,863 $1,783 Provision for losses on loans 759 568 247 Charge-offs, net of immaterial recoveries (709) (166) (167) Allowance resulting from acquisitions 1,300 641 - ----- ----- ----- Balance at end of year $4,256 $2,906 $1,863 ===== ===== =====
Nonaccrual and nonperforming loans totaled approximately $7.9 million, $4.7 million and $4.0 million at December 31, 2001, 2000 and 1999, respectively. Interest income that would have been recognized had such nonaccrual loans performed pursuant to contractual terms totaled approximately $278,000, $188,000 and $171,000 for the years ended December 31, 2001, 2000 and 1999, respectively. NOTE E - OFFICE PREMISES AND EQUIPMENT Office premises and equipment at December 31 is summarized as follows:
2001 2000 (In thousands) Land $ 2,194 $ 1,862 Buildings and improvements 12,764 11,190 Furniture, fixtures and equipment 9,641 9,054 ------ ------ 24,599 22,106 Less accumulated depreciation and amortization 9,750 8,261 ------ ------ $14,849 $13,845 ====== ======
-22- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE F - DEPOSITS Deposit balances by type and weighted-average interest rate at December 31, 2001 and 2000, are summarized as follows:
2001 2000 Amount Rate Amount Rate (Dollars in thousands) NOW accounts $111,649 0.99% $ 90,830 1.60% Money market demand accounts 64,539 3.59 45,047 5.39 Passbook and statement savings accounts 85,443 1.70 69,706 2.90 ------- ---- ------- ---- Total withdrawable accounts 261,631 1.86 205,583 2.87 Certificates of deposit Original maturities of: Seven days to one year 51,472 3.49 64,693 6.49 One to two years 136,859 5.29 139,103 6.42 Two to eight years 163,226 5.95 117,146 6.31 Negotiated rate certificates 54,998 5.13 56,552 6.90 Individual retirement accounts 61,889 5.40 49,211 6.26 ------- ---- ------- ---- Total certificate accounts 468,444 5.32 426,705 6.40 ------- ---- ------- ---- Total deposits $730,075 4.08% $632,288 5.28% ======= ==== ======= ====
At December 31, 2001 and 2000, the Corporation had certificate of deposit accounts with balances in excess of $100,000 totaling $123.3 million and $109.6 million, respectively. Interest expense on deposits is summarized as follows for the years ended December 31:
2001 2000 1999 (In thousands) Certificate of deposit accounts $26,706 $23,249 $14,906 NOW accounts and money market demand accounts 3,059 3,265 2,077 Passbook and statement savings accounts 1,559 2,355 2,136 ------ ------ ------ $31,324 $28,869 $19,119 ====== ====== ======
The contractual maturities of outstanding certificates of deposit are summarized as follows at December 31:
2001 2000 Year ending December 31: (In thousands) 2001 $ - $256,201 2002 312,484 108,825 2003 86,127 37,189 2004 36,764 9,503 After 2004 33,069 14,987 ------- ------- Total certificate of deposit accounts $468,444 $426,705 ======= =======
-23- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE F - DEPOSITS (continued) At December 31, 2001 and 2000, certain savings deposits were collateralized by a pledge of investment securities, interest-bearing deposits in other banks and letters of credit with the Federal Home Loan Bank totaling $78.8 million and $26.6 million, respectively. NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK Advances from the Federal Home Loan Bank, collateralized at December 31, 2001, by pledges of certain residential mortgage loans totaling $429.1 million and the Bank's investment in Federal Home Loan Bank stock, are summarized as follows:
Maturing year Interest rate ending December 31, 2001 2000 (Dollars in thousands) 5.20% - 7.02% 2001 $ - $ 61,210 5.33% - 7.31% 2002 24,693 26,513 5.50% - 7.38% 2003 9,650 21,610 5.24% - 8.20% 2004 5,854 8,695 3.25% - 7.60% Thereafter 218,653 195,443 ------- ------- $258,850 $313,471 ======= ======= Weighted-average interest rate 6.02% 6.20% ==== ====
NOTE H - FEDERAL INCOME TAXES A reconciliation of the effective tax rate to the federal statutory rate is summarized as follows:
2001 2000 1999 (In thousands) Federal income taxes computed at the expected statutory rate $4,253 $3,925 $3,065 Increase (decrease) in taxes resulting from: Amortization of goodwill 51 51 51 Nontaxable dividend and interest income (6) (4) (6) Increase in cash surrender value of life insurance - net (105) (89) (83) Nondeductible expenses 29 27 25 Refunds of prior year taxes (309) - - Other (22) (62) 24 ----- ----- ----- Federal income tax provision per consolidated financial statements $3,891 $3,848 $3,076 ===== ===== =====
-24- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE H - FEDERAL INCOME TAXES (continued) The components of the Corporation's net deferred tax liability at December 31 are as follows:
Taxes (payable) refundable on temporary differences at statutory rate: 2001 2000 (In thousands) Deferred tax liabilities: FHLB stock dividends $(2,396) $(1,780) Mortgage servicing rights (1,593) (1,766) Percentage of earnings bad debt deduction (226) (340) Book versus tax depreciation (525) (463) Original issue discount (105) (46) Other liabilities, net (49) (68) Unrealized gains on securities designated as available for sale (56) (2) ------ ------ Total deferred tax liabilities (4,950) (4,465) Deferred tax assets: General loan loss allowance 1,447 988 Deferred income 68 46 Deferred compensation 457 390 Purchase accounting adjustments 219 236 ------ ------ Total deferred tax assets 2,191 1,660 ------ ------ Net deferred tax liability $(2,759) $(2,805) ====== ======
For years prior to 1996, the Bank was allowed a special bad debt deduction generally limited to 8% of otherwise taxable income, subject to certain limitations based on aggregate loans and savings account balances at the end of the year. If the amounts that qualified as deductions for federal income taxes are later used for purposes other than for bad debt losses, including distributions in liquidation, such distributions will be subject to federal income taxes at the then current corporate income tax rate. The percentage of earnings bad debt deduction had accumulated to approximately $12.8 million as of December 31, 2001. The amount of the unrecognized deferred tax liability relating to the cumulative bad debt deduction was approximately $4.1 million at December 31, 2001. The Bank is required to recapture as taxable income approximately $1.9 million of its bad debt reserve, which represents post-1987 additions to the reserve, and is unable to utilize the percentage of earnings method to compute the reserve in the future. The Bank has provided deferred taxes for this amount and is amortizing the recapture of the bad debt reserve into taxable income over a six year period, which commenced in 1998. -25- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE I - COMMITMENTS The Bank is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers, including commitments to extend credit. Such commitments involve, to varying degrees, elements of credit and interest-rate risk in excess of the amount recognized in the consolidated statement of financial condition. The contract or notional amounts of the commitments reflect the extent of the Bank's involvement in such financial instruments. The Bank's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit is represented by the contractual notional amount of those instruments. The Bank uses the same credit policies in making commitments and conditional obligations as those utilized for on-balance-sheet instruments. At December 31, 2001, the Bank had outstanding commitments to originate and purchase fixed-rate loans of approximately $9.0 million and adjustable-rate loans of approximately $3.9 million. Additionally, the Bank had unused lines of credit under home equity and other loans of $42.0 million at December 31, 2001, and stand by letters of credit of $151,000. Management believes that all loan commitments are able to be funded through cash flow from operations and existing liquidity. Fees received in connection with these commitments have not been recognized in earnings. Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. Since many of the commitments may expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Bank evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if it is deemed necessary by the Bank upon extension of credit, is based on management's credit evaluation of the counterparty. Collateral on loans may vary but the preponderance of loans granted generally include a mortgage interest in real estate as security. The Corporation has entered into lease agreements for office premises and equipment under operating leases which expire at various dates through 2010. The following table summarizes minimum payments due under lease agreements by year: Year ending December 31, (In thousands) 2002 $195 2003 195 2004 158 2005 146 2006 and thereafter 111 --- $805 === Total rental expense under operating leases was approximately $257,000, $260,000 and $278,000 for the years ended December 31, 2001, 2000 and 1999, respectively. -26- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE J - REGULATORY CAPITAL Advantage Bank is subject to the regulatory capital requirements of the Federal Deposit Insurance Corporation (the "FDIC"). Failure to meet minimum capital requirements can initiate certain mandatory -- and possibly additional discretionary -- actions by regulators that, if undertaken, could have a direct material effect on the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. The FDIC has adopted risk-based capital ratio guidelines to which Advantage is subject. The guidelines establish a systematic analytical framework that makes regulatory capital requirements more sensitive to differences in risk profiles among banking organizations. Risk-based capital ratios are determined by allocating assets and specified off-balance sheet commitments to four risk-weighting categories, with higher levels of capital being required for the categories perceived as representing greater risk. These guidelines divide the capital into two tiers. The first tier ("Tier 1") includes common equity, certain non-cumulative perpetual preferred stock (excluding auction rate issues) and minority interests in equity accounts of consolidated subsidiaries, less goodwill and certain other intangible assets (except mortgage servicing rights and purchased credit card relationships, subject to certain limitations). Supplementary ("Tier II") capital includes, among other items, cumulative perpetual and long-term limited-life preferred stock, mandatory convertible securities, certain hybrid capital instruments, term subordinated debt and the allowance for loan losses, subject to certain limitations, less required deductions. Savings banks are required to maintain a total risk-based capital ratio of 8%, of which 4% must be Tier 1 capital. The FDIC may, however, set higher capital requirements when particular circumstances warrant. Savings banks experiencing or anticipating significant growth are expected to maintain capital ratios, including tangible capital positions, well above the minimum levels. During 2001, management was notified from its regulator that Advantage was categorized as "well-capitalized" under the regulatory framework for prompt corrective action. To be categorized as "well-capitalized" Advantage must maintain minimum capital ratios as set forth in the table that follows. The regulatory capital table as of December 31, 2000, is presented on a combined basis, to allow for comparability, giving effect to the charter consolidation, which was consummated in June 2001. Each of Camco's subsidiary banks met their individual regulatory capital requirements as of December 31, 2000. -27- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE J - REGULATORY CAPITAL (continued) As of December 31, 2001, management believes that the Bank met all capital adequacy requirements to which it was subject.
As of December 31, 2001 To be "well- capitalized" under For capital prompt corrective Actual adequacy purposes action provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) Total capital (to risk-weighted assets) $88,017 12.5% =>$56,346 =>8.0% =>$70,433 =>10.0% Tier I capital (to risk-weighted assets) $83,761 11.9% =>$28,173 =>4.0% =>$42,260 => 6.0% Tier I leverage $83,761 7.6% =>$43,868 =>4.0% =>$54,835 => 5.0% As of December 31, 2000 To be "well- capitalized" under For capital prompt corrective Actual adequacy purposes action provisions Amount Ratio Amount Ratio Amount Ratio (Dollars in thousands) Total capital (to risk-weighted assets) $73,785 12.0% =>$49,159 =>8.0% =>$61,449 =>10.0% Tier I capital (to risk-weighted assets) $70,879 11.5% =>$24,580 =>4.0% =>$36,869 => 6.0% Tier I leverage $70,879 6.9% =>$41,323 =>4.0% =>$51,653 => 5.0%
The Corporation's management believes that, under the current regulatory capital regulations, the Bank will continue to meet its minimum capital requirements in the foreseeable future. However, events beyond the control of the Corporation, such as increased interest rates or a downturn in the economy in the Bank's market areas, could adversely affect future earnings and, consequently, the ability to meet future minimum regulatory capital requirements. -28- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE K - BENEFIT PLANS The Corporation has a non-contributory retirement plan which provides benefits to certain key officers. The Corporation's obligations under the plan have been provided for via the purchase of single premium key man life insurance of which the Corporation is the beneficiary. The Corporation recorded expense related to the plan totaling approximately $54,000, $51,000 and $45,000 during the years ended December 31, 2001, 2000 and 1999, respectively. The Corporation also has a 401(k) Salary Savings Plan covering substantially all employees. Contributions by the employees are voluntary and are subject to matching contributions by the employer under a fixed percentage, which may be increased at the discretion of the Board of Directors. Total expense under this plan was $385,000, $334,000 and $181,000 for the years ended December 31, 2001, 2000 and 1999, respectively. NOTE L - STOCK OPTION PLANS Stockholders of the Corporation have approved three stock option plans. Under the 1972 Plan, 254,230 common shares were reserved for issuance to officers, directors, and key employees of the Corporation and its subsidiaries. The 1982 Plan reserved 115,824 common shares for issuance to employees of the Corporation and its subsidiaries. All of the stock options under the 1972 and 1982 Plans have been granted and are subject to exercise at the discretion of the grantees through 2002. Under the 1995 Plan, 161,488 shares were reserved for issuance. Additionally, in connection with the acquisition of First Savings, the stock options of First Savings were converted into options to purchase 174,421 shares of the Corporation's stock at an exercise price of $7.38 per share. In connection with the acquisition of WHFC, the stock options of WHFC were converted into options to purchase 309,272 shares of the Corporation's stock at a weighted-average exercise price of $11.89 per share which expire in 2008. The Corporation accounts for its stock option plans in accordance with SFAS No. 123, "Accounting for Stock-Based Compensation," which contains a fair-value based method for valuing stock-based compensation that entities may use, which measures compensation cost at the grant date based on the fair value of the award. Compensation is then recognized over the service period, which is usually the vesting period. Alternatively, SFAS No. 123 permits entities to continue to account for stock options and similar equity instruments under Accounting Principles Board ("APB") Opinion No. 25, "Accounting for Stock Issued to Employees." Entities that continue to account for stock options using APB Opinion No. 25 are required to make pro forma disclosures of net earnings and earnings per share, as if the fair-value based method of accounting defined in SFAS No. 123 had been applied. The Corporation utilizes APB Opinion No. 25 and related Interpretations in accounting for its stock option plans. Accordingly, no compensation cost has been recognized for the plans. Had compensation cost for the Corporation's stock option plans been determined based on the fair value at the grant dates for awards under the plans consistent with the accounting method utilized in SFAS No. 123, the Corporation's net earnings and earnings per share would have been reported as the pro forma amounts indicated below: -29- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE L - STOCK OPTION PLANS (continued)
2001 2000 1999 (In thousands, except per share data) Net earnings As reported $8,544 $7,652 $5,940 ===== ===== ===== Pro-forma $8,540 $7,640 $5,940 ===== ===== ===== Earnings per share Basic As reported $1.20 $1.11 $1.04 ==== ==== ==== Pro-forma $1.20 $1.10 $1.04 ==== ==== ==== Diluted As reported $1.19 $1.10 $1.02 ==== ==== ==== Pro-forma $1.19 $1.10 $1.02 ==== ==== ====
The fair value of each option grant is estimated on the date of grant using the modified Black-Scholes options-pricing model with the following assumptions used for grants during 2001 and 2000: dividend yield of 4.07% and 2.51%, respectively; expected volatility of 10.0% for each year; a risk-free interest rate of 3.00% and 5.00%, respectively, and an expected life of ten years for all grants. A summary of the status of the Corporation's stock option plans as of December 31, 2001, 2000 and 1999, and changes during the years ending on those dates is presented below:
2001 2000 1999 Weighted- Weighted- Weighted- average average average exercise exercise exercise Shares price Shares price Shares price Outstanding at beginning of year 688,655 $10.53 369,523 $ 9.43 369,523 $9.43 Granted 8,500 11.93 10,700 9.07 - - WHFC options - - 309,272 11.89 - - Exercised (115,656) (10.91) (840) 9.79 - - Forfeited (78,494) 12.50 - - - - ------- ----- ------- ----- ------- ---- Outstanding at end of year 503,005 $10.16 688,655 $10.53 369,523 $9.43 ======= ===== ======= ===== ======= ==== Options exercisable at year-end 503,005 $10.16 688,655 $10.53 369,523 $9.43 ======= ===== ======= ===== ======= ==== Weighted-average fair value of options granted during the year $ .66 $ 1.75 N/A ===== ===== ===
The following information applies to options outstanding at December 31, 2001: Number outstanding 320,791 Range of exercise prices $7.40 - $9.79 Number outstanding 182,214 Range of exercise prices $11.36 - $16.59 Weighted-average exercise price $10.16 Weighted-average remaining contractual life 5.1 years -30- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE M - CAMCO FINANCIAL CORPORATION CONDENSED FINANCIAL INFORMATION The following condensed financial statements summarize the financial position of the Corporation as of December 31, 2001 and 2000, and the results of its operations and its cash flows for each of the years ended December 31, 2001, 2000 and 1999: Camco Financial Corporation
STATEMENTS OF FINANCIAL CONDITION December 31, (In thousands) 2001 2000 ASSETS Cash in Bank subsidiary $ 271 $ 562 Interest-bearing deposits in other financial institutions 7,584 1,375 Investment securities designated as available for sale 305 309 Investment in Bank subsidiary 87,251 74,477 Investment in title agency subsidiary 1,100 694 Office premises and equipment - net 1,786 1,777 Cash surrender value of life insurance 1,054 1,005 Prepaid expenses and other assets 1,946 236 Deferred federal income taxes - 35 ------- ------ Total assets $101,297 $80,470 ======= ====== LIABILITIES AND STOCKHOLDERS' EQUITY Accounts payable and other accrued liabilities $ 4,812 $ 511 Dividends payable 962 832 Accrued federal income taxes 337 377 Deferred federal income taxes 15 - ------- ------ Total liabilities 6,126 1,720 Stockholders' equity Common stock 8,137 7,058 Additional paid-in capital 51,722 41,551 Retained earnings - substantially restricted 36,621 31,553 Unrealized gains on securities designated as available for sale, net of related tax effects 107 4 Treasury stock, at cost (1,416) (1,416) ------- ------ Total stockholders' equity 95,171 78,750 ------- ------ Total liabilities and stockholders' equity $101,297 $80,470 ======= ======
-31- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE M - CAMCO FINANCIAL CORPORATION CONDENSED FINANCIAL INFORMATION (continued) Camco Financial Corporation
STATEMENTS OF EARNINGS Year ended December 31, (In thousands) 2001 2000 1999 Income Dividends from the Bank $9,615 $6,950 $4,350 Dividends from title agency subsidiary - - 300 Interest and other income 173 159 121 (Excess distribution from) undistributed net earnings of the Bank (306) 1,836 2,320 (Excess distribution from) undistributed earnings of the title agency subsidiary 406 113 (102) ----- ----- ----- Total income 9,888 9,058 6,989 General, administrative and other expense 2,237 2,092 1,520 ----- ----- ----- Earnings before federal income tax credits 7,651 6,966 5,469 Federal income tax credits (893) (686) (471) ----- ----- ----- Net earnings $8,544 $7,652 $5,940 ===== ===== =====
-32- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE M - CAMCO FINANCIAL CORPORATION CONDENSED FINANCIAL INFORMATION (continued) Camco Financial Corporation
STATEMENTS OF CASH FLOWS Year ended December 31, (In thousands) 2001 2000 1999 Cash flows from operating activities: Net earnings for the year $ 8,544 $7,652 $5,940 Adjustments to reconcile net earnings to net cash flows provided by (used in) operating activities: Excess distribution from (undistributed net earnings of) Bank subsidiary 306 (1,836) (2,320) Excess distribution from (undistributed net earnings of) title agency subsidiary (406) (113) 102 Depreciation and amortization 125 87 11 Increase (decrease) in cash due to changes in: Prepaid expenses and other assets (1,710) 421 (388) Accounts payable and other liabilities 4,431 351 (3) Accrued federal income taxes (40) 187 421 Deferred federal income taxes 51 (15) (165) Other - net 14 (22) 8 ------ ----- ----- Net cash provided by operating activities 11,315 6,712 3,606 Cash flows from investing activities: Purchase of investment securities - (17) (22) Purchase of cash surrender value of life insurance - - (135) Net increase in cash surrender value of life insurance (49) (48) (36) Purchase of office premises and equipment (381) (374) (1,297) Proceeds from sale of office equipment 247 - - (Increase) decrease in interest-bearing deposits in other financial institutions (6,209) (758) 351 Purchase of Westwood Homestead Financial Corporation - net - (1,879) - Purchase of Columbia Financial of Kentucky, Inc. - net (3,000) - - ------ ----- ----- Net cash used in investing activities (9,392) (3,076) (1,139) Cash flows from financing activities: Stock options exercised 1,262 8 - Dividends paid (3,476) (3,327) (2,550) Purchase of treasury shares - - (457) ------ ----- ----- Net cash used in financing activities (2,214) (3,319) (3,007) ------ ----- ----- Net increase (decrease) in cash and cash equivalents (291) 317 (540) Cash and cash equivalents at beginning of year 562 245 785 ------ ----- ----- Cash and cash equivalents at end of year $ 271 $ 562 $ 245 ====== ===== =====
-33- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE N - RESTRUCTURING CHARGE In June 2001, Camco recorded a restructuring charge totaling $1.1 million related to the consolidation of its banking subsidiaries' charters. Prior to December 31, 2001, management reversed approximately $146,000 of the restructuring liability through operations. Approximately $650,000 of the net charge was recorded to provide for severance and outplacement services to approximately twenty-two accounting and loan servicing employees of the former banking subsidiaries. Additionally, such amount includes the costs associated with disbanding the local boards of directors. The operational consolidation is expected to be completed in August 2002. As of December 31, 2001, three of the employees had been terminated with payments totaling $202,000. The boards of directors have received payments totaling $158,000, with $67,000 remaining to be paid through December 2003. The remainder of the charge is for professional services in connection with the charter consolidation. NOTE O - BUSINESS COMBINATION During 2001, the Corporation agreed to acquire Columbia Financial utilizing the purchase method of accounting. Columbia Financial was merged into Camco in November 2001 and its banking subsidiary, Columbia Federal, continued operations as a division of Advantage. Camco paid $18.1 million in cash and issued 963,962 of its common shares, which were valued at approximately $9.1 million, in connection with the acquisition. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition. (In thousands) Cash and cash equivalents $ 14,183 Investment securities 11,185 Mortgage-backed securities 12,189 Loans receivable 69,237 Prepaid expenses and other assets 3,628 ------- Total assets 110,422 Deposits (81,071) Other liabilities (2,180) ------- Net assets acquired $ 27,171 ======= -34- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE O - BUSINESS COMBINATION (continued) Presented below are Camco's pro-forma condensed consolidated statements of earnings and earnings per share which have been prepared as if the acquisition had been consummated as of the beginning of each of the years ended December 31, 2001 and 2000.
2001 2000 (In thousands) (unaudited) Total interest income $80,906 $83,812 Total interest expense 51,673 53,439 ------ ------ Net interest income 29,233 30,373 Provision for losses on loans 792 1,568 Other income 7,237 5,657 General, administrative and other expense 22,808 22,947 ------ ------ Earnings before income taxes 12,870 11,515 Federal income taxes 4,040 3,853 ------ ------ Net earnings $ 8,830 $ 7,662 ====== ====== Basic earnings per share $1.26 $1.11 ==== ==== Diluted earnings per share $1.25 $1.10 ==== ====
-35- Camco Financial Corporation NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) December 31, 2001, 2000 and 1999 NOTE P - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The following table summarizes the Corporation's quarterly results for the years ended December 31, 2001 and 2000.
Three Months Ended March 31, June 30, September 30, December 31, 2001: (In thousands, except per share data) Total interest income $19,440 $19,030 $18,083 $17,819 Total interest expense 12,748 12,451 11,821 11,413 ------ ------ ------ ------ Net interest income 6,692 6,579 6,262 6,406 Provision for losses on loans 156 150 152 301 Other income 1,407 1,496 1,920 2,330 General, administrative and other expense 4,717 5,798 4,556 4,827 ------ ------ ------ ------ Earnings before income taxes 3,226 2,127 3,474 3,608 Federal income taxes 1,090 593 1,122 1,086 ------ ------ ------ ------ Net earnings $ 2,136 $ 1,534 $ 2,352 $ 2,522 ====== ====== ====== ====== Earnings per share: Basic $.31 $.22 $.34 $.33 === === === === Diluted $.30 $.22 $.34 $.33 === === === === Three Months Ended March 31, June 30, September 30, December 31, 2000: (In thousands, except per share data) Total interest income $17,658 $18,966 $19,545 $19,502 Total interest expense 11,094 12,230 13,204 13,081 ------ ------ ------ ------ Net interest income 6,564 6,736 6,341 6,421 Provision for losses on loans 137 156 138 137 Other income 1,120 1,301 1,773 1,342 General, administrative and other expense 4,931 5,093 4,768 4,738 ------ ------ ------ ------ Earnings before income taxes 2,616 2,788 3,208 2,888 Federal income taxes 882 963 1,061 942 ------ ------ ------ ------ Net earnings $ 1,734 $ 1,825 $ 2,147 $ 1,946 ====== ====== ====== ====== Earnings per share: Basic $.25 $.26 $.31 $.29 === === === === Diluted $.25 $.26 $.31 $.28 === === === ===
-36- SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Amendment on Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized, on the 4th day of April, 2002. Camco Financial Corporation By /s/ Richard C. Baylor ----------------------------------------------- Richard C. Baylor, President, Chief Executive Officer and a Director -37- -----END PRIVACY-ENHANCED MESSAGE-----