Exhibit 99.1
Contacts: | ||||||
Richard C. Baylor, CEO | ||||||
Phone: 740-435-2040 | ||||||
Or | ||||||
Mark A. Severson, CFO | ||||||
Phone: 740-435-2055 | ||||||
NEWS RELEASE
Release Date: | April 24, 2006 |
Release Time: | 4:00 P.M. |
Camco Financial Announces First Quarter 2006 Earnings
Cambridge, Ohio (Nasdaq: CAFI) — Camco Financial Corporation (“Camco”) reported net earnings for the quarter ended March 31, 2006 of $1.68 million or $.22 per basic share as compared with net earnings of $2.22 million or $.29 per share for the same quarter in 2005.
Camco recently announced an increase of its quarterly cash dividend to $.15 from $.145 for the dividend payable on April 21, 2006. This dividend represents an annualized yield of 4.17% on Camco’s March 31, 2006 quarter-end market value. Also, in the first quarter 2006, Camco purchased 42,000 shares under the stock repurchase program.
President & CEO Richard C. Baylor commented, “We continue to see progress in our efforts to restructure the composition of our balance sheet. We are staying on course with our strategic plan to grow consumer and commercial loan assets, which now comprise 46% of our total loan portfolio and contributed to the increase in the net interest margin. The decrease in our earnings stems from lower non-interest income primarily due to a decision to no longer accrue late charges on commercial loans. In addition, we increased employees in important revenue generating areas
4
such as commercial loan officers and commercial lending operations staff during the first quarter of 2006. Competition for loan volume has been acute, yet we are not willing to sacrifice future quality for current growth and therefore our loan outstandings have not shown growth for the first quarter 2006.”
Mr. Baylor continued, “With our net interest margin increasing to 3.06% we have seen the average yield on our earning assets increase at a faster pace than the cost of our interest bearing liabilities. We attribute this improvement to the shift in loan portfolio composition as well as the series of prime rate increases that have occurred over the past year. To encourage this improvement we have recently recruited two seasoned commercial lenders in markets that we serve, which continues our efforts to grow our commercial loan portfolio. In addition, since December 31, 2005, we have been successful in growing deposits by $16.1 million while reducing generally more expensive FHLB advances and repos by $26.9 million.”
Review of significant areas:
Net Interest Margin:
During the first quarter of 2006 the net interest margin rose to 3.06%, versus 2.93% for the first quarter 2005. The primary reason for this growth in the net interest margin was the yield on earnings assets rising faster than the cost of interest bearing liabilities. The yield on earning assets increased from 5.36% in the first quarter 2005 to 5.96% in the first quarter 2006 or 60 basis points. Conversely the total cost of interest bearing liabilities increased from 2.62% in the first quarter 2005 to 3.17% in the first quarter of 2006 or 55 basis points.
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Non-Interest Income:
For the quarter ended March 31, 2006, non-interest income decreased to $1.31 million from $1.71 million in the first quarter 2005. During the first quarter 2006, $11.8 million of loans were sold with a total gain of $99,000 as compared to $14.4 million sold in the first quarter of 2005 for a gain of $170,000.
Mortgage servicing rights were reduced in value in the first quarter of 2006 by $22,000 versus the first quarter of 2005, which had an increase in value of $51,000. This decrease was primarily a function of lower loan sales in the first quarter 2006 vs. the first quarter 2005. In addition management decided to discontinue the accrual of late charges on commercial loans in the first quarter 2006 and moved to a method that will recognize late charges as income when collected. This decision resulted in a decrease in non-interest income in the first quarter 2006 of $166,000.
Operating Expenses:
For the first quarter ended March 31, 2006, operating expenses were $6.3 million compared to $5.6 million for the first quarter 2005. Approximately one-half of this increase was attributable to salaries and benefits. The company has recently made several key hires within the mid-management level of the company as well as commercial lenders in the markets we serve. Additional collection staff has also been hired. In addition, compensation expense related to stock options under FAS123R was $34,000 in the first quarter 2006. Ohio franchise taxes were $166,000 higher in the first quarter 2006 compared to the first quarter 2005, as this expense had previously been reduced due to the 2004 London Financial acquisition which produced a one-time savings that occurred in 2005.
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Asset Quality:
Non-performing loans as a percentage of total loans increased from 1.28% at March 31, 2005 to 1.75% at March 31, 2006. The allowance for loan losses as a percentage of loans increased from 79 basis points at March 31, 2005 to 87 basis points at March 31, 2006, as management continues to increase the Bank’s reserves against the backdrop of a sluggish Midwest manufacturing economy.
Strategic Vision:
Camco continues to execute and manage its long-term strategic plan. This plan encompasses the diversification of the balance sheet primarily through increasing commercial, commercial real estate and consumer loan portfolios as well as transaction-based deposits. Critical to the strategy is the future growth of the balance sheet and the correspondent increase in net interest margin. Complimentary revenue sources to enhance the net interest margin are being actively pursued while management remains vigilant to contain operating expenses in this transitional period.
Camco Financial Corporation, holding company of Advantage Bank, is a multi-state financial services holding company headquartered in Cambridge, Ohio. Advantage Bank and its affiliates offer community banking that includes commercial, business and consumer financial services, internet banking and title insurance services from 29 offices in 22 communities in Ohio, Kentucky and West Virginia.
The words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties including changes in economic conditions in the Company’s market area, changes in policies by regulatory agencies, fluctuations in interest rates, demands for loans in the Company’s market area and competition, that could cause actual results to differ
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materially from historical earnings and those presently anticipated or projected. The Company wishes to caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company does not undertake, and specifically disclaims any obligation, to publicly release the result of any revisions that may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.
Financials Attached.
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Camco Financial Corporation
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and Shares Outstanding)
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and Shares Outstanding)
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | ||||||||||||||||
Assets | ||||||||||||||||||||
Cash and Cash Equivalents | 29,861 | 33,085 | 34,274 | 36,778 | 39,795 | |||||||||||||||
Investments | 109,460 | 113,690 | 113,206 | 113,517 | 109,179 | |||||||||||||||
Loans Held for Sale | 3,325 | 1,968 | 5,317 | 3,441 | 4,616 | |||||||||||||||
Loans Receivable | 847,426 | 853,701 | 856,468 | 847,731 | 843,777 | |||||||||||||||
Allowance for Loan Loss | (7,321 | ) | (6,959 | ) | (6,642 | ) | (6,540 | ) | (6,637 | ) | ||||||||||
Loans Receivable, Net | 840,105 | 846,742 | 849,826 | 841,191 | 837,140 | |||||||||||||||
Goodwill | 6,683 | 6,683 | 6,683 | 6,683 | 6,683 | |||||||||||||||
Other Assets | 68,996 | 69,080 | 68,014 | 67,747 | 67,221 | |||||||||||||||
Total Assets | $ | 1,058,430 | $ | 1,071,248 | $ | 1,077,320 | $ | 1,069,357 | $ | 1,064,634 | ||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 676,376 | 660,242 | 669,908 | 669,283 | 674,853 | |||||||||||||||
Borrowed Funds | 280,280 | 307,223 | 305,211 | 298,295 | 289,302 | |||||||||||||||
Other Liabilities | 11,543 | 13,020 | 11,835 | 11,123 | 10,900 | |||||||||||||||
Total Liabilities | 968,199 | 980,485 | 986,954 | 978,701 | 975,055 | |||||||||||||||
Stockholders Equity | 90,231 | 90,763 | 90,366 | 90,656 | 89,579 | |||||||||||||||
Total Liabilities and Stockholders’ Equity | $ | 1,058,430 | $ | 1,071,248 | $ | 1,077,320 | $ | 1,069,357 | $ | 1,064,634 | ||||||||||
Stockholders’ Equity to | 8.52 | % | 8.47 | % | 8.39 | % | 8.48 | % | 8.41 | % | ||||||||||
Total Assets | ||||||||||||||||||||
Total Shares Outstanding | 7,536,713 | 7,578,713 | 7,621,385 | 7,643,746 | 7,678,747 | |||||||||||||||
Book Value Per Share | $ | 11.97 | $ | 11.98 | $ | 11.86 | $ | 11.86 | $ | 11.67 |
Camco Financial Corporation
Condensed Consolidated Statements of Earnings
Quarterly Information
(In thousands, except for per share data and shares outstanding)
Condensed Consolidated Statements of Earnings
Quarterly Information
(In thousands, except for per share data and shares outstanding)
3 Months | 3 Months | 3 Months | 3 Months | 3 Months | ||||||||||||||||
Ended | Ended | Ended | Ended | Ended | ||||||||||||||||
3/31/06 | 12/31/05 | 9/30/05 | 6/30/05 | 3/31/05 | ||||||||||||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
Interest Income: | ||||||||||||||||||||
Loans | 13,249 | 13,163 | $ | 12,729 | $ | 12,311 | $ | 11,962 | ||||||||||||
Mortgage-backed securities | 633 | 655 | 679 | 742 | 751 | |||||||||||||||
Investment securities | 480 | 466 | 358 | 257 | 185 | |||||||||||||||
Interest-bearing deposits and other | 790 | 873 | 689 | 651 | 607 | |||||||||||||||
Total Interest Income | 15,152 | 15,157 | 14,455 | 13,961 | 13,505 | |||||||||||||||
Interest Expense: | ||||||||||||||||||||
Deposits | 4,424 | 4,136 | 4,009 | 3,786 | 3,503 | |||||||||||||||
Borrowings | 2,949 | 2,922 | 2,893 | 2,646 | 2,634 | |||||||||||||||
Total Interest Expense | 7,373 | 7,058 | 6,902 | 6,432 | 6,137 | |||||||||||||||
Net Interest Income | 7,779 | 8,099 | 7,553 | 7,529 | 7,368 | |||||||||||||||
Provision for Losses on Loans | 360 | 520 | 360 | 360 | 240 | |||||||||||||||
Net Interest Income After Provision for Loan Losses | 7,419 | 7,579 | 7,193 | 7,169 | 7,128 | |||||||||||||||
Noninterest Income | ||||||||||||||||||||
Late charges, rent and other | 462 | 550 | 818 | 715 | 745 | |||||||||||||||
Loan servicing fees | 360 | 363 | 368 | 371 | 378 | |||||||||||||||
Service charges and other fees on deposits | 352 | 393 | 370 | 386 | 334 | |||||||||||||||
Gain on sale of loans | 99 | 119 | 215 | 179 | 170 | |||||||||||||||
Mortgage servicing rights | (22 | ) | 287 | (276 | ) | (42 | ) | 51 | ||||||||||||
Gain on sale of investment, mbs & fixed assets | — | 36 | 66 | 0 | 19 | |||||||||||||||
Gain on sale of real estate acq’d through foreclosure | 55 | (39 | ) | (18 | ) | 25 | 9 | |||||||||||||
Total noninterest income | 1,306 | 1,709 | 1,543 | 1,634 | 1,706 | |||||||||||||||
Non interest expense | ||||||||||||||||||||
Employee compensation and benefits | 3,249 | 2,932 | 3,008 | 2,811 | 2,964 | |||||||||||||||
Occupancy and equipment | 780 | 711 | 780 | 763 | 797 | |||||||||||||||
Data processing | 393 | 373 | 317 | 347 | 331 | |||||||||||||||
Advertising | 303 | 341 | 345 | 303 | 229 | |||||||||||||||
Franchise taxes | 246 | 50 | 71 | 67 | 79 | |||||||||||||||
Other operating | 1,291 | 1,237 | 1,214 | 1,519 | 1,165 | |||||||||||||||
Total noninterest expense | 6,262 | 5,644 | 5,735 | 5,810 | 5,565 | |||||||||||||||
Net Income — Before Income Tax | 2,463 | 3,644 | 3,001 | 2,993 | 3,269 | |||||||||||||||
Provision for income taxes | 784 | 1,174 | 963 | 953 | 1,051 | |||||||||||||||
Net Earnings from Operations | 1,679 | 2,470 | 2,038 | 2,040 | 2,218 | |||||||||||||||
Earnings Per Share Reported: | ||||||||||||||||||||
Basic | $ | 0.22 | $ | 0.32 | $ | 0.27 | $ | 0.27 | $ | 0.29 | ||||||||||
Diluted | $ | 0.22 | $ | 0.32 | $ | 0.27 | $ | 0.27 | $ | 0.29 | ||||||||||
Basic Weighted Number of Shares Outstanding | 7,563,452 | 7,610,499 | 7,632,132 | 7,660,120 | 7,677,795 | |||||||||||||||
Diluted Weighted Number of Shares Outstanding | 7,567,170 | 7,614,127 | 7,638,147 | 7,681,186 | 7,711,433 |
Camco Financial Corporation
Selected Ratios and Statistics
Periods Ended March 31, 2006 and 2005
(In thousands, except for per share data and shares outstanding)
Selected Ratios and Statistics
Periods Ended March 31, 2006 and 2005
(In thousands, except for per share data and shares outstanding)
3 Months | 3 Months | |||||||
Ended | Ended | |||||||
3/31/06 | 3/31/05 | |||||||
(Unaudited) | (Unaudited) | |||||||
Reported: | ||||||||
Return on Average Equity | 7.38 | % | 9.87 | % | ||||
Return on Average Assets | 0.63 | % | 0.83 | % | ||||
Interest Rate Spread | 2.79 | % | 2.74 | % | ||||
Net Interest Margin | 3.06 | % | 2.93 | % | ||||
Yield on earning assets | 5.96 | % | 5.36 | % | ||||
Cost of deposits | 2.81 | % | 2.18 | % | ||||
Cost of funds | 3.92 | % | 3.59 | % | ||||
Total cost of interest bearing liabilities | 3.17 | % | 2.62 | % | ||||
Noninterest expense/average assets | 2.35 | % | 2.09 | % | ||||
Efficiency Ratio | 68.93 | % | 61.33 | % | ||||
Non performing assets to total assets | 1.55 | % | 1.21 | % | ||||
Non performing loans to total net loans including loans held for sale | 1.75 | % | 1.28 | % | ||||
Allowance for loan losses to total loans | 0.87 | % | 0.79 | % |
Ratios are based upon the mathematical average of the balances at the end of each month for the quarter and were annualized where appropriate |
Camco Financial Corporation
Averages for Quarters Ended
March 2006, December and September 2005
(In thousands, except for per share data and shares outstanding)
Averages for Quarters Ended
March 2006, December and September 2005
(In thousands, except for per share data and shares outstanding)
Average Table - Quarter Ended | ||||||||||||||||||||||||||||||||||||
Mar 31, 2006 | Dec 31, 2005 | Sept 30, 2005 | ||||||||||||||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | Average | Yield/ | |||||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||
Interest — Earning Assets: | ||||||||||||||||||||||||||||||||||||
Loans held for sale | 2,550 | 3,197 | 4,547 | |||||||||||||||||||||||||||||||||
Loans receivable — net | 843,007 | 13,249 | 6.27 | % | 846,361 | 13,163 | 6.20 | % | 848,600 | 12,729 | 5.97 | % | ||||||||||||||||||||||||
Mortgage-backed securities | 62,981 | 633 | 4.02 | % | 67,372 | 655 | 3.89 | % | 73,290 | 679 | 3.71 | % | ||||||||||||||||||||||||
Investment securities | 48,795 | 480 | 3.93 | % | 47,013 | 466 | 3.96 | % | 39,555 | 358 | 3.62 | % | ||||||||||||||||||||||||
Interest-bearing deposits and other | 60,304 | 790 | 5.24 | % | 59,556 | 873 | 5.86 | % | 60,004 | 689 | 4.59 | % | ||||||||||||||||||||||||
Total interest earning assets | 1,017,637 | 15,152 | 5.96 | % | 1,023,499 | 15,157 | 5.92 | % | 1,025,996 | 14,455 | 5.64 | % | ||||||||||||||||||||||||
Noninterest-earning assets | 46,471 | 46,927 | 50,918 | |||||||||||||||||||||||||||||||||
Total Assets | 1,064,108 | 1,070,426 | 1,076,914 | |||||||||||||||||||||||||||||||||
Interest-Bearing Liabilities: | ||||||||||||||||||||||||||||||||||||
Deposits | 630,346 | 4,424 | 2.81 | % | 632,190 | 4,136 | 2.62 | % | 642,363 | 4,009 | 2.50 | % | ||||||||||||||||||||||||
Advances | 300,930 | 2,949 | 3.92 | % | 303,310 | 2,922 | 3.85 | % | 303,520 | 2,893 | 3.81 | % | ||||||||||||||||||||||||
Total interest-bearing liabilities | 931,276 | 7,373 | 3.17 | % | 935,500 | 7,058 | 3.02 | % | 945,883 | 6,902 | 2.92 | % | ||||||||||||||||||||||||
Noninterest-bearing sources: | ||||||||||||||||||||||||||||||||||||
Noninterest-bearing liabilities | 41,834 | 43,910 | 40,069 | |||||||||||||||||||||||||||||||||
Shareholders’ equity | 90,998 | 91,016 | 90,962 | |||||||||||||||||||||||||||||||||
Total Liabilities and Shareholders’ Equity | 1,064,108 | 1,070,426 | 1,076,914 | |||||||||||||||||||||||||||||||||
Net Interest Income & Margin | 7,779 | 3.06 | % | 8,099 | 3.17 | % | 7,553 | 2.94 | % | |||||||||||||||||||||||||||