Exhibit 99.2
Description of the Transaction
On October 4, 1996, Camco Financial Corporation consummated the acquisition of
First Ashland Financial Corporation. The acquisition was effected via the
issuance of shares of common stock and cash representing an aggregate fair value
of $29.1 million for the transaction. The acquisition was accounted for using
the purchase method of accounting. Accordingly, the assets and liabilities have
been recorded at market value with the excess of the fair value of assets
received over liabilities assumed allocated to goodwill.
CAMCO FINANCIAL CORPORATION
PRO FORMA UNAUDITED CONDENSED COMBINED CONSOLIDATED STATEMENT OF EARNINGS
For the nine months ended September 30, 1996
CAMCO FIRST ACQUISITION PRO FORMA FOOTNOTE
FINANCIAL ASHLAND ADJUSTMENTS COMBINED REFERENCES
--------- ------- ----------- --------- ----------
DR. (CR.)
(Dollars in thousands)
Total interest income $ 20,371 $ 4,762 $ 31 $ 24,882 (1)
220 (2)
Total interest expense 221 (3)
11,106 2,397 (150) 13,574 (4)
-------- ------- ------ --------
Net interest income 9,265 2,365 322 11,308
Provision for losses on loans 69 50 - 119
-------- ------- ------ --------
Net interest income after provision for
losses on loans 9,196 2,315 322 11,189
Other income 2,677 153 2,830
General, administrative and other expense
Employee compensation 3,391 952 (405) 3,938 (5)
Federal deposit insurance premiums 2,306 575 - 2,881
Amortization of goodwill - - 114 114 (6)
Other 3,479 506 - 3,985
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Total general, administrative and other
expense 9,176 2,033 (291) 10,918
-------- ------- ------ --------
Earnings before federal income taxes 2,697 435 31 3,101
Federal income taxes 917 148 10 1,055 (7)
-------- ------- ------ --------
NET EARNINGS $ 1,780 $ 287 $ 21 $ 2,046
======== ======= ====== ========
EARNINGS PER SHARE (8) $0.86 $0.29 $0.58
======== ======= ========
(1) Amortization of premiums on loans, investments and mortgage-backed
securities.
(2) Loss of interest income on investments of $5.9 million at 5.00%. This
amount represents the foregone revenue on investments which were redeemed
to fund the cash purchase price.
(3) Interest expense on borrowings to fund remainder of cash purchase price of
$5.5 million at 5.38% for nine months.
(4) Premium on deposits over a nine month period (.50% x $399,055 x .75 =
$149,646).
(5) Reduction of employee benefit plan expense related to termination of ESOP,
RRP and pension plan.
(6) Amortization of resultant goodwill over a 25 year estimated useful life.
(7) Tax effects on entries 1 - 7 at 34%.
(8) Camco Financial historic earnings per share is based on 2,075,641 shares
outstanding. First Ashland earnings per share is based on 987,434 pro forma
equivalent shares outstanding. Pro forma combined condensed consolidated
earnings per share is based on 3,063,075 weighted average shares
outstanding. On a pro forma basis giving effect to the BIF/SAIF assessment
and the reduction of deposit premiums pro forma net earnings would be
$3.863 million, or $1.26 per share.
CAMCO FINANCIAL CORPORATION
PRO FORMA UNAUDITED CONDENSED COMBINED CONSOLIDATED FINANCIAL STATEMENTS
At September 30, 1996
CAMCO FIRST ACQUISITION PRO FORMA FOOTNOTE
FINANCIAL ASHLAND ADJUSTMENTS COMBINED REFERENCES
DR. (CR.)
--------- ------- ----------- --------- ----------
(DOLLARS IN THOUSANDS)
Cash and cash equivalents $ 10,998 9,329 $ (5,864) $ 14,463 (1)
Investment securities, net 2,860 5,826 31 8,717 (2)
Mortgage-backed securities, net 22,963 6,661 41 29,665 (2)
Loans receivable, net 319,103 63,403 765 383,271 (2)
Goodwill, net - - 3,790 3,790 (8)
Office premises and equipment, net 4,693 1,340 792 6,825 (3)
Other assets 17,461 1,972 (418) 19,685 (4)
670 (7)
-------- ------- --------- --------
Total assets $378,078 $88,531 $ (193) $466,416
======== ======= ========= ========
Deposits $293,373 $62,204 (399) $355,976 (5)
Advances from FHLB 48,801 1,490 (5,497) 55,788 (6)
Other liabilities 7,231 1,000 - 8,231
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Total liabilities 349,405 64,694 (5,896) 419,995
Stockholders' equity
Common stock and additional
paid in capital (Assumes 3,063,075 9,511 14,415 14,415 27,259
shares issued and outstanding) (17,748)
Employee benefit plans - (1,507) (1,507) -
Retained earnings, net 19,162 10,929 10,929 19,162
-------- ------- --------- --------
Total stockholders' equity 28,673 23,837 6,089 46,421
-------- ------- --------- --------
Total liabilities and stockholders' equity $378,078 $88,531 $ 193 $466,416
======== ======= ========= ========
(1) Utilization of First Ashland's existing cash to fund purchase price.
(2) Fair value of investments, mortgage-backed securities and loans at
September 30, 1996.
(3) Adjustment to reflect office premises and equipment at fair value on
September 30, 1996.
(4) After-tax entry related to pro forma adjustments 1,2,3 and 5.
(5) Fair value adjustment to reflect deposits at fair value at September 30,
1996.
(6) Borrowings from FHLB advances ($5,500) less adjustment to reflect FHLB
advances at fair value at September 30, 1996 ($3).
(7) Tax benefits of ESOP and RRP liabilities.
(8) Goodwill arising from acquisition.
CAMCO FINANCIAL CORPORATION
PRO FORMA UNAUDITED CONDENSED COMBINED CONSOLIDATED STATEMENT OF EARNINGS
For the year ended December 31, 1995
CAMCO FIRST ACQUISITION PRO FORMA FOOTNOTE
FINANCIAL ASHLAND ADJUSTMENTS COMBINED REFERENCES
--------- ------- ----------- --------- ----------
DR. (CR.)
(Dollars in thousands)
Total interest income $25,440 $ 6,079 $ 41 $ 31,185 (1)
293 (2)
Total interest expense 14,257 3,337 294 17,688 (3)
(200) (4)
------- ------- ----- --------
Net interest income 11,183 2,742 428 13,497
Provision for losses (recoveries) on loans 143 (2) - 141
------- ------- ----- --------
Net interest income after provision for
losses on loans 11,040 2,744 428 13,356
Other income 3,293 82 - 3,375
152 (5)
General, administrative and other expense 8,775 1,759 (489) 10,197 (6)
------- ------- ----- --------
Earnings before federal income taxes 5,558 1,067 91 6,534
Federal income taxes 1,910 322 (10) 2,222 (7)
------- ------- ----- --------
NET EARNINGS $ 3,648 $ 745 $ 81 $ 4,312 (8)
======= ======= ===== ========
EARNINGS PER SHARE $1.76 $0.75 $1.41
======= ======= ========
(1) Amortization of premiums on loans, investments and mortgage-backed
securities.
(2) Loss of interest income on investments of $5.9 million at 5.00%. This
amount represents the foregone revenue on investments which were redeemed
to fund the cash purchase price.
(3) Interest expense on borrowings to fund remainder of cash purchase price of
$5.5 million at 5.38% for the year.
(4) Premium on deposits over the year (.50% x $399,055).
(5) Amortization of resultant goodwill over a 25 year estimated useful life.
(6) Reduction of employee benefit plan expense related to termination of ESOP,
RRP and pension plan.
(7) Tax effects on entries 1 - 6 at 34%.
(8) Camco Financial historic earnings per share is based on 2,075,641 shares
outstanding. First Ashland earnings per share is based on 987,434 pro forma
equivalent shares outstanding. Pro forma combined condensed consolidated
earnings per share is based on 3,063,075 weighted average shares
outstanding.