EXHIBIT 99
CAMCO FINANCIAL ANNOUNCES THIRD QUARTER 2004 EARNINGS
Friday October 22, 4:35 pm ET
CAMBRIDGE, Ohio--(BUSINESS WIRE)--Oct. 22, 2004--(Nasdaq:CAFI - News) - Camco
Financial Corporation ("Camco") reported net earnings for the quarter ended
September 30, 2004 of $1.5 million compared to $1.6 million of net earnings
reported for the same quarter in 2003. Basic earnings per share for the third
quarter of 2004 were $.20 compared to $.21 for the same quarter in 2003.
For the nine months ended September 30, 2004, Camco reported net earnings of
$4.0 million compared to $6.3 million of net earnings reported for the same nine
month period in 2003. Basic earnings per share for the nine months ended
September 30, 2004 were $.54 compared to $.83 for the same nine month period in
2003. Camco paid a quarterly dividend of $.145 per share on October 15, 2004,
representing an annualized yield of 4.14% based on Camco's quarter end market
value.
Camco President & CEO Richard C. Baylor said, "We are encouraged by our progress
in evolving our sources of income from strong reliance on the sale of fixed rate
residential loans to earnings driven mostly by activities that produce core
earnings, such as net interest income, deposit and loan service fees. Moreover,
our continuing strategic shift in asset composition has positioned the Company
to benefit from the long anticipated increases in the overall level of interest
rates. Management's internal analysis projects an improvement of over 7% in net
interest income will likely result if interest rates incur an instantaneous and
parallel increase of 200 basis points. This trend would be expected to translate
into a higher net interest margin and a $.15 annual increase in basic earnings
per share."
Baylor continued, "Though overall residential loan production is lower than
2003, we are excited to see the significant pickup in our commercial real estate
production which stands at $93.9 million through September 30, 2004, versus
$44.1 million for the same nine month period of 2003. For the nine months ended
September 30, 2004, commercial real estate and consumer loan production amounted
to 50% of our total year to date production. We are also very pleased that we
have been able to grow deposits, primarily money market checking and long-term
certificates of deposit, exclusive of our recent purchase of London Financial
Corporation."
Review of significant areas:
Net Interest Margin - Management believes the net interest margin will continue
to improve as Camco emphasizes the growth of the commercial real estate and
consumer loan portfolios while at the same time effectively managing the cost of
its funding sources. Net interest margin increased from 2.36% for the nine
months ended September 30, 2003 to 2.45% for the nine months ended September 30,
2004. Quarter on quarter the margin dropped from 2.47% for the second quarter of
2004 to 2.44% for the third quarter of 2004. This drop was due primarily to the
increase in funding costs associated with Camco's transaction accounts in highly
competitive markets. Camco did not receive the full beneficial impact of the
prime rate increases that occurred in the third quarter, which will ultimately
offset the increase in funding costs. Through continual efforts to meet the
needs of the customer base, management is actively administering a deposit
structure that is anticipated to grow over the coming months, which will provide
low cost funding for loans. As an example, in 2004 management launched a new
checking product line called Advantage Platinum that allows customers to receive
local and national merchant discounts as well as reduce service charges when a
minimum balance is maintained in their account or total deposit relationship.
They may also receive discounts on other AdvantageBank products. As of September
30, 2004, Advantage Platinum has already grown to $46 million since the
introduction of the product in the spring of 2004.
Non-Interest Income - For the nine months ended September 30, 2004 non-interest
income was $5.2 million versus $9.2 million for the same period last year. This
decrease is primarily due to reductions in three major sources of revenue.
First, the gain-on-sale of loans sold into the secondary market has decreased
from $3.3 million for the nine months ended September 30, 2003 to $679,000 for
the nine months ended September 30, 2004. This reduction in the gain-on-sale of
loans is directly attributable to lower production volumes of fixed-rate
residential loans. Management expects the gain-on-sale of residential loans into
the secondary market to continue at current levels. However, our anticipated
increased production of adjustable rate residential loans will add to Camco's
portfolio growth of interest rate sensitive and lower risk assets.
Secondly, non-interest income from Camco Title Agency, a subsidiary of Camco,
has decreased. Camco Title's services are driven directly by loan production
through the selling of title insurance to Camco's customers. Camco Title's
contribution to Camco's non-interest income has decreased from $1.5 million for
the first nine months ended September 30, 2003 to $733,000 for the nine months
ended September 30, 2004. Management anticipates a modest growth of title agency
net income as Camco Title expands its services throughout the Bank's franchise.
The third major area driving the decrease in non-interest income was mortgage
servicing rights. Prepayments of the underlying sold portfolios slowed at the
same time Camco experienced lower loan sales into the secondary market. The
resulting impact for the nine months ended September 30, 2004 compared to the
same period in 2003 was $133,000 versus $188,000, or a decrease of $55,000.
Management expects the impact of mortgage servicing rights on earnings to
improve as interest rates increase. An increase in rates is expected to reduce
prepayments from the levels that have been experienced over the past several
years.
Operating Expenses - For the nine months ended September 30, 2004 operating
expenses were up .6%, from $17.2 million for the first nine months of 2003 to
$17.3 million for the first nine months of 2004. The slight increase is
primarily from expenses incurred due to the London acquisition in August of
2004. Management continues to contain personnel costs through operating
efficiencies created by the consolidation of charters in 2001 while at the same
time expending resources to build and develop the current sales culture. For the
nine months ended 2004, personnel costs were down 8.7% when compared to the
first nine months of 2003. The reduction to compensation expense related to
direct loan origination costs has decreased substantially due to the drop in
residential loan production, as this offset to expense decreased from $3.0
million to $1.7 million, or approximately 41.4%. Occupancy and equipment
expenses have decreased from $2.8 million to $2.6 million for the first nine
months of 2004, or a decrease of approximately 8.0% as management utilizes
current infrastructure more efficiently and capitalizes on past investments in
technology.
Asset Quality - At the end of the third quarter of 2004, non-performing loans as
a percentage of loans (including loans held for sale) decreased from 1.53% at
September 30, 2003 to 1.13% at September 30, 2004. The allowance for loan losses
as a percentage of loans has increased from 67 basis points at September 30,
2003 to 72 basis points at September 30, 2004. Significant resources have been
devoted to a continuing reduction of non-performing assets. At September 30,
2004, approximately 70% of all non-performing loans were single family home
loans.
Strategic Vision - Camco continues to actively execute and manage its long-term
strategic plan. This plan encompasses the diversification of the balance sheet
primarily through increasing the commercial real estate and consumer loan
portfolios as well as transaction-based deposits. Critical to this strategy is
the growth of the balance sheet and the corresponding 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's acquisition of London Financial Corporation, London, Ohio closed in
August 2004. Camco's announced sale of its Ashland, Kentucky and Summit,
Kentucky branches is expected to close in the fourth quarter 2004. The announced
transaction involved the sale of approximately $65 million in deposits, an
agreed upon amount of associated loans, as well as the Ashland & Summit,
Kentucky facilities.
Camco Financial Corporation, holding company for Advantage Bank, is a
multi-state financial holding company headquartered in Cambridge, Ohio with
assets of $1.1 billion. Advantage Bank and its affiliates offer community
banking, mortgage banking, internet banking and title services from 32 offices
in 25 communities in Ohio, Kentucky and West Virginia.
Additional information about Camco Financial may be found on Camco's web site:
www.advantagebank.com.
The words or phrases "will likely result," "are expected to," "will continue,"
"is anticipated," "estimate," "project" or similar expressions are intended to
identify "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995. Such statements are subject to certain
risks and uncertainties including changes in economic conditions in the
Company's market area, changes in policies by regulatory agencies, fluctuations
in interest rates, demands for loans in the Company's market area and
competition, that could cause actual results to differ materially from
historical earnings and those presently anticipated or projected. The Company
wishes to caution readers not to place undue reliance on any such
forward-looking
statements, which speak only as of the date made. The Company does not
undertake, and specifically disclaims any obligation, to publicly release the
result of any revisions that may be made to any forward-looking statements to
reflect events or circumstances after the date of such statements or to reflect
the occurrence of anticipated or unanticipated events.
Financials Attached.
Camco Financial Corporation
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and shares outstanding)
(Unaudited) (Unaudited) (Unaudited) Audited (Unaudited)
9/30/04 6/30/04 3/31/04 12/31/03 9/30/03
----------- ----------- ----------- ----------- -----------
Assets
Cash and Cash
Equivalents $ 45,291 $ 38,192 $ 38,761 $ 53,711 $ 45,090
Investments 117,370 124,694 129,573 113,758 132,069
Loans Held for
Sale 4,386 4,805 8,908 5,457 7,934
Loans Receivable 898,355 838,699 817,252 805,266 798,193
Allowance for
Loan Loss (6,398) (5,528) (5,460) (5,641) (5,329)
----------- ----------- ----------- ----------- -----------
Loans
Receivable,
Net 891,957 833,171 811,792 799,625 792,864
Goodwill 7,023 2,953 2,953 2,953 2,953
Other Assets 68,078 64,902 65,036 63,647 63,796
----------- ----------- ----------- ----------- -----------
Total Assets $ 1,134,105 $ 1,068,717 $ 1,057,023 $ 1,039,151 $ 1,044,706
=========== =========== =========== =========== ===========
Liabilities
Deposits $ 728,918 $ 677,567 $ 669,046 $ 671,274 $ 661,520
Borrowed Funds 291,719 289,712 283,280 262,735 277,794
Other
Liabilities 16,440 9,715 11,704 12,599 11,642
----------- ----------- ----------- ----------- -----------
Total
Liabilities 1,037,077 976,994 964,030 946,608 950,956
Stockholders
Equity 97,028 91,723 92,993 92,543 93,750
----------- ----------- ----------- ----------- -----------
Total Liabilities
and Stockholders'
Equity $ 1,134,105 $ 1,068,717 $ 1,057,023 $ 1,039,151 $ 1,044,706
=========== =========== =========== =========== ===========
Stockholders'
Equity to
Total Assets 8.56% 8.58% 8.80% 8.91% 8.97%
Total Shares
Outstanding 7,640,505 7,358,888 7,352,151 7,332,423 7,377,737
Book Value Per
Share $ 12.70 $ 12.46 $ 12.65 $ 12.62 $ 12.71
Camco Financial Corporation
Condensed Consolidated Statements of Earnings
Quarterly Information
(In thousands, except for per share data and shares outstanding)
3 Months 3 Months 3 Months 3 Months 3 Months
Ended Ended Ended Ended Ended
9/30/04 6/30/04 3/31/04 12/31/03 9/30/03
(Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)
---------- ----------- ----------- ----------- -----------
Interest Income:
Loans $ 11,860 $ 11,469 $ 11,415 $ 11,485 $ 11,795
Mortgage-
backed
securities $ 833 $ 791 $ 607 $ 664 $ 736
Investment
securities $ 209 $ 203 $ 182 $ 251 $ 305
Interest-
bearing
deposits and
other $ 571 $ 522 $ 525 $ 522 $ 506
----------- ----------- ----------- ----------- -----------
Total Interest
Income 13,473 12,985 12,729 12,922 13,342
----------- ----------- ----------- ----------- -----------
Interest Expense:
Deposits 3,570 3,303 3,349 3,577 3,827
Borrowings 3,497 3,406 3,309 3,705 3,828
----------- ----------- ----------- ----------- -----------
Total Interest
Expense 7,067 6,709 6,658 7,282 7,655
----------- ----------- ----------- ----------- -----------
Net Interest
Income 6,406 6,276 6,071 5,640 5,687
Provision for
Losses on
Loans 255 255 255 516 255
----------- ----------- ----------- ----------- -----------
Net Interest
Income After
Provision for
Loan Losses 6,151 6,021 5,816 5,124 5,432
----------- ----------- ----------- ----------- -----------
Noninterest Income
Late charges,
rent and other 623 600 640 620 944
Loan servicing
fees 373 379 386 392 412
Service charges
and other
fees on deposits 407 327 272 279 309
Gain on sale
of loans 189 29 276 350 547
Valuation of
mortgage
servicing
rights - net 206 214 (102) 355 (402)
Gain on sale
of investment,
mbs & fixed assets 106 134 (13) 66 531
Gain on sale
of real estate
acq'd through
foreclosure 10 20 77 123 82
----------- ----------- ----------- ----------- -----------
Total
noninterest
income 1,914 1,703 1,536 2,185 2,423
----------- ----------- ----------- ----------- -----------
Non interest expense
Employee
compensation
and benefits 2,763 2,672 2,996 2,338 2,461
Occupancy and
equipment 867 828 874 991 936
Data processing 320 325 342 337 318
Advertising 387 181 254 209 190
Franchise taxes 283 294 214 211 362
Other
operating (1) 1,307 1,194 1,190 2,420 1,284
----------- ----------- ----------- ----------- -----------
Total
noninterest
expense 5,927 5,494 5,870 6,506 5,551
----------- ----------- ----------- ----------- -----------
Net Income -
Before Income
Tax 2,138 2,230 1,482 803 2,304
Provision for
income taxes 670 698 448 215 718
----------- ----------- ----------- ----------- -----------
Net Income 1,468 1,532 1,034 588 1,586
=========== =========== =========== =========== ===========
Earnings Per Share
Reported:
Basic $ 0.20 $ 0.21 $ 0.14 $ 0.09 $ 0.21
Diluted $ 0.19 $ 0.21 $ 0.14 $ 0.09 $ 0.21
Basic Weighted
Number of
Shares
Outstanding 7,513,890 7,357,635 7,345,340 7,355,576 7,417,459
Diluted
Weighted
Number of
Shares
Outstanding 7,559,916 7,403,929 7,414,616 7,440,603 7,500,180
(1) December 2003 includes FHLB prepayment fees of 1,292
Camco Financial Corporation
Selected Ratios and Statistics
Periods Ended September 30, 2004 and 2003
(In thousands, except for per share data and shares outstanding)
9 Months 9 Months 3 Months 3 Months
Ended Ended Ended Ended
9/30/04 9/30/03 9/30/04 9/30/03
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
----------- ----------- ----------- -----------
Reported:
Return on Average Equity 4.71% 8.60% 4.45% 6.50%
Return on Average Assets 0.50% 0.78% 0.53% 0.59%
Interest Rate Spread 2.23% 2.07% 2.22% 1.99%
Net Interest Margin 2.45% 2.36% 2.44% 2.26%
Yield on earning assets 5.13% 5.50% 5.12% 5.31%
Cost of deposits 2.63% 2.53% 2.09% 2.37%
Cost of funds 4.89% 5.56% 4.79% 5.53%
Noninterest expense/average
assets 2.16% 2.14% 2.15% 2.10%
Efficiency Ratio 72.33% 63.14% 71.24% 68.45%
Non performing assets
to total assets 1.11% 1.30% 1.11% 1.30%
Non performing loans
to total net loans
including lhfs 1.13% 1.53% 1.13% 1.53%
Allowance for loan
losses to total loans 0.72% 0.66% 0.72% 0.66%
Camco Financial Corporation
Averages for Quarters Ended
September and June 2004
(In thousands, except for per share data and shares outstanding)
Average Table - Quarter Ended
---------------------------------------------------------------------------------
Sept 30, 2004 June 30, 2004
------------------------------------ --------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
--------- -------- ------ --------- -------- ------
Interest - Earning
Assets:
Loans held for sale 5,150 7,039
Loans receivable -
net 863,595 11,860 5.46% 821,887 11,469 5.53%
Mortgage-backed
securities 93,121 833 3.58% 98,153 791 3.22%
Investment securities 27,358 209 3.06% 29,299 203 2.77%
Interest-bearing
deposits and other 62,477 571 3.66% 59,170 522 3.53%
--------- -------- ------ --------- -------- ------
Total interest
earning assets 1,051,701 13,473 5.12% 1,015,548 12,985 5.11%
--------- -------- ------ --------- -------- ------
Noninterest-earning
assets 82,404 47,107
--------- ---------
Total Assets 1,134,105 1,062,655
========= =========
Interest-Bearing
Liabilities:
Deposits 681,633 3,570 2.09% 650,700 3,303 2.03%
Advances 291,898 3,497 4.79% 283,401 3,406 4.81%
--------- -------- ------ --------- -------- ------
Total interest-
bearing
liabilities 973,531 7,067 2.90% 934,101 6,709 2.87%
--------- -------- ------ --------- -------- ------
Noninterest-bearing
sources:
Noninterest-bearing
liabilities 63,546 35,513
Shareholders' equity 97,028 93,041
--------- ---------
Total Liabilities and
Shareholders' Equity 1,134,105 1,062,655
========= =========
Net Interest Income &
Margin 6,406 2.44% 6,276 2.47%
======== ====== ======== ======
- -------------------
Contact:
Camco Financial Corporation, Cambridge
Richard C. Baylor, 740-435-2040
Mark A. Severson, 740-435-2055
Fax: 740-432-2743 (Private Fax)