[CAMCO FINANCIAL CORPORATION LOGO]
6901 Glenn Highway
Cambridge, OH 43725-9757
Phone: 740-435-2020
Fax: 740-432-2743 [Private Fax]
EXHIBIT 99
NEWS RELEASE
RELEASE DATE: APRIL 22, 2005
RELEASE TIME: 4:00 P.M.
CAMCO FINANCIAL ANNOUNCES STRONG FIRST QUARTER 2005 EARNINGS GROWTH
CAMBRIDGE, OHIO (NASDAQ: CAFI) - Camco Financial Corporation ("Camco") reported
net earnings for the quarter ended March 31, 2005 of $2.2 million or $.29 per
share as compared with net earnings of $1.03 million or $.14 per share for the
same quarter in 2004, an increase of 107%.
On a quarter to quarter basis, comparing the first quarter of 2005 with
the fourth quarter of 2004, net earnings from operations increased 19% to $2.2
million or $.29 per share as compared to $1.9 million or $.24 per share. Net
earnings from operations for the fourth quarter of 2004 excluded the impact of
the restructuring of Federal Home Loan Bank borrowings and the sale of the
Ashland, Kentucky division, which resulted in a net reduction of $1.10 per
share.
Camco recently announced a quarterly dividend of $.145 which was payable
April 15, 2005. This dividend represents an annualized yield of 4.15% on Camco's
March 31 quarter-end market value.
President & CEO Richard C. Baylor commented, "We are beginning to see
significant progress resulting from our efforts to restructure the composition
of our balance sheet to be more commercial bank-like along with the deliberate
efforts to
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stay on course with our strategic plan initiatives that call for less
residential loan assets and more lower cost checking accounts. We were
encouraged to see our annualized return on average equity for the 1st quarter
2005 increase to 9.87% which is in excess of Ohio bank peer groups and
approximates the national average for publicly traded banks."
Mr. Baylor continued, "We saw our net interest margin increase to 2.93%
from 2.46% in the first quarter of 2004. We continue to see the average yield on
our earning assets increase as we continue the shift in the composition of our
loan portfolio. At the end of the first quarter 2005, the percentage of
residential loans continued to drop to a current level of 57% from 65% a year
ago. At the same time our commercial portfolio is at 28% compared to 21% a year
ago. Overall, the yield on our earning assets increased 21 basis points from
last year's first quarter. Additionally, the cost of interest bearing
liabilities decreased 31 basis points, primarily due to the beneficial effects
of the significant restructuring of FHLB borrowings that occurred at the end of
2004. We are encouraged as we continue our focus of changing the composition of
our loan portfolio to include higher margin producing commercial and consumer
rate sensitive loans. As opportunities present themselves, we are recruiting
seasoned commercial lenders in the markets we serve."
Review of significant areas:
NET INTEREST MARGIN:
During the first quarter of 2005, as short-term interest rates rose, management
saw the net interest margin continue to improve. This improvement is predicated
on
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5
Camco's continued emphasis on growth in the commercial, commercial real
estate and consumer loan portfolios and effective cost of funds management,
emphasizing lower cost, transaction-based, deposit accounts. For the first
quarter 2005, the net interest margin increased to 2.93% from 2.46% for the
first quarter 2004. On a quarter to quarter basis, the net interest margin
increased from 2.55% for the fourth quarter 2004 to 2.93% for the first quarter
2005. This significant increase was due primarily to the restructuring of our
FHLB advances in the fourth quarter of 2004 and an increase in the yield on
earning assets.
NON-INTEREST INCOME:
For the quarter ended March 31, 2005, non-interest income increased 11.1% to
$1.7 million from $1.5 million for the first quarter of 2004. Core non-interest
income, which is net of the gain on sale and mortgage servicing rights,
increased 12.4% to $1.5 million in the first quarter 2005 from $1.3 million in
the first quarter 2004. During the first quarter 2005, $14.4 million of loans
were sold with a total gain of $170,000, as compared to $26.5 million sold in
the first quarter of 2004 for a gain of $276,000. Although less volume overall
was originated and sold, the profit margin increased on the sales from 1.04% to
1.18%. The amount of loans sold in the first quarter was 46% below the amount
sold in the first quarter 2004 due to rising interest rates and a higher
percentage of loans being originated as adjustable rate mortgages.
Mortgage servicing rights had a positive impact in the first quarter 2005 of
$51,000 versus the first quarter of 2004, which had a negative adjustment of
$102,000. The
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6
increase in the value of mortgage servicing rights is a result of the continuing
slow-down in prepayments.
OPERATING EXPENSES:
For the first quarter ended March 31, 2005, operating expenses were $5.6 million
compared to $5.9 million for the first quarter of 2004. As a percentage of
average assets, general and administrative expenses decreased to 2.09% from
2.28%. This was a decrease of 5.2%. The main drivers of this decrease were lower
Ohio franchise tax provisions due to the London Financial acquisition, which is
a one time savings that will only occur in 2005, and lower depreciation when
compared to the prior period.
ASSET QUALITY:
Non-performing loans as a percentage of loans increased from 1.17% at December
31, 2004 to 1.28% at March 31, 2005. The allowance for loan losses as a
percentage of loans increased slightly from 78 basis points at December 31, 2004
to 79 basis points at March 31, 2005. At March 31, 2005, approximately 58% of
all non-performing loans were single family home loans.
STRATEGIC VISION:
Camco continues to execute and manage it's 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
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7
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 for Advantage Bank, is a
multi-state financial holding company headquartered in Cambridge, Ohio with
assets of $1.07 billion. Advantage Bank and its affiliates offer community
banking, mortgage banking, internet banking and title services from 30 offices
in 23 communities in Ohio, Kentucky and West Virginia.
Additional information about Camco Financial may be found on Campo'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.
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8
CAMCO FINANCIAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA AND SHARES OUTSTANDING)
(UNAUDITED) AUDITED (UNAUDITED) (UNAUDITED) (UNAUDITED)
3/31/05 12/31/04 9/30/04 6/30/04 3/31/04
------- -------- ------- ------- -------
ASSETS
Cash and Cash
Equivalents 39,795 $ 42,894 $ 45,291 $ 38,192 $ 38,761
Investments 109,179 108,429 117,370 124,694 129,573
Loans Held for Sale 4,616 2,837 4,386 4,805 8,908
Loans Receivable 843,777 840,305 898,355 838,699 817,252
Allowance for Loan
Loss (6,637) (6,476) (6,398) (5,528) (5,460)
----------- ----------- ----------- ----------- -----------
Loans Receivable, Net 837,140 833,829 891,957 833,171 811,792
Goodwill 6,683 6,736 7,023 2,953 2,953
Other Assets 67,221 71,098 68,078 64,902 65,036
----------- ----------- ----------- ----------- -----------
TOTAL ASSETS $ 1,064,634 $ 1,065,823 $ 1,134,105 $ 1,068,717 $ 1,057,023
=========== =========== =========== =========== ===========
LIABILITIES
Deposits 674,853 $ 667,778 $ 728,918 $ 677,567 $ 669,046
Borrowed Funds 289,302 295,310 291,719 289,712 283,280
Other Liabilities 10,900 13,414 16,440 9,715 11,704
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES 975,055 976,502 1,037,077 976,994 964,030
STOCKHOLDERS EQUITY 89,579 89,321 97,028 91,723 92,993
----------- ----------- ----------- ----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 1,064,634 $ 1,065,823 $ 1,134,105 $ 1,068,717 $ 1,057,023
=========== =========== =========== =========== ===========
STOCKHOLDERS' EQUITY TO
TOTAL ASSETS 8.41% 8.38% 8.56% 8.58% 8.80%
TOTAL SHARES OUTSTANDING 7,678,747 7,663,153 7,640,505 7,358,888 7,352,151
BOOK VALUE PER SHARE $ 11.67 $ 11.66 $ 12.70 $ 12.46 $ 12.65
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
3/31/05 12/31/04 9/30/04 6/30/04 3/31/04
(UNAUDITED) (UNAUDITED) (UNAUDITED) (UNAUDITED (UNAUDITED)
------------ ----------- ----------- ---------- -----------
INTEREST INCOME:
LOANS $ 11,962 $ 12,188 $ 11,860 $ 11,469 $ 11,415
MORTGAGE-BACKED SECURITIES $ 751 $ 785 $ 833 $ 791 $ 607
INVESTMENT SECURITIES $ 185 $ 178 $ 209 $ 203 $ 182
INTEREST-BEARING DEPOSITS AND OTHER $ 607 $ 610 $ 571 $ 522 $ 525
----------- ----------- ----------- ----------- -----------
TOTAL INTEREST INCOME 13,505 13,761 13,473 12,985 12,729
----------- ----------- ----------- ----------- -----------
INTEREST EXPENSE:
DEPOSITS 3,503 3,723 3,570 3,303 3,349
BORROWINGS 2,634 3,355 3,497 3,406 3,309
----------- ----------- ----------- ----------- -----------
TOTAL INTEREST EXPENSE 6,137 7,078 7,067 6,709 6,658
----------- ----------- ----------- ----------- -----------
NET INTEREST INCOME 7,368 6,683 6,406 6,276 6,071
PROVISION FOR LOSSES ON LOANS 240 855 255 255 255
----------- ----------- ----------- ----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES 7,128 5,828 6,151 6,021 5,816
----------- ----------- ----------- ----------- -----------
NONINTEREST INCOME
LATE CHARGES, RENT AND OTHER 745 585 623 600 640
LOAN SERVICING FEES 378 381 373 379 386
SERVICE CHARGES AND OTHER FEES ON
DEPOSITS 334 404 407 327 272
GAIN ON SALE OF LOANS 170 140 189 29 276
VALUATION OF MORTGAGE SERVICING RIGHTS
- NET 51 269 206 214 (102)
GAIN ON SALE OF INVESTMENT, MBS & FIXED
ASSETS 19 6,653 106 134 (13)
GAIN ON SALE OF REAL ESTATE ACQ'D
THROUGH FORECLOSURE 9 123 10 20 77
----------- ----------- ----------- ----------- -----------
TOTAL NONINTEREST INCOME 1,706 8,555 1,914 1,703 1,536
----------- ----------- ----------- ----------- -----------
NON INTEREST EXPENSE
EMPLOYEE COMPENSATION AND BENEFITS 2,964 2,655 2,763 2,672 2,996
OCCUPANCY AND EQUIPMENT 797 821 867 828 874
DATA PROCESSING 331 331 320 325 342
ADVERTISING 229 225 387 181 254
FRANCHISE TAXES 79 201 283 294 214
OTHER OPERATING 1,165 1,317 1,307 1,194 1,190
FHLB PREPAYMENT PENALTY (1) 0 18,879 0 0 0
----------- ----------- ----------- ----------- -----------
TOTAL NONINTEREST EXPENSE 5,565 24,429 5,927 5,494 5,870
----------- ----------- ----------- ----------- -----------
NET INCOME - BEFORE INCOME TAX 3,269 (10,046) 2,138 2,230 1,482
PROVISION FOR INCOME TAXES 1,051 (3,476) 670 698 448
----------- ----------- ----------- ----------- -----------
REPORTED NET INCOME 2,218 (6,570) 1,468 1,532 1,034
----------- ----------- ----------- ----------- -----------
ADJUSTED FOR NON-RECURRING ITEMS
SALE OF BRANCHES AND 0 (4,024)
PREPAYMENT COSTS (NET OF TAX) 0 12,460 0 0 0
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
NET EARNINGS FROM OPERATIONS 2,218 1,866 1,468 1,532 1,034
=========== =========== =========== =========== ===========
EARNINGS PER SHARE REPORTED:
BASIC $ 0.29 ($ 0.89) $ 0.20 $ 0.21 $ 0.14
DILUTED $ 0.29 N/A $ 0.19 $ 0.21 $ 0.14
EARNINGS PER SHARE OPERATIONS:
BASIC $ 0.29 $ 0.24 $ 0.20 $ 0.21 $ 0.14
DILUTED $ 0.29 $ 0.24 $ 0.19 $ 0.21 $ 0.14
BASIC WEIGHTED NUMBER OF
SHARES OUTSTANDING 7,677,795 7,645,005 7,513,890 7,357,635 7,345,340
DILUTED WEIGHTED NUMBER OF
SHARES OUTSTANDING 7,711,433 7,684,500 7,559,916 7,403,929 7,414,616
(1) DECEMBER 2004 INCLUDES FHLB PREPAYMENT FEES OF $18,879
CAMCO FINANCIAL CORPORATION
SELECTED RATIOS AND STATISTICS
PERIODS ENDED MARCH 31, 2005 AND 2004
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA AND SHARES OUTSTANDING)
3 MONTHS 3 MONTHS
ENDED ENDED
3/31/05 3/31/04
(UNAUDITED) (UNAUDITED)
----------- -----------
REPORTED:
RETURN ON AVERAGE EQUITY 9.87% 4.45%
RETURN ON AVERAGE ASSETS 0.83% 0.40%
INTEREST RATE SPREAD 2.74% 2.22%
NET INTEREST MARGIN 2.93% 2.46%
YIELD ON EARNING ASSETS 5.36% 5.15%
COST OF DEPOSITS 2.18% 2.08%
COST OF FUNDS 3.59% 5.01%
NONINTEREST EXPENSE/AVERAGE ASSETS 2.09% 2.27%
EFFICIENCY RATIO 61.33% 77.17%
NON PERFORMING ASSETS TO TOTAL ASSETS 1.21% 1.46%
NON PERFORMING LOANS TO TOTAL NET LOANS INCLUDING
LOANS HELD FOR SALE 1.28% 1.55%
ALLOWANCE FOR LOAN LOSSES TO TOTAL LOANS 0.79% 0.67%
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 2005 AND DECEMBER 2004
(IN THOUSANDS, EXCEPT FOR PER SHARE DATA AND SHARES OUTSTANDING)
AVERAGE TABLE - QUARTER ENDED
-------------------------------------------------------------------------------------
MAR 31, 2005 DEC 31, 2004
-------------------------------------------------------------------------------------
Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate
-------------------------------------------------------------------------------------
INTEREST - EARNING ASSETS:
Loans held for sale 4,006 4,326
Loans receivable - net 836,569 11,962 5.69% 869,716 12,188 5.58%
Mortgage-backed securities 82,381 751 3.65% 87,825 785 3.58%
Investment securities 24,369 185 3.04% 24,655 178 2.89%
Interest-bearing deposits and other 60,050 607 4.04% 61,389 610 3.97%
--------- ------ ---- --------- ------ ----
Total interest earning assets 1,007,375 13,505 5.36% 1,047,911 13,761 5.25%
--------- ------ ---- --------- ------ ----
Noninterest-earning assets 56,173 55,825
--------- ---------
TOTAL ASSETS 1,063,548 1,103,736
========= =========
INTEREST-BEARING LIABILITIES:
Deposits 642,359 3,503 2.18% 690,919 3,723 2.16%
Advances 293,551 2,634 3.59% 278,873 3,355 4.81%
--------- ----- ---- --------- ----- ----
Total interest-bearing liabilities 935,910 6,137 2.62% 969,792 7,078 2.92%
--------- ----- ---- --------- ----- ----
Noninterest-bearing sources:
Noninterest-bearing liabilities 37,710 38,163
Shareholders' equity 89,928 95,781
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY 1,063,548 1,103,736
========= =========
----- ---- ----- ----
NET INTEREST INCOME & MARGIN 7,368 2.93% 6,683 2.55%
===== ==== ===== ====