Camco Financial Corporation
6901 Glenn Highway
Cambridge, OH 43725-9757
Phone: 740-435-2020
Fax: 740-435-2021
Contacts: Larry A. Caldwell
Richard C. Baylor
Phone: 740-435-2020
NEWS RELEASE
RELEASE DATE: January 29, 2001
RELEASE TIME: 7:30 A.M.
Camco Financial Reports
Earnings Growth and
Consolidation of Banking Operations
Cambridge, Ohio - Camco Financial Corporation [Nasdaq Symbol: CAFI] reported
record net earnings of $7.7 million for the year ended December 31, 2000, a
28.7% increase over the $5.9 million of net earnings reported for 1999. Basic
earnings per share totaled $1.11 for 2000, compared to $1.04 for 1999, an
increase of 6.7%. Camco's net earnings for the quarter ended December 31, 2000,
totaled $1.9 million, or $.28 per basic share, an increase of $.02, or 7.7% over
comparable 1999 quarterly earnings of $1.5 million, or $.26 per basic share.
Consolidated assets at December 31, 2000 reached $1.04 billion, elevating Camco
to a ranking as the sixth largest thrift holding company headquartered in Ohio.
Growth in retail deposits reflected a healthy 36.9% increase during 2000,
contributing significantly to a $4.9 million, or 23.0% increase in net interest
income for the year. The growth in assets and deposits during the year can be
attributed to both internal and external expansion initiatives. The acquisition
of Westwood Homestead Financial in January 2000 added asset growth of 19.6% and
deposit growth of 21.8%, while internal retail growth in assets and deposits
totaled 7.9% and 15.1%, respectively. Mortgage operations during 2000 were also
a significant factor in 2000 earnings, as loans sold and gains on sale of loans
increased by $14.2 million, or 14.8%, and $297,000, or 16.9%, respectively.
Camco also announced plans to merge its five separate bank charters under one
charter and to convert all of its banking facilities to a common data processing
platform. After months of research, analysis and planning, the boards of Camco
and its five banking affiliates, Cambridge Savings Bank, Marietta Savings Bank,
First Federal Savings Bank of Washington Court House, Westwood Homestead Savings
NASDAQ: CAFI o EMAIL: camco@camco.cc o www.camcofinancial.com
Bank, Cincinnati, Ohio and First Federal Bank For Savings in Ashland, Kentucky,
have approved the merging of the charters. The five banks will merge to create
one Ohio savings bank which will operate under the name "Advantage Bank". The
offices in each of the five regions served by Camco's affiliate banks will
continue to operate under their separate names, except the elimination of the
word "Federal" from the name of Camco's two First Federals, as divisions of
Advantage Bank.
The move from five separate bank charters to one will enable Camco to
consolidate many back-office functions and reduce the cost of regulatory
compliance. Camco presently has three Ohio savings bank charters, regulated by
the FDIC and the Ohio Division of Financial Institutions, and two federal
savings bank charters, regulated by the FDIC and the Office of Thrift
Supervision. The consolidated bank will be regulated by the FDIC and the Ohio
Division of Financial Institutions. The Office of Thrift Supervision will be
limited to regulatory oversight of the holding company.
Richard C. Baylor, President of Camco, will be the President of the consolidated
bank, and D. Edward Rugg, currently President of Cambridge Savings, will be
Executive Vice President and Chief Operating Officer. Vice Presidents will
include David S. Caldwell, currently President of Westwood Homestead Savings
Bank, as Vice President of Retail Banking and Financial Services, and Edward A.
Wright, currently Vice President/Chief Operating Officer of Cambridge Savings
Bank, who will be Vice President of Operations. Each of the five current Camco
affiliates will function as divisions under the leadership of a Division
President, which will ensure that Camco remains responsive to the different
communities served by its banks. Baylor will also remain as President and Chief
Executive Officer of Camco, and Larry A. Caldwell will continue to serve as
Chairman of the Board of Camco.
Caldwell commented, "Our acquisition philosophy has served us well over the last
30 years. However, we have come to the conclusion that the old model does not
provide the optimal base for sustained earnings growth in the increasingly
competitive and technology-driven banking industry. Therefore, we have found a
way to support continued earnings growth as we expand products, services and
technological innovations, like internet banking, which we need to remain
competitive in our diverse markets. Drawing on the talented group of bankers
that built Camco into the $1.04 billion company it is today, we are poised to
meet the challenges of the 21st century."
The Advantage Bank name, chosen by Camco as the name of the consolidated bank,
is an extension of the "AdvantageBanking" servicemark that Camco's affiliate
banks have used since 1994 to describe the Camco brand of customer service and
products. Baylor commented, "Unifying our banks under the Advantage Bank
umbrella and tradename will enhance Camco's corporate identity and provide
further continuity from the customer's perspective. Our customers will continue
to see what is familiar to them - from the name of their local institution to
the faces of their tellers, lending staff and other bank employees they know and
trust - but significant changes will occur in the less visible support areas -
accounting, data processing, marketing and human resources. We expect that the
results will be very visible to our investors, however. The cost savings we
expect to achieve from the reorganization will place Camco in the upper quartile
of thrifts nationally in terms of operating efficiency."
NASDAQ: CAFI o EMAIL: camco@camco.cc o www.camcofinancial.com
Camco will record a one-time after tax restructuring charge of $700,000, or $.10
per basic share in the second quarter of 2001. The restructuring charge is
primarily related to one-time compensation charges and professional fees related
to the consolidation. Camco anticipates that the approximate savings from the
restructuring, coupled with other recent personnel reductions, will add earnings
of $.01 per share in 2001, $.14 per share in the four quarters immediately
following the charge, while enhancing the per share earnings level by $.17 in
2002. Pro forma adjustments related to the merger follow Camco's historical
condensed financial statements.
It is anticipated that the charter consolidation will be completed in the second
quarter of 2001, subject to timely receipt of regulatory approvals.
Camco Financial Corporation is a multi-state/multi-bank holding company
headquartered in Cambridge, Ohio concentrating in Community Banking, Mortgage
Banking and Title Services. Through its insured subsidiaries, Cambridge Savings
Bank, Marietta Savings Bank, First Federal Savings Bank of Washington Court
House, Westwood Homestead Savings Bank, Cincinnati, Ohio and First Federal Bank
For Savings in Ashland, Kentucky, provides a broad array of financial services
through 32 offices in 24 communities in Ohio, Kentucky and West Virginia.
Larry A. Caldwell and Richard C. Baylor will host a webcast/conference call
(listen only mode) at 2:30 p.m. eastern time on Friday, February 2, 2001.
Interested parties may access the conference call by calling 1-888-890-6819.
Internet access to the call is also available (listen only) by going to
prnewswire.com. Participants are asked to call in a few minutes prior to the
call in order to register for the event.
This press release contains statements, including estimates of restructuring
charges and anticipated cost savings, that are based on current plans and
expectations, rather than historical facts, and are "forward-looking statements"
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21B of the Securities Act of 1934, as amended. Actual results could vary
materially depending on a variety of factors, including but not limited to risks
and uncertainties inherent in general and local banking and economic conditions
and competitive factors specific to markets in which Camco and its subsidiaries
operate. Camco assumes no liability to update this information. For more
details, please refer to Camco's SEC filings, including its most recent Annual
Report on Form 10-K and quarterly reports on Form 10-Q.
NASDAQ: CAFI o EMAIL: camco@camco.cc o www.camcofinancial.com
Camco Financial Corporation
Condensed Consolidated Statements of Financial Condition
(In thousands, except for per share data and shares outstanding)
(Unaudited)
12/31/2000 12/31/1999
Assets
Cash and Cash Equivalents $ 24,069 $ 16,954
Investments 32,105 29,556
Loans Receivable Net of
Loan Loss Allowance of
$2,906 and $1,863 Respectively 930,672 726,225
Goodwill 3,103 3,252
Other Assets 47,177 37,495
--------- -------
Total Assets $1,037,126 $813,482
========= =======
Liabilities
Deposits $ 632,288 $461,787
Borrowed Funds 313,471 279,125
Other Liabilities 12,623 9,961
--------- -------
Total Liabilities 958,382 750,873
Stockholders'+A55 Equity 78,744 62,609
--------- -------
Total Liabilities and
Stockholders' Equity $1,037,126 $813,482
========= =======
Stockholders' Equity to 7.59% 7.70%
Total Assets
Total Shares Outstanding 6,931,897 5,710,422
Book Value Per Share $11.36 $10.96
Page 1 of 3
Camco Financial Corporation
Condensed Consolidated Statements of Income
Periods Ended December 31, 2000 and 1999
(In thousands, except for per share data and shares outstanding)
12 Months 12 Months 3 Months 3 Months
Ended Ended Ended Ended
(Unaudited) (Unaudited) (Unaudited)
12/31/00 12/31/99 12/31/00 12/31/99
-------- -------- -------- --------
Total Interest Income $75,671 $51,093 $19,503 $14,235
Total Interest Expense 49,610 29,907 13,083 8,632
------ ------ ------ ------
Net Interest Income 26,061 21,186 6,420 5,603
Provision for Loan Losses 567 247 136 79
------ ------ ------ ------
Net Interest Income After
Provision for Loan Losses 25,494 20,939 6,284 5,524
Non Interest Income 5,536 5,190 1,343 1,091
Non Interest Expense 19,530 17,113 4,739 4,336
------ ------ ------ ------
Income Before Taxes 11,500 9,016 2,888 2,279
Income Tax Expense 3,848 3,076 942 795
------ ------ ------ ------
Net Income $ 7,652 $ 5,940 $ 1,946 $ 1,484
====== ====== ====== ======
Earnings Per Share:
Basic $1.11 $1.04 $0.28 $0.26
Diluted $1.10 $1.02 $0.28 $0.26
Basic Weighted Number of
Shares Outstanding 6,915,154 5,730,829 6,931,897 5,715,379
Diluted Weighted Number of
Shares Outstanding 6,957,431 5,834,391 6,982,830 5,788,159
Selected Financial Ratios
Net Interest Spread 2.44% 2.82% 2.31% 2.71%
Net Interest Margin 2.71% 3.07% 2.59% 2.94%
Return on Average Assets 0.76% 0.82% 0.75% 0.74%
Return on Average Equity 9.99% 9.68% 9.96% 9.42%
Efficiency Ratio 61.81% 64.88% 61.05% 64.77%
Page 2 of 3
CAMCO FINANCIAL CORPORATION
CHARTER CONSOLIDATION PRO FORMA ADJUSTMENTS
Camco Camco Camco Camco
Year Pro Year Pro
Ended Pro Forma Forma Ended Pro Forma Forma
12/31/2000 Adjustments 12/31/2001 12/31/2001 Adjustments 12/31/2002
----------- ----------- ---------- ---------- ----------- ----------
Cost/(Savings) (4) Cost/(Savings)
Dollars in Thousands Dollars in Thousands
Net Interest Income $26,061 $ - $26,061 $26,061 $26,061
Provision for Losses on Loans 567 567 567 567
Other Income 5,536 5,536 5,536 5,536
Other Expense 19,530 1,089 (1) 19,476 19,530 (1,786) (5) 17,744
(1,143) (2) -
------ ----- ------ ------ ------- ------
Earnings before Taxes 11,500 (54) 11,554 11,500 (1,786) 13,286
Income Tax Expense 3,848 19 (3) 3,867 3,848 625 (3) 4,473
------ ----- ------ ------ ------- ------
Net Earnings $ 7,652 $ (35) $ 7,687 $ 7,652 $(1,161) $ 8,813
====== ===== ====== ====== ====== ======
(1) The restructuring charge consists of the following costs:
Employee Compensation and Benefits $ 762
Occupancy and Equipment 202
Professional Services 125
-----
$1,089
=====
(2) The cost savings associated with the restructuring include the following:
Employee Compensation and Benefits $1,108
Occupancy and Equipment 35
-----
$1,143
=====
(3) Tax effects associated with the net pro forma adjustment at the expected
federal statutory rate of 35%
(4) In determining the future benefits of the pro forma adjustments, it is
assumed that the earnings for the year ended December 31, 2001 will be equal
to the earnings for the year ended December 31, 2000.
(5) The pro forma adjustment in 2002 consists primarily of a reduction in
employee compensation and benefits.
Page 3 of 3