FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
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OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _______________
Commission File Number 0-25196
CAMCO FINANCIAL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 51-0110823
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
6901 Glenn Highway, Cambridge, Ohio 43725
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(Address of principal executive office)
Registrant's telephone number, including area code: (740) 435-2020
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
As of May 11, 2001, the latest practicable date, 6,952,926.5 shares of the
registrant's common stock, $1.00 par value, were issued and outstanding.
Page 1 of 15 pages
Camco Financial Corporation
INDEX
Page
PART I - FINANCIAL INFORMATION
Consolidated Statements of Financial Condition 3
Consolidated Statements of Earnings 4
Consolidated Statements of Comprehensive Income 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
Quantitative and Qualitative Disclosures about
Market Risk 13
PART II - OTHER INFORMATION 14
SIGNATURES 15
2
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except share data)
March 31, December 31,
ASSETS 2001 2000
Cash and due from banks $ 17,266 $ 19,153
Interest-bearing deposits in other financial institutions 19,654 4,916
--------- ---------
Cash and cash equivalents 36,920 24,069
Investment securities available for sale - at market 272 309
Investment securities held to maturity - at cost, approximate market value of $9,428
and $16,617 as of March 31, 2001 and December 31, 2000 9,368 16,672
Mortgage-backed securities available for sale - at market 9,413 9,850
Mortgage-backed securities held to maturity - at cost, approximate market value of
$5,192 and $5,247 as of March 31, 2001 and December 31, 2000 5,149 5,273
Loans held for sale - at lower of cost or market 7,458 4,235
Loans receivable - net 912,759 926,437
Office premises and equipment - net 13,503 13,845
Real estate acquired through foreclosure 800 583
Federal Home Loan Bank stock - at cost 19,786 19,339
Accrued interest receivable on loans 5,635 5,611
Accrued interest receivable on mortgage-backed securities 107 111
Accrued interest receivable on investment securities and interest-bearing deposits 157 256
Prepaid expenses and other assets 2,133 1,439
Cash surrender value of life insurance 6,069 5,999
Goodwill and other intangible assets 3,066 3,103
Prepaid federal income taxes - 725
--------- ---------
Total assets $1,032,595 $1,037,856
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 649,381 $ 632,288
Advances from the Federal Home Loan Bank 290,921 313,471
Advances by borrowers for taxes and insurance 2,720 4,382
Accounts payable and accrued liabilities 5,304 5,328
Dividends payable 834 832
Accrued federal income taxes 362 -
Deferred federal income taxes 2,823 2,805
--------- ---------
Total liabilities 952,345 959,106
Stockholders' equity
Preferred stock - $1 par value; authorized 100,000 shares;
no shares outstanding - -
Common stock - $1 par value; authorized 14,900,000 shares, 7,078,946 and
7,057,917 shares issued at March 31, 2001 and December 31, 2000, respectively 7,079 7,058
Additional paid-in capital 41,718 41,551
Retained earnings - substantially restricted 32,854 31,553
Less 126,019 shares of treasury stock - at cost (1,416) (1,416)
Accumulated comprehensive income, unrealized gains on securities designated
as available for sale, net of related tax effects 15 4
--------- ---------
Total stockholders' equity 80,250 78,750
--------- ---------
Total liabilities and stockholders' equity $1,032,595 $1,037,856
========= =========
3
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF EARNINGS
For the three months ended March 31,
(In thousands, except per share data)
2001 2000
Interest income
Loans $18,416 $16,669
Mortgage-backed securities 255 289
Investment securities 242 276
Interest-bearing deposits and other 527 424
------ ------
Total interest income 19,440 17,658
Interest expense
Deposits 8,072 6,402
Borrowings 4,676 4,692
------ ------
Total interest expense 12,748 11,094
------ ------
Net interest income 6,692 6,564
Provision for losses on loans 156 137
------ ------
Net interest income after provision for losses on loans 6,536 6,427
Other income
Late charges, rent and other 579 469
Loan servicing fees (costs) (20) 294
Service charges and other fees on deposits 213 162
Gain on sale of loans 625 157
Gain (loss) on sale of office premises and equipment (1) 5
Gain on sale of real estate acquired through foreclosure 11 33
------ ------
Total other income 1,407 1,120
General, administrative and other expense
Employee compensation and benefits 2,122 2,457
Occupancy and equipment 779 732
Federal deposit insurance premiums 30 29
Data processing 350 282
Advertising 174 189
Franchise taxes 278 291
Amortization of goodwill 37 40
Other operating 947 911
------ ------
Total general, administrative and other expense 4,717 4,931
------ ------
Earnings before federal income taxes 3,226 2,616
Federal income taxes
Current 1,081 570
Deferred 9 312
------ ------
Total federal income taxes 1,090 882
------ ------
NET EARNINGS $ 2,136 $ 1,734
====== ======
BASIC EARNINGS PER SHARE $.31 $.25
=== ===
DILUTED EARNINGS PER SHARE $.30 $.25
=== ===
4
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the three months ended March 31,
(In thousands)
2001 2000
Net earnings $2,136 $1,734
Other comprehensive income (loss), net of tax:
Unrealized holding gains (losses) during the period, net of taxes (benefits)
of $6 and $(7) in 2001 and 2000, respectively 11 (13)
----- -----
Comprehensive income $2,147 $1,721
===== =====
Accumulated comprehensive income (loss) $ 15 $ (137)
===== =====
5
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31,
(In thousands)
2001 2000
Cash flows from operating activities:
Net earnings for the period $ 2,136 $ 1,734
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Amortization of deferred loan origination fees (373) (73)
Amortization of premiums and discounts on investment and
mortgage-backed securities - net 12 5
Amortization of goodwill 37 40
Depreciation and amortization 390 288
Amortization of purchase accounting adjustments, net 155 10
Provision for losses on loans 156 137
Gain on sale of real estate acquired through foreclosure (11) (33)
(Gain) loss on sale of office premises and equipment 1 (5)
Federal Home Loan Bank stock dividends (347) (289)
Gain on sale of loans (300) (64)
Loans originated for sale in the secondary market (25,291) (14,397)
Proceeds from sale of loans in the secondary market 22,368 12,857
Increase (decrease) in cash, net of acquisition of Westwood Homestead
Financial Corporation, due to changes in:
Accrued interest receivable - loans (24) (331)
Accrued interest receivable - mortgage-backed securities 4 3
Accrued interest receivable - investments 99 (7)
Prepaid expenses and other assets 5 (1,524)
Accrued interest and other liabilities (22) 556
Federal income taxes
Current 362 196
Deferred 9 312
------ ------
Net cash used in operating activities (634) (585)
Cash flows provided by (used in) investing activities:
Proceeds from maturities of investment securities 10,300 -
Principal repayments on mortgage-backed securities 631 660
Purchases of investment securities (2,995) (750)
Loan principal repayments 53,742 31,153
Loan disbursements (39,429) (66,380)
Purchases of loans (1,167) -
Additions to office premises and equipment (49) (259)
Additions to real estate acquired through foreclosure (81) (2)
Proceeds from sale of real estate acquired through foreclosure 517 464
Purchase of Federal Home Loan Bank stock (100) (853)
Net increase in cash surrender value of life insurance (70) (66)
Purchase of Westwood Homestead Financial Corporation - net - (1,879)
------ ------
Net cash provided by (used in) investing activities 21,299 (37,912)
------ ------
Net cash provided by (used in) operating and investing
activities (balance carried forward) 20,665 (38,497)
------ ------
6
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the three months ended March 31,
(In thousands)
2001 2000
Net cash provided by (used in) operating and investing
activities (balance brought forward) $20,665 $(38,497)
Cash flows provided by (used in) financing activities:
Net increase in deposits 17,093 19,992
Proceeds from Federal Home Loan Bank advances 22,750 54,800
Repayment of Federal Home Loan Bank advances (45,348) (32,045)
Dividends paid on common stock (835) (832)
Proceeds from exercise of stock options 188 8
Decrease in advances by borrowers for taxes and insurance (1,662) (1,503)
------ -------
Net cash provided by (used in) financing activities (7,814) 40,420
------ -------
Increase in cash and cash equivalents 12,851 1,923
Cash and cash equivalents at beginning of period 24,069 16,954
------ -------
Cash and cash equivalents at end of period $36,920 $ 18,877
====== =======
Supplemental disclosure of cash flow information: Cash paid during the period
for:
Interest on deposits and borrowings $12,860 $ 10,962
====== =======
Income taxes $ 511 $ 175
====== =======
Supplemental disclosure of noncash investing activities:
Unrealized gains (losses) on securities designated as available
for sale, net of related tax effects $ 11 $ (13)
====== =======
Recognition of mortgage servicing rights in accordance with
SFAS No. 125 $ 325 $ 93
====== =======
Transfers from mortgage loans to real estate acquired through foreclosure $ 666 $ 321
====== =======
Liabilities assumed, stock and cash paid in acquisition of Westwood
Homestead Financial Corporation $ - $159,698
Less: fair value of assets received - 159,698
------ -------
Amount assigned to goodwill $ - $ -
====== =======
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Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited consolidated financial statements were
prepared in accordance with instructions for Form 10-Q and, therefore,
do not include information or footnotes necessary for a complete
presentation of financial position, results of operations and cash
flows in conformity with accounting principles generally accepted in
the United States of America. Accordingly, these financial statements
should be read in conjunction with the consolidated financial
statements and notes thereto of Camco Financial Corporation ("Camco"
or the "Corporation") included in Camco's Annual Report on Form 10-K
for the year ended December 31, 2000. However, all adjustments
(consisting only of normal recurring accruals) which, in the opinion
of management, are necessary for a fair presentation of the
consolidated financial statements, have been included. The results of
operations for the three-month period ended March 31, 2001, are not
necessarily indicative of the results which may be expected for the
entire year.
In January 2000, the Corporation acquired Westwood Homestead Financial
Corporation ("Westwood Financial") utilizing the purchase method of
accounting (the "Merger"). Westwood Financial was dissolved upon
consummation of the Merger and Westwood Financial's banking
subsidiary, Westwood Homestead Savings Bank, continued operations as a
wholly-owned subsidiary of the Corporation. Camco paid $11.1 million
in cash and issued 1,304,875 of its common shares in connection with
the Merger.
2. Principles of Consolidation
The accompanying consolidated financial statements include the
accounts of Camco and its six wholly-owned subsidiaries: Cambridge
Savings Bank ("Cambridge Savings"), Marietta Savings Bank ("Marietta
Savings"), First Federal Savings Bank of Washington Court House
("First Federal"), First Federal Bank for Savings ("First Savings"),
Westwood Homestead Savings Bank ("Westwood") (collectively hereinafter
"the Banks") and Camco Title Insurance Agency, Inc., as well as two
second tier subsidiaries, Camco Mortgage Corporation and WestMar
Mortgage Company. All significant intercompany balances and
transactions have been eliminated.
3. Earnings Per Share
Basic earnings per share for the three-month periods ended March 31,
2001 and 2000, is computed based on 6,942,012 and 6,864,553
weighted-average shares outstanding, respectively.
Diluted earnings per share is computed taking into consideration
common shares outstanding and dilutive potential common shares to be
issued under the Corporation's stock option plans. Weighted-average
common shares deemed outstanding for purposes of computing diluted
earnings per share totaled 7,017,900 and 6,905,051 for the three-month
periods ended March 31, 2001 and 2000, respectively.
8
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
3. Earnings Per Share (continued)
There were 75,888 and 40,498 incremental shares related to the assumed
exercise of stock options included in the computation of diluted
earnings per share for the three-month periods ended March 31, 2001
and 2000, respectively.
Options to purchase 322,152 and 176,059 shares of common stock with
weighted-average exercise prices of $12.97 and $11.67 were outstanding
at March 31, 2001 and 2000, respectively, but were excluded from the
computation of common share equivalents because the exercise prices
were greater than the average market price of the common shares.
4. Effects of Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") No. 133,
"Accounting for Derivative Instruments and Hedging Activities," which
requires entities to recognize all derivatives in their financial
statements as either assets or liabilities measured at fair value.
SFAS No. 133 also specifies new methods of accounting for hedging
transactions, prescribes the items and transactions that may be
hedged, and specifies detailed criteria to be met to qualify for hedge
accounting.
The definition of a derivative financial instrument is complex, but in
general, it is an instrument with one or more underlyings, such as an
interest rate or foreign exchange rate, that is applied to a notional
amount, such as an amount of currency, to determine the settlement
amount(s). It generally requires no significant initial investment and
can be settled net or by delivery of an asset that is readily
convertible to cash. SFAS No. 133 applies to derivatives embedded in
other contracts, unless the underlying of the embedded derivative is
clearly and closely related to the host contract.
SFAS No. 133, as amended by SFAS No. 137, is effective for fiscal
years beginning after June 15, 2000. On adoption, entities are
permitted to transfer held-to-maturity debt securities to the
available-for-sale or trading category without calling into question
their intent to hold other debt securities to maturity in the future.
Management adopted SFAS No. 133 effective January 1, 2001, as
required, without material impact on the Corporation's financial
position or results of operations.
In September 2000, the FASB issued SFAS No. 140 "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities", which revises the standards for accounting for
securitizations and other transfers of financial assets and collateral
and requires certain disclosures, but carries over most of the
provisions of SFAS No. 125 without reconsideration. SFAS No. 140 is
effective for transfers and servicing of financial assets and
extinguishments of liabilities occurring after March 31, 2001. The
Statement is effective for recognition and reclassification of
collateral and for disclosures relating to securitization transactions
and collateral for fiscal years ending after December 15, 2000. SFAS
No. 140 is not expected to have a material effect on the Corporation's
financial position or results of operations.
9
Camco Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
For the three-month periods ended March 31, 2001 and 2000
General
Camco's profitability depends primarily on the level of its net interest income,
which is the difference between interest income on interest-earning assets,
principally loans, mortgage-backed securities and investment securities, and
interest expense on deposit accounts and borrowings. In recent years, Camco's
net earnings have been heavily influenced by the level of other income,
including gains on sale of loans, loan servicing fees, and other fees. Camco's
operations are also influenced by the level of general, administrative and other
expenses, including employee compensation and benefits, occupancy and equipment
and data processing, as well as various other operating expense categories,
including federal income tax expense.
Discussion of Financial Condition Changes from December 31, 2000 to March 31,
2001
At March 31, 2001, Camco's consolidated assets totaled $1.0 billion, a decrease
of $5.3 million, or .5%, from the December 31, 2000 total. This decrease
consisted primarily of a decrease in loans receivable and investment securities,
partially offset by an increase in interest-bearing deposits.
Cash and interest-bearing deposits in other financial institutions totaled $36.9
million at March 31, 2001, an increase of $12.9 million, or 53.4%, over December
31, 2000 levels. Investment securities totaled $9.6 million at March 31, 2001, a
decrease of $7.3 million, or 43.2%, from the total at December 31, 2000.
Investment securities purchases totaled $3.0 million, while maturities amounted
to $10.3 million during the three-month period ended March 31, 2001.
Mortgage-backed securities totaled $14.6 million at March 31, 2001, a decrease
of $561,000, or 3.7%, from December 31, 2000, due primarily to principal
repayments totaling $631,000.
Loans receivable, including loans held for sale, decreased by $10.5 million, or
1.1%, during the three months ended March 31, 2001, to a total of $920.2
million. The decrease resulted primarily from principal repayments of $53.7
million and loan sales of $22.1 million, which were partially offset by loan
disbursements, including purchased loans, which totaled $65.9 million. The
volume of loans originated and purchased during the 2001 three-month period was
less than that of the 2000 period by $14.9 million, or 18.4%, while the volume
of loan sales increased by $9.3 million year to year.
10
Camco Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
For the three-month periods ended March 31, 2001 and 2000
Discussion of Financial Condition Changes from December 31, 2000 to March 31,
2001 (continued)
As interest rates in the economy have declined over the first quarter of 2001,
consumer preference has shifted to long-term fixed-rate mortgage loans to fund
home purchases and to refinance current loans. Camco's loan production in this
lower interest rate environment has clearly shifted to fixed-rate mortgage loans
and Camco will continue its asset/liability management strategy of selling low
yielding long-term fixed-rate loans.
Nonperforming loans (90 days or more delinquent plus nonaccrual loans) totaled
$5.8 million and $4.7 million at March 31, 2001 and December 31, 2000,
respectively, constituting .63% and .51% of total net loans, including loans
held for sale, at those dates. At March 31, 2001, nonperforming loans consisted
primarily of one- to four-family residential properties which management
believes are adequately collateralized. The consolidated allowance for loan
losses totaled $3.0 million and $2.9 million at March 31, 2001 and December 31,
2000, respectively, representing 52.3% and 61.5% of nonperforming loans,
respectively, at those dates. Although management believes that its allowance
for loan losses is adequate based upon the available facts and circumstances at
March 31, 2001, there can be no assurance that additions to such allowance will
not be necessary in future periods, which could adversely affect Camco's results
of operations.
Deposits totaled $649.4 million at March 31, 2001, an increase of $17.1 million,
or 2.7%, over December 31, 2000 levels. The increase resulted primarily from
management's continuing efforts to achieve growth in deposits through marketing
and pricing strategies. Advances from the Federal Home Loan Bank ("FHLB")
decreased by $22.6 million, or 7.2%, to a total of $290.9 million at March 31,
2001. The proceeds from deposit growth, coupled with excess repayments on loans
receivable, were used to repay FHLB borrowings during the period.
The Banks are required to maintain minimum regulatory capital pursuant to
federal regulations. At March 31, 2001, each of the Banks' regulatory capital
exceeded all regulatory capital requirements.
Comparison of Results of Operations for the Three Months Ended March 31, 2001
and 2000
General
Camco's net earnings for the three months ended March 31, 2001 totaled $2.1
million, an increase of $402,000, or 23.2%, over the $1.7 million of net
earnings reported in the comparable 2000 period. The increase in earnings was
primarily attributable to a $128,000 increase in net interest income, an
increase of $287,000 in other income and a decrease in general, administrative
and other expense of $214,000, which were partially offset by a $19,000 increase
in the provision for losses on loans and an increase in the provision for
federal income taxes of $208,000.
11
Camco Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
For the three-month periods ended March 31, 2001 and 2000
Comparison of Results of Operations for the Three Months Ended March 31, 2001
and 2000 (continued)
Net Interest Income
Total interest income for the three months ended March 31, 2001, amounted to
$19.4 million, an increase of $1.8 million, or 10.1%, over the three-month
period ended March 31, 2000, generally reflecting the effects of growth in
average interest-earning assets outstanding of approximately $84.5 million, or
9.3%.
Interest income on loans and mortgage-backed securities totaled $18.7 million
for the three months ended March 31, 2001, an increase of $1.7 million, or
10.1%, over the comparable 2000 period. The increase resulted primarily from a
$78.5 million, or 9.1%, increase in the average balance outstanding year to
year. Interest income on investment securities and other interest-earning assets
increased by $69,000, or 9.9%, due primarily to a $5.9 million, or 14.4%,
increase in the average balance outstanding year to year.
Interest expense on deposits increased by $1.7 million, or 26.1%, to a total of
$8.1 million for the three months ended March 31, 2001, due primarily to an
$83.6 million, or 15.2%, increase in average deposits outstanding over the prior
year. Interest expense on borrowings totaled $4.7 million for the three months
ended March 31, 2001, a decrease of $16,000, or 0.3%, from the 2000 three-month
period. The decrease resulted primarily from a $7.7 million, or 2.5%, decrease
in the average balance outstanding year to year.
As a result of the foregoing changes in interest income and interest expense,
net interest income increased by $128,000, or 2.0%, to a total of $6.7 million
for the three months ended March 31, 2001. The interest rate spread decreased to
approximately 2.42% for the three months ended March 31, 2001, from 2.65% for
the 2000 period, while the net interest margin decreased to approximately 2.70%
in 2001, compared to 2.90% in 2000.
Provision for Losses on Loans
A provision for losses on loans is charged to earnings to bring the total
allowance for loan losses to a level considered appropriate by management based
on historical experience, the volume and type of lending conducted by the Banks,
the status of past due principal and interest payments, general economic
conditions, particularly as such conditions relate to the Banks' market areas
and other factors related to the collectibility of the Banks' loan portfolios.
Management elected to record a provision for losses on loans totaling $156,000
for the three months ended March 31, 2001, an increase of $19,000, or 13.9%,
over the comparable period in 2000. The current period provision generally
reflects the overall growth in the loan portfolio year to year, as well as the
increase in the level of nonperforming loans during the first quarter of fiscal
2001. There can be no assurance that the allowance for loan losses will be
adequate to cover losses on nonperforming loans in the future.
12
Camco Financial Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
For the three month periods ended March 31, 2001 and 2000
Comparison of Results of Operations for the Three Months Ended March 31, 2001
and 2000 (continued)
Other Income
Other income totaled $1.4 million for the three months ended March 31, 2001, an
increase of $287,000, or 25.6%, over the comparable 2000 period. The increase in
other income was primarily attributable to a $468,000, or 298.1%, increase in
gains on sale of loans, an increase of $110,000, or 23.5%, in late charges, rent
and other and a $51,000, or 31.5%, increase in service charges and fees on
deposits, which were partially offset by a decrease of $314,000, or 106.8%, in
loan servicing fees and a $22,000 decrease in gain on sale of real estate owned.
The increase in gain on sale of loans was due to the increase in sales volume as
a result of the demand for fixed-rate loans in the declining interest rate
environment. The decrease in loan servicing fees was primarily due to an
increase in the level of amortization of mortgage servicing rights. Such
amortization is based, among other factors, upon the repayment of loans
receivable, which increased by $22.6 million, or 72.5%, over the comparable
period.
General, Administrative and Other Expense
General, administrative and other expense totaled $4.7 million for the three
months ended March 31, 2001, a decrease of $214,000, or 4.3%, from the
comparable period in 2000. The decrease was due to a decrease of $335,000, or
13.6%, in employee compensation and benefits, which was partially offset by an
increase in occupancy and equipment of $47,000, or 6.4%, and a $68,000, or
24.1%, increase in data processing. The decrease in employee compensation and
benefits was primarily attributable to employee retirements, attrition, and the
closing of non-profitable loan production offices. Data processing expense
increased over the comparable 2000 period due to costs relating to
implementation of an internal wide area network and continued growth.
Federal Income Taxes
The provision for federal income taxes totaled $1.1 million for the three months
ended March 31, 2001, an increase of $208,000, or 23.6%, over the three months
ended September 30, 2000. This increase was primarily attributable to a
$610,000, or 23.3%, increase in pre-tax earnings. The Corporation's effective
tax rate amounted to 33.8% and 33.7% for the three-month periods ended March 31,
2001 and 2000, respectively.
Quantitative and Qualitative Disclosures about Market Risk
There has been no material change in the Corporation's market risk since the
Corporation's Form 10-K filed with the Securities and Exchange Commission for
the year ended December 31, 2000.
13
Camco Financial Corporation
PART II
ITEM 1. Legal Proceedings
Not applicable
ITEM 2. Changes in Securities and Use of Proceeds
None
ITEM 3. Defaults Upon Senior Securities
Not applicable
ITEM 4. Submission of Matters to a Vote of Security Holders
None
ITEM 5. Other Information
Not applicable
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None.
(b) Reports on Form 8-K: Camco filed a Form 8-K on February 1,
2001 to report Camco's plans to merge
its five wholly - owned banking
subsidiaries.
14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: May 14, 2001 By: /s/Richard C. Baylor
-------------------- --------------------------
Richard C. Baylor
Chief Executive Officer
Date: May 14, 2001 By: /s/Kristina K. Tipton
-------------------- --------------------------
Kristina K. Tipton
Assistant Controller
15