SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
Amendment No. 1
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2001
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
incorporation or organization) Identification Number)
6901 Glenn Highway, Cambridge, Ohio 43725
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (740) 435-2020
Securities registered pursuant to Section 12(b) of the Act:
None None
- ------------------------------- -------------------------------------
(Title of Each Class) (Name of exchange on which registered)
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1 par value per share
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(Title of Class)
Indicate by check mark whether the issuer (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act 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_____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates
of the registrant, computed by reference to the last sale reported as of March
21, 2002, was $103.9 million. (The exclusion from such amount of the market
value of the shares owned by any person shall not be deemed an admission by the
registrant that such person is an affiliate of the registrant.)
The registrant's revenues for the fiscal year ended December 31,
2001, were $81.5 million. 7,964,119 shares of the registrant's
common stock were outstanding on March 21, 2002.
DOCUMENTS INCORPORATED BY REFERENCE:
Part III of Form 10-K: Portions of the Proxy Statement for the 2002 Annual
Meeting of Stockholders
-1-
PART II
Item 8. Financial Statements and Supplementary Data.
Report of Independent Certified Public Accountants
Board of Directors
Camco Financial Corporation
We have audited the accompanying consolidated statements of financial condition
of Camco Financial Corporation as of December 31, 2001 and 2000, and the related
consolidated statements of earnings, comprehensive income, stockholders' equity
and cash flows for each of the years in the three year period ended December 31,
2001. These consolidated financial statements are the responsibility of the
Corporation's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Camco Financial
Corporation as of December 31, 2001 and 2000, and the consolidated results of
its operations and its cash flows for each of the years in the three year period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States of America.
/s/GRANT THORNTON LLP
Cincinnati, Ohio
February 22, 2002
-2-
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
December 31,
(In thousands, except share data)
ASSETS 2001 2000
Cash and due from banks $ 15,665 $ 19,153
Interest-bearing deposits in other financial institutions 89,299 4,916
--------- ---------
Cash and cash equivalents 104,964 24,069
Investment securities available for sale - at market 305 309
Investment securities held to maturity - at cost, approximate market
value of $19,083 and $16,617 as of December 31, 2001 and 2000, respectively 18,872 16,672
Mortgage-backed securities available for sale - at market 6,975 9,850
Mortgage-backed securities held to maturity - at cost, approximate market
value of $30,744 and $5,247 as of December 31, 2001 and 2000, respectively 30,765 5,273
Loans held for sale - at lower of cost or market 21,445 4,235
Loans receivable - net 850,001 926,437
Office premises and equipment - net 14,849 13,845
Real estate acquired through foreclosure 2,151 583
Federal Home Loan Bank stock - at cost 22,481 19,339
Accrued interest receivable 5,769 5,978
Prepaid expenses and other assets 4,779 1,439
Cash surrender value of life insurance 15,751 5,999
Goodwill - net of accumulated amortization 2,953 3,103
Prepaid federal income taxes 592 725
--------- ---------
Total assets $1,102,652 $1,037,856
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $ 730,075 $ 632,288
Advances from the Federal Home Loan Bank 258,850 313,471
Advances by borrowers for taxes and insurance 3,860 4,382
Accounts payable and accrued liabilities 10,975 5,328
Dividends payable 962 832
Deferred federal income taxes 2,759 2,805
--------- ---------
Total liabilities 1,007,481 959,106
Commitments - -
Stockholders' equity
Preferred stock - $1 par value; authorized 100,000 shares; no shares outstanding - -
Common stock - $1 par value; authorized 14,900,000 shares; 8,137,039 and
7,057,917 shares issued at December 31, 2001 and 2000, respectively 8,137 7,058
Additional paid-in capital 51,722 41,551
Retained earnings - substantially restricted 36,621 31,553
Accumulated comprehensive income - unrealized gains on securities designated
as available for sale, net of related tax effects 107 4
Less 126,019 shares of treasury stock - at cost (1,416) (1,416)
--------- ---------
Total stockholders' equity 95,171 78,750
--------- ---------
Total liabilities and stockholders' equity $1,102,652 $1,037,856
========= =========
The accompanying notes are an integral part of these statements.
-3-
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF EARNINGS
For the year ended December 31,
(In thousands, except per share data)
2001 2000 1999
Interest income
Loans $69,461 $71,524 $47,904
Mortgage-backed securities 1,059 1,120 759
Investment securities 696 1,141 896
Interest-bearing deposits and other 3,156 1,886 1,534
------ ------ ------
Total interest income 74,372 75,671 51,093
Interest expense
Deposits 31,324 28,869 19,119
Borrowings 17,109 20,740 10,788
------ ------ ------
Total interest expense 48,433 49,609 29,907
------ ------ ------
Net interest income 25,939 26,062 21,186
Provision for losses on loans 759 568 247
------ ------ ------
Net interest income after provision for losses on loans 25,180 25,494 20,939
Other income (expense)
Late charges, rent and other 3,112 2,046 2,133
Loan servicing fees (costs) (1,421) 665 706
Service charges and other fees on deposits 838 733 574
Gain on sale of loans 4,532 2,058 1,761
Loss on sale of investment and mortgage-backed securities - (37) -
Gain on sale of real estate acquired through foreclosure 62 56 20
Gain (loss) on sale of premises and equipment 30 15 (4)
------ ------ ------
Total other income 7,153 5,536 5,190
General, administrative and other expense
Employee compensation and benefits 7,887 8,948 7,926
Occupancy and equipment 3,172 3,064 2,464
Federal deposit insurance premiums 123 117 263
Data processing 1,345 1,337 835
Advertising 705 720 645
Franchise taxes 1,118 1,059 844
Amortization of goodwill 150 150 150
Other operating 4,448 4,135 3,986
Restructuring charges related to charter consolidation 950 - -
------ ------ ------
Total general, administrative and other expense 19,898 19,530 17,113
------ ------ ------
Earnings before federal income taxes 12,435 11,500 9,016
Federal income taxes
Current 2,715 2,102 2,518
Deferred 1,176 1,746 558
------ ------ ------
Total federal income taxes 3,891 3,848 3,076
------ ------ ------
NET EARNINGS $ 8,544 $ 7,652 $ 5,940
====== ====== ======
EARNINGS PER SHARE
Basic $1.20 $1.11 $1.04
==== ==== ====
Diluted $1.19 $1.10 $1.02
==== ==== ====
The accompanying notes are an integral part of these statements.
-4-
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the year ended December 31,
(In thousands)
2001 2000 1999
Net earnings $8,544 $7,652 $5,940
Other comprehensive income (loss), net of tax:
Unrealized holding gains (losses) on securities during the period, net of
taxes (benefits) of $53, $54 and $(113) in 2001, 2000
and 1999, respectively 103 104 (220)
Reclassification adjustment for realized gains included in earnings,
net of tax benefits of $13 for the year ended December 31, 2000 - 24 -
----- ----- -----
Comprehensive income $8,647 $7,780 $5,720
===== ===== =====
Accumulated comprehensive income (loss) $ 107 $ 4 $ (124)
===== ===== =====
The accompanying notes are an integral part of these statements.
-5-
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the years ended December 31, 2001, 2000 and 1999
(In thousands, except per share data)
Unrealized
gains (losses)
on securities
Additional designated Total
Common paid-in Retained as available Treasury stockholders'
stock capital earnings for sale stock equity
Balance at January 1, 1999 $5,480 $27,053 $27,628 $ 96 $ (118) $60,139
Cash dividends declared - $0.4614 per share - - (2,770) - - (2,770)
Stock dividend (5%) including cash in lieu
of fractional shares 272 3,298 (3,593) - - (23)
Net earnings for the year ended December 31, 1999 - - 5,940 - - 5,940
Purchase of treasury shares - - - - (457) (457)
Unrealized losses on securities designated as
available for sale, net of related tax effects - - - (220) - (220)
----- ------ ------ --- ------ ------
Balance at December 31, 1999 5,752 30,351 27,205 (124) (575) 62,609
Stock options exercised 1 7 - - - 8
Cash dividends declared - $0.48 per share - - (3,327) - - (3,327)
Purchase of Westwood Homestead Financial Corporation 1,305 11,193 23 - (841) 11,680
Net earnings for the year ended December 31, 2000 - - 7,652 - - 7,652
Unrealized gains on securities designated as
available for sale, net of related tax effects - - - 128 - 128
----- ------ ------ --- ------ ------
Balance at December 31, 2000 7,058 41,551 31,553 4 (1,416) 78,750
Stock options exercised 116 1,146 - - - 1,262
Cash dividends declared - $0.48 per share - - (3,476) - - (3,476)
Net earnings for the year ended December 31, 2001 - - 8,544 - - 8,544
Purchase of Columbia Financial of Kentucky, Inc. 963 9,025 - - - 9,988
Unrealized gains on securities designated as
available for sale, net of related tax effects - - - 103 - 103
----- ------ ------ --- ------ ------
Balance at December 31, 2001 $8,137 $51,722 $36,621 $107 $(1,416) $95,171
===== ====== ====== === ====== ======
The accompanying notes are an integral part of these statements.
-6-
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the year ended December 31,
(In thousands)
2001 2000 1999
Cash flows from operating activities:
Net earnings for the year $ 8,544 $ 7,652 $ 5,940
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Amortization of goodwill 150 150 150
Amortization of premiums and discounts on investment and
mortgage-backed securities - net 87 19 (5)
Depreciation and amortization 1,655 1,610 983
Amortization of purchase accounting adjustments - net 303 13 88
Provision for losses on loans 759 568 247
Amortization of deferred loan origination fees (683) (374) (361)
Gain on sale of real estate acquired through foreclosure (62) (56) (20)
Loss on sale of investments and mortgage-backed securities
designated as available for sale - 37 -
(Gain) loss on sale of office premises and equipment (30) (15) 4
Federal Home Loan Bank stock dividends (1,367) (1,320) (754)
Gain on sale of loans (2,194) (905) (461)
Loans originated for sale in the secondary market (312,847) (120,503) (89,956)
Proceeds from sale of mortgage loans in the secondary market 297,831 120,356 97,353
Increase (decrease) in cash, net of acquisition of Westwood Homestead
Financial Corporation and Columbia Financial of Kentucky, Inc.,
due to changes in:
Accrued interest receivable 893 (972) (354)
Prepaid expenses and other assets (2,921) (437) (480)
Accounts payable and other liabilities 2,432 2,230 327
Federal income taxes
Current (248) (1,009) (221)
Deferred 1,176 1,746 558
------- ------- -------
Net cash provided by (used in) operating activities (6,522) 8,790 13,038
Cash flows provided by (used in) investing activities:
Proceeds from maturities of investment securities 19,480 1,040 6,008
Proceeds from sale of mortgage-backed securities designated as
available for sale - 5,045 -
Purchase of investment securities designated as available for sale - (17) (22)
Purchase of investment securities designated as held to maturity (10,495) (840) (10,896)
Purchase of mortgage-backed securities designated as available for sale - (5,087) (5,080)
Purchase of mortgage-backed securities designated as held to maturity (15,228) - (1,992)
Principal repayments on mortgage-backed securities 4,865 2,608 2,844
Loan disbursements (126,582) (237,956) (335,287)
Purchases of loans (2,527) (3,552) (24,358)
Principal repayments on loans 271,195 176,055 173,960
Purchase of office premises and equipment - net (1,711) (1,675) (2,095)
Proceeds from sale of office premises and equipment 119 35 -
Proceeds from sale of real estate acquired through foreclosure 1,806 505 1,191
Purchase of Federal Home Loan Bank stock (100) (2,077) (5,601)
Proceeds from redemption of Federal Home Loan Bank stock - 504 -
Additions to real estate acquired through foreclosure (60) (25) (153)
Purchase of life insurance (9,445) (80) (250)
Net increase in cash surrender value of life insurance (307) (262) (246)
Purchase of Westwood Homestead Financial Corporation - (1,879) -
Purchase of Columbia Financial of Kentucky, Inc. (3,000) - -
------- ------- -------
Net cash provided by (used in) investing activities 128,010 (67,658) (201,977)
------- ------- -------
Net cash provided by (used in) operating and investing
activities (balance carried forward) 121,488 (58,868) (188,939)
------- ------- -------
-7-
Camco Financial Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
For the year ended December 31,
(In thousands)
2001 2000 1999
Net cash provided by (used in) operating and investing
activities (balance brought forward) $121,488 $(58,868) $(188,939)
Cash flows provided by (used in) financing activities:
Net increase in deposits 16,716 70,185 18,560
Proceeds from Federal Home Loan Bank advances 50,451 243,178 229,466
Repayment of Federal Home Loan Bank advances (105,072) (244,123) (75,823)
Dividends paid on common stock (3,346) (3,327) (2,550)
Proceeds from exercise of stock options 1,262 8 -
Purchase of treasury shares - - (457)
Increase (decrease) in advances by borrowers for taxes and insurance (604) 62 882
------- ------- --------
Net cash provided by (used in) financing activities (40,593) 65,983 170,078
------- ------- --------
Net increase (decrease) in cash and cash equivalents 80,895 7,115 (18,861)
Cash and cash equivalents at beginning of year 24,069 16,954 35,815
------- ------- --------
Cash and cash equivalents at end of year $104,964 $ 24,069 $ 16,954
======= ======= ========
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest on deposits and borrowings $ 48,792 $ 48,952 $ 29,457
======= ======= ========
Income taxes $ 3,528 $ 3,430 $ 2,927
======= ======= ========
Supplemental disclosure of noncash investing activities:
Transfers from mortgage loans to real estate acquired through foreclosure $ 3,208 $ 1,432 $ 1,220
======= ======= ========
Issuance of mortgage loans upon sale of real estate acquired through
foreclosure $ 1,182 $ 703 $ 761
======= ======= ========
Unrealized gains (losses) on securities designated as available for sale,
net of related tax effects $ 103 $ 128 $ (220)
======= ======= ========
Recognition of mortgage servicing rights in accordance with
SFAS No. 140 $ 2,338 $ 1,153 $ 1,300
======= ======= ========
Supplemental disclosure of noncash financing activities:
Dividends declared but unpaid $ 962 $ 832 $ 832
======= ======= ========
Fair value of assets received in acquisition of:
Westwood Homestead Financial Corporation $ - $159,698 $ -
======= ======= ========
Columbia Financial of Kentucky, Inc. $110,422 $ - $ -
======= ======= ========
The accompanying notes are an integral part of these statements.
-8-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
During 2001, the Boards of Directors of Camco Financial Corporation ("Camco"
or the "Corporation") and its wholly-owned subsidiaries, Cambridge Savings
Bank ("Cambridge Savings"), Marietta Savings Bank ("Marietta Savings"),
First Savings Bank of Washington Court House ("First Bank"), First Bank for
Savings ("First Savings") and Westwood Homestead Savings Bank ("Westwood
Homestead"), approved a business plan whereby the subsidiary banks
consolidated charters and operations into one state savings bank charter
under the name Advantage Bank. The combining of charters and operations
resulted in the Corporation incurring a one-time after-tax restructuring
charge totaling $627,000. Hereinafter, the consolidated financial statements
use the terms "Advantage" or the "Bank" to describe all of the preexisting
individual financial institutions owned by the Corporation.
During 2001, Camco's Board of Directors approved a business combination,
that was completed in November 2001, whereby Columbia Financial of Kentucky,
Inc., ("Columbia Financial") the parent of Columbia Federal Savings Bank,
("Columbia Federal") was merged into Camco. Following the merger, Columbia
Federal became a division of Advantage. The business combination was
accounted for using the purchase method of accounting. Accordingly, the
consolidated financial statements herein include the accounts of Columbia
Federal from the November 15, 2001 consummation date through December 31,
2001.
During 1999, Camco's Board of Directors approved a business combination,
which was completed in January 2000, whereby Westwood Homestead Financial
Corporation ("WHFC"), the parent of Westwood Homestead, was merged into
Camco and Westwood Homestead became a wholly-owned subsidiary of the
Corporation. The business combination was accounted for using the purchase
method of accounting. Accordingly, the 2000 consolidated financial
statements herein include the accounts of Westwood Homestead from the
January 6, 2000 acquisition date through December 31, 2000.
The business activities of Camco are limited primarily to holding the common
stock of the Bank and Camco Title Insurance Agency ("Camco Title") and two
second tier subsidiaries, Camco Mortgage Corporation and WestMar Mortgage
Company. The Corporation's results of operations are economically dependent
upon the results of Advantage's operations. Advantage conducts a general
banking business within Ohio, West Virginia and northern Kentucky which
consists of attracting deposits from the general public and applying those
funds to the origination of loans for residential, consumer and
nonresidential purposes. Advantage's profitability is significantly
dependent on net interest income, which is the difference between interest
income generated from interest-earning assets (i.e. loans and investments)
and the interest expense paid on interest-bearing liabilities (i.e. customer
deposits and borrowed funds). Net interest income is affected by the
relative amounts of interest-earning assets and interest-bearing liabilities
and the interest received or paid on these balances. The level of interest
rates paid or received by Advantage can be significantly influenced by a
number of factors, such as governmental monetary policy, that are outside of
management's control.
The consolidated financial information presented herein has been prepared in
accordance with accounting principles generally accepted in the United
States of America ("U.S. GAAP") and general accounting practices within the
financial services industry. In preparing financial statements in accordance
with U.S. GAAP, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and revenues and expenses during the reporting period. Actual
results could differ from such estimates.
-9-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The following is a summary of the Corporation's significant accounting
policies which have been consistently applied in the preparation of the
accompanying consolidated financial statements.
1. Principles of Consolidation
The consolidated financial statements include the accounts of the
Corporation and its wholly-owned and second tier subsidiaries. All
significant intercompany balances and transactions have been eliminated.
2. Interest Rate Risk
The earnings of the Corporation are primarily dependent upon net interest
income, which is determined by 1) the difference between yields earned on
interest-earning assets and rates paid on interest-bearing liabilities
(interest rate spread) and 2) the relative amounts of interest-earning
assets and interest-bearing liabilities outstanding. The Corporation's
interest rate spread is affected by regulatory, economic and competitive
factors that influence interest rates, loan demand and deposit flows. The
Corporation is vulnerable to an increase in interest rates to the extent
that interest-bearing liabilities mature or reprice more rapidly than
interest-earning assets. At December 31, 2001, 2000 and 1999, the
Corporation had net interest-earning assets of approximately $1.1 billion,
$993.0 million and $776.3 million, with weighted-average effective yields of
6.63%, 7.92% and 7.39%, respectively, and net interest-bearing liabilities
of approximately $988.9 million, $945.8 million and $740.9 million, with
weighted-average effective interest rates of 4.59%, 5.53% and 4.81%,
respectively. To minimize the effect of adverse changes in interest rates on
its results of operations, the Corporation has implemented an asset and
liability management plan that emphasizes increasing the interest rate
sensitivity and shortening the maturities of its interest-earning assets and
extending the maturities of its interest-bearing liabilities. Although the
Corporation has undertaken a variety of strategies to minimize its exposure
to interest rate risk, its primary emphasis has been on the origination and
purchase of adjustable rate loans.
3. Investment Securities and Mortgage-Backed Securities
The Corporation accounts for investment and mortgage-backed securities in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 115
"Accounting for Certain Investments in Debt and Equity Securities." SFAS No.
115 requires that investments be categorized as held-to-maturity, trading,
or available for sale. Securities classified as held-to-maturity are carried
at cost only if the Corporation has the positive intent and ability to hold
these securities to maturity. Trading securities and securities available
for sale are carried at fair value with resulting unrealized gains or losses
recorded to operations or stockholders' equity, respectively. Investment and
mortgage-backed securities are classified as held-to-maturity or available
for sale upon acquisition. Realized gains and losses on sales of securities
are recognized using the specific identification method.
-10-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
4. Loans Receivable
Loans held in portfolio are stated at the principal amount outstanding,
adjusted for deferred loan origination fees and costs, capitalized mortgage
servicing rights and the allowance for loan losses.
Interest is accrued as earned unless the collectibility of the loan is in
doubt. Uncollectible interest on loans that are contractually past due is
charged off, or an allowance is established based on management's periodic
evaluation. The allowance is established by a charge to interest income
equal to all interest previously accrued, and income is subsequently
recognized only to the extent that cash payments are received until, in
management's judgment, the borrower's ability to make periodic interest and
principal payments has returned to normal, in which case the loan is
returned to accrual status.
Loans held for sale are carried at the lower of cost (less principal
payments received) or fair value (market value), calculated on an aggregate
basis. At December 31, 2001, Advantage Bank recorded an unrealized loss of
$28,000 on loans held for sale. At December 31, 2000, loans held for sale
were carried at cost.
The Corporation accounts for mortgage servicing rights in accordance with
SFAS No. 140 "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," which requires that the Corporation
recognize, as separate assets, rights to service mortgage loans for others,
regardless of how those servicing rights are acquired. An institution that
acquires mortgage servicing rights through either the purchase or
origination of mortgage loans and sells those loans with servicing rights
retained must allocate some of the cost of the loans to the mortgage
servicing rights.
SFAS No. 140 requires that capitalized mortgage servicing rights and
capitalized excess servicing receivables be assessed for impairment.
Impairment is measured based on fair value. The mortgage servicing rights
recorded by the Bank, calculated in accordance with the provisions of SFAS
No. 140, were segregated into pools for valuation purposes, using as pooling
criteria the loan term and coupon rate. Once pooled, each grouping of loans
was evaluated on a discounted earnings basis to determine the present value
of future earnings that a purchaser could expect to realize from each
portfolio. Earnings were projected from a variety of sources including loan
servicing fees, interest earned on float, net interest earned on escrows,
miscellaneous income, and costs to service the loans. The present value of
future earnings is the "economic" value for the pool, i.e., the net
realizable present value to an acquirer of the acquired servicing.
The Corporation recorded amortization related to mortgage servicing rights
totaling approximately $1.5 million, $602,000 and $516,000, for the years
ended December 31, 2001, 2000 and 1999, respectively. Additionally, the
Corporation recorded an impairment charge on mortgage servicing rights
totaling $1.3 million in 2001. The carrying value of the Corporation's
mortgage servicing rights, which approximated their fair value, totaled
approximately $4.7 million and $5.2 million at December 31, 2001 and 2000,
respectively.
At December 31, 2001 and 2000, the Bank was servicing mortgage loans of
approximately $535.5 million and $475.6 million, respectively, that have
been sold to the Federal Home Loan Mortgage Corporation and other investors.
-11-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. Loan Origination and Commitment Fees
The Corporation accounts for loan origination fees and costs in accordance
with SFAS No. 91, "Accounting for Nonrefundable Fees and Costs Associated
with Originating or Acquiring Loans and Initial Direct Costs of Leases."
Pursuant to the provisions of SFAS No. 91, all loan origination fees
received, net of certain direct origination costs, are deferred on a
loan-by-loan basis and amortized to interest income using the interest
method, giving effect to actual loan prepayments. Additionally, SFAS No. 91
generally limits the definition of loan origination costs to the direct
costs attributable to originating a loan, i.e., principally actual personnel
costs.
Fees received for loan commitments are deferred and amortized over the life
of the related loan using the interest method.
6. Allowance for Loan Losses
It is the Corporation's policy to provide valuation allowances for estimated
losses on loans based upon past loss experience, current trends in the level
of delinquent and problem loans, adverse situations that may affect the
borrower's ability to repay, the estimated value of any underlying
collateral and current economic conditions in the Bank's primary market
areas. When the collection of a loan becomes doubtful, or otherwise
troubled, the Corporation records a charge-off equal to the difference
between the fair value of the property securing the loan and the loan's
carrying value. Such provision is based on management's estimate of the fair
value of the underlying collateral, taking into consideration the current
and currently anticipated future operating or sales conditions. As a result,
such estimates are particularly susceptible to changes that could result in
a material adjustment to results of operations in the near term. Recovery of
the carrying value of such loans is dependent to a great extent on economic,
operating, and other conditions that may be beyond the Corporation's
control.
The Corporation accounts for impaired loans in accordance with SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan." SFAS No. 114 requires
that impaired loans be measured based upon the present value of expected
future cash flows discounted at the loan's effective interest rate or, as an
alternative, at the loan's observable market price or fair value of the
collateral.
A loan is defined under SFAS No. 114 as impaired when, based on current
information and events, it is probable that a creditor will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. In applying the provisions of SFAS No. 114, the Corporation
considers its investment in one- to four-family residential loans and
consumer installment loans to be homogeneous and therefore excluded from
separate identification for evaluation of impairment. With respect to the
Corporation's investment in multi-family and nonresidential loans, and its
evaluation of any impairment thereon, such loans are generally
collateral-dependent and as a result are carried as a practical expedient at
the lower of cost or fair value.
It is the Corporation's policy to charge off unsecured credits that are more
than ninety days delinquent. Similarly, collateral-dependent loans which are
more than ninety days delinquent are considered to constitute more than a
minimum delay in repayment and are evaluated for impairment under SFAS No.
114 at that time.
-12-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
6. Allowance for Loan Losses (continued)
At December 31, 2001 and 2000, the Corporation had no loans that would be
defined as impaired under SFAS No. 114.
7. Real Estate Acquired Through Foreclosure
Real estate acquired through foreclosure is carried at the lower of the
loan's unpaid principal balance (cost) or fair value less estimated selling
expenses at the date of acquisition. Real estate loss provisions are
recorded if the fair value of the property subsequently declines below the
amount determined at the recording date. In determining the lower of cost or
fair value at acquisition, costs relating to development and improvement of
property are capitalized. Costs relating to holding real estate acquired
through foreclosure, net of rental income, are charged against earnings as
incurred.
8. Office Premises and Equipment
Office premises and equipment are carried at cost and include expenditures
which extend the useful lives of existing assets. Maintenance, repairs and
minor renewals are expensed as incurred. For financial reporting,
depreciation and amortization are provided on the straight-line method over
the useful lives of the assets, estimated to be ten to fifty years for
buildings and improvements and three to twenty-five years for furniture,
fixtures and equipment. An accelerated depreciation method is used for tax
reporting purposes.
9. Goodwill
Goodwill resulting from the acquisition of First Savings totaled
approximately $3.7 million, and has been amortized over a twenty-five year
period using the straight-line method. It is management's policy to
periodically evaluate the carrying value of intangible assets in relation to
the continuing earnings capacity of the acquired assets and assumed
liabilities.
In June 2001, the Financial Accounting Standards Board issued SFAS No. 142
"Goodwill and Intangible Assets," which prescribes accounting for all
purchased goodwill and intangible assets. Pursuant to SFAS No. 142, acquired
goodwill is not amortized, but is tested for impairment at the reporting
unit level annually and whenever an impairment indicator arises. All
goodwill should be assigned to reporting units that are expected to benefit
from the goodwill. Goodwill impairment should be tested with a two-step
approach. First, the fair value of the reporting unit should be compared to
its carrying value, including goodwill. If the reporting unit's carrying
value exceeds its fair value, then any goodwill impairment should be
measured as the excess of the goodwill's carrying value over its implied
fair value. The implied fair value of goodwill should be calculated in the
same manner as goodwill is calculated for a business combination, using the
reporting unit's fair value as the "purchase price." Therefore, the
goodwill's implied fair value will be the excess of the "purchase price"
over the amounts allocated to assets, including unrecognized intangible
assets, and liabilities of the reporting unit. Goodwill impairment losses
should be reported in the income statement as a separate line item within
operations, except for such losses included in the calculation of a gain or
loss from discontinued operations.
-13-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
9. Goodwill (continued)
An acquired intangible asset, other than goodwill, should be amortized over
its useful economic life. The useful life of an intangible asset is
indefinite if it extends beyond the foreseeable horizon. If an asset's life
is indefinite, the asset should not be amortized until the life is
determined to be finite. Intangible assets being amortized should be tested
for impairment. Intangible assets not being amortized should be tested for
impairment annually and whenever there are indicators of impairment, by
comparing the asset's fair value to its carrying amount.
SFAS No. 142 is effective for fiscal years beginning after December 15,
2001, or January 1, 2002 as to the Corporation. Adoption of SFAS No. 142 is
expected to result in the elimination of annual goodwill amortization
totaling approximately $150,000 beginning in 2002.
10. Federal Income Taxes
The Corporation accounts for federal income taxes in accordance with SFAS
No. 109, "Accounting for Income Taxes." In accordance with SFAS No. 109, a
deferred tax liability or deferred tax asset is computed by applying the
current statutory tax rates to net taxable or deductible temporary
differences between the tax basis of an asset or liability and its reported
amount in the financial statements that will result in taxable or deductible
amounts in future periods. Deferred tax assets are recorded only to the
extent that the amount of net deductible temporary differences or
carryforward attributes may be utilized against current period earnings,
carried back against prior years' earnings, offset against taxable temporary
differences reversing in future periods, or utilized to the extent of
management's estimate of future taxable income. A valuation allowance is
provided for deferred tax assets to the extent that the value of net
deductible temporary differences and carryforward attributes exceeds
management's estimates of taxes payable on future taxable income. Deferred
tax liabilities are provided on the total amount of net temporary
differences taxable in the future.
Deferral of income taxes results primarily from different methods of
accounting for deferred loan origination fees and costs, mortgage servicing
rights, Federal Home Loan Bank stock dividends, deferred compensation, the
general loan loss allowance and the percentage of earnings bad debt
deductions. A temporary difference is also recognized for depreciation
expense computed using accelerated methods for federal income tax purposes.
-14-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
11. Earnings Per Share
Basic earnings per common share is computed based upon the weighted-average
number of common shares outstanding during the year. Diluted earnings per
common share is computed including the dilutive effect of additional
potential common shares issuable under stock option. The computations were
as follows for the years ended December 31:
2001 2000 1999
Weighted-average common shares
outstanding (basic) 7,096,960 6,915,154 5,730,829
Dilutive effect of assumed exercise
of stock options 100,132 42,277 103,562
--------- --------- ---------
Weighted-average common shares
outstanding (diluted) 7,197,092 6,957,431 5,834,391
========= ========= =========
Options to purchase 176,714, 435,295 and 65,416 shares of common stock at
weighted-average exercise prices of $13.11, $12.15 and $14.94 were
outstanding at December 31, 2001, 2000 and 1999, respectively, but were
excluded from the computation of diluted earnings per share for those years
because the exercise price was greater than the average market price of the
common shares.
12. Fair Value of Financial Instruments
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of fair value information about financial instruments,
whether or not recognized in the consolidated statement of financial
condition, for which it is practicable to estimate that value. In cases
where quoted market prices are not available, fair values are based on
estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. In that regard, the
derived fair value estimates cannot be substantiated by comparison to
independent markets and, in many cases, could not be realized in immediate
settlement of the instrument. SFAS No. 107 excludes certain financial
instruments and all non-financial instruments from its disclosure
requirements. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Corporation.
The following methods and assumptions were used by the Corporation in
estimating its fair value disclosures for financial instruments. The use of
different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.
Cash and Cash Equivalents: The carrying amount reported in the
consolidated statements of financial condition for cash and
cash equivalents is deemed to approximate fair value.
-15-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
12. Fair Value of Financial Instruments (continued)
Investment Securities and Mortgage-backed Securities: Fair
values for investment securities and mortgage-backed
securities are based on quoted market prices and dealer
quotes.
Loans receivable: The loan portfolio has been segregated into
categories with similar characteristics, such as one- to
four-family residential real estate, multi-family residential
real estate, installment and other. These loan categories were
further delineated into fixed-rate and adjustable-rate loans.
The fair values for the resultant loan categories were
computed via discounted cash flow analysis, using current
interest rates offered for loans with similar terms to
borrowers of similar credit quality.
Federal Home Loan Bank stock: The carrying amount presented in
the consolidated statements of financial condition is deemed
to approximate fair value.
Deposits: The fair values of deposits with no stated maturity,
such as money market demand deposits, savings and NOW
accounts, are deemed to equal the amount payable on demand as
of December 31, 2001 and 2000. The fair value of fixed-rate
certificates of deposit is based on the discounted value of
contractual cash flows. The discount rate is estimated using
the rates currently offered for deposits of similar remaining
maturities.
Advances from the Federal Home Loan Bank: The fair value of
these advances is estimated using the rates currently offered
for similar advances of similar remaining maturities or, when
available, quoted market prices.
Advances by Borrowers for Taxes and Insurance: The carrying
amount of advances by borrowers for taxes and insurance is
deemed to approximate fair value.
Commitments to extend credit: For fixed-rate and
adjustable-rate loan commitments, the fair value estimate
considers the difference between current levels of interest
rates and committed rates. At December 31, 2001 and 2000, the
difference between the fair value and notional amount of loan
commitments was not material.
-16-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
12. Fair Value of Financial Instruments (continued)
Based on the foregoing methods and assumptions, the carrying value and fair
value of the Corporation's financial instruments are as follows:
December 31,
2001 2000
Carrying Fair Carrying Fair
value value value value
(In thousands)
Financial assets
Cash and cash equivalents $ 104,964 $ 104,964 $ 24,069 $ 24,069
Investment securities 19,177 19,388 16,981 16,926
Mortgage-backed securities 37,740 37,719 15,123 15,097
Loans receivable 871,446 879,776 930,672 934,055
Federal Home Loan Bank stock 22,481 22,481 19,339 19,339
--------- --------- --------- ---------
$1,055,808 $1,064,328 $1,006,184 $1,009,486
========= ========= ========= =========
Financial liabilities
Deposits $ 730,075 $ 743,329 $ 632,288 $ 639,892
Advances from the Federal Home Loan Bank 258,850 281,638 313,471 307,013
Advances by borrowers for taxes and insurance 3,860 3,860 4,382 4,382
--------- --------- --------- ---------
$ 992,785 $1,028,827 $ 950,141 $ 951,287
========= ========= ========= =========
13. Cash and Cash Equivalents
Cash and cash equivalents consist of cash and due from banks and
interest-bearing deposits in other financial institutions with original
maturities of three months or less.
14. Advertising
Advertising costs are expensed when incurred.
15. Reclassifications
Certain prior year amounts have been reclassified to conform to the 2001
consolidated financial statement presentation.
-17-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE B - INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES
The amortized cost, gross unrealized gains, gross unrealized losses and
estimated fair values of investment securities at December 31, 2001 and 2000
are as follows:
2001
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
(In thousands)
Held to maturity:
U.S. Government agency obligations $18,682 $243 $ 34 $18,891
Municipal bonds 190 2 - 192
------ --- --- ------
Total investment securities held to maturity 18,872 245 34 19,083
Available for sale:
Corporate equity securities 245 89 29 305
------ --- --- ------
Total investment securities $19,117 $334 $ 63 $19,388
====== === === ======
2000
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
(In thousands)
Held to maturity:
U.S. Government agency obligations $16,482 $ 16 $ 71 $16,427
Municipal bonds 190 - - 190
------ --- --- ------
Total investment securities held to maturity 16,672 16 71 16,617
Available for sale:
Corporate equity securities 245 104 40 309
------ --- --- ------
Total investment securities $16,917 $120 $111 $16,926
====== === === ======
-18-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE B - INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES (continued)
The amortized cost and estimated fair value of investment securities at
December 31, 2001 (including securities designated as available for sale) by
contractual term to maturity are shown below.
Estimated
Amortized fair
cost value
(In thousands)
Due in one year or less $ 1,100 $ 1,132
Due after one year through five years 16,867 17,073
Due after five years 905 878
------ ------
Total investment securities 18,872 19,083
Corporate equity securities 245 305
------ ------
Total $19,117 $19,388
====== ======
The amortized cost, gross unrealized gains, gross unrealized losses and
estimated fair values of mortgage-backed securities at December 31, 2001 and
2000, are as follows:
2001
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
(In thousands)
Held to maturity:
FNMA $17,632 $ 96 $119 $17,609
FHLMC 11,069 51 38 11,082
GNMA 2,052 22 37 2,037
CMOs 3 - - 3
Other 9 4 - 13
------ --- --- ------
Total mortgage-backed securities
held to maturity 30,765 173 194 30,744
Available for sale:
FHLMC 2,553 46 - 2,599
FNMA 1,250 16 - 1,266
GNMA 3,069 41 - 3,110
------ --- --- ------
Total mortgage-backed securities
available for sale 6,872 103 - 6,975
------ --- --- ------
Total mortgage-backed securities $37,637 $276 $194 $37,719
====== === === ======
-19-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE B - INVESTMENT SECURITIES AND MORTGAGE-BACKED SECURITIES (continued)
2000
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
(In thousands)
Held to maturity:
FNMA $ 3,633 $ 27 $ 31 $ 3,629
FHLMC 1,537 15 49 1,503
GNMA 83 6 - 89
CMOs 9 - - 9
Other 11 6 - 17
------ --- --- ------
Total mortgage-backed securities
held to maturity 5,273 54 80 5,247
Available for sale:
FHLMC 3,898 20 15 3,903
FNMA 1,695 - 18 1,677
GNMA 4,315 9 54 4,270
------ --- --- ------
Total mortgage-backed securities
available for sale 9,908 29 87 9,850
------ --- --- ------
Total mortgage-backed securities $15,181 $ 83 $167 $15,097
====== === === ======
The amortized cost of mortgage-backed securities, including those designated
as available for sale at December 31, 2001, by contractual terms to
maturity, are shown below. Expected maturities will differ from contractual
maturities because borrowers may generally prepay obligations without
prepayment penalties.
Amortized cost
(In thousands)
Due within one year or less $ 115
Due after one year through five years 8,592
Due after five years through ten years 7,979
Due after ten years 20,951
------
$37,637
======
-20-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE C - LOANS RECEIVABLE
Loans receivable at December 31 consist of the following:
2001 2000
(In thousands)
Conventional real estate loans:
Existing residential properties $683,611 $760,593
Nonresidential real estate 70,239 54,722
Construction 42,666 56,039
Developed building lots 5,908 5,640
Education loans 1,198 1,459
Consumer and other loans 67,918 71,719
------- -------
Total 871,540 950,172
Less:
Undisbursed portion of loans in process 15,343 19,911
Unamortized yield adjustments 1,940 918
Allowance for loan losses 4,256 2,906
------- -------
Loans receivable - net $850,001 $926,437
======= =======
As depicted above, the Corporation's lending efforts have historically
focused on loans secured by existing residential properties, which comprise
approximately $683.6 million, or 80%, of the total loan portfolio at
December 31, 2001 and approximately $760.6 million, or 82%, of the total
loan portfolio at December 31, 2000. Generally, such loans have been
underwritten on the basis of no more than an 80% loan-to-value ratio, which
has historically provided the Corporation with adequate collateral coverage
in the event of default. Nevertheless, the Corporation, as with any lending
institution, is subject to the risk that residential real estate values
could deteriorate in its primary lending areas within Ohio, West Virginia,
and northern Kentucky, thereby impairing collateral values. However,
management believes that residential real estate values in the Corporation's
primary lending areas are presently stable.
The Bank, in the ordinary course of business, has granted loans to certain
of its directors, executive officers, and their associates. Such loans are
made on the same terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with unrelated persons
and do not involve more than normal risk of collectibility. The aggregate
dollar amount of these loans totaled approximately $1.6 million and $3.3
million at December 31, 2001 and 2000, respectively.
-21-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE D - ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses is summarized as follows for the
years ended December 31:
2001 2000 1999
(In thousands)
Balance at beginning of year $2,906 $1,863 $1,783
Provision for losses on loans 759 568 247
Charge-offs, net of immaterial recoveries (709) (166) (167)
Allowance resulting from acquisitions 1,300 641 -
----- ----- -----
Balance at end of year $4,256 $2,906 $1,863
===== ===== =====
Nonaccrual and nonperforming loans totaled approximately $7.9 million, $4.7
million and $4.0 million at December 31, 2001, 2000 and 1999, respectively.
Interest income that would have been recognized had such nonaccrual loans
performed pursuant to contractual terms totaled approximately $278,000,
$188,000 and $171,000 for the years ended December 31, 2001, 2000 and 1999,
respectively.
NOTE E - OFFICE PREMISES AND EQUIPMENT
Office premises and equipment at December 31 is summarized as follows:
2001 2000
(In thousands)
Land $ 2,194 $ 1,862
Buildings and improvements 12,764 11,190
Furniture, fixtures and equipment 9,641 9,054
------ ------
24,599 22,106
Less accumulated depreciation and amortization 9,750 8,261
------ ------
$14,849 $13,845
====== ======
-22-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE F - DEPOSITS
Deposit balances by type and weighted-average interest rate at December 31,
2001 and 2000, are summarized as follows:
2001 2000
Amount Rate Amount Rate
(Dollars in thousands)
NOW accounts $111,649 0.99% $ 90,830 1.60%
Money market demand accounts 64,539 3.59 45,047 5.39
Passbook and statement savings accounts 85,443 1.70 69,706 2.90
------- ---- ------- ----
Total withdrawable accounts 261,631 1.86 205,583 2.87
Certificates of deposit
Original maturities of:
Seven days to one year 51,472 3.49 64,693 6.49
One to two years 136,859 5.29 139,103 6.42
Two to eight years 163,226 5.95 117,146 6.31
Negotiated rate certificates 54,998 5.13 56,552 6.90
Individual retirement accounts 61,889 5.40 49,211 6.26
------- ---- ------- ----
Total certificate accounts 468,444 5.32 426,705 6.40
------- ---- ------- ----
Total deposits $730,075 4.08% $632,288 5.28%
======= ==== ======= ====
At December 31, 2001 and 2000, the Corporation had certificate of deposit
accounts with balances in excess of $100,000 totaling $123.3 million and
$109.6 million, respectively.
Interest expense on deposits is summarized as follows for the years ended
December 31:
2001 2000 1999
(In thousands)
Certificate of deposit accounts $26,706 $23,249 $14,906
NOW accounts and money
market demand accounts 3,059 3,265 2,077
Passbook and statement savings
accounts 1,559 2,355 2,136
------ ------ ------
$31,324 $28,869 $19,119
====== ====== ======
The contractual maturities of outstanding certificates of deposit are
summarized as follows at December 31:
2001 2000
Year ending December 31: (In thousands)
2001 $ - $256,201
2002 312,484 108,825
2003 86,127 37,189
2004 36,764 9,503
After 2004 33,069 14,987
------- -------
Total certificate of deposit accounts $468,444 $426,705
======= =======
-23-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE F - DEPOSITS (continued)
At December 31, 2001 and 2000, certain savings deposits were collateralized
by a pledge of investment securities, interest-bearing deposits in other
banks and letters of credit with the Federal Home Loan Bank totaling $78.8
million and $26.6 million, respectively.
NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK
Advances from the Federal Home Loan Bank, collateralized at December 31,
2001, by pledges of certain residential mortgage loans totaling $429.1
million and the Bank's investment in Federal Home Loan Bank stock, are
summarized as follows:
Maturing year
Interest rate ending December 31, 2001 2000
(Dollars in thousands)
5.20% - 7.02% 2001 $ - $ 61,210
5.33% - 7.31% 2002 24,693 26,513
5.50% - 7.38% 2003 9,650 21,610
5.24% - 8.20% 2004 5,854 8,695
3.25% - 7.60% Thereafter 218,653 195,443
------- -------
$258,850 $313,471
======= =======
Weighted-average interest rate 6.02% 6.20%
==== ====
NOTE H - FEDERAL INCOME TAXES
A reconciliation of the effective tax rate to the federal statutory rate is
summarized as follows:
2001 2000 1999
(In thousands)
Federal income taxes computed at the
expected statutory rate $4,253 $3,925 $3,065
Increase (decrease) in taxes resulting from:
Amortization of goodwill 51 51 51
Nontaxable dividend and interest income (6) (4) (6)
Increase in cash surrender value of life insurance - net (105) (89) (83)
Nondeductible expenses 29 27 25
Refunds of prior year taxes (309) - -
Other (22) (62) 24
----- ----- -----
Federal income tax provision per consolidated
financial statements $3,891 $3,848 $3,076
===== ===== =====
-24-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE H - FEDERAL INCOME TAXES (continued)
The components of the Corporation's net deferred tax liability at December
31 are as follows:
Taxes (payable) refundable on temporary
differences at statutory rate: 2001 2000
(In thousands)
Deferred tax liabilities:
FHLB stock dividends $(2,396) $(1,780)
Mortgage servicing rights (1,593) (1,766)
Percentage of earnings bad debt deduction (226) (340)
Book versus tax depreciation (525) (463)
Original issue discount (105) (46)
Other liabilities, net (49) (68)
Unrealized gains on securities designated as
available for sale (56) (2)
------ ------
Total deferred tax liabilities (4,950) (4,465)
Deferred tax assets:
General loan loss allowance 1,447 988
Deferred income 68 46
Deferred compensation 457 390
Purchase accounting adjustments 219 236
------ ------
Total deferred tax assets 2,191 1,660
------ ------
Net deferred tax liability $(2,759) $(2,805)
====== ======
For years prior to 1996, the Bank was allowed a special bad debt deduction
generally limited to 8% of otherwise taxable income, subject to certain
limitations based on aggregate loans and savings account balances at the end
of the year. If the amounts that qualified as deductions for federal income
taxes are later used for purposes other than for bad debt losses, including
distributions in liquidation, such distributions will be subject to federal
income taxes at the then current corporate income tax rate. The percentage
of earnings bad debt deduction had accumulated to approximately $12.8
million as of December 31, 2001. The amount of the unrecognized deferred tax
liability relating to the cumulative bad debt deduction was approximately
$4.1 million at December 31, 2001.
The Bank is required to recapture as taxable income approximately $1.9
million of its bad debt reserve, which represents post-1987 additions to the
reserve, and is unable to utilize the percentage of earnings method to
compute the reserve in the future. The Bank has provided deferred taxes for
this amount and is amortizing the recapture of the bad debt reserve into
taxable income over a six year period, which commenced in 1998.
-25-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE I - COMMITMENTS
The Bank is a party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers,
including commitments to extend credit. Such commitments involve, to varying
degrees, elements of credit and interest-rate risk in excess of the amount
recognized in the consolidated statement of financial condition. The
contract or notional amounts of the commitments reflect the extent of the
Bank's involvement in such financial instruments.
The Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit is
represented by the contractual notional amount of those instruments. The
Bank uses the same credit policies in making commitments and conditional
obligations as those utilized for on-balance-sheet instruments.
At December 31, 2001, the Bank had outstanding commitments to originate and
purchase fixed-rate loans of approximately $9.0 million and adjustable-rate
loans of approximately $3.9 million. Additionally, the Bank had unused lines
of credit under home equity and other loans of $42.0 million at December 31,
2001, and stand by letters of credit of $151,000. Management believes that
all loan commitments are able to be funded through cash flow from operations
and existing liquidity. Fees received in connection with these commitments
have not been recognized in earnings.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since many of the commitments may
expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Bank evaluates each
customer's creditworthiness on a case-by-case basis. The amount of
collateral obtained, if it is deemed necessary by the Bank upon extension of
credit, is based on management's credit evaluation of the counterparty.
Collateral on loans may vary but the preponderance of loans granted
generally include a mortgage interest in real estate as security.
The Corporation has entered into lease agreements for office premises and
equipment under operating leases which expire at various dates through 2010.
The following table summarizes minimum payments due under lease agreements
by year:
Year ending
December 31, (In thousands)
2002 $195
2003 195
2004 158
2005 146
2006 and thereafter 111
---
$805
===
Total rental expense under operating leases was approximately $257,000,
$260,000 and $278,000 for the years ended December 31, 2001, 2000 and 1999,
respectively.
-26-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE J - REGULATORY CAPITAL
Advantage Bank is subject to the regulatory capital requirements of the
Federal Deposit Insurance Corporation (the "FDIC"). Failure to meet minimum
capital requirements can initiate certain mandatory -- and possibly
additional discretionary -- actions by regulators that, if undertaken, could
have a direct material effect on the Bank's financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt
corrective action, the Bank must meet specific capital guidelines that
involve quantitative measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Bank's capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings,
and other factors.
The FDIC has adopted risk-based capital ratio guidelines to which Advantage
is subject. The guidelines establish a systematic analytical framework that
makes regulatory capital requirements more sensitive to differences in risk
profiles among banking organizations. Risk-based capital ratios are
determined by allocating assets and specified off-balance sheet commitments
to four risk-weighting categories, with higher levels of capital being
required for the categories perceived as representing greater risk.
These guidelines divide the capital into two tiers. The first tier ("Tier
1") includes common equity, certain non-cumulative perpetual preferred stock
(excluding auction rate issues) and minority interests in equity accounts of
consolidated subsidiaries, less goodwill and certain other intangible assets
(except mortgage servicing rights and purchased credit card relationships,
subject to certain limitations). Supplementary ("Tier II") capital includes,
among other items, cumulative perpetual and long-term limited-life preferred
stock, mandatory convertible securities, certain hybrid capital instruments,
term subordinated debt and the allowance for loan losses, subject to certain
limitations, less required deductions. Savings banks are required to
maintain a total risk-based capital ratio of 8%, of which 4% must be Tier 1
capital. The FDIC may, however, set higher capital requirements when
particular circumstances warrant. Savings banks experiencing or anticipating
significant growth are expected to maintain capital ratios, including
tangible capital positions, well above the minimum levels.
During 2001, management was notified from its regulator that Advantage was
categorized as "well-capitalized" under the regulatory framework for prompt
corrective action. To be categorized as "well-capitalized" Advantage must
maintain minimum capital ratios as set forth in the table that follows. The
regulatory capital table as of December 31, 2000, is presented on a combined
basis, to allow for comparability, giving effect to the charter
consolidation, which was consummated in June 2001. Each of Camco's
subsidiary banks met their individual regulatory capital requirements as of
December 31, 2000.
-27-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE J - REGULATORY CAPITAL (continued)
As of December 31, 2001, management believes that the Bank met all capital
adequacy requirements to which it was subject.
As of December 31, 2001
To be "well-
capitalized" under
For capital prompt corrective
Actual adequacy purposes action provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in thousands)
Total capital
(to risk-weighted assets) $88,017 12.5% =>$56,346 =>8.0% =>$70,433 =>10.0%
Tier I capital
(to risk-weighted assets) $83,761 11.9% =>$28,173 =>4.0% =>$42,260 => 6.0%
Tier I leverage $83,761 7.6% =>$43,868 =>4.0% =>$54,835 => 5.0%
As of December 31, 2000
To be "well-
capitalized" under
For capital prompt corrective
Actual adequacy purposes action provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in thousands)
Total capital
(to risk-weighted assets) $73,785 12.0% =>$49,159 =>8.0% =>$61,449 =>10.0%
Tier I capital
(to risk-weighted assets) $70,879 11.5% =>$24,580 =>4.0% =>$36,869 => 6.0%
Tier I leverage $70,879 6.9% =>$41,323 =>4.0% =>$51,653 => 5.0%
The Corporation's management believes that, under the current regulatory
capital regulations, the Bank will continue to meet its minimum capital
requirements in the foreseeable future. However, events beyond the control
of the Corporation, such as increased interest rates or a downturn in the
economy in the Bank's market areas, could adversely affect future earnings
and, consequently, the ability to meet future minimum regulatory capital
requirements.
-28-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE K - BENEFIT PLANS
The Corporation has a non-contributory retirement plan which provides
benefits to certain key officers. The Corporation's obligations under the
plan have been provided for via the purchase of single premium key man life
insurance of which the Corporation is the beneficiary. The Corporation
recorded expense related to the plan totaling approximately $54,000, $51,000
and $45,000 during the years ended December 31, 2001, 2000 and 1999,
respectively.
The Corporation also has a 401(k) Salary Savings Plan covering substantially
all employees. Contributions by the employees are voluntary and are subject
to matching contributions by the employer under a fixed percentage, which
may be increased at the discretion of the Board of Directors. Total expense
under this plan was $385,000, $334,000 and $181,000 for the years ended
December 31, 2001, 2000 and 1999, respectively.
NOTE L - STOCK OPTION PLANS
Stockholders of the Corporation have approved three stock option plans.
Under the 1972 Plan, 254,230 common shares were reserved for issuance to
officers, directors, and key employees of the Corporation and its
subsidiaries. The 1982 Plan reserved 115,824 common shares for issuance to
employees of the Corporation and its subsidiaries. All of the stock options
under the 1972 and 1982 Plans have been granted and are subject to exercise
at the discretion of the grantees through 2002. Under the 1995 Plan, 161,488
shares were reserved for issuance. Additionally, in connection with the
acquisition of First Savings, the stock options of First Savings were
converted into options to purchase 174,421 shares of the Corporation's stock
at an exercise price of $7.38 per share. In connection with the acquisition
of WHFC, the stock options of WHFC were converted into options to purchase
309,272 shares of the Corporation's stock at a weighted-average exercise
price of $11.89 per share which expire in 2008.
The Corporation accounts for its stock option plans in accordance with SFAS
No. 123, "Accounting for Stock-Based Compensation," which contains a
fair-value based method for valuing stock-based compensation that entities
may use, which measures compensation cost at the grant date based on the
fair value of the award. Compensation is then recognized over the service
period, which is usually the vesting period. Alternatively, SFAS No. 123
permits entities to continue to account for stock options and similar equity
instruments under Accounting Principles Board ("APB") Opinion No. 25,
"Accounting for Stock Issued to Employees." Entities that continue to
account for stock options using APB Opinion No. 25 are required to make pro
forma disclosures of net earnings and earnings per share, as if the
fair-value based method of accounting defined in SFAS No. 123 had been
applied.
The Corporation utilizes APB Opinion No. 25 and related Interpretations in
accounting for its stock option plans. Accordingly, no compensation cost has
been recognized for the plans. Had compensation cost for the Corporation's
stock option plans been determined based on the fair value at the grant
dates for awards under the plans consistent with the accounting method
utilized in SFAS No. 123, the Corporation's net earnings and earnings per
share would have been reported as the pro forma amounts indicated below:
-29-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE L - STOCK OPTION PLANS (continued)
2001 2000 1999
(In thousands, except per share data)
Net earnings As reported $8,544 $7,652 $5,940
===== ===== =====
Pro-forma $8,540 $7,640 $5,940
===== ===== =====
Earnings per share
Basic As reported $1.20 $1.11 $1.04
==== ==== ====
Pro-forma $1.20 $1.10 $1.04
==== ==== ====
Diluted As reported $1.19 $1.10 $1.02
==== ==== ====
Pro-forma $1.19 $1.10 $1.02
==== ==== ====
The fair value of each option grant is estimated on the date of grant using
the modified Black-Scholes options-pricing model with the following
assumptions used for grants during 2001 and 2000: dividend yield of 4.07%
and 2.51%, respectively; expected volatility of 10.0% for each year; a
risk-free interest rate of 3.00% and 5.00%, respectively, and an expected
life of ten years for all grants.
A summary of the status of the Corporation's stock option plans as of
December 31, 2001, 2000 and 1999, and changes during the years ending on
those dates is presented below:
2001 2000 1999
Weighted- Weighted- Weighted-
average average average
exercise exercise exercise
Shares price Shares price Shares price
Outstanding at beginning of year 688,655 $10.53 369,523 $ 9.43 369,523 $9.43
Granted 8,500 11.93 10,700 9.07 - -
WHFC options - - 309,272 11.89 - -
Exercised (115,656) (10.91) (840) 9.79 - -
Forfeited (78,494) 12.50 - - - -
------- ----- ------- ----- ------- ----
Outstanding at end of year 503,005 $10.16 688,655 $10.53 369,523 $9.43
======= ===== ======= ===== ======= ====
Options exercisable at year-end 503,005 $10.16 688,655 $10.53 369,523 $9.43
======= ===== ======= ===== ======= ====
Weighted-average fair value of
options granted during the year $ .66 $ 1.75 N/A
===== ===== ===
The following information applies to options outstanding at December 31,
2001:
Number outstanding 320,791
Range of exercise prices $7.40 - $9.79
Number outstanding 182,214
Range of exercise prices $11.36 - $16.59
Weighted-average exercise price $10.16
Weighted-average remaining contractual life 5.1 years
-30-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE M - CAMCO FINANCIAL CORPORATION CONDENSED FINANCIAL INFORMATION
The following condensed financial statements summarize the financial
position of the Corporation as of December 31, 2001 and 2000, and the
results of its operations and its cash flows for each of the years ended
December 31, 2001, 2000 and 1999:
Camco Financial Corporation
STATEMENTS OF FINANCIAL CONDITION
December 31,
(In thousands)
2001 2000
ASSETS
Cash in Bank subsidiary $ 271 $ 562
Interest-bearing deposits in other financial institutions 7,584 1,375
Investment securities designated as available for sale 305 309
Investment in Bank subsidiary 87,251 74,477
Investment in title agency subsidiary 1,100 694
Office premises and equipment - net 1,786 1,777
Cash surrender value of life insurance 1,054 1,005
Prepaid expenses and other assets 1,946 236
Deferred federal income taxes - 35
------- ------
Total assets $101,297 $80,470
======= ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and other accrued liabilities $ 4,812 $ 511
Dividends payable 962 832
Accrued federal income taxes 337 377
Deferred federal income taxes 15 -
------- ------
Total liabilities 6,126 1,720
Stockholders' equity
Common stock 8,137 7,058
Additional paid-in capital 51,722 41,551
Retained earnings - substantially restricted 36,621 31,553
Unrealized gains on securities designated as available for sale,
net of related tax effects 107 4
Treasury stock, at cost (1,416) (1,416)
------- ------
Total stockholders' equity 95,171 78,750
------- ------
Total liabilities and stockholders' equity $101,297 $80,470
======= ======
-31-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE M - CAMCO FINANCIAL CORPORATION CONDENSED FINANCIAL INFORMATION (continued)
Camco Financial Corporation
STATEMENTS OF EARNINGS
Year ended December 31,
(In thousands)
2001 2000 1999
Income
Dividends from the Bank $9,615 $6,950 $4,350
Dividends from title agency subsidiary - - 300
Interest and other income 173 159 121
(Excess distribution from) undistributed net earnings
of the Bank (306) 1,836 2,320
(Excess distribution from) undistributed earnings
of the title agency subsidiary 406 113 (102)
----- ----- -----
Total income 9,888 9,058 6,989
General, administrative and other expense 2,237 2,092 1,520
----- ----- -----
Earnings before federal income tax credits 7,651 6,966 5,469
Federal income tax credits (893) (686) (471)
----- ----- -----
Net earnings $8,544 $7,652 $5,940
===== ===== =====
-32-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE M - CAMCO FINANCIAL CORPORATION CONDENSED FINANCIAL INFORMATION (continued)
Camco Financial Corporation
STATEMENTS OF CASH FLOWS
Year ended December 31,
(In thousands)
2001 2000 1999
Cash flows from operating activities:
Net earnings for the year $ 8,544 $7,652 $5,940
Adjustments to reconcile net earnings to net cash
flows provided by (used in) operating activities:
Excess distribution from (undistributed net earnings of)
Bank subsidiary 306 (1,836) (2,320)
Excess distribution from (undistributed net earnings of)
title agency subsidiary (406) (113) 102
Depreciation and amortization 125 87 11
Increase (decrease) in cash due to changes in:
Prepaid expenses and other assets (1,710) 421 (388)
Accounts payable and other liabilities 4,431 351 (3)
Accrued federal income taxes (40) 187 421
Deferred federal income taxes 51 (15) (165)
Other - net 14 (22) 8
------ ----- -----
Net cash provided by operating activities 11,315 6,712 3,606
Cash flows from investing activities:
Purchase of investment securities - (17) (22)
Purchase of cash surrender value of life insurance - - (135)
Net increase in cash surrender value of life insurance (49) (48) (36)
Purchase of office premises and equipment (381) (374) (1,297)
Proceeds from sale of office equipment 247 - -
(Increase) decrease in interest-bearing deposits in other
financial institutions (6,209) (758) 351
Purchase of Westwood Homestead Financial Corporation - net - (1,879) -
Purchase of Columbia Financial of Kentucky, Inc. - net (3,000) - -
------ ----- -----
Net cash used in investing activities (9,392) (3,076) (1,139)
Cash flows from financing activities:
Stock options exercised 1,262 8 -
Dividends paid (3,476) (3,327) (2,550)
Purchase of treasury shares - - (457)
------ ----- -----
Net cash used in financing activities (2,214) (3,319) (3,007)
------ ----- -----
Net increase (decrease) in cash and cash equivalents (291) 317 (540)
Cash and cash equivalents at beginning of year 562 245 785
------ ----- -----
Cash and cash equivalents at end of year $ 271 $ 562 $ 245
====== ===== =====
-33-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE N - RESTRUCTURING CHARGE
In June 2001, Camco recorded a restructuring charge totaling $1.1 million
related to the consolidation of its banking subsidiaries' charters. Prior to
December 31, 2001, management reversed approximately $146,000 of the
restructuring liability through operations. Approximately $650,000 of the
net charge was recorded to provide for severance and outplacement services
to approximately twenty-two accounting and loan servicing employees of the
former banking subsidiaries. Additionally, such amount includes the costs
associated with disbanding the local boards of directors. The operational
consolidation is expected to be completed in August 2002. As of December 31,
2001, three of the employees had been terminated with payments totaling
$202,000. The boards of directors have received payments totaling $158,000,
with $67,000 remaining to be paid through December 2003. The remainder of
the charge is for professional services in connection with the charter
consolidation.
NOTE O - BUSINESS COMBINATION
During 2001, the Corporation agreed to acquire Columbia Financial utilizing
the purchase method of accounting. Columbia Financial was merged into Camco
in November 2001 and its banking subsidiary, Columbia Federal, continued
operations as a division of Advantage. Camco paid $18.1 million in cash and
issued 963,962 of its common shares, which were valued at approximately $9.1
million, in connection with the acquisition.
The following table summarizes the estimated fair values of the assets
acquired and liabilities assumed at the date of acquisition.
(In thousands)
Cash and cash equivalents $ 14,183
Investment securities 11,185
Mortgage-backed securities 12,189
Loans receivable 69,237
Prepaid expenses and other assets 3,628
-------
Total assets 110,422
Deposits (81,071)
Other liabilities (2,180)
-------
Net assets acquired $ 27,171
=======
-34-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE O - BUSINESS COMBINATION (continued)
Presented below are Camco's pro-forma condensed consolidated statements of
earnings and earnings per share which have been prepared as if the
acquisition had been consummated as of the beginning of each of the years
ended December 31, 2001 and 2000.
2001 2000
(In thousands)
(unaudited)
Total interest income $80,906 $83,812
Total interest expense 51,673 53,439
------ ------
Net interest income 29,233 30,373
Provision for losses on loans 792 1,568
Other income 7,237 5,657
General, administrative and other expense 22,808 22,947
------ ------
Earnings before income taxes 12,870 11,515
Federal income taxes 4,040 3,853
------ ------
Net earnings $ 8,830 $ 7,662
====== ======
Basic earnings per share $1.26 $1.11
==== ====
Diluted earnings per share $1.25 $1.10
==== ====
-35-
Camco Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 2001, 2000 and 1999
NOTE P - QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
The following table summarizes the Corporation's quarterly results for the
years ended December 31, 2001 and 2000.
Three Months Ended
March 31, June 30, September 30, December 31,
2001: (In thousands, except per share data)
Total interest income $19,440 $19,030 $18,083 $17,819
Total interest expense 12,748 12,451 11,821 11,413
------ ------ ------ ------
Net interest income 6,692 6,579 6,262 6,406
Provision for losses on loans 156 150 152 301
Other income 1,407 1,496 1,920 2,330
General, administrative and other expense 4,717 5,798 4,556 4,827
------ ------ ------ ------
Earnings before income taxes 3,226 2,127 3,474 3,608
Federal income taxes 1,090 593 1,122 1,086
------ ------ ------ ------
Net earnings $ 2,136 $ 1,534 $ 2,352 $ 2,522
====== ====== ====== ======
Earnings per share:
Basic $.31 $.22 $.34 $.33
=== === === ===
Diluted $.30 $.22 $.34 $.33
=== === === ===
Three Months Ended
March 31, June 30, September 30, December 31,
2000: (In thousands, except per share data)
Total interest income $17,658 $18,966 $19,545 $19,502
Total interest expense 11,094 12,230 13,204 13,081
------ ------ ------ ------
Net interest income 6,564 6,736 6,341 6,421
Provision for losses on loans 137 156 138 137
Other income 1,120 1,301 1,773 1,342
General, administrative and other expense 4,931 5,093 4,768 4,738
------ ------ ------ ------
Earnings before income taxes 2,616 2,788 3,208 2,888
Federal income taxes 882 963 1,061 942
------ ------ ------ ------
Net earnings $ 1,734 $ 1,825 $ 2,147 $ 1,946
====== ====== ====== ======
Earnings per share:
Basic $.25 $.26 $.31 $.29
=== === === ===
Diluted $.25 $.26 $.31 $.28
=== === === ===
-36-
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this Amendment on Form
10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized,
on the 4th day of April, 2002.
Camco Financial Corporation
By /s/ Richard C. Baylor
-----------------------------------------------
Richard C. Baylor,
President, Chief Executive Officer and a Director
-37-