##### Table of Contents



FORM 10-Q
 SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2009
 OR
 o
    
    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
 
  Delaware
    
    51-0110823(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer Identification Number)
  
   þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o þ
    Page 1 of 29




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##### 



PagePART I   FINANCIAL INFORMATIONConsolidated Statements of Financial Condition
    
    
    3Consolidated Statements of Earnings
    
    
    4Consolidated Statements of Comprehensive Income (Loss)
    
    
    5Consolidated Statements of Cash Flows
    
    
    6Notes to Consolidated Financial Statements
    
    
    8Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    
    15Quantitative and Qualitative Disclosures about
Market Risk
    
    
    28Controls and Procedures
    
    
    28PART II   OTHER INFORMATION
    
    
    29SIGNATURES
    
    
    32EX-10EX-31.1EX-31.2EX-32.1EX-32.2
  2




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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
 June 30,
    
    
    December 31,2009
    
    
    2008(unaudited)ASSETSCash and due from banks
    
    $
    20,554
    
    
    $
    17,013Interest-bearing deposits in other financial institutions
    
    
    61,572
    
    
    
    35,272Cash and cash equivalents
    
    
    82,126
    
    
    
    52,285Securities available for sale, at fair value
    
    
    75,938
    
    
    
    85,352Securities held to maturity, at cost, approximate fair value of $2,265 and
$13,530 as of June 30, 2009 and December 31, 2008, respectively
    
    
    2,224
    
    
    
    13,406Loans held for sale  at lower of cost or fair value
    
    
    5,370
    
    
    
    2,185Loans receivable  net
    
    
    696,477
    
    
    
    756,641Office premises and equipment  net
    
    
    11,428
    
    
    
    11,868Real estate acquired through foreclosure
    
    
    5,963
    
    
    
    5,841Federal Home Loan Bank stock  at cost
    
    
    29,888
    
    
    
    29,888Accrued interest receivable
    
    
    3,990
    
    
    
    4,118Mortgage servicing rights  at lower of cost or fair value
    
    
    4,000
    
    
    
    3,731Prepaid expenses and other assets
    
    
    6,311
    
    
    
    10,785Cash surrender value of life insurance
    
    
    18,483
    
    
    
    22,532Prepaid and refundable federal income taxes
    
    
    953
    
    
    
    1,814Total assets
    
    $
    943,151
    
    
    $
    1,000,446LIABILITIES AND STOCKHOLDERS EQUITYDeposits
    
    $
    711,603
    
    
    $
    723,956Advances from the Federal Home Loan Bank and other borrowings
    
    
    146,436
    
    
    
    183,833Advances by borrowers for taxes and insurance
    
    
    219
    
    
    
    2,458Accounts payable and accrued liabilities
    
    
    11,249
    
    
    
    16,942Deferred federal income taxes  net
    
    
    1,714
    
    
    
    1,557Total liabilities
    
    
    871,221
    
    
    
    928,746Commitments
    
    
    
    
    
    
    Stockholders equity:Preferred stock  $1 par value; authorized 100,000 shares; no shares outstanding
    
    
    
    
    
    
    Common stock  $1 par value; authorized 14,900,000 shares; 8,884,509 shares
issued at June 30, 2009 and 8,834,509 at December 31, 2008
    
    
    8,885
    
    
    
    8,835Additional paid-in capital
    
    
    60,124
    
    
    
    59,896Retained earnings
    
    
    26,148
    
    
    
    26,055Accumulated other comprehensive income net of related tax effects
    
    
    1,012
    
    
    
    1,028Unearned compensation; 50,000 shares
    
    
    (125
    )
    
    
    Treasury stock  1,678,913 shares at June 30, 2009 and December 31, 2008, at cost
    
    
    (24,114
    )
    
    
    (24,114
    )Total stockholders equity
    
    
    71,930
    
    
    
    71,700Total liabilities and stockholders equity
    
    $
    943,151
    
    
    $
    1,000,446
 3




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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF EARNINGS
  Six months ended
    
    
    Three months endedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Interest incomeLoans
    
    $
    20,613
    
    
    $
    26,191
    
    
    $
    10,046
    
    
    $
    12,667Investment securities
    
    
    1,819
    
    
    
    2,145
    
    
    
    844
    
    
    
    1,069Other interest-earning accounts and dividends
    
    
    689
    
    
    
    1,063
    
    
    
    344
    
    
    
    579Total interest and dividend income
    
    
    23,121
    
    
    
    29,399
    
    
    
    11,234
    
    
    
    14,315Interest expenseDeposits
    
    
    8,420
    
    
    
    12,121
    
    
    
    3,948
    
    
    
    5,720Borrowings
    
    
    2,971
    
    
    
    4,332
    
    
    
    1,402
    
    
    
    2,129Total interest expense
    
    
    11,391
    
    
    
    16,453
    
    
    
    5,350
    
    
    
    7,849Net interest income
    
    
    11,730
    
    
    
    12,946
    
    
    
    5,884
    
    
    
    6,466Provision for losses on loans
    
    
    1,438
    
    
    
    3,172
    
    
    
    790
    
    
    
    850Net interest income after provision for losses on loans
    
    
    10,292
    
    
    
    9,774
    
    
    
    5,094
    
    
    
    5,616Other incomeRent and other
    
    
    982
    
    
    
    679
    
    
    
    521
    
    
    
    327Loan servicing fees
    
    
    632
    
    
    
    652
    
    
    
    316
    
    
    
    321Service charges and other fees on deposits
    
    
    1,071
    
    
    
    1,179
    
    
    
    570
    
    
    
    598Gain on sale of loans
    
    
    773
    
    
    
    175
    
    
    
    404
    
    
    
    57Mortgage servicing rights  Net
    
    
    269
    
    
    
    (48
    )
    
    
    209
    
    
    
    261Income on cash surrender value life
    
    
    494
    
    
    
    492
    
    
    
    238
    
    
    
    249Gain on sale of mortgage-backed securities and fixed assets
    
    
    4
    
    
    
    3
    
    
    
    4
    
    
    
    0Total other income
    
    
    4,225
    
    
    
    3,132
    
    
    
    2,262
    
    
    
    1,813General, administrative and other expenseEmployee compensation and benefits
    
    
    6,540
    
    
    
    6,840
    
    
    
    3,064
    
    
    
    3,271Occupancy and equipment
    
    
    1,543
    
    
    
    1,719
    
    
    
    761
    
    
    
    826Federal deposit insurance premium
    
    
    1,061
    
    
    
    226
    
    
    
    779
    
    
    
    97Data processing
    
    
    614
    
    
    
    527
    
    
    
    307
    
    
    
    299Advertising
    
    
    297
    
    
    
    490
    
    
    
    125
    
    
    
    294Franchise taxes
    
    
    582
    
    
    
    620
    
    
    
    314
    
    
    
    273Postage, supplies and office expenses
    
    
    687
    
    
    
    681
    
    
    
    327
    
    
    
    311Travel, training and insurance
    
    
    138
    
    
    
    227
    
    
    
    73
    
    
    
    107Professional services
    
    
    858
    
    
    
    957
    
    
    
    414
    
    
    
    549Real estate owned and other expenses
    
    
    829
    
    
    
    587
    
    
    
    555
    
    
    
    252Loan and deposit expenses
    
    
    748
    
    
    
    1,151
    
    
    
    174
    
    
    
    607Total general, administrative and other expenses
    
    
    13,897
    
    
    
    14,025
    
    
    
    6,893
    
    
    
    6,886Earnings before federal income tax expense (benefit)
    
    
    620
    
    
    
    (1,119
    )
    
    
    463
    
    
    
    543Total federal income tax expense (benefit)
    
    
    383
    
    
    
    (489
    )
    
    
    461
    
    
    
    170NET EARNINGS (LOSS)
    
    $
    237
    
    
    $
    (630
    )
    
    $
    2
    
    
    $
    373EARNINGS (LOSS) PER SHAREBasic
    
    $
    .03
    
    
    $
    (.09
    )
    
    $
    .00
    
    
    $
    .05Diluted
    
    $
    .03
    
    
    $
    (.09
    )
    
    $
    .00
    
    
    $
    .05Dividends declared per share
    
    
    .02
    
    
    
    .15
    
    
    
    .01
    
    
    
    
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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
  Six months ended
    
    
    Three months endedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Net earnings (loss)
    
    $
    237
    
    
    $
    (630
    )
    
    $
    2
    
    
    $
    373Other comprehensive income, net of tax:Unrealized holding gains (losses) during the period,
net of tax effects $(8) and$(140), $(122) and $(490)
for the respective periods
    
    
    (16
    )
    
    
    (273
    )
    
    
    (237
    )
    
    
    (951
    )Reclassification adjustment for realized gains included
in net in earnings, net of taxes of $0 and $1 for the
respective six
month periods and $0 for each of the three month
periods ended June 30, 2009 and 2008, respectively
    
    
    
    
    
    
    2
    
    
    
    
    
    
    
    Comprehensive income (loss)
    
    $
    221
    
    
    $
    (901
    )
    
    $
    (235
    )
    
    $
    (578
    )
 5




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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 2009
    
    
    2008Cash flows from operating activities:Net earnings (loss) for the period
    
    $
    237
    
    
    $
    (630
    )Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:Amortization of deferred loan origination fees
    
    
    242
    
    
    
    148Amortization of premiums and discounts on investment and
mortgage-backed securities  net
    
    
    (30
    )
    
    
    68Amortization of mortgage servicing rights  net
    
    
    459
    
    
    
    340Depreciation and amortization
    
    
    546
    
    
    
    677Provision for losses on loans
    
    
    1,438
    
    
    
    3,172Stock option expense (FAS 123R)
    
    
    228
    
    
    
    52Deferred federal income taxes
    
    
    166
    
    
    
    (383
    )Restricted stock / unearned compensation
    
    
    (75
    )
    
    
    Loss of sale of real estate acquired through foreclosure
    
    
    15
    
    
    
    168(Gain) loss on sale of investments and fixed assets
    
    
    (4
    )
    
    
    (3
    )Federal Home Loan Bank stock dividends
    
    
    
    
    
    
    (768
    )Gain on sale of loans
    
    
    (773
    )
    
    
    (175
    )Loans originated for sale in the secondary market
    
    
    (71,732
    )
    
    
    (22,023
    )Proceeds from sale of loans in the secondary market
    
    
    69,320
    
    
    
    24,980Net increase in cash surrender value of life insurance
    
    
    (411
    )
    
    
    (406
    )Increase (decrease) in cash due to changes in:Accrued interest receivable
    
    
    412
    
    
    
    827Prepaid expenses and other assets
    
    
    (829
    )
    
    
    (855
    )Accrued interest and other liabilities
    
    
    (943
    )
    
    
    (825
    )Federal income taxes:Current
    
    
    861
    
    
    
    (547
    )Net cash provided by (used in) operating activities
    
    
    (873
    )
    
    
    3,817Cash flows provided by (used in) investing activities:Principal repayments, maturities on securities
    
    
    44,620
    
    
    
    35,043Purchase of investment securities designated as available for sale
    
    
    (24,019
    )
    
    
    (43,200
    )Purchase of investment securities designated as held to maturity
    
    
    
    
    
    
    (200
    )Loan principal repayments
    
    
    111,338
    
    
    
    129,321Loan disbursements and purchased loans
    
    
    (55,964
    )
    
    
    (114,682
    )Proceeds from sale of securities designated as available for sale
    
    
    
    
    
    
    4,254Proceeds from sale of office premises and equipment
    
    
    4
    
    
    
    2Proceeds from surrender of bank owned life insurance
    
    
    4,460
    
    
    
    Additions to office premises and equipment
    
    
    (106
    )
    
    
    (196
    )Proceeds from sale of real estate acquired through foreclosure
    
    
    2,514
    
    
    
    2,480Net cash provided by investing activities
    
    
    82,847
    
    
    
    12,822Net cash provided by operating and investing activities
(balance carried forward)
    
    
    81,974
    
    
    
    16,639
 6




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##### Table of Contents



Camco Financial Corporation
 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 
 2009
    
    
    2008Net cash provided by operating and investing activities
(balance brought forward)
    
    $
    81,974
    
    
    $
    16,639Cash flows provided by (used in) financing activities:Net increase (decrease) in deposits
    
    
    (12,353
    )
    
    
    38,875Proceeds from Federal Home Loan Bank advances
    
    
    22,000
    
    
    
    107,243Repayment of Federal Home Loan Bank advances and other borrowings
    
    
    (59,397
    )
    
    
    (134,866
    )Dividends paid on common stock
    
    
    (144
    )
    
    
    (2,147
    )Decrease in advances by borrowers for taxes and insurance
    
    
    (2,239
    )
    
    
    (2,635
    )Net cash provided by (used in) financing activities
    
    
    (52,133
    )
    
    
    6,470Increase (decrease) in cash and cash equivalents
    
    
    29,841
    
    
    
    23,109Cash and cash equivalents at beginning of period
    
    
    52,285
    
    
    
    23,004Cash and cash equivalents at end of period
    
    $
    82,126
    
    
    $
    $46,113Supplemental disclosure of cash flow information:Cash paid during the period for interest on deposits and borrowings
    
    $
    11,509
    
    
    $
    16,271Supplemental disclosure of noncash investing activities:Recognition of mortgage-servicing rights in accordance with
SFAS No. 140
    
    $
    728
    
    
    $
    292Transfer of loans to real estate acquired through foreclosure
    
    $
    3,289
    
    
    $
    3,568
 7




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##### Table of Contents



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 (US GAAP). 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, 2008. 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 six
month period ended June 30, 2009, are not necessarily indicative of the results which may be
expected for the entire year.
 2.
    
    Principles of Consolidation
 The accompanying consolidated financial statements include the accounts of Camco
and its two wholly-owned subsidiaries: Advantage Bank (Advantage or the Bank) and
Camco Title Agency, Inc.
 3.
    
    Critical Accounting Policies
 Material estimates that are particularly susceptible to significant change in the near term
relate to the determination of the allowance for loan losses and the valuation of mortgage
servicing rights. Actual results could differ from those estimates.Allowance for Loan Losses
 The procedures for assessing the adequacy of the allowance for loan losses reflect our
evaluation of credit risk after careful consideration and interpretation of relevant
information available to us. In developing this assessment, we must rely on estimates and
exercise judgment regarding matters where the ultimate outcome is unknown such as economic
factors, developments affecting companies in specific industries and issues with respect to
single borrowers. Depending on changes in circumstances, future assessments of credit risk
may yield materially different results, which may require an increase or a decrease in the
allowance for loan losses.
 The allowance is regularly reviewed by management to determine whether the amount is
considered adequate to absorb probable, incurred losses inherent in the loan portfolio at
the balance sheet dates presented. Our evaluation of the adequacy of the allowance for loan
losses is an estimate based on managements current judgment about the credit quality of the
loan portfolio.. This evaluation includes specific loss estimates on certain individually
reviewed loans, statistical loss estimates for loan pools that are based on historical loss
experience, and general loss estimates that are based upon the size, quality, and
concentration characteristics of the various loan portfolios, adverse situations that may
affect a borrowers ability to repay, and current economic and industry conditions. Also
considered as part of that judgment is a review of the Banks trends in delinquencies and
loan losses, as well as trends in delinquencies and losses for the region and nationally,
and economic factors. While we strive to reflect all known risk factors in our evaluations,
actual results may differ significantly from our estimates
 8




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Camco Financial Corporation
 
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Mortgage Servicing Rights
 To determine the fair value of our mortgage servicing rights (MSRs) each reporting
quarter, we provide information to a third party valuation firm who assists us with
determining the possible impairment of MSRs, as described below.
 MSRs are recognized as separate assets when loans are sold with servicing retained. A
pooling methodology to the servicing valuation, in which loans with similar characteristics
are pooled together, is applied for valuation purposes. Once pooled, each grouping of
loans is evaluated on a discounted earnings basis to determine the present value of future
earnings that the Bank could expect to realize from the portfolio. Earnings are projected
from a variety of sources including loan service fees, interest earned on float, net
interest earned on escrow balances, miscellaneous income and costs to service the loans.
The present value of future earnings is the estimated fair value for the pool, calculated
using consensus assumptions that a third party purchaser would utilize in evaluating a
potential acquisition of the servicing.
 Events that may significantly affect the estimates used are changes in interest rates and
the related impact on mortgage loan prepayment speeds and the payment performance of the
underlying loans. The interest rate for float, which we estimate, takes into consideration
the investment portfolio average yield as well as current short duration investment yields.
We believe this methodology provides a reasonable estimate. Mortgage loan prepayment speeds
are calculated by the third party provider utilizing the Economic Outlook as published by
the Office of Chief Economist of Freddie Mac in estimating prepayment speeds and provides a
specific scenario with each evaluation. Based on the assumptions discussed, pre-tax
projections are prepared for each pool of loans serviced. These earnings figures
approximate the cash flow that could be received from the servicing portfolio. Valuation
results are presented quarterly to management. At that time, we review the information and
MSRs are marked to the lower of amortized cost or fair value for the current quarter.
 4.
    
    Earnings Per Share
 Basic earnings per common share are computed based upon the weighted-average number of
common shares outstanding during the period. Diluted earnings per common share include the
dilutive effect of additional potential common shares issuable under the Corporations stock
option plans. The computations are as follows:
 For the six months ended
    
    
    For the three months endedJune 30,
    
    
    June 30,2009
    
    
    2008
    
    
    2009
    
    
    2008In thousands, except per share dataBASIC:Net Earnings (loss)
    
    $
    237
    
    
    $
    (630
    )
    
    $
    2
    
    
    $
    373Weighted average common shares outstanding
    
    
    7,199
    
    
    
    7,156
    
    
    
    7,206
    
    
    
    7,156Basic earnings (loss) per share
    
    $
    .03
    
    
    $
    (0.09
    )
    
    $
    .00
    
    
    $
    .05DILUTED:Net Earnings (loss)
    
    $
    237
    
    
    $
    (630
    )
    
    $
    2
    
    
    $
    373Weighted average common shares outstanding
    
    
    7,199
    
    
    
    7,156
    
    
    
    7,206
    
    
    
    7,156Dilutive effect of stock options
    
    
    1
    
    
    
    0
    
    
    
    6
    
    
    
    8Total common shares and dilutive potential
common shares
    
    
    7,200
    
    
    
    7,156
    
    
    
    7,212
    
    
    
    7,164Earnings (Loss) per share  Diluted
    
    $
    .03
    
    
    $
    (0.09
    )
    
    $
    .00
    
    
    $
    .05
 9




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  5.
    
    Stock Option Plans
 Effective January 1, 2006, the Corporation adopted SFAS No. 123R, Accounting for
Stock-Based Compensation, which contains a fair-value based method for valuing stock-based
compensation is recognized based on the grant date at the fair value of the award.
 The fair value of each option grant is estimated on the date of grant using the modified
Black-Scholes options-pricing model. The following table details the fair value and
assumptions used to value stock options as of the grant date that were granted in 2009 and
2008:
 2009
    
    
    2008Fair value, calculated
    
    $
    1.43
    
    
    $
    0.58Exercise Price
    
    $
    2.46
    
    
    $
    8.92Risk-free interest rate
    
    
    2.66
    %
    
    
    3.52
    %Expected stock price volatility
    
    
    61.00
    %
    
    
    15.75
    %Expected dividend yield
    
    
    1.63
    %
    
    
    6.00
    %Expected Life
    
    
    10 years
    
    
    10 years
 A summary of the status of the Corporations stock option plans as of June 30, 2009 and
December 31, 2008, and changes during the periods ending on those dates is presented below:
 Six months ended
    
    
    Year endedJune 30,
    
    
    December 31,2009
    
    
    2008Weighted-
    
    
    
    
    
    
    Weighted-average
    
    
    
    
    
    
    averageexercise
    
    
    
    
    
    
    exerciseShares
    
    
    price
    
    
    Shares
    
    
    priceOutstanding at beginning of
period
    
    
    260,703
    
    
    $
    14.11
    
    
    
    318,238
    
    
    $
    15.10Granted
    
    
    80,000
    
    
    
    2.46
    
    
    
    47,167
    
    
    
    9.07Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Expired
    
    
    
    
    
    
    
    
    
    
    (39,429
    )
    
    
    14.88Forfeited
    
    
    (17,065
    )
    
    
    10.37
    
    
    
    (65,273
    )
    
    
    14.82Outstanding at end of period
    
    
    323,638
    
    
    $
    11.43
    
    
    
    260,703
    
    
    $
    14.11Options exercisable at end of
period
    
    
    220,990
    
    
    $
    14.51
    
    
    
    195,717
    
    
    $
    15.01Weighted-average fair value of
options granted during the period
    
    
    
    
    
    $
    1.43
    
    
    
    
    
    
    $
    0.74
 10




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
   Options outstanding
    
    Options ExercisableWeighted-Average
    
    Weighted-
    
    
    
    
    
    Weighted-Remaining
    
    Average
    
    
    
    
    
    AverageRange of Exercise
    
    Number
    
    Contractual
    
    Exercise
    
    Number
    
    ExercisePrices
    
    Outstanding
    
    Life (Years)
    
    Price
    
    Exercisable
    
    Price$
    1.89 - $  2.50
    
    
    
    80,000
    
    
    
    9.6
    
    
    
    2.46
    
    
    
    80,000
    
    
    
    2.46$
    8.92 - $  9.75
    
    
    
    30,927
    
    
    
    6.6
    
    
    
    8.99
    
    
    
    16,746
    
    
    
    9.04$
    11.36 - $14.16
    
    
    
    93,035
    
    
    
    4.3
    
    
    
    13.52
    
    
    
    79,568
    
    
    
    13.58$
    14.55 - $17.17
    
    
    
    119,676
    
    
    
    2.6
    
    
    
    16.42
    
    
    
    119,676
    
    
    
    16.42323,638
    
    
    
    6.4
    
    
    
    11.43
    
    
    
    295,990
    
    
    
    14.51
 6.
    
    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.
 Investment Securities : Fair values for investment securities are based on
quoted market prices and dealer quotes.
 Loans Held for Sale: Fair value for loans held for sale is the contracted
sale price of loans committed for delivery, which is determined on the date of sale
commitment.
 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.
 Accrued Interest Receivable and Payable: The carrying value for accrued
interest approximates fair value.
 11




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  6. Fair Value of Financial Instruments (continued)
 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 June 30, 2009 and December 31, 2008. 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.
 Repurchase Agreements: The fair value of repurchase agreements is based on
the discounted value of contractual cash flows using rates currently offered for
similar maturities.
 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 June 30, 2009 and December 31, 2008, the
fair value of loan commitments was not material.
  June 30, 2009
    
    
    December 31, 2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fairvalue
    
    
    value
    
    
    value
    
    
    value(In thousands)Financial assetsCash and cash equivalents
    
    $
    82,126
    
    
    $
    81,820
    
    
    $
    52,285
    
    
    $
    52,285Investment securities available for sale
    
    
    75,938
    
    
    
    85,532
    
    
    
    85,352
    
    
    
    85,352Investment securities held to maturity
    
    
    2,224
    
    
    
    2,265
    
    
    
    13,406
    
    
    
    13,530Loans held for sale
    
    
    5,370
    
    
    
    5,417
    
    
    
    2,185
    
    
    
    2,205Loans receivable
    
    
    696,477
    
    
    
    687,547
    
    
    
    756,641
    
    
    
    713,447Federal Home Loan Bank stock
    
    
    29,888
    
    
    
    29,888
    
    
    
    29,888
    
    
    
    29,888Accrued interest receivable
    
    
    3,990
    
    
    
    3,990
    
    
    
    4,118
    
    
    
    4,118Financial liabilitiesDeposits
    
    
    711,603
    
    
    
    721,176
    
    
    $
    723,956
    
    
    $
    733,322Advances from the Federal Home Loan Bank
    
    
    132,659
    
    
    
    138,048
    
    
    
    167,106
    
    
    
    175,246Repurchase agreements
    
    
    8,777
    
    
    
    8,777
    
    
    
    11,727
    
    
    
    11,727Subordinated debentures
    
    
    5,000
    
    
    
    5,457
    
    
    
    5,000
    
    
    
    4,997Advances by borrowers for taxes and insurance
    
    
    219
    
    
    
    219
    
    
    
    2,458
    
    
    
    2,458Accrued interest payable
    
    
    1,703
    
    
    
    1,703
    
    
    
    1,801
    
    
    
    1,801
 12




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  6. Fair Value of Financial Instruments (continued)
 SFAS No. 157 establishes a fair value hierarchy which requires an entity to maximize
the use of observable inputs and minimize the use of unobservable inputs when measuring fair
value. SFAS No. 157 describes three levels of inputs that Camco uses to measure fair value:
 Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active
markets that the entity has the ability to access as of the measurement date.
 Level 2: Level 1 inputs for assets or liabilities that are not actively traded. Also
consists of an observable market price for a similar asset or liability. This
includes the use of matrix pricing used to value debt securities absent the
exclusive use of quoted prices.
 Level 3: Consists of unobservable inputs that are used to measure fair value when
observable market inputs are not available. This could include the use of internally
developed models, financial forecasting, etc.
 Fair value is defined as the price that would be received to sell an asset or transfer a
liability between market participants at the balance sheet date. When possible, the
Corporation looks to active and observable markets to price identical assets or liabilities.
When identical assets and liabilities are not traded in active markets, the Corporation
looks to observable market data for similar assets and liabilities. However, certain assets
and liabilities are not traded in observable markets and Camco must use other valuation
methods to develop a fair value. The fair value of impaired loans is based on the fair value
of the underlying collateral, which is estimated through third party appraisals or internal
estimates of collateral values.
 The following table presents financial assets and liabilities measured on a recurring basis:
 Fair Value Measurements at Reporting Date Using(in thousands)
    
    June 30, 2009
    
    Level 1
    
    Level 2
    
    Level 3Securities available for sale
    
    $
    75,938
    
    
    $
    
    
    
    $
    75,938
    
    
    $
 The following table presents financial assets and liabilities measured on a non-recurring
basis:
 Fair Value Measurements at Reporting Date Using(in thousands)
    
    June 30, 2009
    
    Level 1
    
    Level 2
    
    Level 3Impaired loans
    
    $
    39,070
    
    
    $
    
    
    
    $
    
    
    
    $
    39,070Loans held for sale
    
    
    5,370
    
    
    
    
    
    
    
    
    
    
    
    5,370Mortgage servicing rights
    
    
    4,000
    
    
    
    
    
    
    
    
    
    
    
    4,000Real estate acquired
through foreclosure
    
    
    5,963
    
    
    
    
    
    
    
    
    
    
    
    5,963
 Impaired loans, which are measured for impairment using the fair value of the collateral at
June 30, 2009, had a carrying amount of $46.3 million, with a valuation allowance of $7.2
million, resulting in an additional provision for loan losses of $1.6 million during the
first half of 2009.
 13




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  6. Fair Value of Financial Instruments (continued)
 Loans held for sale are originated on forward commitment contracts and are reported at
the lower of cost or fair value. All loans held for sale at June 30, 2009, are secured by
liens on 1-4 family residential properties.
 Mortgage servicing rights are recognized as separate assets when loans are sold with
servicing retained. A pooling methodology to the servicing valuation, in which loans with
similar characteristics are pooled together, is applied for valuation purposes. Once
pooled, each grouping of loans is evaluated on a discounted earnings
basis to determine the present value of future earnings that the bank could expect to realize from the portfolio.
Earnings are projected from a variety of sources including loan service fees, interest
earned on float, net interest earned on escrow balances, miscellaneous income and costs to
service the loans. The present value of future earnings is the estimated fair value for the
pool, calculated using consensus assumptions that a third party purchaser would utilize in
evaluating a potential acquisition of the servicing.
 Fair value for real estate acquired through foreclosure is determined by obtaining recent
appraisals on the properties. The fair value under such appraisals is determined by using
one of the following valuation techniques: income, cost or comparable sales. The fair value
is then reduced by managements estimate for the direct costs expected to be incurred in
order to sell the property. Holding costs or maintenance expenses are recorded as period
costs when occurred and are not included in the fair value estimate.
 7. Recent Accounting Prouncements
 In May 2009, the FASB issued SFAS No. 165, Subsequent Events. SFAS 165 establishes
general standards of accounting for and disclosure of events that occur after the balance
sheet date but before financial statements are issued or are available to be issued.
Although there is new terminology, the standard is based on the same principles as those
that currently exist in the auditing standards. The standard also includes a required
disclosure of the date through which the entity has evaluated subsequent events and whether
the evaluation date is the date of issuance or the date the financial statements were
available to be issued. The standard is effective for interim or annual periods ending after
June 15, 2009. The Corporation has complied with the disclosure requirements.
 In June 2009, the FASB issued SFAS No. 168, The FASB Accounting Standards Codification and
the Hierarchy of Generally Accepted Accounting Principles  a replacement of FASB Statement
No. 162. The FASB Accounting Standards Codification(Codification) will become the source of
authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to
be applied by nongovernmental entities. Rules and interpretive releases of the SEC under
authority of federal securities laws are also sources of authoritative GAAP for SEC
registrants. On the effective date of this Statement, the Codification will supersede all
then-existing non-SEC accounting and reporting standards. All other non-grandfathered
non-SEC accounting literature not included in the Codification will become
non-authoritative. This Statement is effective for financial statements issued for interim
and annual periods ending after September 15, 2009. The Corporation will comply with the
requirements of the Statement beginning in the third quarter of 2009.
 8. Subsequent Events
 In accordance with Statement of Financial Accounting Standards (SFAS) No. 165,
Subsequent Events, we have evaluated subsequent events through the date of this filing. We
do not believe there are any material subsequent events which would require further
disclosure.
 
 14




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation
 Forward Looking Statements
  
    
    anticipated changes in industry conditions created by state and federal legislation and
regulations;
 
    
    anticipated changes in general interest rates and the impact of future interest rate
changes on our profitability, capital adequacy and the fair value of our financial assets
and liabilities;
 
    
    retention of our existing customer base and our ability to attract new customers;
 
    
    the development of new products and services and their success in the marketplace;
 
    
    the adequacy of the allowance for loan losses; and
 
    
    statements regarding our anticipated loan and deposit account growth, expense levels,
liquidity and capital resources and projections of earnings.
  
    
    competition in the industry and markets in which we operate;
 
    
    levels of nonperforming assets;
 
    
    changes in general interest rates;
 
    
    loan demand;
 
    
    rapid changes in technology affecting the financial services industry;
 
    
    real estate values;
 
    
    changes in government regulation; and
 
    
    general economic and business conditions.
 Overview
  nd
 15




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Overview (continued)
  Discussion of Financial Condition Changes from December 31, 2008 to June 30, 2009
    
  16




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Discussion of Financial Condition Changes from December 31, 2008 to June 30, 2009
   June 30, 2009
    
    
    December 31, 200890+ days
    
    
    
    
    
    
    
    
    
    
    90+ days30 - 89 days
    
    
    delinquent,
    
    
    
    
    
    
    30 - 89 days
    
    
    delinquent,In thousands
    
    delinquent
    
    
    accruing
    
    
    Nonaccrual
    
    
    delinquent
    
    
    accruing
    
    
    NonaccrualConstruction and development
    
    $
    255
    
    
    $
    
    
    
    $
    9,118
    
    
    $
    253
    
    
    $
    
    
    
    $
    8,603HELOC and second mortgage
    
    
    1,526
    
    
    
    
    
    
    
    6,574
    
    
    
    2,434
    
    
    
    
    
    
    
    4,9621-4 Family
    
    
    6,301
    
    
    
    
    
    
    
    22,484
    
    
    
    6,419
    
    
    
    44
    
    
    
    17,203Multifamily
    
    
    490
    
    
    
    
    
    
    
    1,939
    
    
    
    30
    
    
    
    
    
    
    
    3,139Commercial and agricultural
    
    
    1,573
    
    
    
    
    
    
    
    17,894
    
    
    
    759
    
    
    
    
    
    
    
    19,450Consumer and other
    
    
    71
    
    
    
    
    
    
    
    78
    
    
    
    89
    
    
    
    
    
    
    
    127Total
    
    $
    10,216
    
    
    $
    
    
    
    $
    58,087
    
    
    $
    9,984
    
    
    $
    44
    
    
    $
    53,484
   June 30, 2009
    
    
    December 31, 2008
    
    
    ChangeBalance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    RateNoninterest-bearing demand
    
    $
    37,138
    
    
    
    0.00
    %
    
    $
    37,526
    
    
    
    0.00
    %
    
    $
    (388
    )
    
    
    0.00
    %Interest-bearing demand
    
    
    88,914
    
    
    
    0.67
    
    
    
    87,199
    
    
    
    0.91
    
    
    
    1,715
    
    
    
    (0.24
    )Money market
    
    
    104,841
    
    
    
    0.67
    
    
    
    112,749
    
    
    
    1.35
    
    
    
    (7,908
    )
    
    
    (0.68
    )Savings
    
    
    37,282
    
    
    
    0.25
    
    
    
    33,838
    
    
    
    0.26
    
    
    
    3,444
    
    
    
    (0.01
    )Certificates of deposit  retail
    
    
    391,054
    
    
    
    3.12
    
    
    
    413,134
    
    
    
    3.75
    
    
    
    (22,080
    )
    
    
    (0.63
    )Certificates of deposit  brokered
    
    
    52,374
    
    
    
    3.36
    
    
    
    39,510
    
    
    
    4.23
    
    
    
    12,864
    
    
    
    (0.87
    )Total deposits
    
    $
    711,603
    
    
    
    2.16
    %
    
    $
    723,956
    
    
    
    2.71
    %
    
    $
    (12,353
    )
    
    
    (0.55
    )%
  17




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
      Comparison of Results of Operations for the Six Months Ended June 30, 2009 and 2008
  Net Interest Income
   18




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Comparison of Results of Operations for the Six Months Ended June 30, 2009 and 2008
(continued)
 AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA
  Six Months Ended June 30,
    
    2009
    
    2008(Dollars in thousands)
    
    Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    Averageoutstanding
    
    
    earned
    
    
    yield/
    
    
    outstanding
    
    
    earned
    
    
    yield/balance
    
    
    / paid
    
    
    rate
    
    
    balance
    
    
    / paid
    
    
    rateInterest-earning assets:Loans receivable (1)
    
    $
    688,140
    
    
    $
    20,613
    
    
    
    5.99
    %
    
    $
    779,324
    
    
    $
    26,191
    
    
    
    6.72
    %Securities
    
    
    89,560
    
    
    
    1,819
    
    
    
    4.06
    %
    
    
    95,032
    
    
    
    2,145
    
    
    
    4.51
    %FHLB stock
    
    
    29,888
    
    
    
    670
    
    
    
    4.48
    %
    
    
    28,992
    
    
    
    768
    
    
    
    5.30
    %Other Interest-bearing
accounts
    
    
    58,579
    
    
    
    19
    
    
    
    0.06
    %
    
    
    20,789
    
    
    
    295
    
    
    
    2.84
    %Total interest-earning assets
    
    
    866,167
    
    
    
    23,121
    
    
    
    5.34
    %
    
    
    924,137
    
    
    
    29,399
    
    
    
    6.36
    %Noninterest-earning assets (2)
    
    
    107,011
    
    
    
    
    
    
    
    
    
    
    
    104,294Total average assets
    
    $
    973,178
    
    
    
    
    
    
    
    
    
    
    $
    1,028,431Interest-bearing liabilities:Deposits
    
    
    683,191
    
    
    
    8,420
    
    
    
    2.46
    %
    
    
    682,490
    
    
    
    12,121
    
    
    
    3.55
    %FHLB advances and other
    
    
    166,656
    
    
    
    2,971
    
    
    
    3.57
    %
    
    
    199,309
    
    
    
    4,332
    
    
    
    4.35
    %Total interest-bearing liabilities
    
    
    849,847
    
    
    
    11,391
    
    
    
    2.68
    %
    
    
    881,799
    
    
    
    16,453
    
    
    
    3.73
    %Noninterest-bearing deposits
    
    
    37,975
    
    
    
    
    
    
    
    
    
    
    
    38,333Noninterest-bearing liabilities
    
    
    13,301
    
    
    
    
    
    
    
    
    
    
    
    21,09851,276
    
    
    
    
    
    
    
    
    
    
    
    59,431Total average liabilities
    
    
    901,123
    
    
    
    
    
    
    
    
    
    
    
    941,230Total average shareholders equity
    
    
    72,055
    
    
    
    
    
    
    
    
    
    
    
    87,201Total liabilities and shareholders
equity
    
    $
    973,178
    
    
    
    
    
    
    
    
    
    
    $
    1,028,431Net interest income/Interest rate spread
    
    
    
    
    
    $
    11,730
    
    
    
    2.66
    %
    
    
    
    
    
    $
    12,946
    
    
    
    2.63
    %Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    2.71
    %
    
    
    
    
    
    
    
    
    
    
    2.80
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    101.9
    %
    
    
    
    
    
    
    
    
    
    
    104.8
    %
 
 (1)
    
    Includes loans held for sale. Loan fees are immaterial.(2)
    
    Includes nonaccrual loans, mortgage servicing rights and allowance for loan losses(3)
    
    Net interest income as a percent of average interest-earning assets 19




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Comparison of Results of Operations for the Six Months Ended June 30, 2009 and 2008
      Provision for Losses on Loans
   20




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Comparison of Results of Operations for the Six Months Ended June 30, 2009 and 2008
 Other Income
   General, Administrative and Other Expense
   Federal Income Taxes
  Comparison of Results of Operations for the Three Months Ended June 30, 2009 and 2008
   Net Interest Income
 
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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Comparison of Results of Operations for the Three Months Ended June 30, 2009 and 2008
(continued)
  AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA
  Three Months Ended June 30,
    
    2009
    
    
    2008(Dollars in thousands)
    
    Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    Averageoutstanding
    
    
    earned
    
    
    yield/
    
    
    outstanding
    
    
    earned
    
    
    yield/balance
    
    
    / paid
    
    
    rate
    
    
    balance
    
    
    / paid
    
    
    rateInterest-earning assets:Loans receivable (1)
    
    $
    671,688
    
    
    $
    10,046
    
    
    
    5.98
    %
    
    $
    769,962
    
    
    $
    12,667
    
    
    
    6.58
    %Securities
    
    
    86,386
    
    
    
    844
    
    
    
    3.91
    %
    
    
    96,578
    
    
    
    1,069
    
    
    
    4.43
    %FHLB stock
    
    
    29,888
    
    
    
    332
    
    
    
    4.44
    %
    
    
    29,195
    
    
    
    393
    
    
    
    5.38
    %Other Interest-bearing accounts
    
    
    47,217
    
    
    
    12
    
    
    
    0.10
    %
    
    
    29,065
    
    
    
    186
    
    
    
    2.56
    %Total interest-earning assets
    
    
    835,179
    
    
    
    11,234
    
    
    
    5.38
    %
    
    
    924,800
    
    
    
    14,315
    
    
    
    6.19
    %Noninterest-earning assets (2)
    
    
    124,573
    
    
    
    
    
    
    
    
    
    
    
    107,134Total average assets
    
    $
    959,752
    
    
    
    
    
    
    
    
    
    
    $
    1,031,934Interest-bearing liabilities:Deposits
    
    
    680,782
    
    
    
    3,948
    
    
    
    2.32
    %
    
    
    693,014
    
    
    
    5,720
    
    
    
    3.30
    %FHLB advances and other
    
    
    154,066
    
    
    
    1,402
    
    
    
    3.64
    %
    
    
    193,929
    
    
    
    2,129
    
    
    
    4.39
    %Total interest-bearing liabilities
    
    
    842,348
    
    
    
    5,350
    
    
    
    2.56
    %
    
    
    886,943
    
    
    
    7,849
    
    
    
    3.54
    %Noninterest-bearing deposits
    
    
    37,391
    
    
    
    
    
    
    
    
    
    
    
    38,309Noninterest-bearing liabilities
    
    
    15,280
    
    
    
    
    
    
    
    
    
    
    
    20,264Total average liabilities
    
    
    887,519
    
    
    
    
    
    
    
    
    
    
    
    945,516Total average shareholders equity
    
    
    72,233
    
    
    
    
    
    
    
    
    
    
    
    86,418Total liabilities and shareholders equity
    
    $
    959,752
    
    
    
    
    
    
    
    
    
    
    $
    1,031,934Net interest income/Interest rate spread
    
    
    
    
    
    $
    5,884
    
    
    
    2.82
    %
    
    
    
    
    
    $
    6,466
    
    
    
    2.65
    %Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    2.82
    %
    
    
    
    
    
    
    
    
    
    
    2.80
    %Average interest-earning assets to average
interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    108.1
    %
    
    
    
    
    
    
    
    
    
    
    104.3
    %
 
 (1)
    
    Includes loans held for sale. Loan fees are immaterial.(2)
    
    Includes nonaccrual loans, mortgage servicing rights and allowance for loan losses.(3)
    
    Net interest income as a percent of average interest-earning assets. 22




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Comparison of Results of Operations for the Three Months Ended June 30, 2009 and 2008
(continued)
 
     Provision for Losses on Loans
   23




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Comparison of Results of Operations for the Three Months Ended June 30, 2009 and 2008
(continued)
 Other Income
   General, Administrative and Other Expense
    Federal Income Taxes
  Liquidity and Capital Resources
   24




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Liquidity and Capital Resources (continued)
      25




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
   Payments due by periodLess
    
    
    
    
    
    
    
    
    
    
    MoreThan
    
    
    1-3
    
    
    3-5
    
    
    Than1 year
    
    
    years
    
    
    years
    
    
    5 years
    
    
    Total(In thousands)Contractual obligations:Operating lease obligations
    
    $
    182
    
    
    $
    447
    
    
    $
    284
    
    
    $
    312
    
    
    $
    1,225Advances from the Federal Home Loan Bank
    
    
    57,171
    
    
    
    28,000
    
    
    
    20,618
    
    
    
    26,870
    
    
    
    132,659Certificates of deposit
    
    
    254,877
    
    
    
    173,616
    
    
    
    14,935
    
    
    
    
    
    
    
    443,428Repurchase agreements
    
    
    8,777
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,777Subordinated debentures (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    5,000Ohio Equity Funds for Housing
    
    
    1,189
    
    
    
    959
    
    
    
    301
    
    
    
    227
    
    
    
    2,676Amount of commitments expiration per periodCommitments to originate loans:Revolving, open-end lines
    
    $
    56,848
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    56,8481-4 family residential construction
    
    
    956
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    956Commercial real estate, other
construction loan and land
development loans
    
    
    19,595
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,595Other unused commitments
    
    
    4,365
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,365Stand by letters of credit
    
    
    655
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    655Total contractual obligations
    
    $
    404,615
    
    
    $
    203,022
    
    
    $
    36,138
    
    
    $
    32,409
    
    
    $
    676,184
 
 (1)
    
    The subordinated debentures are redeemable, at Camcos option, as of September 15, 2008. The
debentures mature on September 15, 2037. 26




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Liquidity and Capital Resources (continued)
  To be well-capitalizedunder promptFor capital
    
    corrective actionActual
    
    Adequacy purposes
    
    provisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total capital to risk-weighted
assets:Camco Financial Corporation
    
    $
    83,357
    
    
    
    13.45
    %
    
    
    > $49,573
    
    
    
    >           8.0
    %
    
    
    >       $61,966
    
    
    
    10.0
    %Advantage Bank
    
    $
    78,311
    
    
    
    12.64
    %
    
    
    >          $49,559
    
    
    
    >           8.0
    %
    
    
    >       $61,948
    
    
    
    10.0
    %Tier I capital to risk-weighted
assets:Camco Financial Corporation
    
    $
    75,518
    
    
    
    12.19
    %
    
    
    >          $24,786
    
    
    
    >           4.0
    %
    
    
    >       $31,179
    
    
    
    6.0
    %Advantage Bank
    
    $
    70,472
    
    
    
    11.38
    %
    
    
    >          $25,779
    
    
    
    >           4.0
    %
    
    
    >       $37,169
    
    
    
    6.0
    %Tier I leverage to average assets:Camco Financial Corporation
    
    $
    75,518
    
    
    
    7.88
    %
    
    
    >          $38,356
    
    
    
    >           4.0
    %
    
    
    >       $47,945
    
    
    
    5.0
    %Advantage Bank
    
    $
    70,472
    
    
    
    7.38
    %
    
    
    >          $38,196
    
    
    
    >           4.0
    %
    
    
    >       $47,745
    
    
    
    5.0
    %
    27




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
       
 ITEM 4:
    
    Controls and Procedures
   
 
  28




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##### Table of Contents



ITEM 1.
    
    Legal Proceedings
  ITEM 1A.
    
    Risk Factors
  ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 (a)
    
    Not applicable(b)
    
    Not applicable(c)
    
    Not applicable
 ITEM 3.
    
    Defaults Upon Senior Securities
  ITEM 4.
    
    Submission of Matters to a Vote of Security Holders
  For
    
    WithheldJames E. Huston
    
    
    5,180,293
    
    
    
    831,069Paul D. Leake
    
    
    5,161,403
    
    
    
    849,959Douglas F. Mock
    
    
    5,241,059
    
    
    
    770,302
  ITEM 5.
    
    Other Information
  29




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##### Table of Contents



ITEM 6.
    
    Exhibits
 Exhibit 10
    
    Director Deferred Compensation PlanExhibit 11
    
    Statement regarding computation of
per share earnings
    
    Incorporated by reference to Note 4 to the
ConsolidateFinancial Statements on page
9 of this 
Form 10-QExhibit 31(i)
    
    Section 302 certification by 

Chief Executive OfficerExhibit 31(ii)
    
    Section 302 Certification by 

Chief Financial OfficerExhibit 32(i)
    
    Section 1350 certification by 

Chief Executive OfficerExhibit 32(ii)
    
    Section 1350 certification by 

Chief Financial Officer
 30




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##### Table of Contents



SIGNATURES
  CAMCO FINANCIAL CORPORATION
(Registrant)Date:      August 5, 2009
    By:

/s/ James E. HustonJames E. HustonChief Executive OfficerDate:      August 5, 2009
    By:

/s/ James E. BrooksJames E. BrooksChief Financial Officer 31