##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2007
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period fromto
 Commission File Number 0-25196
 CAMCO FINANCIAL CORPORATION
  Delaware
    
    51-0110823(State or other jurisdiction of
    
    (I.R.S. Employer Identification Number)incorporation or organization)
  
   þ o
  o þ o
 o þ




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##### 



PagePART I -
    
    FINANCIAL INFORMATIONConsolidated Statements of Financial Condition
    
    
    3Consolidated Statements of Earnings
    
    
    4Consolidated Statements of Comprehensive Income
    
    
    5Consolidated Statements of Cash Flows
    
    
    6Notes to Consolidated Financial Statements
    
    
    8Managements Discussion and Analysis of
Financial Condition and Results of
Operations
    
    
    13Quantitative and Qualitative Disclosures about
Market Risk
    
    
    20Controls and Procedures
    
    
    21PART II -
    
    OTHER INFORMATION
    
    
    21SIGNATURES
    
    
    
    
    23EX-31.1EX-31.2EX-32.1EX-32.2
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Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  March 31,
    
    
    December 31,2007
    
    
    2006(unaudited)ASSETSCash and due from banks
    
    $
    15,094
    
    
    $
    13,869Interest-bearing deposits in other financial institutions
    
    
    9,005
    
    
    
    12,673Cash and cash equivalents
    
    
    24,099
    
    
    
    26,542Investment securities available for sale  at market
    
    
    56,214
    
    
    
    56,053Investment securities held to maturity  at cost, approximate fair
value of $734 and $736 as of March 31, 2007 and December 31,
2006, respectively
    
    
    709
    
    
    
    710Mortgage-backed securities available for sale  at market
    
    
    49,026
    
    
    
    51,453Mortgage-backed securities held to maturity  at cost, approximate fair
value of $2,620 and $2,734 as of March 31, 2007 and December 31,
2006, respectively
    
    
    2,653
    
    
    
    2,739Loans held for sale  at lower of cost or market
    
    
    3,415
    
    
    
    3,664Loans receivable  net
    
    
    831,511
    
    
    
    824,578Office premises and equipment  net
    
    
    13,149
    
    
    
    13,200Real estate acquired through foreclosure
    
    
    3,380
    
    
    
    3,956Federal Home Loan Bank stock  at cost
    
    
    28,722
    
    
    
    28,722Accrued interest receivable
    
    
    6,135
    
    
    
    6,502Prepaid expenses and other assets
    
    
    1,984
    
    
    
    1,537Cash surrender value of life insurance
    
    
    21,113
    
    
    
    20,921Goodwill
    
    
    6,683
    
    
    
    6,683Prepaid federal income taxes
    
    
    597
    
    
    
    956Total assets
    
    $
    1,049,390
    
    
    $
    1,048,216LIABILITIES AND STOCKHOLDERS EQUITYDeposits
    
    $
    685,341
    
    
    $
    684,782Advances from the Federal Home Loan Bank and other borrowings
    
    
    258,285
    
    
    
    257,139Advances by borrowers for taxes and insurance
    
    
    2,794
    
    
    
    3,484Accounts payable and accrued liabilities
    
    
    5,906
    
    
    
    6,350Dividends payable
    
    
    1,114
    
    
    
    1,120Deferred federal income taxes, net
    
    
    4,719
    
    
    
    4,249Total liabilities
    
    $
    958,159
    
    
    
    957,124Commitments
    
    
    
    
    
    
    Stockholders equityPreferred stock  $1 par value; authorized 100,000 shares; no shares outstanding
    
    
    
    
    
    
    Common stock  $1 par value; authorized 14,900,000 shares; 8,832,082
issued at March 31, 2007 and December 31, 2006
    
    
    8,832
    
    
    
    8,832Additional paid-in capital
    
    
    59,745
    
    
    
    59,722Retained earnings  substantially restricted
    
    
    44,344
    
    
    
    43,954Accumulated other comprehensive loss  unrealized losses on securities
designated as available for sale, net of related tax effects
    
    
    (962
    )
    
    
    (1,225
    )Less 1,412,535 and 1,369,025 shares of treasury stock at March 31, 2007
and December 31, 2006, respectively  at cost
    
    
    (20,728
    )
    
    
    (20,191
    )Total stockholders equity
    
    
    91,231
    
    
    
    91,092Total liabilities and stockholders equity
    
    $
    1,049,390
    
    
    $
    1,048,216
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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF EARNINGS
 
 2007
    
    
    2006Interest income
Loans
    
    $
    14,151
    
    
    $
    13,249Mortgage-backed securities
    
    
    560
    
    
    
    633Investment securities
    
    
    640
    
    
    
    480Interest-bearing deposits and other
    
    
    838
    
    
    
    790Total interest income
    
    
    16,189
    
    
    
    15,152Interest expenseDeposits
    
    
    6,004
    
    
    
    4,424Borrowings
    
    
    2,798
    
    
    
    2,949Total interest expense
    
    
    8,802
    
    
    
    7,373Net interest income
    
    
    7,387
    
    
    
    7,779Provision for losses on loans
    
    
    195
    
    
    
    360Net interest income after provision for losses on loans
    
    
    7,192
    
    
    
    7,419Other incomeLate charges, rent and other
    
    
    776
    
    
    
    462Loan servicing fees
    
    
    352
    
    
    
    360Service charges and other fees on deposits
    
    
    380
    
    
    
    352Gain on sale of loans
    
    
    86
    
    
    
    99Decrease in mortgage servicing rights  net
    
    
    (53
    )
    
    
    (22
    )Gain on sale of real estate acquired through foreclosure
    
    
    17
    
    
    
    55Gain on sale of mortgage-backed securities and fixed assets
    
    
    10
    
    
    
    Total other income
    
    
    1,568
    
    
    
    1,306General, administrative and other expenseEmployee compensation and benefits
    
    
    3,825
    
    
    
    3,736Deferred loan origination costs
    
    
    (480
    )
    
    
    (487
    )Occupancy and equipment
    
    
    869
    
    
    
    780Data processing
    
    
    285
    
    
    
    393Advertising
    
    
    322
    
    
    
    303Franchise taxes
    
    
    268
    
    
    
    246Other operating
    
    
    1,474
    
    
    
    1,291Total general, administrative and other expense
    
    
    6,563
    
    
    
    6,262Earnings before federal income taxes
    
    
    2,197
    
    
    
    2,463Federal income taxes
    
    
    693
    
    
    
    784NET EARNINGS
    
    $
    1,504
    
    
    $
    1,679EARNINGS PER SHAREBasic
    
    $
    .20
    
    
    $
    .22Diluted
    
    $
    .20
    
    
    $
    .22Dividends declared per share
    
    $
    .15
    
    
    $
    .15
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Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
 
 2007
    
    
    2006Net earnings
    
    $
    1,504
    
    
    $
    1,679Other comprehensive income, net of tax:Unrealized holding gains (losses) on securities during the period, net of tax
effects (benefits) of $135 and $(268) in 2007 and 2006, respectively
    
    
    263
    
    
    
    (520
    )Comprehensive income
    
    $
    1,767
    
    
    $
    1,159
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Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 2007
    
    
    2006Cash flows from operating activities:Net earnings for the period
    
    $
    1,504
    
    
    $
    1,679Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:Amortization of deferred loan origination fees
    
    
    3
    
    
    
    56Amortization of premiums and discounts on investment and
mortgage-backed securities  net
    
    
    27
    
    
    
    76Amortization of mortgage servicing rights  net
    
    
    163
    
    
    
    191Depreciation and amortization
    
    
    568
    
    
    
    294Accretion of loan purchase accounting adjustments, net
    
    
    
    
    
    
    (22
    )Provision for losses on loans
    
    
    195
    
    
    
    360Stock option expense
    
    
    23
    
    
    
    35Gain on sale of real estate acquired through foreclosure
    
    
    (17
    )
    
    
    (55
    )Federal Home Loan Bank stock dividends
    
    
    
    
    
    
    (384
    )Gain on sale of loans
    
    
    (86
    )
    
    
    (99
    )Loans originated for sale in the secondary market
    
    
    (7,840
    )
    
    
    (13,140
    )Proceeds from sale of loans in the secondary market
    
    
    8,175
    
    
    
    11,861Net increase in cash surrender value of life insurance
    
    
    (192
    )
    
    
    (188
    )Increase (decrease) in cash due to changes in:Accrued interest receivable
    
    
    367
    
    
    
    78Prepaid expenses and other assets
    
    
    (447
    )
    
    
    (623
    )Accrued interest and other liabilities
    
    
    (859
    )
    
    
    (366
    )Federal income taxesCurrent
    
    
    359
    
    
    
    793Deferred
    
    
    335
    
    
    
    (9
    )Net cash provided by (used in) operating activities
    
    
    2,278
    
    
    
    537Cash flows provided by (used in) investing activities:Proceeds from maturities and calls of investment securities
    
    
    5,000
    
    
    
    Principal repayments on mortgage-backed securities
    
    
    2,724
    
    
    
    3,367Purchases of investment securities designated as available for sale
    
    
    (5,000
    )
    
    
    Loan principal repayments
    
    
    71,101
    
    
    
    74,282Additions to real estate acquired through foreclosure
    
    
    
    
    
    
    (20
    )Loan disbursements
    
    
    (75,425
    )
    
    
    (67,061
    )Purchases of loans
    
    
    (2,164
    )
    
    
    (637
    )Additions to office premises and equipment
    
    
    (517
    )
    
    
    (538
    )Proceeds from sale of real estate acquired through foreclosure
    
    
    202
    
    
    
    509Net cash provided by (used in) investing activities
    
    
    (4,079
    )
    
    
    9,902Net cash (used in) provided by operating and investing
activities balance carried forward
    
    
    (1,801
    )
    
    
    10,439
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Camco Financial Corporation
 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 
 2007
    
    
    2006Net cash provided by (used in) operating and investing
activities (balance brought forward)
    
    $
    (1,801
    )
    
    $
    10,439Cash flows provided by (used in) financing activities:Net increase in deposits
    
    
    559
    
    
    
    16,134Proceeds from Federal Home Loan Bank advances
    
    
    26,403
    
    
    
    7,000Repayment of Federal Home Loan Bank advances
    
    
    (25,257
    )
    
    
    (33,943
    )Dividends paid on common stock
    
    
    (1,120
    )
    
    
    (1,100
    )Purchase of treasury shares
    
    
    (537
    )
    
    
    (597
    )Decrease in advances by borrowers for taxes and insurance
    
    
    (690
    )
    
    
    (1,157
    )Net cash used in financing activities
    
    
    (642
    )
    
    
    (13,663
    )Decrease in cash and cash equivalents
    
    
    (2,443
    )
    
    
    (3,224
    )Cash and cash equivalents at beginning of period
    
    
    26,542
    
    
    
    33,085Cash and cash equivalents at end of period
    
    $
    24,099
    
    
    $
    29,861Supplemental disclosure of cash flow information:Cash paid during the period for:Interest on deposits and borrowings
    
    $
    8,749
    
    
    $
    7,304Cash paid for taxes
    
    
    
    
    
    
    Supplemental disclosure of noncash investing activities:Recognition of mortgage servicing rights in accordance with SFAS No. 140
    
    $
    110
    
    
    $
    169Transfers from loans to real estate acquired through foreclosure
    
    $
    944
    
    
    $
    205Dividends declared but unpaid
    
    $
    1,114
    
    
    $
    1,131
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Camco Financial Corporation
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    
    Basis of PresentationThe 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, 2006. However, all adjustments (consisting only of normal recurring
accruals) which, in the opinion of management, are necessary for a fair presentation of the
consolidated financial statements, have been included. The results of operations for the
three month period ended March 31, 2007, are not necessarily indicative of the results which
may be expected for the entire year.2.
    
    Principles of ConsolidationThe 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Managements Discussion and Analysis of Financial Condition and Results of Operations, as
well as disclosures found elsewhere in this quarterly report, are based upon Camcos
consolidated financial statements, which are prepared in accordance with US GAAP. The
preparation of these financial statements requires Camco to make estimates and judgments
that affect the reported amounts of assets, liabilities, revenues and expenses. Several
factors are considered in determining whether or not a policy is critical in the preparation
of financial statements. These factors include, among other things, whether the estimates
are significant to the financial statements, the nature of the estimates, the ability to
readily validate the estimates with other information including third parties or available
prices, and sensitivity of the estimates to changes in economic conditions and whether
alternative accounting methods may be utilized under US GAAP.Material estimates that are particularly susceptible to significant change in the near term
relate to the determination of the allowance for loan losses, the valuation of mortgage
servicing rights and goodwill impairment. Actual results could differ from those estimates.Allowance for Loan LossesThe procedures for assessing the adequacy of the allowance for loan losses reflect our
evaluation of credit risk after careful consideration of all 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.
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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  3.
    
    Critical Accounting Policies (continued)Allowance for Loan Losses(continued)The allowance is regularly reviewed by management to determine whether the amount is
considered adequate to absorb probable losses. 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 judgement 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.The allowance for loan losses is maintained at a level believed adequate by management to
absorb probable losses inherent in the loan portfolio. Managements evaluation of the
adequacy of the allowance is an estimate based on managements current judgement about the
credit quality of the loan portfolio. While the Corporation strives to reflect all known
risk factors in its evaluations, there can be no assurance that increased provisions will
not be necessary in future periods, which could adversely affect Camcos results of
operations.Mortgage Servicing RightsTo determine the fair value of its mortgage servicing rights (MSRs) each reporting
quarter, the Corporation uses a third party provider. Camco transmits information
representing individual loan information in each pooling period accompanied by escrow
amounts to the third party which then evaluates the possible impairment of MSRs as described
below.Servicing assets are recognized as separate assets when loans are sold with servicing
retained. A pooling methodology 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 a purchaser 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 market 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 is supplied by management, takes into
consideration the investment portfolio average yield as well as current short duration
investment yields. Management believes 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 earning figures approximate the cash flow that could be received from the servicing
portfolio. Valuation results are presented quarterly to management.
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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  3.
    
    Critical Accounting Policies (continued)At that time, management reviews the information and mortgage servicing rights are marked to
lower of amortized cost or market for the current quarter.GoodwillWe have developed procedures to test goodwill for impairment on an annual basis using June
30 financial information. This testing procedure is outsourced to a third party that
evaluates possible impairment based on the following:The test involves assigning tangible assets and liabilities, identified intangible assets
and goodwill to reporting units and comparing the fair value of each reporting unit to its
carrying value including goodwill. The value is determined assuming a freely negotiated
transaction between a willing buyer and a willing seller, neither being under any compulsion
to buy or sell and both having reasonable knowledge of relevant facts. Accordingly, to
derive the fair value of the reporting unit, the following common approaches to valuing
business combination transactions involving financial institutions are utilized by a third
party selected by Camco: (1) the comparable transactions approach  specifically based on
earnings, book, assets and deposit premium multiples received in recent sales of comparable
thrift franchises; and (2) the discounted cash flow approach. The application of the
valuation techniques takes into account the reporting units operating history, the current
market environment and future prospects. As of the most recent quarter, the only reporting
unit carrying goodwill is the Bank.If the fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting
unit is considered not impaired and no second step is required. If not, a second test is
required to measure the amount of goodwill impairment. The second test of the overall
goodwill impairment compares the implied fair value of the reporting unit goodwill with the
carrying amount of the goodwill. The impairment loss shall equal the excess of carrying
value over fair value.After each testing period, the third party compiles a summary of the test that is then
provided to the Audit and Risk Management Committee and management for review.SummaryManagement believes the accounting estimates related to the allowance for loan losses, the
capitalization, amortization, and valuation of mortgage servicing rights and the goodwill
impairment test are critical accounting estimates because: (1) the estimates are highly
susceptible to change from period to period because they require management to make
assumptions concerning the changes in the types and volumes of the portfolios, rates of
future prepayments, and anticipated economic conditions, and (2) the impact of recognizing
an impairment or loan loss could have a material effect on Camcos assets reported on the
balance sheet as well as its net earnings. Management has discussed the development and
selection of these critical accounting estimates with the Enterprise Risk and Audit
Committee of the Board of Directors and the Audit and Risk Management Committee has reviewed
Camcos disclosures relating to such matters in the quarterly Managements Discussion and
Analysis.
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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  4.
    
    Earnings Per ShareBasic 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 three months endedMarch 31,2007
    
    
    2006Weighted-average common shares
outstanding (basic)
    
    
    7,457,583
    
    
    
    7,563,452Dilutive effect of assumed exercise
of stock options
    
    
    1,348
    
    
    
    3,718Weighted-average common shares
outstanding (diluted)
    
    
    7,458,931
    
    
    
    7,567,170
 Anti-dilutive options to purchase 293,351 and 232,364 shares of common stock with respective
weighted-average exercise prices of $15.45 and $15.87 were outstanding at March 31, 2007 and
2006, respectively, but were excluded from the computation of common share equivalents for
those respective periods because the exercise prices were greater than the average market
price of the common shares.5.
    
    Stock Option PlansEffective 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 that measures compensation cost at the grant date based on 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 with the following assumptions used for grants during
2007 and 2006: dividend yield of 4.8% and 4.0%, respectively; expected volatility of 11.98%
and 15.16% respectively; a risk-free interest rate of 4.81% and 4.57% respectively, and an
expected life of ten years for all grants.
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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  5.
    
    Stock Option Plans (continued)A summary of the status of the Corporations stock option plans as of March 31, 2007 and
December 31, 2006, and changes during the periods ending on those dates is presented below:
 Three months ended
    
    
    
    
    
    
    Year endedMarch 31,
    
    
    
    
    
    
    December 31,2007
    
    
    
    
    
    
    2006Weighted-
    
    
    
    
    
    
    Weighted-average
    
    
    
    
    
    
    averageexercise
    
    
    
    
    
    
    exerciseShares
    
    
    price
    
    
    Shares
    
    
    priceOutstanding at beginning of period
    
    
    304,874
    
    
    $
    15.20
    
    
    
    224,636
    
    
    $
    15.71Granted
    
    
    21,920
    
    
    
    12.35
    
    
    
    87,013
    
    
    
    14.08Exercised
    
    
    
    
    
    
    
    
    
    
    (2,243
    )
    
    
    8.92Forfeited
    
    
    (3,011
    )
    
    
    14.59
    
    
    
    (4,532
    )
    
    
    15.23Outstanding at end of period
    
    
    323,783
    
    
    $
    15.11
    
    
    
    304,874
    
    
    $
    15.20Options exercisable at period end
    
    
    260,012
    
    
    $
    15.20
    
    
    
    222,333
    
    
    $
    15.37Weighted-average fair value of
options granted during the year
    
    
    
    
    
    $
    1.19
    
    
    
    
    
    
    $
    2.09
  Number outstanding
    
    
    3,012Range of exercise prices
    
    
    8.92-9.75Number outstanding
    
    
    118,616Range of exercise prices
    
    
    11.36-14.16Number outstanding
    
    
    202,155Range of exercise prices
    
    
    14.55-17.17Weighted-average exercise price
    
    $
    15.11Weighted-average remaining contractual life
    
    7.1
    years
 6.
    
    Forward Looking StatementsCertain statements contained in this report that are not historical facts are forward
looking statements that are subject to certain risks and uncertainties. When used herein,
the terms anticipates, plans, expects, believes, and similar expressions as they
relate to Camco or its management are intended to identify such forward looking statements.
Camcos actual results, performance or achievements may materially differ from those
expressed or implied in the forward-looking statements. Risks and uncertainties that could
cause or contribute to such material differences include, but are not limited to, general
economic conditions, interest rate environment, competitive conditions in the financial
services industry, changes in law, governmental policies and regulations, and rapidly
changing technology affecting financial services.
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MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Discussion of Financial Condition Changes from December 31, 2006 to March 31, 2007
    .
 4
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Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Discussion of Financial Condition Changes from December 31, 2006 to March 31, 2007
(continued)
     Camco:
    
    
    
    As of March 31, 2007
 To be well-capitalized underFor capital
    
    prompt correctiveActual
    
    adequacy purposes
    
    action provisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total capital
(to risk-weighted assets)
    
    $
    91,231
    
    
    
    12.13
    %
    
    
    3$60,659
    
    
    
    38.0
    %
    
    
    N/A
    
    
    
    N/ATier I capital

(to risk-weighted assets)
    
    $
    84,873
    
    
    
    11.19
    %
    
    
    3$30,330
    
    
    
    34.0
    %
    
    
    N/A
    
    
    
    N/ATier I leverage
    
    $
    84,873
    
    
    
    8.18
    %
    
    
    3$41,495
    
    
    
    34.0
    %
    
    
    N/A
    
    
    
    N/A
 14




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Comparison of Financial changes from December 31, 2006 to March 31, 2007 (continued)
 Advantage:
    
    
    
    
    
    
    
    
    
    At March 31, 2007To be well-capitalized underFor capital
    
    prompt correctiveActual
    
    adequacy purposes
    
    action provisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    Ratio(Dollars in thousands)Total capital

(to risk-weighted assets)
    
    $
    84,932
    
    
    
    11.32
    %
    
    
    3$60,554
    
    
    
    38.0
    %
    
    
    3$75,694
    
    
    
    310.0
    %Tier I capital

(to risk-weighted assets)
    
    $
    78,590
    
    
    
    10.38
    %
    
    
    3$30,277
    
    
    
    34.0
    %
    
    
    3$45,416
    
    
    
    3   6.0
    %Tier I leverage
    
    $
    78,590
    
    
    
    7.58
    %
    
    
    3$41,495
    
    
    
    34.0
    %
    
    
    3$51,869
    
    
    
    3   5.0
    %
 Comparison of Results of Operations for the Three Months Ended March 31, 2007 and 2006
 General
  Net Interest Income
  15




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Comparison of Financial changes from December 31, 2006 to March 31, 2007 (continued)
 AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA
  For the three months ended March 31,2007
    
    

    
    

    
    

    

    
    
    
    2006Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    Averageoutstanding
    
    
    earned/
    
    
    yield/
    
    
    outstanding
    
    
    earned/
    
    
    yield/balance
    
    
    paid
    
    
    rate
    
    
    balance
    
    
    paid
    
    
    rate(Dollars in thousands)Interest-earning assets:Loans receivable (1)
    
    $
    832,426
    
    
    $
    14,151
    
    
    
    6.80
    %
    
    $
    845,557
    
    
    $
    13,249
    
    
    
    6.27
    %Mortgage-backed securities (2)
    
    
    52,860
    
    
    
    560
    
    
    
    4.24
    %
    
    
    62,981
    
    
    
    633
    
    
    
    4.02
    %Investment securities (2)
    
    
    58,057
    
    
    
    640
    
    
    
    4.41
    %
    
    
    48,795
    
    
    
    480
    
    
    
    3.93
    %Interest-bearing deposits and other
    
    
    61,312
    
    
    
    838
    
    
    
    5.47
    %
    
    
    60,304
    
    
    
    790
    
    
    
    5.24
    %Total interest-earning assets
    
    
    1,004,655
    
    
    
    16,189
    
    
    
    6.45
    %
    
    
    1,017,637
    
    
    
    15,152
    
    
    
    5.96
    %Interest-bearing liabilities:Deposits
    
    
    649,451
    
    
    
    6,004
    
    
    
    3.70
    %
    
    
    630,346
    
    
    
    4,424
    
    
    
    2.81
    %FHLB advances and other
    
    
    261,510
    
    
    
    2,798
    
    
    
    4.28
    %
    
    
    300,930
    
    
    
    2,949
    
    
    
    3.92
    %Total interest-bearing liabilities
    
    
    910,961
    
    
    
    8,802
    
    
    
    3.86
    %
    
    
    931,276
    
    
    
    7,373
    
    
    
    3.17
    %Net interest income/Interest rate spread
    
    
    
    
    
    $
    7,387
    
    
    
    2.59
    %
    
    
    
    
    
    $
    7,779
    
    
    
    2.79
    %Net interest margin(3)
    
    
    
    
    
    
    
    
    
    
    2.94
    %
    
    
    
    
    
    
    
    
    
    
    3.06
    %
 
 (1) Includes nonaccrual loans and loans held for sale.(2) Includes securities designated as available for sale.(3) Net interest income as a percent of average interest-earning assets.  16




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Comparison of Results of Operations for the Three Months Ended March 31, 2007 and 2006
(continued)
   Provision for Losses on Loans
  Other Income
  17




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Comparison of Results of Operations for the Three Months Ended March 31, 2007 and 2006
(continued)
 General, Administrative and Other Expense
  Federal Income Taxes
  Liquidity and Capital Resources
    18




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Comparison of Results of Operations for the Three Months Ended March 31, 2007 and 2006
(continued)
  Payments due by periodLess
    
    
    
    
    
    
    
    
    
    
    Morethan
    
    
    1-3
    
    
    3-5
    
    
    than1 year
    
    
    years
    
    
    years
    
    
    5 years
    
    
    Total(In thousands)Contractual obligations:Operating lease obligations
    
    $
    235
    
    
    $
    521
    
    
    $
    382
    
    
    $
    576
    
    
    $
    1,714Advances from the Federal Home Loan Bank
    
    
    84,375
    
    
    
    107,465
    
    
    
    8,673
    
    
    
    44,519
    
    
    
    245,032Repurchase Agreements
    
    
    12,602
    
    
    
    651
    
    
    
    
    
    
    
    
    
    
    
    13,253Certificates of deposit
    
    
    280,215
    
    
    
    129,755
    
    
    
    6,136
    
    
    
    797
    
    
    
    416,903Ohio Equity Funds for Housing
    
    
    
    
    
    
    3,529
    
    
    
    785
    
    
    
    519
    
    
    
    4,833Amount of commitments expiring per periodCommitments to originate loans:Overdraft lines of credit
    
    
    872
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    872Home equity lines of credit
    
    
    79,499
    
    
    
    
    
    
    
    
    
    

    
    
    

    

    
    79,499One- to four-family and multi-family loans (1)
    
    
    27,984
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,984Commercial (2)
    
    
    18,249
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,249Non-residential real estate and land loans
    
    
    1,093
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,093Total contractual obligations
    
    $
    505,124
    
    
    $
    241,921
    
    
    $
    15,976
    
    
    $
    46,411
    
    
    $
    809,432
 
 (1)
    
    Includes loans in process(2)
    
    Includes loans in process and line of credits 
 Quantitative and Qualitative Disclosures About Market Risk
    19




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Quantitative and Qualitative Disclosures About Market Risk (continued)
    Change in
    
    Percentage Change inInterest Rates
    
    Net Interest Income(basis points)
    
    12 Months+200
    
    
    -12.25
    %+100
    
    
    -   5.67
    %- 100
    
    
    -  0.81
    %- 200
    
    
    -   2.41
    %
   Change inInterest Rates
    
    Percentage(basis points)
    
    change in EVE+ 200
    
    
    -    4.55
    %+ 100
    
    
    -    1.50
    %0
    
    
    0.00-  100
    
    
    +  4.50
    %-  200
    
    
    +10.51
    %
  20




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##### Table of Contents



Controls and Procedures
   
  ITEM 1.
    
    Legal ProceedingsNot applicable.ITEM 1A.
    
    Risk FactorsNone.ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 Maximum Numberof shares that mayNumber of shares
    
    Average price paid
    
    be purchased underPeriod of Repurchase
    
    purchased
    
    per share
    
    the programJanuary 1  January 31
    
    0
    
    N/A
    
    300,936Feb. 1  Feb. 28
    
    0
    
    N/A
    
    300,936March 1  March 31 (1)
    
    43,510
    
    12.36
    
    362,902
 
 (1)
    
    35,010 purchases of shares during the quarter related to the 5% stock
repurchase program announced April 25, 2006. The plan expired in April
2007.On March 27, 2007 the Board of Directors of Camco Financial Corporation
approved a stock repurchase plan under which the company may repurchase up
to 5% of its outstanding common stock. 8,500 shares during the quarter
were purchased under this new plan. ITEM 3.
    
    Defaults Upon Senior SecuritiesNot applicableITEM 4.
    
    Submission of Matters to a Vote of Security HoldersNot applicableITEM 5.
    
    Other InformationNot applicableITEM 6.
    
    Exhibits
 21




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##### Table of Contents



Exhibit 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
 22




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##### Table of Contents



SIGNATURES
  Date:
    
    May 4, 2007
    
    
    
    By:
    
    /s/Richard C. BaylorRichard C. BaylorChief Executive OfficerDate:
    
    May 4, 2007
    
    
    
    By:
    
    /s/Mark A. SeversonMark A. SeversonChief Financial Officer
 23