##### Table of Contents



UNITED STATES
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 September 30, 2010
 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)
 814 Wheeling Avenue, Cambridge, Ohio 43725-9757
  Yes þ No o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting Corporation þ
 Yes o No 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
    
    
    17Quantitative and Qualitative Disclosures about
Market Risk
    
    
    38Controls and Procedures
    
    
    40PART II  OTHER INFORMATION
    
    
    40SIGNATURES
    
    
    44Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  September 30,
    
    
    December 31,2010
    
    
    2009(unaudited)ASSETSCash and due from banks
    
    $
    12,500
    
    
    $
    20,490Interest-bearing deposits in other financial institutions
    
    
    22,828
    
    
    
    17,663Cash and cash equivalents
    
    
    35,328
    
    
    
    38,153Securities available for sale, at fair value
    
    
    35,588
    
    
    
    55,950Securities held to maturity, at cost, approximate fair value of $3,667 and
$2,200 as of September 30, 2010 and December 31, 2009, respectively
    
    
    3,486
    
    
    
    2,113Loans held for sale  at lower of cost or fair value
    
    
    12,143
    
    
    
    475Loans receivable  net
    
    
    676,533
    
    
    
    659,022Office premises and equipment  net
    
    
    10,224
    
    
    
    10,870Real estate acquired through foreclosure
    
    
    10,556
    
    
    
    9,660Federal Home Loan Bank stock  at cost
    
    
    29,888
    
    
    
    29,888Accrued interest receivable
    
    
    3,745
    
    
    
    3,979Mortgage servicing rights  at lower of cost or fair value
    
    
    3,812
    
    
    
    4,433Prepaid expenses and other assets
    
    
    4,879
    
    
    
    5,712Cash surrender value of life insurance
    
    
    19,207
    
    
    
    18,838Refundable federal income taxes
    
    
    3,861
    
    
    
    3,562Total assets
    
    $
    849,250
    
    
    $
    842,655LIABILITIES AND STOCKHOLDERS EQUITYDeposits
    
    $
    647,937
    
    
    $
    659,902Advances from the Federal Home Loan Bank and other borrowings
    
    
    143,665
    
    
    
    109,232Advances by borrowers for taxes and insurance
    
    
    1,279
    
    
    
    1,909Accounts payable and accrued liabilities
    
    
    11,157
    
    
    
    11,098Total liabilities
    
    
    804,038
    
    
    
    782,141Commitments
    
    
    
    
    
    
    Stockholders equity:Preferred stock  $1 par value; authorized 100,000 shares; no shares outstanding
    
    
    
    
    
    
    Common stock  $1 par value; authorized 14,887,500 shares; 8,884,509 shares
issued at September 30, 2010 and December 31, 2009
    
    
    8,885
    
    
    
    8,885Additional paid-in capital
    
    
    60,262
    
    
    
    60,124Retained earnings (accumulated deficit)
    
    
    (873
    )
    
    
    14,695Accumulated other comprehensive income net of related tax effects
    
    
    1,146
    
    
    
    1,049Unearned compensation; 50,000 shares
    
    
    (94
    )
    
    
    (125
    )Treasury stock  1,678,913 shares at Sept. 30, 2010 and Dec. 31, 2009, at cost
    
    
    (24,114
    )
    
    
    (24,114
    )Total stockholders equity
    
    
    45,212
    
    
    
    60,514Total liabilities and stockholders equity
    
    $
    849,250
    
    
    $
    842,655
  3




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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF EARNINGS
  Nine months ended
    
    
    Three months endedSeptember 30,
    
    
    September 30,(unaudited)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Interest incomeLoans
    
    $
    28,074
    
    
    $
    30,560
    
    
    $
    9,513
    
    
    $
    9,948Mortgage-backed securities
    
    
    1,291
    
    
    
    1,821
    
    
    
    388
    
    
    
    551Investment securities
    
    
    224
    
    
    
    660
    
    
    
    54
    
    
    
    110Interest-bearing deposits and other
    
    
    1,010
    
    
    
    1,067
    
    
    
    337
    
    
    
    378Total interest income
    
    
    30,599
    
    
    
    34,108
    
    
    
    10,292
    
    
    
    10,987Interest expenseDeposits
    
    
    8,259
    
    
    
    12,039
    
    
    
    2,570
    
    
    
    3,619Borrowings
    
    
    2,961
    
    
    
    4,161
    
    
    
    972
    
    
    
    1,189Total interest expense
    
    
    11,220
    
    
    
    16,200
    
    
    
    3,542
    
    
    
    4,808Net interest income
    
    
    19,379
    
    
    
    17,908
    
    
    
    6,750
    
    
    
    6,179Provision for losses on loans
    
    
    17,524
    
    
    
    1,877
    
    
    
    11,407
    
    
    
    440Net interest income after provision
for losses on loans
    
    
    1,855
    
    
    
    16,031
    
    
    
    (4,657
    )
    
    
    5,739Other incomeRent and other
    
    
    1,234
    
    
    
    1,274
    
    
    
    497
    
    
    
    292Loan servicing fees
    
    
    952
    
    
    
    948
    
    
    
    315
    
    
    
    316Service charges and other fees on deposits
    
    
    1,719
    
    
    
    1,684
    
    
    
    603
    
    
    
    613Gain on sale of loans
    
    
    822
    
    
    
    980
    
    
    
    332
    
    
    
    207Increases (decreases) in mortgage servicing rights  net
    
    
    (622
    )
    
    
    84
    
    
    
    (528
    )
    
    
    (185
    )Gain (loss) on sale of fixed assets and investments
    
    
    1
    
    
    
    156
    
    
    
    2
    
    
    
    153Income on cash surrender value life
    
    
    656
    
    
    
    710
    
    
    
    221
    
    
    
    216Total other income
    
    
    4,762
    
    
    
    5,836
    
    
    
    1,442
    
    
    
    1,612General, administrative and other expenseEmployee compensation and benefits
    
    
    10,121
    
    
    
    9,587
    
    
    
    3,467
    
    
    
    3,047Occupancy and equipment
    
    
    2,219
    
    
    
    2,423
    
    
    
    734
    
    
    
    880Federal deposit insurance premium
    
    
    1,574
    
    
    
    1,771
    
    
    
    538
    
    
    
    710Data processing
    
    
    842
    
    
    
    908
    
    
    
    276
    
    
    
    295Advertising
    
    
    275
    
    
    
    415
    
    
    
    105
    
    
    
    118Franchise taxes
    
    
    814
    
    
    
    803
    
    
    
    280
    
    
    
    221Postage, supplies and office expenses
    
    
    829
    
    
    
    1,041
    
    
    
    262
    
    
    
    354Travel, training and insurance
    
    
    282
    
    
    
    216
    
    
    
    106
    
    
    
    78Professional services
    
    
    1,776
    
    
    
    1,310
    
    
    
    605
    
    
    
    453Transaction processing
    
    
    572
    
    
    
    661
    
    
    
    194
    
    
    
    222Real estate owned and other expenses
    
    
    1,653
    
    
    
    1,494
    
    
    
    822
    
    
    
    661Loan expenses
    
    
    771
    
    
    
    516
    
    
    
    422
    
    
    
    210Total general, administrative and other expense
    
    
    21,728
    
    
    
    21,145
    
    
    
    7,811
    
    
    
    7,249Earnings (loss) before federal income taxes (benefit)
    
    
    (15,111
    )
    
    
    722
    
    
    
    (11,026
    )
    
    
    102Total federal income taxes (benefit)
    
    
    457
    
    
    
    131
    
    
    
    572
    
    
    
    (253
    )NET EARNINGS (LOSS)
    
    $
    (15,568
    )
    
    $
    591
    
    
    $
    (11,598
    )
    
    $
    355EARNINGS (LOSS) PER SHAREBasic
    
    $
    (2.16
    )
    
    $
    0.08
    
    
    $
    (1.61
    )
    
    $
    0.05Diluted
    
    $
    (2.16
    )
    
    $
    0.08
    
    
    $
    (1.61
    )
    
    $
    0.05Dividends declared per share
    
    
    0.000
    
    
    
    0.020
    
    
    
    0.000
    
    
    
    0.000
  4




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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
  Nine months ended
    
    
    Three months endedSeptember 30,
    
    
    September 30,(unaudited)
    
    2010
    
    
    2009
    
    
    2010
    
    
    2009Net earnings (loss)
    
    $
    (15,568
    )
    
    $
    591
    
    
    $
    (11,598
    )
    
    $
    355Other comprehensive income, net of tax:Unrealized holding gains (losses) during the period, net of
taxes $50, $154, $(49) and $162
for the respective periods
    
    
    97
    
    
    
    298
    
    
    
    (96
    )
    
    
    314Comprehensive income (loss)
    
    $
    (15,471
    )
    
    $
    889
    
    
    $
    (11,502
    )
    
    $
    669
  5




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##### Table of Contents



Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 2010
    
    
    2009(unaudited)Cash flows from operating activities:Net earnings (loss) for the period
    
    $
    (15,568
    )
    
    $
    591Adjustments to reconcile net earnings (loss) to net cash
provided by operating activities:Amortization of deferred loan origination fees
    
    
    78
    
    
    
    337Amortization of premiums and discounts on investment
and mortgage-backed securities  net
    
    
    9
    
    
    
    (22
    )Amortization of mortgage servicing rights  net
    
    
    1,828
    
    
    
    888Depreciation and amortization
    
    
    920
    
    
    
    1,007Provision for losses on loans
    
    
    17,524
    
    
    
    1,877Stock option expense
    
    
    138
    
    
    
    228Provision for losses on REO
    
    
    617
    
    
    
    458(Gain) Loss on sale of real estate acquired through foreclosure
    
    
    (2
    )
    
    
    11Restricted stock / unearned compensation
    
    
    31
    
    
    
    (75
    )(Gain) loss on sale of investments and fixed assets
    
    
    1
    
    
    
    (156
    )Gain on sale of loans
    
    
    (822
    )
    
    
    (980
    )Loans originated for sale in the secondary market
    
    
    (60,326
    )
    
    
    (91,855
    )Proceeds from sale of loans in the secondary market
    
    
    49,480
    
    
    
    92,834Net increase in cash surrender value of life insurance
    
    
    (529
    )
    
    
    (586
    )Increase (decrease) in cash, due to changes in:Accrued interest receivable
    
    
    234
    
    
    
    383Prepaid expenses and other assets
    
    
    483
    
    
    
    5,461Accounts payable and other liabilities
    
    
    59
    
    
    
    (4,978
    )Net cash provided by (used in) operating activities
    
    
    (5,845
    )
    
    
    5,423Cash flows provided by (used in) investing activities:Principal repayments, maturities on securities held to maturity
    
    
    246
    
    
    
    11,287Principal repayments, maturities on securities available for sale
    
    
    20,505
    
    
    
    48,863Purchase of securities designated as available for sale
    
    
    
    
    
    
    (24,019
    )Purchase of securities designated as held to maturity
    
    
    (1,623
    )
    
    
    Loan disbursements and purchased loans
    
    
    (134,825
    )
    
    
    (92,349
    )Principal repayments on loans
    
    
    94,537
    
    
    
    154,727Purchase of office premises and equipment
    
    
    (295
    )
    
    
    (284
    )Proceeds from sale of office premises and equipment
    
    
    20
    
    
    
    180Proceeds from surrender of bank owned life insurance
    
    
    160
    
    
    
    4,460Proceeds from sales of real estate acquired through foreclosure
    
    
    2,457
    
    
    
    3,170Net cash provided by (used in) investing activities
    
    
    (18,818
    )
    
    
    106,035Net cash provided by (used in) operating and investing activities
(subtotal carried forward)
    
    
    (24,663
    )
    
    
    111,458
  6




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##### Table of Contents



Camco Financial Corporation
 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 
 2010
    
    
    2009(unaudited)Net cash
provided by (used in) operating and investing activities
(subtotal carried forward)
    
    $
    (24,663
    )
    
    $
    111,458Cash flows provided by financing activities:Net (decrease) in deposits
    
    
    (11,965
    )
    
    
    (53,565
    )Proceeds from Federal Home Loan Bank advances and other borrowings
    
    
    145,185
    
    
    
    44,000Repayment of Federal Home Loan Bank advances and other borrowings
    
    
    (110,752
    )
    
    
    (93,953
    )Dividends paid on common stock
    
    
    
    
    
    
    (143
    )Decrease in advances by borrowers for taxes and insurance
    
    
    (630
    )
    
    
    (1,838
    )Net cash provided by (used in) financing activities
    
    
    21,838
    
    
    
    (105,499
    )Net increase (decrease) in cash and cash equivalents
    
    
    (2,825
    )
    
    
    5,959Cash and cash equivalents at beginning of period
    
    
    38,153
    
    
    
    52,285Cash and cash equivalents at end of period
    
    $
    35,328
    
    
    $
    58,244Supplemental disclosure of cash flow information:Cash paid during the period for:Interest on deposits and borrowings
    
    $
    11,955
    
    
    $
    16,343Income Taxes
    
    $
    
    
    
    $
    238Supplemental disclosure of noncash investing activities:Recognition of mortgage-servicing rights
    
    $
    585
    
    
    $
    973Transfer of loans to real estate acquired through foreclosure
    
    $
    3,968
    
    
    
    7,453
  7




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##### Table of Contents



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  1.
    
    Basis of Presentation
  2.
    
    Principles of Consolidation
  3.
    
    Critical Accounting Policies
   Allowance for Loan Losses
    8




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  Critical Accounting Policies
 Allowance for Loan Losses
   Mortgage Servicing Rights
    9




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  3.
    
    Critical Accounting Policies (continued)
 Mortgage Servicing Rights (continued)
  Deferred Income Taxes
  Reclassifications
   10




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  4.
    
    Earnings Per Share
  For the nine months ended
    
    
    For the three months endedSeptember 30,
    
    
    September 30,2010
    
    
    2009
    
    
    2010
    
    
    2009(In thousands, except per share information)BASIC:Net Earnings (Loss)
    
    $
    (15,568
    )
    
    $
    591
    
    
    $
    (11,598
    )
    
    $
    355Weighted average common shares outstanding
    
    
    7,206
    
    
    
    7,201
    
    
    
    7,206
    
    
    
    7,206Basic earnings (loss) per share
    
    $
    (2.16
    )
    
    $
    0.08
    
    
    $
    (1.61
    )
    
    $
    0.05DILUTED:Net Earnings (Loss)
    
    $
    (15,568
    )
    
    $
    591
    
    
    $
    (11,598
    )
    
    $
    355Weighted average common shares outstanding
    
    
    7,206
    
    
    
    7,201
    
    
    
    7,206
    
    
    
    7,206Dilutive effect of stock options
    
    
    
    
    
    
    1
    
    
    
    
    
    
    
    Total common shares and dilutive potential common shares
    
    
    7,206
    
    
    
    7,202
    
    
    
    7,206
    
    
    
    7,206Diluted earnings (loss) per share
    
    $
    (2.16
    )
    
    $
    0.08
    
    
    $
    (1.61
    )
    
    $
    0.05
    11




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  5.
    
    Stock Option Plans
   2010
    
    
    2009Fair value, calculated
    
    $
    1.65
    
    
    $
    1.43Exercise Price
    
    $
    2.51
    
    
    $
    2.46Risk-free interest rate
    
    
    3.61
    %
    
    
    2.66
    %Expected stock price volatility
    
    
    51.62
    %
    
    
    61.00
    %Expected dividend yield
    
    
    
    
    
    
    1.63
    %Expected Life
    
    10 years
    
    
    10 years
  Nine months ended
    
    
    Year endedSeptember 30,
    
    
    December 31,2010
    
    
    2009Weighted-
    
    
    
    
    
    
    Weighted-average
    
    
    
    
    
    
    averageexercise
    
    
    
    
    
    
    exerciseShares
    
    
    price
    
    
    Shares
    
    
    priceOutstanding at beginning of period
    
    
    260,833
    
    
    $
    10.59
    
    
    
    260,703
    
    
    $
    14.11Granted
    
    
    260,729
    
    
    
    2.51
    
    
    
    80,000
    
    
    
    2.46Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeited or Expired
    
    
    (54,508
    )
    
    
    12.72
    
    
    
    (79,870
    )
    
    
    13.96Outstanding at end of period
    
    
    467,054
    
    
    
    5.83
    
    
    
    260,833
    
    
    $
    10.59Options exercisable at end of period
    
    
    257,037
    
    
    
    8.23
    
    
    
    235,451
    
    
    $
    10.54Weighted-average fair value of
options granted during the period
    
    
    
    
    
    
    1.65
    
    
    
    
    
    
    $
    1.43
  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 - $2.51
    
    
    331,191
    
    
    
    9.1
    
    
    $
    2.50
    
    
    
    132,125
    
    
    $
    2.48$8.92 - $9.75
    
    
    21,514
    
    
    
    7.3
    
    
    
    8.92
    
    
    
    12,894
    
    
    
    8.92$11.36 - $14.16
    
    
    58,474
    
    
    
    5.0
    
    
    
    13.40
    
    
    
    56,143
    
    
    
    13.43$14.55 - $17.17
    
    
    55,875
    
    
    
    3.6
    
    
    
    16.45
    
    
    
    55,875
    
    
    
    16.45467,054
    
    
    
    7.9
    
    
    
    5.83
    
    
    
    257,037
    
    
    $
    8.23
  12




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  6.
    
    Fair Value
   Cash and Cash Equivalents
 Investment Securities
 Loans Held for Sale:
 Loans Receivable
 Federal Home Loan Bank stock
 Accrued Interest Receivable and Payable:
 Deposits
  13




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  6.
    
    Fair Value (continued)
 Advances from the Federal Home Loan Bank
 Repurchase Agreements:
 Subordinated debentures:
 Advances by Borrowers for Taxes and Insurance
 Commitments to Extend Credit
  September 30, 2010
    
    
    December 31, 2009Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fairvalue
    
    
    value
    
    
    value
    
    
    value(In thousands)Financial assetsCash and cash equivalents
    
    $
    35,328
    
    
    $
    35,328
    
    
    $
    38,153
    
    
    $
    38,153Investment securities available for sale
    
    
    35,588
    
    
    
    35,588
    
    
    
    55,950
    
    
    
    55,950Investment securities held to maturity
    
    
    3,486
    
    
    
    3,667
    
    
    
    2,113
    
    
    
    2,200Loans held for sale
    
    
    12,143
    
    
    
    12,423
    
    
    
    475
    
    
    
    485Loans receivable
    
    
    676,533
    
    
    
    669,414
    
    
    
    659,022
    
    
    
    646,990Federal Home Loan Bank stock
    
    
    29,888
    
    
    
    29,888
    
    
    
    29,888
    
    
    
    29,888Accrued interest receivable
    
    
    3,745
    
    
    
    3,745
    
    
    
    3,979
    
    
    
    3,979Financial liabilitiesDeposits
    
    
    647,937
    
    
    
    641,941
    
    
    
    659,902
    
    
    
    647,149Advances from the Federal Home Loan Bank
    
    
    133,028
    
    
    
    138,811
    
    
    
    97,291
    
    
    
    101,924Repurchase agreements
    
    
    5,637
    
    
    
    5,637
    
    
    
    6,941
    
    
    
    6,941Subordinated debentures
    
    
    5,000
    
    
    
    4,820
    
    
    
    5,000
    
    
    
    4,768Advances by borrowers for taxes and insurance
    
    
    1,279
    
    
    
    1,279
    
    
    
    1,909
    
    
    
    1,909Accrued interest payable
    
    
    1,646
    
    
    
    1,646
    
    
    
    1,669
    
    
    
    1,669
  14




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  6.
    
    Fair Value (continued)
       September 30,
    
    
    Fair Value Measurements at Reporting Date Using(in thousands)
    
    2010
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Securities available for sale:U.S. government sponsored enterprises
    
    $
    6,160
    
    
    $
    
    
    
    $
    6,160
    
    
    $
    Corporate equity securities
    
    
    95
    
    
    
    52
    
    
    
    43
    
    
    
    Mortgage-backed securities
    
    
    32,819
    
    
    
    
    
    
    
    32,819
    
    
    
    
  Fair Value Measurements at Reporting Date UsingChange in fairSept. 30,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    value for the(in thousands)
    
    2010
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    period endedImpaired loans
    
    $
    19,989
    
    
    $
    
    
    
    $
    
    
    
    $
    19,989
    
    
    $
    10,700Real estate
acquired through
foreclosure
    
    
    10,556
    
    
    
    
    
    
    
    
    
    
    
    10,556
    
    
    
    460
 Fair Value Measurements at Reporting Date UsingChange in fairDecember 31,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    value for the(in thousands)
    
    2009
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    period endedImpaired loans
    
    $
    25,982
    
    
    
    
    
    
    
    
    
    
    $
    25,982
    
    
    $
    13,081Real estate
acquired through
foreclosure
    
    
    9,660
    
    
    
    
    
    
    
    
    
    
    
    9,660
    
    
    
    945
  15




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
  6.
    
    Fair Value (continued)
   7.
    
    Recent Accounting Pronouncements
    16




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operation
 Forward Looking Statements
  
    
    continued deterioration in the credit quality of the loan portfolio could occur due to a
number of factors, such as adverse changes in economic conditions that impair the ability
of borrowers to repay their loans, the underlying value of the collateral could prove less
valuable than otherwise assumed and assumed cash flows may be worse than expected, which
may adversely impact the provision for loan losses;
 
    
    changes in prepayment speeds, loan originations, sale volumes and charge-offs, which may
be less favorable than expected and adversely impact the amount of interest income
generated;
 
    
    changes in accounting standards, policies, estimates or procedures may adversely affect
reported financial condition or results of operations;
 
    
    delayed or incomplete resolution of regulatory issues that could arise;
 
    
    ability to receive dividends from its subsidiaries;
 
    
    ability to maintain required capital levels and adequate sources of funding and
liquidity;
 
    
    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, capital resources and projections of earnings.
  17




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Discussion of Financial Condition Changes from December 31, 2009 to September 30, 2010
 Forward Looking Statements (continued)
  
    
    competition in the industry and markets in which we operate;
 
    
    levels of non-performing 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
   
    
    Volatile equity markets that declined significantly
 
    
    Stress on the banking industry with significant financial assistance to many financial
institutions, extensive regulatory and congressional scrutiny and regulatory requirements
 
    
    Low interest rate environment particularly given the government involvement in the
financial markets, and
 
    
    Continued high levels of unemployment nationally and in our local markets
   18




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Discussion of Financial Condition Changes from December 31, 2009 to September 30, 2010
 Overview (continued)
     19




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Discussion of Financial Condition Changes from December 31, 2009 to September 30, 2010
        20




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Discussion of Financial Condition Changes from December 31, 2009 to September 30, 2010
    September
    
    
    December 31,30, 2010
    
    
    200930 - 89 days
    
    
    30 - 89 daysdelinquent
    
    
    delinquentResidential
    
    $
    4,599
    
    
    $
    4,818Multifamily
    
    
    77
    
    
    
    79Non Residential
    
    
    
    
    
    
    2,693Construction / development
    
    
    
    
    
    
    534Commercial
    
    
    737
    
    
    
    92HELOC and second mortgage
    
    
    1,838
    
    
    
    2,020Consumer and other
    
    
    70
    
    
    
    77Total
    
    $
    7,321
    
    
    $
    10,313
   21




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
  Discussion of Financial Condition Changes from December 31, 2009 to September 30, 2010
   Sept 30,
    
    
    December 31,2010
    
    
    2009(Dollars in thousands)Balance at beginning of year
    
    $
    16,099
    
    
    $
    15,747Charge-offs:1-4 family residential real estate (1)
    
    
    6,731
    
    
    
    8,267Multifamily & nonresidential real estate
    
    
    5,100
    
    
    
    9,664Other Construction and Land
    
    
    2,614
    
    
    
    2,484Consumer
    
    
    20
    
    
    
    20Commercial
    
    
    3,410
    
    
    
    2,052Agriculture Loans
    
    
    
    
    
    
    41Overdraft Protection
    
    
    7
    
    
    
    18Total charge-offs
    
    
    17,882
    
    
    
    22,546Recoveries:1-4 family residential real estate (1)
    
    
    411
    
    
    
    445Multifamily & nonresidential real estate
    
    
    258
    
    
    
    621Other Construction and Land
    
    
    225
    
    
    
    Commercial
    
    
    204
    
    
    
    22Agriculture Loans
    
    
    8
    
    
    
    Consumer and Overdraft Protection
    
    
    8
    
    
    
    18Total recoveries
    
    
    1,114
    
    
    
    1,106Net (charge-offs) recoveries
    
    
    16,768
    
    
    
    21,440Provision for losses on loans
    
    
    17,524
    
    
    
    21,792Balance at end of period
    
    $
    16,855
    
    
    $
    16,099
 (1)
    
    Includes home equity lines of credit    22




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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 Nine Months Ended September 30, 2010 and 2009
(continued)
  September 30, 2010
    
    
    December 31, 2009
    
    
    ChangeBalance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    RateNoninterest-bearing demand
    
    $
    43,236
    
    
    
    0.00
    %
    
    $
    38,911
    
    
    
    0.00
    %
    
    $
    4,325
    
    
    
    0.00
    %Interest-bearing demand
    
    
    63,845
    
    
    
    0.33
    
    
    
    70,564
    
    
    
    0.43
    
    
    
    (6,719
    )
    
    
    (0.10
    )Money market
    
    
    93,854
    
    
    
    0.67
    
    
    
    96,172
    
    
    
    0.68
    
    
    
    (2,318
    )
    
    
    (0.01
    )Savings
    
    
    38,634
    
    
    
    0.25
    
    
    
    36,638
    
    
    
    0.25
    
    
    
    1,997
    
    
    
    0.00Certificates of deposit  retail
    
    
    393,342
    
    
    
    2.07
    
    
    
    385,622
    
    
    
    2.70
    
    
    
    7,720
    
    
    
    (0.63
    )Certificates of deposit  brokered
    
    
    15,026
    
    
    
    3.71
    
    
    
    31,995
    
    
    
    3.19
    
    
    
    (16,970
    )
    
    
    0.52Total deposits
    
    $
    647,937
    
    
    
    1.49
    %
    
    $
    659,902
    
    
    
    1.89
    %
    
    $
    (11,965
    )
    
    
    (0.40
    )%
      23




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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 Nine Months Ended September 30, 2010 and 2009
  Interest Income
    24




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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 Nine Months Ended September 30, 2010 and 2009
(continued)
 AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA
  2010
    
    
    2009Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    AverageNine Months Ended September 30,
    
    outstanding
    
    
    earned
    
    
    yield/
    
    
    outstanding
    
    
    earned
    
    
    yield/(Dollars in thousands)
    
    balance
    
    
    / paid
    
    
    rate
    
    
    balance
    
    
    / paid
    
    
    rateInterest-earning assets:Loans receivable (1)
    
    $
    656,746
    
    
    
    28,074
    
    
    
    5.70
    %
    
    $
    676,494
    
    
    
    30,560
    
    
    
    6.02
    %Securities
    
    
    47,052
    
    
    
    1,515
    
    
    
    4.29
    %
    
    
    82,405
    
    
    
    2,481
    
    
    
    4.01
    %FHLB stock
    
    
    29,888
    
    
    
    1,006
    
    
    
    4.49
    %
    
    
    29,888
    
    
    
    1,042
    
    
    
    4.65
    %Other Interest-bearing accts
    
    
    24,694
    
    
    
    4
    
    
    
    0.02
    %
    
    
    57,301
    
    
    
    25
    
    
    
    0.06
    %Total interest-earning assets
    
    
    758,380
    
    
    
    30,599
    
    
    
    5.38
    %
    
    
    846,088
    
    
    
    34,108
    
    
    
    5.38
    %Noninterest-earning assets (2)
    
    
    92,463
    
    
    
    
    
    
    
    
    
    
    
    106,790Total average assets
    
    $
    850,843
    
    
    
    
    
    
    
    
    
    
    $
    952,878Interest-bearing liabilities:Deposits
    
    
    610,673
    
    
    
    8,259
    
    
    
    1.80
    %
    
    
    641,929
    
    
    
    12,039
    
    
    
    2.50
    %FHLB advances and other
    
    
    127,141
    
    
    
    2,961
    
    
    
    3.11
    %
    
    
    157,968
    
    
    
    4,161
    
    
    
    3.51
    %Total interest-bearing liabilities
    
    
    737,814
    
    
    
    11,220
    
    
    
    2.03
    %
    
    
    799,897
    
    
    
    16,200
    
    
    
    2.70
    %Noninterest-bearing deposits
    
    
    41,845
    
    
    
    
    
    
    
    
    
    
    
    37,183Noninterest-bearing liabilities
    
    
    13,125
    
    
    
    
    
    
    
    
    
    
    
    43,681Total average liabilities
    
    
    792,784
    
    
    
    
    
    
    
    
    
    
    
    880,761Total average shareholders equity
    
    
    58,059
    
    
    
    
    
    
    
    
    
    
    
    72,117Total liabilities and shareholders
equity
    
    $
    850,843
    
    
    
    
    
    
    
    
    
    
    $
    952,878Net interest income/Interest rate spread
    
    
    
    
    
    $
    19,379
    
    
    
    3.35
    %
    
    
    
    
    
    $
    17,908
    
    
    
    2.67
    %Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    3.41
    %
    
    
    
    
    
    
    
    
    
    
    2.82
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    102.8
    %
    
    
    
    
    
    
    
    
    
    
    105.8
    %
 (1)
    
    Includes Loans Held for Sale but does not include ALLL and Non-Accrual
Loans.(2)
    
    Includes nonaccrual loans, mortgage servicing rights and allowance for loan losses.(3)
    
    Net interest income as a percent of average interest-earning assets.  25




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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 Nine Months Ended September 30, 2010 and 2009
(continued)
    Interest Expense
   Provision for Losses on Loans
   26




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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 Nine Months Ended September 30, 2010 and 2009
(continued)
 Provision for Losses on Loans (continued)
   Other Income
   General, Administrative and Other Expense
     27




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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 Nine Months Ended September 30, 2010 and 2009
   Federal Income Taxes
   Asset Quality
   28




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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 September 30, 2010 and 2009
 Asset Quality (continued)
  (in thousands)
    
    9/30/2010
    
    
    6/30/2010
    
    
    12/31/2009Criticized Loans *
    
    
    63,716
    
    
    
    71,554
    
    
    
    71,673Non Performing Loans
    
    
    34,009
    
    
    
    42,643
    
    
    
    36,449Delinquent 60+ days
    
    
    28,017
    
    
    
    34,407
    
    
    
    32,296Loan Loss Reserve **
    
    
    16,855
    
    
    
    15,676
    
    
    
    16,099Loan Loss Reserve / Total Loans **
    
    
    2.39
    %
    
    
    2.26
    %
    
    
    2.38
    %
 *
    
    Includes special mention, substandard, and doubtful.**
    
    As restated in the 2nd quarter 10-Q/A     
    
    The Banks largest borrowers exceeding $1,000,000
 
    
    Watch List borrowers exceeding a threshold of $250,000
 
    
    A risk based sampling of other borrowers between $400,000 and $999,999
   29




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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 September 30, 2010 and 2009
 General
  Interest Income
      Interest Expense
   30




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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 September 30, 2010 and 2009
 Interest Expense(continued)
  Net Interest Income
   31




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##### Table of Contents



Camco Financial Corporation
 AVERAGE BALANCE, YIELD, RATE AND VOLUME DATA
  2010
    
    
    2009Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    AverageThree Months Ended September 30,
    
    outstanding
    
    
    earned
    
    
    yield/
    
    
    outstanding
    
    
    earned
    
    
    yield/(Dollars in thousands)
    
    balance
    
    
    / paid
    
    
    rate
    
    
    balance
    
    
    / paid
    
    
    rateInterest-earning assets:Loans receivable (1)
    
    $
    661,778
    
    
    
    9,513
    
    
    
    5.75
    %
    
    $
    651,796
    
    
    
    9,948
    
    
    
    6.10
    %Securities
    
    
    40,154
    
    
    
    442
    
    
    
    4.40
    %
    
    
    68,825
    
    
    
    661
    
    
    
    3.84
    %FHLB stock
    
    
    29,888
    
    
    
    335
    
    
    
    4.48
    %
    
    
    29,888
    
    
    
    373
    
    
    
    4.99
    %Other Interest-bearing accts
    
    
    21,301
    
    
    
    2
    
    
    
    0.04
    %
    
    
    54,206
    
    
    
    5
    
    
    
    0.04
    %Total interest-earning assets
    
    
    753,121
    
    
    
    10,292
    
    
    
    5.47
    %
    
    
    804,714
    
    
    
    10,987
    
    
    
    5.46
    %Noninterest-earning assets (2)
    
    
    94,118
    
    
    
    
    
    
    
    
    
    
    
    110,207Total average assets
    
    $
    847,239
    
    
    
    
    
    
    
    
    
    
    $
    914,922Interest-bearing liabilities:Deposits
    
    
    608,661
    
    
    
    2,570
    
    
    
    1.69
    %
    
    
    577,546
    
    
    
    3,619
    
    
    
    2.51
    %FHLB advances and other
    
    
    129,429
    
    
    
    972
    
    
    
    3.00
    %
    
    
    139,882
    
    
    
    1,189
    
    
    
    3.40
    %Total interest-bearing liabilities
    
    
    738,090
    
    
    
    3,542
    
    
    
    1.92
    %
    
    
    717,428
    
    
    
    4,808
    
    
    
    2.68
    %Noninterest-bearing deposits
    
    
    42,848
    
    
    
    
    
    
    
    
    
    
    
    36,094Noninterest-bearing liabilities
    
    
    12,317
    
    
    
    
    
    
    
    
    
    
    
    89,221Total average liabilities
    
    
    793,255
    
    
    
    
    
    
    
    
    
    
    
    842,743Total average shareholders equity
    
    
    53,984
    
    
    
    
    
    
    
    
    
    
    
    72,179Total liabilities and shareholders
equity
    
    $
    847,239
    
    
    
    
    
    
    
    
    
    
    $
    914,922Net interest income/Interest rate spread
    
    
    
    
    
    $
    6,750
    
    
    
    3.55
    %
    
    
    
    
    
    $
    6,179
    
    
    
    2.78
    %Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    3.59
    %
    
    
    
    
    
    
    
    
    
    
    3.07
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    102.0
    %
    
    
    
    
    
    
    
    
    
    
    112.2
    %
 (1)
    
    Includes Loans Held for Sale but does not include ALLL and Non-Accrual
Loans.(2)
    
    Includes securities designated as available for sale.(3)
    
    Net interest income as a percent of average interest-earning assets.  32




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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 September 30, 2010 and 2009
 Provision for Losses on Loans
  Other Income
   General, Administrative and Other Expense
       33




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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 September 30, 2010 and 2009
 Federal Income Taxes
   Additional Capital
  Liquidity and Capital Resources
   34




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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 September 30, 2010 and 2009
 Liquidity and Capital Resources (continued)
 see below
      35




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
 Liquidity and Capital Resources  (continued)
   Payments due by periodLess
    
    
    
    
    
    
    
    
    
    
    MoreThan
    
    
    1-3
    
    
    3-5
    
    
    Than1 year
    
    
    years
    
    
    years
    
    
    5 years
    
    
    Total(In thousands)Contractual obligations:Operating lease obligations (1)
    
    $
    91
    
    
    
    571
    
    
    
    362
    
    
    
    175
    
    
    
    1,199Advances from the Federal Home Loan Bank
    
    
    52,000
    
    
    
    44,047
    
    
    
    30,601
    
    
    
    6,380
    
    
    
    133,028Certificates of deposit
    
    
    208,659
    
    
    
    145,614
    
    
    
    54,095
    
    
    
    
    
    
    
    408,368Repurchase agreements
    
    
    5,637
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,637Subordinated debentures (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    5,000Ohio Equity Funds for Housing
    
    
    781
    
    
    
    205
    
    
    
    289
    
    
    
    137
    
    
    
    1,412Amount of commitments expiration per periodCommitments to originate loans:Revolving, open-end lines
    
    $
    48,909
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    48,9091-4 family residential construction
    
    
    10,506
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,506Commercial real estate, other
construction land development
    
    
    16,139
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    16,139Commitments to fund commercial
real estate, construction and land
development loans not secured by
real estate
    
    
    8,551
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,551Other unused commitments
    
    
    11,861
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,861Stand by letters of credit
    
    
    397
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    397Total contractual obligations
    
    $
    363,531
    
    
    
    190,437
    
    
    
    85,347
    
    
    
    11,692
    
    
    
    651,007
 (1)
    
    The subordinated debentures are redeemable, at Camcos option, as of September 15, 2009. The
debentures mature on September 15, 2037.    36




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Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
 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
    
    $
    57,057
    
    
    
    8.61
    %
    
    
    3$53,026
    
    
    
    8.0
    %
    
    
    3$66,283
    
    
    
    10.0
    %Advantage Bank
    
    $
    53,785
    
    
    
    8.13
    %
    
    
    3$52,906
    
    
    
    8.0
    %
    
    
    3$66,132
    
    
    
    10.0
    %Tier I capital to risk-weighted
assets:Camco Financial Corporation
    
    $
    48,684
    
    
    
    7.34
    %
    
    
    3$26,513
    
    
    
    4.0
    %
    
    
    3$39,770
    
    
    
    6.0
    %Advantage Bank
    
    $
    45,412
    
    
    
    6.87
    %
    
    
    3$26,453
    
    
    
    4.0
    %
    
    
    3$39,679
    
    
    
    6.0
    %Tier I leverage to average assets:Camco Financial Corporation
    
    $
    48,684
    
    
    
    5.73
    %
    
    
    3$33,985
    
    
    
    4.0
    %
    
    
    3$42,481
    
    
    
    5.0
    %Advantage Bank (1)
    
    $
    45,412
    
    
    
    5.37
    %
    
    
    3$33,816
    
    
    
    4.0
    %
    
    
    3$42,270
    
    
    
    5.0
    %
 (1)
    
    Due to the consent order Advantage cannot be considered well or adequately capitalized until
such order is lifted by the FDIC and the Ohio Division.      37




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
 Liquidity and Capital Resources (continued)
     
 Quantitative and Qualitative Disclosures about Market Risk
      38




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Camco Financial Corporation
 Quantitative and Qualitative Disclosures About Market Risk
       39




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Camco Financial Corporation
 
 Controls and Procedures
 Disclosure Controls
  
  Legal Proceedings
  Risk Factors
 The recently enacted Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 may
adversely affect our business, financial condition and results of operations.
   
    
    the Dodd-Frank Act creates a Consumer Financial Protection Bureau with broad powers to
adopt and enforce consumer protection regulations;
 
    
    new capital regulations for bank holding companies will be adopted, which may impose
stricter requirements, and any new trust preferred securities will no longer count toward
Tier I capital;
 
    
    the federal law prohibition on the payment of interest on commercial demand deposit
accounts will be eliminated effective in July 2011;
 
    
    the standard maximum amount of deposit insurance per customer is permanently increased
to $250,000, and non-interest bearing transaction accounts will have unlimited insurance
through December 31, 2012;
 
    
    the assessment base for determining deposit insurance premiums will be expanded to
include liabilities other than just deposits; and
  40




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Camco Financial Corporation
 Risk Factors (continued)
 
    
    new corporate governance requirements applicable generally to all public companies in
all industries will require new compensation practices, including requiring companies to
claw back incentive compensation under certain circumstances, to provide shareholders
the opportunity to cast a non-binding vote on executive compensation, and to consider the
independence of compensation advisers, and new executive compensation disclosure
requirements.
   We are subject to examination and challenges by bank regulators that may materially adversely
affect our financial condition and results of operations.
   Our Tier 1 risk-based capital ratio is currently not in compliance with our Bank Agreement or the
written agreement, which may subject us to additional enforcement action.
   41




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Camco Financial Corporation
 The Corporations results of operations, financial condition or liquidity may be adversely impacted
by issues arising in foreclosure practices, including delays in the foreclosure process related to
certain industry deficiencies, as well as potential losses in connection with actual or projected
repurchases and indemnification payments related to mortgages sold into the secondary market.
    Unregistered Sales of Equity Securities and Use of Proceeds
 (a)
    
    Not applicable
 (b)
    
    Not applicable
 (c)
    
    Not applicable
 Defaults Upon Senior Securities
  (Removed and Reserved)
 Other Information
   42




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Camco Financial Corporation
  Exhibits
 Exhibit 11
    
    Statement regarding computation of per share earnings (incorporated by reference to
Note 4 on page 11 of this Form 10-Q)Exhibit 31.1
    
    Section 302 Certification by Chief Executive OfficerExhibit 31.2
    
    Section 302 Certification by Principal Financial OfficerExhibit 32.1
    
    Section 1350 certification by Chief Executive OfficerExhibit 32.2
    
    Section 1350 certification by Principal Financial Officer
  43




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SIGNATURES
  CAMCO FINANCIAL CORPORATION
(Registrant)Date: November 15, 2010
    By:
    /s/ James E. HustonJames E. HustonChief Executive OfficerDate: November 15, 2010
    By:
    /s/ Kristina K. TiptonKristina K. TiptonPrincipal Financial Accounting Officer  44