##### 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 March 31, 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
    
    (I.R.S. Employer Identification Number)incorporation or organization)
  
   þ o
 Yes þ No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 Indicate by checkmark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act).
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
    
    
    15Quantitative and Qualitative Disclosures about Market Risk
    
    
    27Controls and Procedures
    
    
    27PART II   OTHER INFORMATION
    
    
    28SIGNATURES
    
    
    30Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
  March 31,
    
    
    December 31,2010
    
    
    2009(unaudited)ASSETSCash and due from banks
    
    $
    19,527
    
    
    $
    $20,490Interest-bearing deposits in other financial institutions
    
    
    8,767
    
    
    
    17,663Cash and cash equivalents
    
    
    28,294
    
    
    
    38,153Securities available for sale, at fair value
    
    
    47,880
    
    
    
    55,950Securities held to maturity, at cost, approximate fair value of $2,125 and
$2,200 as of March 31, 2010 and December 31, 2009, respectively
    
    
    2,055
    
    
    
    2,113Loans held for sale  at lower of cost or fair value
    
    
    1,600
    
    
    
    475Loans receivable  net
    
    
    683,945
    
    
    
    659,022Office premises and equipment  net
    
    
    10,750
    
    
    
    10,870Real estate acquired through foreclosure
    
    
    10,373
    
    
    
    9,660Federal Home Loan Bank stock  at cost
    
    
    29,888
    
    
    
    29,888Accrued interest receivable
    
    
    3,858
    
    
    
    3,979Mortgage servicing rights  at lower of cost or fair value
    
    
    4,463
    
    
    
    4,433Prepaid expenses and other assets
    
    
    5,186
    
    
    
    5,712Cash surrender value of life insurance
    
    
    18,851
    
    
    
    18,838Prepaid and refundable federal income taxes
    
    
    4,336
    
    
    
    3,562Total assets
    
    $
    851,479
    
    
    $
    842,655LIABILITIES AND STOCKHOLDERS EQUITYDeposits
    
    $
    649,354
    
    
    $
    $659,902Other Borrowings
    
    
    14,051
    
    
    
    11,941Advances from the Federal Home Loan Bank
    
    
    116,192
    
    
    
    97,291Advances by borrowers for taxes and insurance
    
    
    1,040
    
    
    
    1,909Accounts payable and accrued liabilities
    
    
    9,962
    
    
    
    11,098Total liabilities
    
    
    790,599
    
    
    
    782,141Commitments
    
    
    
    
    
    
    Stockholders equity:Preferred stock  $1 par value; authorized 100,000 shares; no shares outstanding
    
    
    
    
    
    
    Common stock  $1 par value; authorized 14,900,000 shares; 8,884,508 shares
issued at March 31, 2010 and December 31, 2009
    
    
    8,885
    
    
    
    8,885Unearned compensation
    
    
    (94
    )
    
    
    (125
    )Additional paid-in capital
    
    
    60,262
    
    
    
    60,124Retained earnings
    
    
    14,824
    
    
    
    14,695Accumulated other comprehensive income net of related tax effects
    
    
    1,117
    
    
    
    1,049Treasury stock -1,678,913 shares at March 31, 2010 and December 31, 2009, at cost
    
    
    (24,114
    )
    
    
    (24,114
    )Total stockholders equity
    
    
    60,880
    
    
    
    60,514Total liabilities and stockholders equity
    
    $
    851,479
    
    
    $
    842,655
  3




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Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF EARNINGS
 
 2010
    
    
    2009(unaudited)Interest and dividend incomeLoans
    
    $
    9,280
    
    
    $
    10,567Investment securities
    
    
    578
    
    
    
    975Other interest-earning accounts
    
    
    340
    
    
    
    345Total interest and dividend income
    
    
    10,198
    
    
    
    11,887Interest ExpenseDeposits
    
    
    2,945
    
    
    
    4,473Borrowings
    
    
    997
    
    
    
    1,569Total interest expense
    
    
    3,942
    
    
    
    6,042Net interest income
    
    
    6,256
    
    
    
    5,845Provision for losses on loans
    
    
    905
    
    
    
    648Net interest income after provision for losses on loans
    
    
    5,351
    
    
    
    5,197Other incomeLate charges, rent and other
    
    
    409
    
    
    
    461Loan servicing fees
    
    
    317
    
    
    
    316Service charges and other fees on deposits
    
    
    518
    
    
    
    501Gain on sale of loans
    
    
    229
    
    
    
    369Mortgage servicing rights  net
    
    
    30
    
    
    
    60Income on cash surrender value life
    
    
    215
    
    
    
    256Total other income
    
    
    1,718
    
    
    
    1,963General, administrative and other expensesEmployee compensation and benefits
    
    
    3,385
    
    
    
    3,476Occupancy and equipment
    
    
    742
    
    
    
    782Federal deposit insurance premiums
    
    
    478
    
    
    
    281Data processing
    
    
    280
    
    
    
    307Advertising
    
    
    81
    
    
    
    172Franchise taxes
    
    
    265
    
    
    
    268Postage, supplies and office expenses
    
    
    293
    
    
    
    360Travel, training and insurance
    
    
    78
    
    
    
    66Professional services
    
    
    575
    
    
    
    444Transaction processing
    
    
    193
    
    
    
    274Real estate owned and other expenses
    
    
    422
    
    
    
    277Loan expenses
    
    
    150
    
    
    
    296Total general, administrative and other expense
    
    
    6,942
    
    
    
    7,003Earnings before federal income taxes
    
    
    127
    
    
    
    157Federal income taxes
    
    
    (2
    )
    
    
    (78
    )NET EARNINGS
    
    $
    129
    
    
    $
    235EARNINGS PER SHAREBasic
    
    $
    .02
    
    
    $
    .03Diluted
    
    $
    .02
    
    
    $
    .03Dividends declared per share
    
    $
    .00
    
    
    $
    .01
  4




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Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 
 2010
    
    
    2009(unaudited)Net earnings
    
    $
    129
    
    
    $
    235Other comprehensive income, net of tax:Unrealized holding gains on securities during the period, net of tax
effects of $35 and $114 in 2010 and 2009, respectively
    
    
    68
    
    
    
    221Comprehensive income
    
    $
    197
    
    
    $
    456
  5




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Camco Financial Corporation
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 
 2010
    
    
    2009(unaudited)Cash flows from operating activities:Net earnings for the period
    
    $
    129
    
    
    $
    235Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:Amortization of deferred loan origination fees
    
    
    38
    
    
    
    150Amortization of premiums and discounts on investment and
mortgage-backed securities  net
    
    
    6
    
    
    
    (24
    )Amortization of mortgage servicing rights  net
    
    
    103
    
    
    
    224Depreciation and amortization
    
    
    289
    
    
    
    317Provision for losses on loans
    
    
    905
    
    
    
    648Stock option expense
    
    
    138
    
    
    
    228Deferred compensation
    
    
    31
    
    
    
    (50
    )Provisions for losses on REO
    
    
    77
    
    
    
    (Gain) loss on sale of real estate acquired through foreclosure
    
    
    3
    
    
    
    5Gain on sale of loans
    
    
    (229
    )
    
    
    (369
    )Loans originated for sale in the secondary market
    
    
    (13,302
    )
    
    
    (28,166
    )Proceeds from sale of loans in the secondary market
    
    
    12,406
    
    
    
    26,380Net increase in cash surrender value of life insurance
    
    
    (173
    )
    
    
    (217
    )Increase (decrease) in cash due to changes in:Accrued interest receivable
    
    
    121
    
    
    
    198Prepaid expenses and other assets
    
    
    (283
    )
    
    
    (1,632
    )Accrued interest and other liabilities
    
    
    (1,136
    )
    
    
    1,021Net cash used in operating activities
    
    
    (877
    )
    
    
    (1,052
    )Cash flows provided by (used in) investing activities:Principal repayments, maturities on securities held to maturity
    
    
    56
    
    
    
    3,100Principal repayments, maturities on securities available for sale
    
    
    8,169
    
    
    
    12,011Purchases of investment securities designated as available for sale
    
    
    
    
    
    
    (11,501
    )Loan principal repayments
    
    
    42,791
    
    
    
    74,966Loan disbursements
    
    
    (70,179
    )
    
    
    (44,751
    )Additions to office premises and equipment
    
    
    (169
    )
    
    
    (100
    )Proceeds from sale of life insurance
    
    
    160
    
    
    
    Proceeds from sale of real estate acquired through foreclosure
    
    
    596
    
    
    
    1,624Net cash
provided by (used in) investing activities
    
    
    (18,576
    )
    
    
    35,349Net cash provided by (used in) operating and investing
activities balance carried forward
    
    
    (19,453
    )
    
    
    34,297
  6




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Camco Financial Corporation
 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
 
 2010
    
    
    2009Net cash provided by (used in) operating and investing
activities (balance brought forward)
    
    $
    (19,453
    )
    
    $
    34,297Cash flows provided by (used in) financing activities:Net decrease in deposits
    
    
    (10,548
    )
    
    
    (3,692
    )Proceeds from Federal Home Loan Bank advances and other borrowings
    
    
    64,397
    
    
    
    15,000Repayment of Federal Home Loan Bank advances and other borrowings
    
    
    (43,386
    )
    
    
    (40,269
    )Dividends paid on common stock
    
    
    
    
    
    
    (72
    )Decrease in advances by borrowers for taxes and insurance
    
    
    (869
    )
    
    
    (1,541
    )Net cash
provided by (used in) financing activities
    
    
    9,594
    
    
    
    (30,574
    )Increase (decrease) in cash and cash equivalents
    
    
    (9,859
    )
    
    
    3,723Cash and cash equivalents at beginning of period
    
    
    38,153
    
    
    
    52,285Cash and cash equivalents at end of period
    
    $
    28,294
    
    
    $
    56,008Supplemental disclosure of cash flow information:Cash paid during the period for:Interest on deposits and borrowings
    
    $
    4,283
    
    
    $
    6,266Income taxes
    
    
    
    
    
    
    Transfers from loans to real estate acquired through foreclosure
    
    
    1,389
    
    
    
    1,917
  7




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##### Table of Contents



Camco Financial Corporation
 
 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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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    Mortgage Servicing Rights
   Deferred Income Taxes
   9




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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  4.
    
    Earnings Per Share
  For the three months endedMarch 31,(in thousands, except per share information)
    
    2010
    
    
    2009BASIC:Net earnings
    
    $
    129
    
    
    $
    235Weighted average common shares outstanding
    
    
    7,206
    
    
    
    7,193Earnings per share  Basic
    
    $
    0.02
    
    
    $
    0.03DILUTED:Net earnings
    
    $
    129
    
    
    $
    235Weighted average common shares outstanding
    
    
    7,206
    
    
    
    7,193Dilutive effect of stock options
    
    
    33
    
    
    
    Total common shares and dilutive potential
common shares
    
    
    7,239
    
    
    
    7,193Earnings per share  Diluted
    
    $
    0.02
    
    
    $
    0.03
  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
  10




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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Three Months ended
    
    
    Year endedMarch 31, 2010
    
    
    December 31, 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
    
    
    (41,332
    )
    
    
    15.29
    
    
    
    (79,870
    )
    
    
    13.96Expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Outstanding at end of period
    
    
    480,230
    
    
    $
    5.80
    
    
    
    260,833
    
    
    $
    10.59Options exercisable at period end
    
    
    259,527
    
    
    $
    7.52
    
    
    
    235,451
    
    
    $
    10.54Weighted-average fair value of
options granted during the year
    
    
    
    
    
    $
    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
    
    
    340,729
    
    
    
    9.5
    
    
    $
    2.50
    
    
    
    132,145
    
    
    $
    2.508.92  9.75
    
    
    24,152
    
    
    
    7.3
    
    
    
    9.01
    
    
    
    15,218
    
    
    
    9.0211.36  14.16
    
    
    59,474
    
    
    
    4.5
    
    
    
    13.37
    
    
    
    56,290
    
    
    
    13.5214.55  17.17
    
    
    55,875
    
    
    
    3.5
    
    
    
    16.13
    
    
    
    55,874
    
    
    
    16.43480,230
    
    
    
    6.6
    
    
    
    5.80
    
    
    
    259,527
    
    
    
    7.52
 6.
    
    Fair Value
   Cash and Cash Equivalents
 Investment Securities
  11




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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Loans Held for Sale:
 Loans Receivable
 Federal Home Loan Bank stock
 Accrued Interest Receivable and Payable
 Deposits
 Advances from the Federal Home Loan Bank
 Repurchase Agreements:
 Subordinated debentures:
 Advances by Borrowers for Taxes and Insurance
 Commitments to Extend Credit
  12




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Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   March 31, 2010
    
    
    December 31, 2009Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fairvalue
    
    
    value
    
    
    value
    
    
    value(In thousands)Financial assetsCash and cash equivalents
    
    $
    28,294
    
    
    $
    28,294
    
    
    $
    38,153
    
    
    $
    38,153Investment securities available for sale
    
    
    47,880
    
    
    
    47,880
    
    
    
    55,950
    
    
    
    55,950Investment securities held to maturity
    
    
    2,055
    
    
    
    2,125
    
    
    
    2,113
    
    
    
    2,200Loans held for sale
    
    
    1,600
    
    
    
    1,622
    
    
    
    475
    
    
    
    485Loans receivable
    
    
    683,945
    
    
    
    664,695
    
    
    
    659,022
    
    
    
    646,990Federal Home Loan Bank stock
    
    
    29,888
    
    
    
    29,888
    
    
    
    29,888
    
    
    
    29,888Accrued interest receivable
    
    
    3,858
    
    
    
    3,858
    
    
    
    3,979
    
    
    
    3,979Financial liabilitiesDeposits
    
    $
    649,354
    
    
    $
    636,799
    
    
    $
    659,902
    
    
    $
    647,149Advances from the Federal Home Loan Bank
    
    
    116,192
    
    
    
    120,961
    
    
    
    97,291
    
    
    
    101,924Repurchase agreements
    
    
    9,051
    
    
    
    9,051
    
    
    
    6,941
    
    
    
    6,941Subordinated debentures
    
    
    5,000
    
    
    
    4,778
    
    
    
    5,000
    
    
    
    4,768Advances by borrowers for taxes and insurance
    
    
    1,040
    
    
    
    1,040
    
    
    
    1,909
    
    
    
    1,909Accrued interest payable
    
    
    1,650
    
    
    
    1,650
    
    
    
    1,669
    
    
    
    1,669
       Fair Value Measurements at Reporting Date Using(in thousands)March 31, 2010
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Securities available for sale
    
    $
    47,880
    
    
    $
    
    
    
    $
    47,880
    
    
    $
    
  13




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##### Table of Contents



Camco Financial Corporation
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   Fair Value Measurements at Reporting Date UsingBalance @
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Change in fair value(in thousands)
    
    March 31, 2010
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    

for the year endedImpaired loans
    
    $
    35,571
    
    
    
    
    
    
    
    
    
    
    $
    35,571
    
    
    $
    708Real estate
acquired through
foreclosure
    
    
    10,373
    
    
    
    
    
    
    
    
    
    
    
    10,373
    
    
    
    49Balance @December 31, 2009Impaired loans
    
    $
    25,982
    
    
    
    
    
    
    
    
    
    
    $
    25,982
    
    
    $
    13,081Real estate
acquired through
foreclosure
    
    
    9,660
    
    
    
    
    
    
    
    
    
    
    
    9,660
    
    
    
    945
      14




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
  
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operation
 Forward Looking Statements
  
    
    anticipated changes in industry conditions created by state and federal legislation and
regulations;
    
    anticipated changes in general interest rates and the impact of future interest rate
changes on our profitability, capital adequacy and the fair value of our financial assets
and liabilities;
    
    retention of our existing customer base and our ability to attract new customers;
    
    the development of new products and services and their success in the marketplace;
    
    the adequacy of the allowance for loan losses; and
    
    statements regarding our anticipated loan and deposit account growth, expense levels,
liquidity and capital resources and projections of earnings.
  
    
    competition in the industry and markets in which we operate;
    
    changes in general interest rates;
    
    rapid changes in technology affecting the financial services industry;
    
    changes in government regulation; and
    
    general economic and business conditions
  Discussion of Financial Condition Changes from December 31, 2009 to March 31, 2010
      15




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
      March 31,
    
    
    December 31,2010
    
    
    200930  89 days
    
    
    30  89 daysdelinquent
    
    
    delinquentResidential
    
    $
    2,805
    
    
    $
    4,818Multifamily
    
    
    208
    
    
    
    79Non Residential
    
    
    946
    
    
    
    2,693Construction / development
    
    
    36
    
    
    
    534Commercial
    
    
    251
    
    
    
    92HELOC and second mortgage
    
    
    1,374
    
    
    
    2,020Consumer and other
    
    
    79
    
    
    
    77Total
    
    $
    5,699
    
    
    $
    10,313
     16




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
  March 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2008
    
    
    2007
    
    
    2006(Dollars in thousands)Loans accounted for on nonaccrual basis:Real estate:Residential(1)
    
    $
    21,287
    
    
    $
    19,190
    
    
    $
    20,616
    
    
    $
    8,411
    
    
    $
    9,618Multi-family
    
    
    2,430
    
    
    
    2,341
    
    
    
    3,139
    
    
    
    871
    
    
    
    4,682Nonresidential
    
    
    7,747
    
    
    
    3,857
    
    
    
    18,057
    
    
    
    6,908
    
    
    
    1,989Construction
    
    
    4,587
    
    
    
    4,382
    
    
    
    8,603
    
    
    
    5,568
    
    
    
    92Commercial
    
    
    3,297
    
    
    
    515
    
    
    
    1,393
    
    
    
    455
    
    
    
    398Home equity lines of credit
    
    
    2,624
    
    
    
    2,415
    
    
    
    1,549
    
    
    
    925
    
    
    
    750Consumer and other
    
    
    145
    
    
    
    148
    
    
    
    127
    
    
    
    857
    
    
    
    136Total nonaccrual loans
    
    
    42,117
    
    
    
    32,848
    
    
    
    53,484
    
    
    
    23,995
    
    
    
    17,665Accruing loans delinquent three months or moreReal estate:Residential
    
    
    
    
    
    
    
    
    
    
    44
    
    
    
    1,520
    
    
    
    728Multi-family
    
    
    155
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    143Nonresidential
    
    
    192
    
    
    
    2,853
    
    
    
    
    
    
    
    
    
    
    
    Construction
    
    
    745
    
    
    
    638
    
    
    
    
    
    
    
    
    
    
    
    Commercial
    
    
    110
    
    
    
    110
    
    
    
    
    
    
    
    
    
    
    
    Total loans 90 days past due and accruing
    
    
    1,202
    
    
    
    3,601
    
    
    
    44
    
    
    
    1,520
    
    
    
    871Total nonperforming loans
    
    
    43,319
    
    
    
    36,449
    
    
    
    53,528
    
    
    
    25,515
    
    
    
    18,536Other real estate owned
    
    
    10,373
    
    
    
    9,660
    
    
    
    5,841
    
    
    
    5,034
    
    
    
    3,956Total nonperforming assets
    
    $
    53,692
    
    
    $
    46,109
    
    
    $
    59,369
    
    
    $
    30,549
    
    
    $
    22,492Allowance for loan losses
    
    $
    15,821
    
    
    $
    16,099
    
    
    $
    15,747
    
    
    $
    6,623
    
    
    $
    7,144Nonperforming loans as a percent of total net loans (2)
    
    
    6.18
    %
    
    
    5.40
    %
    
    
    6.91
    %
    
    
    3.13
    %
    
    
    2.23
    %Nonperforming assets to total assets
    
    
    6.16
    %
    
    
    5.19
    %
    
    
    5.93
    %
    
    
    2.99
    %
    
    
    2.15
    %Allowances for loan losses as a percent of nonperforming loans
    
    
    36.5
    %
    
    
    44.2
    %
    
    
    29.4
    %
    
    
    26.0
    %
    
    
    38.5
    %Memo section:Troubled debt restructuringsLoans and leases restructured and in compliance with modified
terms
    
    $
    17,894
    
    
    $
    16,645
    
    
    
    11,440
    
    
    
    
    
    
    
    Loans and leases restructured and not in compliance with
modified terms (included in nonaccrual)
    
    $
    9,978
    
    
    $
    4,783
    
    
    
    12,882
    
    
    
    
    
    
    
    
 (1)
    
    Includes loans secured by first and junior liens(2)
    
    Includes loans held for sale.   17




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Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
   March 31,
    
    2010
    
    
    2009(Dollars in thousands)Balance at beginning of year
    
    $
    16,099
    
    
    $
    15,268Charge-offs:1-4 family residential real estate (1)
    
    
    979
    
    
    
    540Multifamily real estate
    
    
    47
    
    
    
    1Nonresidential real estate
    
    
    218
    
    
    
    Other Construction and Land
    
    
    
    
    
    
    Consumer
    
    
    8
    
    
    
    6Commercial
    
    
    32
    
    
    
    Agriculture Loans
    
    
    
    
    
    
    41Overdraft Protection
    
    
    2
    
    
    
    3Total charge-offs
    
    
    1,286
    
    
    
    591Recoveries:1-4 family residential real estate (1)
    
    
    60
    
    
    
    51Multifamily, real estate
    
    
    27
    
    
    
    Nonresidential real estate
    
    
    2
    
    
    
    2Other Construction and Land
    
    
    2
    
    
    
    Consumer
    
    
    
    
    
    
    2Commercial
    
    
    11
    
    
    
    Agriculture Loans
    
    
    
    
    
    
    Overdraft Protection
    
    
    1
    
    
    
    1Total recoveries
    
    
    103
    
    
    
    56Net (charge-offs) recoveries
    
    
    1,182
    
    
    
    535Provision for losses on loans
    
    
    905
    
    
    
    648Balance at end of period
    
    $
    15,821
    
    
    $
    15,860
 (1)
    
    Includes home equity lines of credit    18




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
   March 31, 2010
    
    
    December 31, 2009
    
    
    ChangeBalance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    RateNoninterest-bearing demand
    
    
    38,980
    
    
    
    0.00
    %
    
    
    38,911
    
    
    
    0.00
    %
    
    
    69
    
    
    
    0.00
    %Interest-bearing demand
    
    
    64,841
    
    
    
    0.32
    
    
    
    70,564
    
    
    
    0.43
    
    
    
    (5,723
    )
    
    
    (0.10
    )Money market
    
    
    94,595
    
    
    
    0.68
    
    
    
    96,172
    
    
    
    0.68
    
    
    
    (1,577
    )
    
    
    0.00Savings
    
    
    38,604
    
    
    
    0.25
    
    
    
    36,638
    
    
    
    0.25
    
    
    
    1,966
    
    
    
    0.00Certificates of deposit  retail
    
    
    391,373
    
    
    
    2.51
    
    
    
    385,622
    
    
    
    2.70
    
    
    
    5,751
    
    
    
    (0.19
    )Certificates of deposit  brokered
    
    
    20,961
    
    
    
    3.35
    
    
    
    31,995
    
    
    
    3.19
    
    
    
    (11,034
    )
    
    
    0.16Total deposits
    
    
    649,354
    
    
    
    1.76
    %
    
    
    659,902
    
    
    
    1.89
    %
    
    
    (10,548
    )
    
    
    (0.13
    )
      Comparison of Results of Operations for the Three Months Ended March 31, 2010 and 2009
   19




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
  Net Interest Income
   2010
    
    
    2009Average
    
    
    Interest
    
    
    Average
    
    
    Average
    
    
    Interest
    
    
    AverageThree Months Ended March 31,
    
    outstanding
    
    
    earned
    
    
    yield/
    
    
    outstanding
    
    
    earned
    
    
    yield/(Dollars in thousands)
    
    balance
    
    
    / paid
    
    
    rate
    
    
    balance
    
    
    / paid
    
    
    rateInterest-earning assets:Loans receivable (1)
    
    $
    657,081
    
    
    $
    9,280
    
    
    
    5.65
    %
    
    $
    704,211
    
    
    $
    10,567
    
    
    
    6.00
    %Securities
    
    
    55,294
    
    
    
    578
    
    
    
    4.18
    %
    
    
    94,220
    
    
    
    975
    
    
    
    4.14
    %FHLB stock
    
    
    29,888
    
    
    
    339
    
    
    
    4.54
    %
    
    
    29,888
    
    
    
    338
    
    
    
    4.52
    %Other Interest-bearing accounts
    
    
    26,726
    
    
    
    1
    
    
    
    .01
    %
    
    
    64,493
    
    
    
    7
    
    
    
    0.04
    %Total interest-earning assets
    
    
    768,989
    
    
    
    10,198
    
    
    
    5.30
    %
    
    
    892,812
    
    
    
    11,887
    
    
    
    5.33
    %Noninterest-earning assets (2)
    
    
    115,965
    
    
    
    
    
    
    
    
    
    
    
    92,221Total average assets
    
    $
    853,024
    
    
    
    
    
    
    
    
    
    
    $
    985,033Interest-bearing liabilities:Deposits
    
    
    612,881
    
    
    
    2,945
    
    
    
    1.92
    %
    
    
    685,870
    
    
    
    4,473
    
    
    
    2.61
    %FHLB advances and other
    
    
    124,617
    
    
    
    997
    
    
    
    3.20
    %
    
    
    169,723
    
    
    
    1,569
    
    
    
    3.70
    %Total interest-bearing liabilities
    
    
    737,498
    
    
    
    3,942
    
    
    
    2.14
    %
    
    
    855,593
    
    
    
    6,042
    
    
    
    2.82
    %Noninterest-bearing deposits
    
    
    40,192
    
    
    
    
    
    
    
    
    
    
    
    38,064Noninterest-bearing liabilities
    
    
    14,670
    
    
    
    
    
    
    
    
    
    
    
    19,447Total average liabilities
    
    
    792,360
    
    
    
    
    
    
    
    
    
    
    
    913,104Total average shareholders equity
    
    
    60,664
    
    
    
    
    
    
    
    
    
    
    
    71,929Total liabilities and shareholders equity
    
    $
    853,024
    
    
    
    
    
    
    
    
    
    
    $
    985,033Net interest income/Interest rate spread
    
    
    
    
    
    $
    6,256
    
    
    
    3.16
    %
    
    
    
    
    
    $
    5,845
    
    
    
    2.51
    %Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    3.25
    %
    
    
    
    
    
    
    
    
    
    
    2.62
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    
    
    
    
    104.27
    %
    
    
    
    
    
    
    
    
    
    
    107.88
    %
 (1)
    
    Includes loans held for sale. Loan fees are immaterial.(2)
    
    Includes nonaccrual loans, mortgage servicing rights and allowance for loan losses(3)
    
    Net interest income as a percent of average interest-earning assets 
  20




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
   See .
   Provision for Losses on Loans
      21




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
   
    
    The percentage of impaired loans on which we relied on a current third party appraisal for
valuation exceeded 90% as of December 31, 2009.
 
    
    Based on policy, a loan is typically deemed impaired (nonperforming) once it has gone over
90 days delinquent. Our management of the troubled credit will vary as will the timing of
valuations, loan loss provision and charge offs based on a
multitude of factors such as, cash flow of the business/borrower, responsiveness of the borrower,
communication with the commercial banker, property inspections, property deterioration, and
delinquency. Typically, a nonperforming, non-homogeneous collateral dependent loan will be
valued and adjusted (if needed) within a 90 day period after determination of impairment. If
impaired, the collateral is then evaluated and an updated appraisal is most typically ordered.
Upon receipt of an appraisal or other valuation, we complete an analysis to determine if the
impaired loan requires a specific reserve. The time frame may be as short as 30 days or as much
as 180 days when an appraisal is ordered.
 
    
    Camcos credit risk management process consistently monitors key performance metrics across
both the performing and non performing assets to identify any further degradation of credit
quality. Additionally, impaired credits are monitored in weekly loan committee asset quality
discussions, monthly Asset Classification Committee meetings and quarterly loan loss reserve
reviews. Strategy documents and exposure projections are completed on a monthly basis to
ensure that the current status of the troubled asset is clearly understood and reported.
 
    
    The Asset Classification Committee oversees the management of all impaired loans and any
subsequent loss provision or chargeoff that is considered. When a loan is deemed impaired,
the valuation is obtained to determine any existing loss that may be present as of the
valuation date. Policy dictates that any differences from fair market value, less costs to
sell, are to be recognized as loss during the current period (loan loss provision or
chargeoff). Any deviations from this policy will be identified by amount and contributing
reasons for the policy departure during our quarterly reporting process.
 
    
    Camcos policies dictate that an impaired loan subject to partial chargeoff will remain in
a nonperforming status until it is brought current. Typically, this occurs when a loan is
paid current and completes a period on on-time payments that demonstrate that the loan can
perform. Camco monitors through various system reports any loan whose terms have been
modified. These reports identify troubled debt restructures, modification, and renewals.
 
    
    When circumstances do not allow for updated collateral or Camco determines that an
appraisal is not needed, the underlying collaterals fair market value is estimated in the
following ways:
 
    
    Camco personnel property inspections combined with original
appraisal review
    
    Auditor values
    
    Broker price opinions
    
    Various on-line fair market value estimations programs (i.e.
Freddie Mac, Fannie Mae, Zillow, etc).
 Other Income
    22




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
  General, Administrative and Other Expense
      Federal Income Taxes
  Liquidity and Capital Resources
  see below
  23




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
          24




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
    Payments due by periodLessthan
    
    
    1  3
    
    
    3  5
    
    
    More than1 year
    
    
    Years
    
    
    years
    
    
    5 years
    
    
    Total(In thousands)Contractual obligations:Operating lease obligations
    
    $
    291
    
    
    $
    510
    
    
    $
    353
    
    
    $
    119
    
    
    $
    1,273Advances from the FHLB
    
    
    26,000
    
    
    
    48,000
    
    
    
    15,483
    
    
    
    26,709
    
    
    
    116,192Repurchase agreements
    
    
    9,051
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,051Certificates of deposit
    
    
    247,465
    
    
    
    130,197
    
    
    
    34,671
    
    
    
    
    
    
    
    412,333Subordinated debentures (1)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    5,000Ohio equity funds for housing
    
    
    781
    
    
    
    205
    
    
    
    289
    
    
    
    137
    
    
    
    1,412Amount of commitments expiring per period:Commitments to originate loans:Revolving open-end lines secured by 1-4
    
    $
    51,399
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    51,399Not secured by real estate
    
    
    7,293
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,293One- to four-family construction loan
    
    
    5,937
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,937Commercial real estate, other
construction loan and land development
    
    
    10,893
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,893Commercial and industrial and other
unused commitments
    
    
    11,033
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,033Letters of credit
    
    
    397
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    397Total contractual obligations
    
    $
    370,540
    
    
    $
    178,912
    
    
    $
    50,796
    
    
    $
    31,965
    
    
    $
    632,213
 (1)
    
    The subordinated debentures are redeemable, at Camcos option.The debentures mature on September 15, 2037.    25




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##### Table of Contents



Camco Financial Corporation
 MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
   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:Camco Financial Corporation
    
    $
    72,575
    
    
    
    11.09
    %
    
    
    >$52,368
    
    
    
    >       8.0
    %
    
    
    >$65,460
    
    
    
    10.0
    %Advantage Bank
    
    $
    67,915
    
    
    
    10.40
    %
    
    
    >$52,252
    
    
    
    >       8.0
    %
    
    
    >$65,314
    
    
    
    10.0
    %Tier I capital to risk-weighted assets:Camco Financial Corporation
    
    $
    64,317
    
    
    
    9.83
    %
    
    
    >$26,184
    
    
    
    >      4.0
    %
    
    
    >$39,276
    
    
    
    6.0
    %Advantage Bank
    
    $
    59,657
    
    
    
    9.13
    %
    
    
    >$26,126
    
    
    
    >      4.0
    %
    
    
    >$39,188
    
    
    
    6.0
    %Tier I leverage to average assets:Camco Financial Corporation
    
    $
    64,317
    
    
    
    7.46
    %
    
    
    >$34,488
    
    
    
    >       4.0
    %
    
    
    >$43,110
    
    
    
    5.0
    %Advantage Bank
    
    $
    59,657
    
    
    
    6.95
    %
    
    
    >$34,320
    
    
    
    >       4.0
    %
    
    
    >$42,900
    
    
    
    5.0
    %
        26




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
      
 Item 4:
    
    Controls and Procedures
    
    
    Established an interdepartmental committee, which is a subgroup of the
Asset Classification Committee, amongst credit administration,
enterprise risk management and finance department to review the
overall loan loss provision process by assessing the historical risk
factors, the recent trends, and economic forecasts, as appropriate.
This enhanced collaborative process will help identify trends that
should be recognized in the overall loan loss provision process while
permitting the use of professional judgment necessary to interpret the
complex data. The jointly compiled loan loss provision will be
reported to and approved by the executive management including the CEO
and the Board of Directors on a quarterly basis.
    
    Performed more frequent loan loss provision analysis than current
quarterly analysis until otherwise decided in the future. Complete
analysis as of the month-end prior to the quarter-end will be
performed and reviewed by the aforementioned committee.
  27




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##### Table of Contents



PART II
 ITEM 1.
    
    Legal Proceedings
  ITEM 1A.
    
    Risk Factors
  ITEM 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
 (a)
    
    Not applicable(b)
    
    Not applicable(c)
    
    Not applicable
 ITEM 3.
    
    Defaults Upon Senior Securities
  ITEM 4.
    
    (Removed and Reserved)
 ITEM 5.
    
    Other Information
   28




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##### Table of Contents



ITEM 6.
    
    Exhibits
 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
  29




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##### Table of Contents



SIGNATURES
  Date: May 17, 2010
    By:
    /s/ James E. HustonJames E. HustonChief Executive OfficerDate: May 17, 2010
    By:
    /s/ James E. BrooksJames E. BrooksChief Financial Officer  30