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Articles 

Camco Financial Corp. Reports Operating Results (10-Q)

August 12, 2013 | About:

Camco Financial Corp. (CAFI) filed Quarterly Report for the period ended 2013-06-30.

Camco Financial Corp has a market cap of $60.9 million; its shares were traded at around $4.30 with a P/E ratio of 10.60 and P/S ratio of 1.40.

Highlight of Business Operations:

Net interest income totaled $10.9 million for the six months ended June 30, 2013, a decrease of $1.3 million or 10.3%, compared to the six month period ended June 30, 2012, generally reflecting the effects of the balance sheet movement in the different types of earning assets, their respective average balances and the average yield. Due to these changes the yield, on earning assets decreased 69 basis points to 3.93% for the six months ended June 30, 2013 compared to 4.62% for the six months ended June 30, 2012. This decrease was partially offset by a 37 basis point decrease in interest bearing liabilities. The decrease was primarily related to decreased certificates of deposit, average balances, which have higher costs than core deposits, coupled with the maturity and payoff of $10.0 million of advances in 2012.

Federal income tax benefit totaled $5.9 million, for the six months ended June 30, 2013, compared to a $25,000 benefit in the six months ended June 30, 2012. This increase relates to the reversal of the Corporations DTA valuation allowance of approximately $6.5 million. As a result, net income for the six months ended June 30, 2013, increased by approximately $0.44 per share. The DTA valuation allowance recovery is the result of sustained profitability and improving credit quality that has led to significantly lower credit costs. This, along with a reasonable expectation of continued profitability, has prompted management to determine that the tax assets would more likely than not be recovered through future taxable income and that maintaining the entire valuation allowance was no longer necessary. The DTA includes a gross net operating loss carry forward of approximately $4.3 million which will be used in future periods to reduce income tax payments. The net operating loss carry forward is expected to decline during 2013 as the Corporation continues to generate taxable income.

Camcos net earnings for the three months ended June 30, 2013 totaled $6.2 million, an increase of $5.7 million, from the net earnings of $482,000 reported in the comparable 2012 period. On a diluted per share basis, net earnings for the three months ended June 30, 2013 were $0.42, compared to $0.06 in the three months ended June 30, 2012. The increase in earnings was primarily attributable to the reversal of the valuation allowance against the Corporations DTA. The DTA valuation allowance recovery is the result of sustained profitability and improving credit quality that has led to significantly lower credit costs. This, along with a reasonable expectation of continued profitability, has prompted management to determine that the tax assets would more likely than not be recovered through future taxable income and that maintaining the valuation allowance was no longer necessary.

Net interest income totaled $5.5 million for the three months ended June 30, 2013, a decrease of $459,000 or 7.8%, compared to the three month period ended June 30, 2012, generally reflecting the effects of the balance sheet movement in the different types of earning assets, their respective average balances and the average yield. Due to these changes, the yield on earning assets decreased 54 basis points to 3.93% for the three months ended June 30, 2013 compared to 4.47% for the three months ended June 30, 2012. This decrease was partially offset by a 31 basis point decrease in interest bearing liabilities. The decrease was primarily related to decreased certificates of deposit average balances, which have higher costs than core deposits, coupled with the maturity and payoff of $10.0 million of advances in 2012.

Federal income tax benefit totaled $5.9 million, for the six months ended June 30, 2013, compared to a $62,000 benefit in the three months ended June 30, 2012. This increase relates to the reversal of the Corporations DTA valuation allowance of approximately $6.5 million. As a result, net income for the second quarter of 2013 increased by approximately $0.43 per share. The DTA valuation allowance recovery is the result of sustained profitability and improving credit quality that has led to significantly lower credit costs. This, along with a reasonable expectation of continued profitability, has prompted management to determine that the tax assets would more likely than not be recovered through future taxable income and that maintaining the valuation allowance was no longer necessary. The DTA includes a gross net operating loss carry forward of approximately $4.3 million, which will be used in future periods to reduce income tax payments. The net operating loss carry forward is expected to decline during 2013 as the Corporation continues to generate taxable income.

Read the The complete Report

About the author:

10qk
Charlie Tian, Ph.D., is the founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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