SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 6, 2000
---------------
Camco FINANCIAL CORPORATION
---------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 0-25196 51-0110823
--------------------------- --------------------- ----------------------
(State or other jurisdiction (Commission File No.) (IRS Employer I.D. No.)
of incorporation)
814 Wheeling Avenue, Cambridge, Ohio 45725-0708
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (740) 435-2020
----------------------
<PAGE>
This Amendment No. 1 to Form 8-K amends and supplements the Form 8-K dated
January 6, 2000 filed with the Securities and Exchange Commission on January 21,
2000, relating to the acquisition by Camco Financial Corporation of Westwood
Homestead Financial Corporation. This Amendment No. 1 contains the information
referred to in Item 7 of the Form 8-K.
Item 7. Financial Statements and Exhibits.
- ------ ---------------------------------
(a) Financial Statement of Business Acquired.
See Index to Financial Statements and Pro Forma Financial
Information below.
(b) Pro Forma Financial Information.
See Index to Financial Statements and Pro Forma Financial
Information below.
(c) Exhibits.
See Index to Exhibits.
2
<PAGE>
INDEX TO FINANICAL STATEMENTS
AND PRO FORMA FINANCIAL INFORMATION
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 4
CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION 5
CONSOLIDATED STATEMENT OF EARNINGS 6
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME 7
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 8
CONSOLIDATED STATEMENT OF CASH FLOWS 9
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION 30
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS 31
3
<PAGE>
Report of Independent Certified Public Accountants
Board of Directors
Westwood Homestead Financial Corporation
We have audited the accompanying consolidated statement of financial condition
of Westwood Homestead Financial Corporation as of December 31, 1999, and the
related consolidated statements of earnings, comprehensive income, stockholders'
equity and cash flows for the year then ended. These consolidated financial
statements are the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Westwood Homestead
Financial Corporation as of December 31, 1999, and the consolidated results of
its operations and its cash flows for the year then ended, in conformity with
generally accepted accounting principles.
/s/GRANT THORNTON LLP
Cincinnati, Ohio
March 2, 2000
4
<PAGE>
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
December 31, 1999
(In thousands, except share data)
ASSETS
<S> <C>
Cash on hand and due from banks $ 973
Interest-bearing deposits in other financial institutions 5,138
Federal funds sold 1,932
-------
Cash and cash equivalents 8,043
Mortgage-backed securities available for sale - at market 5,170
Loans receivable - net 141,859
Office premises and equipment - net 2,094
Stock in Federal Home Loan Bank - at cost 1,841
Accrued interest receivable 788
Prepaid expenses and other assets 329
Prepaid federal income taxes 97
-------
Total assets $160,221
=======
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $100,536
Advances from the Federal Home Loan Bank 35,239
Advances by borrowers for taxes and insurance 918
Accrued expenses and other liabilities 194
Deferred federal income taxes 267
-------
Total liabilities 137,154
Commitments -
Stockholders' equity
Common stock - $.01 par value; 15,000,000 shares authorized;
2,843,375 shares issued 28
Additional paid-in capital 18,768
Retained earnings - substantially restricted 15,776
Less 674,557 shares of treasury stock - at cost (8,289)
Accumulated comprehensive income - unrealized gains on securities
designated as available for sale, net of related tax effects 5
Shares acquired by Employee Stock Ownership Plan (2,198)
Shares acquired by Management Recognition Plan (1,023)
-------
Total stockholders' equity 23,067
-------
Total liabilities and stockholders' equity $160,221
=======
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF EARNINGS
December 31, 1999
(In thousands, except share data)
<S> <C>
Interest income
Loans receivable $10,393
Mortgage-backed securities 237
Interest-bearing deposits and other 284
------
Total interest income 10,914
Interest expense
Deposits 4,607
Borrowings 1,500
------
Total interest expense 6,107
------
Net interest income 4,807
Provision for losses on loans 341
------
Net interest income after provision for losses on loans 4,466
Other income
Services charges and other fees 291
Gain on sale of loans 77
------
Total other income 368
General, administrative and other expense
Employee compensation and benefits 1,857
Occupancy and equipment 404
Franchise taxes 267
Federal deposit insurance premiums 52
Data processing 114
Advertising 86
Other operating 347
------
Total general, administrative and other expense 3,127
------
Earnings before federal income taxes 1,707
Federal income taxes
Current 528
Deferred 36
------
Total federal income taxes 564
------
NET EARNINGS $ 1,143
======
BASIC EARNINGS PER SHARE $.60
===
DILUTED EARNINGS PER SHARE $.60
===
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE>
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended December 31, 1999
(In thousands)
<S> <C>
Net earnings $1,143
Other comprehensive loss, net of tax benefits:
Unrealized holding losses on securities designated as available
for sale during the period, net of related tax effects of $4 (7)
-----
Comprehensive income $1,136
=====
Accumulated other comprehensive income $ 5
=====
</TABLE>
The accompanying notes are an integral part of these statements.
7
<PAGE>
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
For the year ended December 31, 1999
(In thousands, except share data)
Unrealized
gain on
Additional available Shares Shares Total
Common paid-in Retained for sale acquired acquired Treasury stockholders'
stock capital earnings securities by ESOP by MRP stock equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1998 $ 28 $18,811 $15,515 $ 12 $(2,419) $(1,323) $(6,647) $23,977
Net earnings - - 1,143 - - - - 1,143
Other comprehensive loss - - - (7) - - - (7)
Dividends on common stock of $.45 per share - - (882) - - - - (882)
Purchase of treasury shares - at cost - - - - - - (1,642) (1,642)
Management recognition plan award - (27) - - - 27 - -
Amortization of Management Recognition Plan - - - - - 273 - 273
Amortization of Employee Stock Ownership Plan - (16) - - 221 - - 205
--- ------ ------ --- ------ ------ ------ -------
Balance at December 31, 1999 $ 28 $18,768 $15,776 $ 5 $(2,198) $(1,023) $(8,289) $23,067
=== ====== ====== === ====== ====== ====== ======
</TABLE>
The accompanying notes are an integral part of these statements.
8
<PAGE>
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended December 31, 1999
(In thousands)
<S> <C>
Cash flows from operating activities:
Net earnings for the year $ 1,143
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Amortization of premiums and discounts on investment and
mortgage-backed securities - net 33
Depreciation and amortization 222
Federal Home Loan Bank stock dividends (97)
Employee Stock Ownership Plan amortization 205
Management Recognition Plan amortization 273
Amortization of deferred net loan fees (102)
Provision losses on loans 341
Gain on sale of loans (63)
Loans originated for sale (4,887)
Proceeds from sale of loans 5,238
Increase (decrease) in cash due to changes in:
Accrued interest receivable (70)
Prepaid expenses and other assets (151)
Accrued expenses and other liabilities 68
Federal income taxes
Current 87
Deferred 36
------
Net cash provided by operating activities 2,276
Cash flows provided by (used in) investing activities:
Purchase of mortgage-backed securities designated as available for sale (4,995)
Principal repayments on mortgage-backed securities 1,309
Net increase in loans receivable (23,406)
Additions to office premises and equipment (139)
Purchase of Federal Home Loan Bank stock (603)
------
Net cash used in investing activities (27,834)
------
Net cash used in operating and investing activities
(balance carried forward) (25,558)
------
</TABLE>
9
<PAGE>
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
For the year ended December 31, 1999
(In thousands)
<S> <C>
Net cash used in operating and investing activities
(balance brought forward) $(25,558)
Cash flows provided by (used in) financing activities:
Net increase in deposits 13,200
Proceeds from Federal Home Loan Bank advances 17,801
Repayments of Federal Home Loan Bank advances (14)
Increase in advances by borrowers for taxes and insurance 128
Purchase of treasury shares (1,642)
Dividends on common stock (882)
-------
Net cash provided by financing activities 28,591
-------
Net increase in cash and cash equivalents 3,033
Cash and cash equivalents at beginning of year 5,010
-------
Cash and cash equivalents at end of year $ 8,043
=======
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest on deposits and borrowings $ 6,111
=======
Income taxes $ 579
=======
Supplemental disclosure of noncash investing activities:
Transfers from mortgage loans to real estate acquired through foreclosure $ 101
=======
Issuance of mortgage loans upon sale of real estate through foreclosure $ 82
=======
Unrealized gain on securities designated as available for sale, net of related tax effects $ 7
=======
Recognition of mortgage servicing rights in accordance with SFAS No. 125 $ 14
=======
</TABLE>
The accompanying notes are an integral part of these statements.
10
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The business activity of Westwood Homestead Financial Corporation (the
"Corporation") has been limited primarily to holding the common shares of
its wholly-owned subsidiary, Westwood Homestead Savings Bank (the "Bank").
The Bank conducts a general banking business in southwestern Ohio which
consists of attracting deposits from the general public and applying those
funds to the origination of loans for residential, consumer and
nonresidential purposes. The profitability of the Bank is significantly
dependent on net interest income, which is the difference between interest
income generated from interest-earning assets (i.e., loans and investments)
and the interest expense paid on interest-bearing liabilities (i.e.,
customer deposits and borrowed funds.). Net interest income is affected by
the relative amount of interest-earning assets and interest-bearing
liabilities and the interest received or paid on these balances. The level
of interest rates paid or received by the Bank can be significantly
influenced by a number of environmental factors, such as governmental
monetary policy, that are outside management's control.
The consolidated financial information presented herein has been prepared in
accordance with generally accepted accounting principles ("GAAP") and
general accounting practices within the financial services industry. In
preparing financial statements in accordance with GAAP, management is
required to make estimates and assumptions that affect the reported amounts
of assets and liabilities and the disclosure of contingent assets and
liabilities at the date of the financial statements and revenues and
expenses during the reporting period. Actual results could differ from such
estimates.
The Bank is subject to competition from other financial institutions. The
Bank's deposits are insured up to applicable limits by the Savings
Association Insurance Fund of the Federal Deposit Insurance Corporation
(FDIC). The Bank is an Ohio chartered savings bank and is subject to
comprehensive regulation, examination and supervision by the FDIC and the
State of Ohio Division of Financial Institutions.
The following is a summary of the Corporation's significant accounting
policies which have been consistently applied in the preparation of the
accompanying consolidated financial statements.
1. Principles of Consolidation
The consolidated financial statements include the accounts of the
Corporation and the Bank. All significant intercompany balances and
transactions have been eliminated.
2. Mortgage-Backed Securities
The Corporation accounts for its investment in mortgage-backed securities in
accordance with Statement of Financial Accounting Standards ("SFAS") No. 115
"Accounting for Certain Investments in Debt and Equity Securities." SFAS No.
115 requires that investments be categorized as held-to-maturity, trading,
or available for sale. Securities classified as held-to-maturity are carried
at cost only if the Corporation has the positive intent and ability to hold
these securities to maturity. Trading securities and securities available
for sale are carried at fair value with resulting unrealized gains or losses
recorded to operations or stockholders' equity, respectively.
Mortgage-backed securities are classified as held-to-maturity or available
for sale
11
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2. Mortgage-Backed Securities (continued)
upon acquisition. At December 31, 1999, the Corporation's stockholders'
equity reflected net unrealized gains on securities designated as available
for sale of $5,000. Realized gains and losses on sales of securities are
recognized using the specific identification method.
3. Loans Receivable
Loans held in portfolio are stated at the principal amount outstanding,
adjusted for unamortized yield adjustments, including deferred loan
origination fees and costs, capitalized mortgage servicing rights and the
allowance for loan losses. The yield adjustments are amortized and accreted
to operations using the interest method over the average life of the
underlying loans.
Interest is accrued as earned unless the collectibility of the loan is in
doubt. Uncollectible interest on loans that are contractually past due is
charged off, or an allowance is established based on management's periodic
evaluation. The allowance is established by a charge to interest income
equal to all interest previously accrued, and income is subsequently
recognized only to the extent that cash payments are received until, in
management's judgment, the borrower's ability to make periodic interest and
principal payments has returned to normal, in which case the loan is
returned to accrual status.
Loans held for sale are carried at the lower of cost (less principal
payments received) or fair value (market value), calculated on an aggregate
basis. At December 31, 1999 the Bank had no loans identified as held for
sale.
The Bank accounts for mortgage servicing rights in accordance with SFAS No.
125 "Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities," which requires that the Corporation
recognize as separate assets, rights to service mortgage loans for others,
regardless of how those servicing rights are acquired. An institution that
acquires mortgage servicing rights through either the purchase or
origination of mortgage loans and sells those loans with servicing rights
retained must allocate some of the cost of the loans to the mortgage
servicing rights.
SFAS No. 125 requires that capitalized mortgage servicing rights and
capitalized excess servicing receivables be assessed for impairment.
Impairment is measured based on fair value. The mortgage servicing rights
recorded by the Bank calculated in accordance with the provisions of SFAS
No. 125, were segregated into pools for valuation purposes, using as pooling
criteria the loan term and coupon rate. Once pooled, each grouping of loans
was evaluated on a discounted earnings basis to determine the present value
of future earnings that a purchaser could expect to realize from each
portfolio. Earnings were projected from a variety of sources including loan
servicing fees, interest earned on float, net interest earned on escrows,
miscellaneous income, and costs to service the loans. The present value of
future earnings is the "economic" value for the pool, i.e., the net
realizable present value to an acquirer of the acquired servicing.
12
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
3. Loans Receivable (continued)
The Bank recorded amortization related to mortgage servicing rights totaling
approximately $68,000 for the year ended December 31, 1999. At December 31,
1999, the carrying value and fair value of the Bank's mortgage servicing
rights totaled approximately $191,000.
At December 31, 1999, the Bank was servicing mortgage loans of approximately
$20.0 million that have been sold to the Federal Home Loan Mortgage
Corporation and other investors, of which approximately $6.4 million had
been sold with recourse.
4. Loan Origination and Commitment Fees
The Corporation accounts for loan origination fees and costs in accordance
with SFAS No. 91, "Accounting for Nonrefundable Fees and Costs Associated
with Originating or Acquiring Loans and Initial Direct Costs of Leases."
Pursuant to the provisions of SFAS No. 91, all loan origination fees
received, net of certain direct origination costs, are deferred on a
loan-by-loan basis and amortized to interest income using the interest
method, giving effect to actual loan prepayments. Additionally, SFAS No. 91
generally limits the definition of loan origination costs to the direct
costs attributable to originating a loan, i.e., principally actual personnel
costs.
Fees received for loan commitments are deferred and amortized over the life
of the related loan using the interest method.
5. Allowance for Loan Losses
It is the Corporation's policy to provide valuation allowances for estimated
losses on loans based upon past loss experience, current trends in the level
of delinquent and problem loans, adverse situations that may affect the
borrower's ability to repay, the estimated value of any underlying
collateral and current and anticipated economic conditions in the
Corporation's primary market area. When the collection of a loan becomes
doubtful, or otherwise troubled, the Corporation records a charge-off equal
to the difference between the fair value of the property securing the loan
and the loan's carrying value. Such provision is based on management's
estimate of the fair value of the underlying collateral, taking into
consideration the current and currently anticipated future operating or
sales conditions. As a result, such estimates are particularly susceptible
to changes that could result in a material adjustment to results of
operations in the near term. Recovery of the carrying value of such loans is
dependent to a great extent on economic, operating, and other conditions
that may be beyond the Corporation's control.
The Corporation accounts for impaired loans in accordance with SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan". SFAS No. 114 requires
that impaired loans be measured based upon the present value of expected
future cash flows discounted at the loan's effective interest rate or, as an
alternative, at the loan's observable market price or fair value of the
collateral.
13
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
5. Allowance for Loan Losses (continued)
A loan is defined under SFAS No. 114 as impaired when, based on current
information and events, it is probable that a creditor will be unable to
collect all amounts due according to the contractual terms of the loan
agreement. In applying the provisions of SFAS No. 114, the Corporation
considers its investment in one- to four-family residential loans and
consumer installment loans to be homogeneous and therefore excluded from
separate identification for evaluation of impairment. With respect to the
Corporation's investment in multi-family and nonresidential loans, and its
evaluation of impairment thereon, such loans are generally collateral
dependent and as a result are carried as a practical expedient at the lower
of cost or fair value.
It is the Corporation's policy to charge off unsecured credits that are more
than ninety days delinquent. Similarly, collateral dependent loans which are
more than ninety days delinquent are considered to constitute more than a
minimum delay in repayment and are evaluated for impairment under SFAS No.
114 at that time.
At December 31, 1999, the Corporation had no loans that would be defined as
impaired under SFAS No. 114.
6. Real Estate Acquired Through Foreclosure
Real estate acquired through foreclosure is carried at the lower of the
loan's unpaid principal balance (cost) or fair value less estimated selling
expenses at the date of acquisition. Real estate loss provisions are
recorded if the properties' fair value subsequently declines below the
amount determined at the recording date. In determining the lower of cost or
fair value at acquisition, costs relating to development and improvement of
property are capitalized. Costs relating to holding real estate acquired
through foreclosure, net of rental income, are charged against earnings as
incurred.
7. Office Premises and Equipment
Office premises and equipment are carried at cost and include expenditures
which extend the useful lives of existing assets. Maintenance, repairs and
minor renewals are expensed as incurred. For financial reporting,
depreciation and amortization are provided on the straight-line and
accelerated methods over the useful lives of the assets, estimated to be ten
to fifty years for buildings and improvements and three to twenty-five years
for furniture, fixtures and equipment. An accelerated depreciation method is
used for tax reporting purposes.
8. Federal Income Taxes
The Corporation accounts for federal income taxes in accordance with SFAS
No. 109, "Accounting for Income Taxes," which requires that a deferred tax
liability or deferred tax asset be computed by applying the current
statutory tax rates to net taxable or deductible temporary differences
between the tax basis of an asset or liability and its reported amount in
the financial statements that will result in taxable or deductible amounts
in future periods. Deferred tax assets
14
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
8. Federal Income Taxes (continued)
are recorded only to the extent that the amount of net deductible temporary
differences or carryforward attributes may be utilized against current
period earnings, carried back against prior years' earnings, offset against
taxable temporary differences reversing in future periods, or utilized to
the extent of management's estimate of future taxable income. A valuation
allowance is provided for deferred tax assets to the extent that the value
of net deductible temporary differences and carryforward attributes exceeds
management's estimates of taxes payable on future taxable income. Deferred
tax liabilities are provided on the total amount of net temporary
differences taxable in the future.
Deferral of income taxes results primarily from different methods of
accounting for deferred loan origination fees and costs, Federal Home Loan
Bank stock dividends, mortgage servicing rights, the general loan loss
allowance, and certain components of retirement and stock benefit plan
expense. A temporary difference is also recognized for depreciation expense
computed using accelerated methods for federal income tax purposes.
9. Earnings Per Share
Basic earnings per share is calculated based on 1,913,857 weighted-average
common shares outstanding for the year ended December 31, 1999.
Diluted earnings per share is computed taking into consideration common
shares outstanding and dilutive potential common shares to be issued under
the Corporation's stock option plan. Options to purchase 278,023 common
shares with a weighted-average exercise price of $13.33 were outstanding at
December 31, 1999, but excluded from the computation of common share
equivalents because their exercise prices were greater than the average
market price of the common shares.
10. Fair Value of Financial Instruments
SFAS No. 107, "Disclosures about Fair Value of Financial Instruments,"
requires disclosure of fair value information about financial instruments,
whether or not recognized in the consolidated statement of financial
condition, for which it is practicable to estimate that value. In cases
where quoted market prices are not available, fair values are based on
estimates using present value or other valuation techniques. Those
techniques are significantly affected by the assumptions used, including the
discount rate and estimates of future cash flows. In that regard, the
derived fair value estimates cannot be substantiated by comparison to
independent markets and, in many cases, could not be realized in immediate
settlement of the instrument. SFAS No. 107 excludes certain financial
instruments and all non-financial instruments from its disclosure
requirements. Accordingly, the aggregate fair value amounts presented do not
represent the underlying value of the Corporation.
15
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
10. Fair Value of Financial Instruments (continued)
The following methods and assumptions were used by the Corporation in
estimating its fair value disclosures for financial instruments. The use of
different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.
Cash and Cash Equivalents: The carrying amount reported in the
consolidated statement of financial condition for cash and cash
equivalents is deemed to approximate fair value.
Mortgage-backed Securities: Fair values for mortgage-backed securities
are based on quoted market prices and dealer quotes.
Loans receivable: The loan portfolio has been segregated into
categories with similar characteristics, such as one- to four-family
residential real estate, multi-family residential real estate,
installment and other. These loan categories were further delineated
into fixed-rate and adjustable-rate loans. The fair values for the
resultant loan categories were computed via discounted cash flow
analysis, using current interest rates offered for loans with similar
terms to borrowers of similar credit quality.
Federal Home Loan Bank stock: The carrying amount presented in the
consolidated statement of financial condition is deemed to approximate
fair value.
Deposits: The fair values of deposits with no stated maturity, such as
money market demand deposits, savings and NOW accounts, are deemed
equal to the amount payable on demand as of December 31, 1999. The
fair value of fixed-rate certificates of deposit is based on the
discounted value of contractual cash flows. The discount rate is
estimated using the rates currently offered for deposits of similar
remaining maturities.
Advances from the Federal Home Loan Bank: The fair value of these
advances is estimated using the rates currently offered for similar
advances of similar remaining maturities or, when available, quoted
market prices.
Advances by Borrowers for Taxes and Insurance: The carrying amount of
advances by borrowers for taxes and insurance is deemed to approximate
fair value.
Commitments to extend credit: For fixed-rate and adjustable-rate loan
commitments, the fair value estimate considers the difference between
current levels of interest rates and committed rates. At December 31,
1999, the difference between the fair value and notional amount of
loan commitments was not material.
16
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
10. Fair Value of Financial Instruments (continued)
Based on the foregoing methods and assumptions, the carrying value and fair
value of the Corporation's financial instruments are as follows:
<TABLE>
<CAPTION>
December 31,
1999
Carrying Fair
value value
(In thousands)
<S> <C> <C>
Financial assets
Cash and cash equivalents $ 8,043 $ 8,043
Mortgage-backed securities 5,170 5,170
Loans receivable 141,859 140,293
Federal Home Loan Bank stock 1,841 1,841
------- -------
$156,913 $155,347
======= =======
Financial liabilities
Deposits $100,536 $100,774
Advances from the Federal Home Loan Bank 35,239 34,641
Advances by borrowers for taxes and insurance 918 918
------- -------
$136,693 $136,333
======= =======
</TABLE>
11. Cash and Cash Equivalents
Cash and cash equivalents consist of cash and due from banks and
interest-bearing deposits in other financial institutions with original
maturities of three months or less.
12. Advertising
Advertising costs are expensed when incurred.
17
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE B - MORTGAGE-BACKED SECURITIES
The amortized cost, gross unrealized gains, gross unrealized losses, and
estimated fair values of mortgage-backed securities at December 31, 1999 is
as follows:
<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized unrealized unrealized fair
cost gains losses value
(In thousands)
<S> <C> <C> <C> <C>
Available for sale:
GNMA $ 184 $ 9 $ - $ 193
FHLMC 3,048 9 2 3,055
FNMA 1,930 1 9 1,922
----- -- -- -----
Total mortgage-backed securities
available for sale $5,162 $19 $11 $5,170
===== == == =====
</TABLE>
The amortized cost and estimated fair value of mortgage-backed securities at
December 31, 1999 by contractual term to maturity are shown below. Actual
maturities may differ from contractual maturities because borrowers may have
the right to prepay obligations with or without prepayment penalties.
<TABLE>
<CAPTION>
Estimated
Amortized fair
cost value
(In thousands)
<S> <C> <C>
Due within five years $ 71 $ 71
Due after five years through ten years 106 114
Due after ten years 4,985 4,985
----- -----
Total mortgage-backed securities $5,162 $5,170
===== =====
</TABLE>
18
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE C - LOANS RECEIVABLE
Loans receivable at December 31, 1999 consist of the following:
(In thousands)
Conventional real estate loans:
Existing residential properties $112,605
Nonresidential real estate 24,637
Construction 5,010
Consumer and other loans 1,223
-------
Total 143,475
Less:
Undisbursed portion of loans in process 687
Unamortized yield adjustments 288
Allowance for loan losses 641
-------
Loans receivable - net $141,859
=======
As depicted above, the Corporation's lending efforts have historically
focused on loans secured by existing residential properties, which comprise
approximately $112.6 million, or 79% of the total loan portfolio at December
31, 1999. Generally, such loans have been underwritten on the basis of no
more than an 80% loan-to-value ratio, which has historically provided the
Corporation with adequate collateral coverage in the event of default.
Nevertheless, the Corporation, as with any lending institution, is subject
to the risk that residential real estate values could deteriorate in its
primary lending area of southwestern Ohio, thereby impairing collateral
values. However, management is of the belief that residential real estate
values in the Corporation's primary lending area are presently stable.
NOTE D - ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses is summarized as follows for the
year ended December 31, 1999:
(In thousands)
Balance at beginning of year $294
Provision for losses 341
Net recoveries 6
---
Balance at end of year $641
===
At December 31, 1999, the Bank's allowance for loan losses was solely
general in nature, which is includible as a component of regulatory total
capital.
19
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE D - ALLOWANCE FOR LOAN LOSSES (continued)
Nonaccrual and nonperforming loans totaled approximately $100,000 at
December 31, 1999. Interest income that would have been recognized had such
nonaccrual loans performed pursuant to contractual terms totaled
approximately $1,000 for the year ended December 31, 1999.
NOTE E - OFFICE PREMISES AND EQUIPMENT
Office premises and equipment at December 31, 1999, is summarized as
follows:
(In thousands)
Land $ 202
Buildings and improvements 1,829
Furniture, fixtures and equipment 1,215
-----
3,246
Less accumulated depreciation and amortization 1,152
-----
$2,094
=====
NOTE F - DEPOSITS
Deposit balances by type and weighted-average interest rate at December 31,
1999 are summarized as follows:
<TABLE>
<CAPTION>
Amount Rate
(Dollars in thousands)
<S> <C> <C>
NOW accounts $ 11,448 2.93%
Money market demand accounts 8,470 3.64
Passbook and statement savings accounts 3,954 1.98
------- ----
Total withdrawable accounts 23,872 3.02
Certificates of deposit:
Three months to one year 5,971 5.14
One to two years 30,851 5.30
Two to five years 24,048 5.78
Five or more 15,794 6.47
------- ----
Total certificate accounts 76,664 5.68
-------
Total deposits $100,536 5.05%
======= ====
</TABLE>
20
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE F - DEPOSITS (continued)
Interest expense on deposits is summarized as follows for the year ended
December 31:
1999
(In thousands)
Certificate of deposit accounts $3,935
NOW accounts 287
Money market demand accounts 312
Passbook and statement savings accounts 73
-----
$4,607
The contractual maturities of outstanding certificates of deposit are
summarized as follows at December 31, 1999:
Maturing year ending December 31: (In thousands)
2000 $44,664
2001 17,832
2002 6,776
After 2002 7,392
------
Total certificate of deposit accounts $76,664
======
NOTE G - ADVANCES FROM THE FEDERAL HOME LOAN BANK
Advances from the Federal Home Loan Bank, collateralized at December 31,
1999 by pledges of certain residential mortgage loans totaling $52.9 million
and the Bank's investment in Federal Home Loan Bank stock are summarized as
follows:
Maturing year
Interest rate ending December 31,
(In thousands)
5.18% - 6.40% 2000 $12,650
5.20% - 6.60% 2001 5,800
5.59% - 6.64% 2002 10,300
5.95% - 8.20% Thereafter 6,489
-------
$35,239
======
Weighted average rate 6.01%
====
21
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE H - FEDERAL INCOME TAXES
A reconciliation of the effective tax rate for the year ended December 31,
1999 and the federal statutory rate, computed by applying the statutory
federal corporate tax rate to earnings before taxes, is summarized as
follows:
(In thousands)
Federal income taxes computed at the
expected statutory rate $580
Decrease in taxes resulting from:
Other (16)
---
Tax provision per consolidated financial
statements $564
===
The components of the Corporation's net deferred tax liability at December
31, 1999 is as follows:
Taxes (payable) refundable on temporary
differences at statutory rate:
(In thousands)
Deferred tax liabilities:
Deferred loan origination costs $(416)
FHLB stock dividends (220)
Book versus tax depreciation (3)
Mortgage servicing rights (65)
Unrealized gain on securities designated
as available for sale (3)
----
Total deferred tax liabilities (707)
Deferred tax assets:
General loan loss allowance 218
Benefit plan accruals 164
Other assets 58
----
Total deferred tax assets 440
----
Net deferred tax liability $(267)
====
The Bank was allowed a special bad debt deduction, generally limited to 8%
of otherwise taxable income, and subject to certain limitations based on
aggregate loans and deposit account balances at the end of the year. If the
amounts which previously qualified as bad debt deductions for federal income
tax purposes are later used for purposes other than to absorb loan losses,
including distributions in liquidation, they will be subject to federal
income taxes at the then current corporate income tax rate. Tax bad debt
deductions that arose prior to 1988 will require recognition of deferred tax
liabilities only if it becomes apparent that those temporary differences
will reverse in the foreseeable future. Retained earnings at December 31,
1999 includes approximately $2.4 million of tax bad debt reserves for which
no deferred federal income tax liability has been recognized.
22
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE I - COMMITMENTS
The Bank is party to financial instruments with off-balance-sheet risk in
the normal course of business to meet the financing needs of its customers,
including commitments to extend credit. Such commitments involve, to varying
degrees, elements of credit and interest-rate risk in excess of the amount
recognized in the consolidated statement of financial condition. The
contract or notional amounts of the commitments reflect the extent of the
Bank's involvement in such financial instruments.
The Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit is
represented by the contractual notional amount of those instruments. The
Bank uses the same credit policies in making commitments and conditional
obligations as those utilized for on-balance-sheet instruments.
At December 31, 1999, the Bank had outstanding commitments to originate or
purchase fixed rate loans of approximately $2.1 million and adjustable rate
loans of approximately $800,000. Additionally, the Bank had unused lines of
credit under home equity and other loans of $6.5 million at December 31,
1999. Management believes that all loan commitments are able to be funded
through cash flow from operations and existing excess liquidity. Fees
received in connection with these commitments have not been recognized in
earnings.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee. Since many of the commitments may
expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Bank evaluates each
customer's creditworthiness on a case-by-case basis. The amount of
collateral obtained, if it is deemed necessary by the Bank upon extension of
credit, is based on management's credit evaluation of the counterparty.
Collateral on loans may vary but the preponderance of loans granted
generally include a mortgage interest in real estate as security.
NOTE J - REGULATORY CAPITAL
The Bank is subject to the regulatory capital requirements of the Federal
Deposit Insurance Corporation (the "FDIC"). Failure to meet minimum capital
requirements can initiate certain mandatory -- and possibly additional
discretionary -- actions by regulators that, if undertaken, could have a
direct material effect on the Bank's financial statements. Under capital
adequacy guidelines and the regulatory framework for prompt corrective
action, the Bank must meet specific capital guidelines that involve
quantitative measures of the Bank's assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting practices.
The Bank's capital amounts and classification are also subject to
qualitative judgments by the regulators about components, risk weightings,
and other factors.
During the calendar year, the Bank was notified from its regulators that the
Bank was categorized as "well-capitalized" under the regulatory framework
for prompt corrective action. To be categorized as "well-capitalized" the
Bank must maintain minimum capital ratios as set forth in the table that
follows.
23
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE J - REGULATORY CAPITAL (continued)
The FDIC has adopted risk-based capital ratio guidelines to which the Bank
is subject. The guidelines establish a systematic analytical framework that
makes regulatory capital requirements more sensitive to differences in risk
profiles among banking organizations. Risk-based capital ratios are
determined by allocating assets and specified off-balance sheet commitments
to four risk-weighting categories, with higher levels of capital being
required for the categories perceived as representing greater risk.
These guidelines divide the capital into two tiers. The first tier ("Tier
1") includes common equity, certain non-cumulative perpetual preferred stock
(excluding auction rate issues) and minority interests in equity accounts of
consolidated subsidiaries, less goodwill and certain other intangible assets
(except mortgage servicing rights and purchased credit card relationships,
subject to certain limitations). Supplementary ("Tier II") capital includes,
among other items, cumulative perpetual and long-term limited-life preferred
stock, mandatory convertible securities, certain hybrid capital instruments,
term subordinated debt and the allowance for loan losses, subject to certain
limitations, less required deductions. Banks are required to maintain a
total risk-based capital ratio of 8%, of which 4% must be Tier 1 capital.
The FDIC may, however, set higher capital requirements when particular
circumstances warrant. Banks experiencing or anticipating significant growth
are expected to maintain capital ratios, including tangible capital
positions, well above the minimum levels.
In addition, the FDIC established guidelines prescribing a minimum Tier 1
leverage ratio (Tier 1 capital to adjusted total assets as specified in the
guidelines). These guidelines provide for a minimum Tier 1 leverage ratio of
3% for banks that meet certain specified criteria, including that they have
the highest regulatory rating and are not experiencing or anticipating
significant growth. All other banks are required to maintain a Tier 1
leverage ratio of 3% plus an additional cushion of at least 100 to 200 basis
points.
As of December 31, 1999, management believes that the Bank met all capital
adequacy requirements to which the Bank was subject.
<TABLE>
<CAPTION>
As of December 31, 1999
To be "well-
capitalized" under
For capital prompt corrective
Actual adequacy purposes action provisions
Amount Ratio Amount Ratio Amount Ratio
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Total capital
(to risk-weighted assets) $18,567 20.1% =>$7,569 =>8.0% =>$9,419 =>10.0%
Tier I capital
(to risk-weighted assets) $17,926 19.4% =>$3,700 =>4.0% =>$5,551 => 6.0%
Tier I leverage $17,926 11.6% =>$6,202 =>4.0% =>$7,752 => 5.0%
</TABLE>
24
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE J - REGULATORY CAPITAL (continued)
The Corporation's management believes that, under the current regulatory
capital regulations, the Bank will continue to meet the minimum capital
requirements in the foreseeable future. However, events beyond the control
of the Corporation, such as increased interest rates or a downturn in the
economy in the Bank's market area, could adversely affect future earnings
and, consequently, the ability to meet future minimum regulatory capital
requirements.
NOTE K - BENEFIT PLANS
The Bank has a Directors' Retirement Plan (the "Plan"), a program designed
to provide retirement benefits to members of the Board of Directors after
their retirement from active service on the board. Any director who has met
certain age and length of service requirements may elect to participate in
the amended Plan. The Corporation makes quarterly contributions to eligible
directors' accounts in an amount equal to the board member's most recent
twelve months base director's fees for a specified number of years based on
length of service, not to exceed ten years. Expense of the Plan was $50,000
for 1999. The Plan had net assets held in a trust of approximately $395,000
at December 31, 1999.
The Corporation has an Employee Stock Ownership Plan ("ESOP"), which
provides retirement benefits to substantially all employees who have
completed at least one year of service and have attained the age of 21. The
Corporation accounts for the ESOP in accordance with Statement of Position
("SOP") 93-6, "Employers' Accounting for Employee Stock Ownership Plans."
SOP 93-6 requires the measure of compensation expense recorded by employers
to equal the fair value of ESOP shares allocated to participants the year.
Expense recognized related to the ESOP totaled approximately $220,000 for
the year ended December 31, 1999.
Additionally, the Corporation has a Management Recognition Plan ("MRP"). The
Bank funded the MRP through the purchase of 113,735 shares of the
Corporation's common stock in the open market. The Corporation awarded
81,115 shares to members of management and the Board of Directors. The MRP
provides for one-fifth of the shares to vest at the award date and the
remainder to vest ratably at the anniversary date over a four-year period.
The Corporation recorded expense related to the MRP totaling $273,000 for
the year ended December 31, 1999.
The Corporation maintains a savings plan under Section 401(k) of the
Internal Revenue Code, covering substantially all full-time employees after
one month of continuous employment. The Corporation did not make any
contributions to the plan for the year ended December 31, 1999.
NOTE L - STOCK OPTION PLAN
Stockholders of the Corporation approved a stock option plan pursuant to
which the Corporation may grant stock options to directors and key employees
of the Corporation and its affiliates, including the Bank. The purpose of
the option plan is to advance the interests of the Corporation by providing
directors and key employees of the Corporation with the opportunity to
acquire shares of common stock. By encouraging such stock ownership, the
Corporation seeks to attract, retain, and motivate the best available
personnel for positions of substantial responsibility and to provide
additional incentive to directors and employees of the Corporation
25
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE L - STOCK OPTION PLAN (continued)
to promote the success of the business of the Corporation. The option plan
authorizes grants of options to purchase up to 10% of authorized but
unissued shares of common stock. Stock options are granted with an exercise
price equal to the stock's fair market value at the date of grant. All
stock options have a 10-year term and vest and become fully exercisable
after 4 years from the date of grant. At December 31, 1999, there were
278,023 options outstanding under the option plan.
The Corporation accounts for its stock option plan in accordance with SFAS
No. 123, "Accounting for Stock-Based Compensation," which contains a
fair-value based method for valuing stock-based compensation that entities
may use, which measures compensation cost at the grant date based on the
fair value of the award. Compensation is then recognized over the service
period, which is usually the vesting period. Alternatively, SFAS No. 123
permits entities to continue to account for stock options and similar
equity instruments under Accounting Principles Board ("APB") Opinion No.
25, "Accounting for Stock Issued to Employees." Entities that continue to
account for stock options using APB Opinion No. 25 are required to make pro
forma disclosures of net earnings and earnings per share, as if the
fair-value based method of accounting defined in SFAS No. 123 had been
applied.
The Corporation utilizes APB Opinion No. 25 and related Interpretations in
accounting for its stock option plan. Accordingly, no compensation cost has
been recognized for the plan.
The disclosures required by SFAS No. 123 are not applicable to the year
ended December 31, 1999, as the Corporation did not grant options during
1999.
A summary of the status of the Corporation's stock option plan as of
December 31, 1999 and changes during the year ended December 31, 1999 is as
follows:
Weighted-
average
exercise
Shares price
Outstanding at beginning of year 279,192 $13.37
Granted - -
Exercised - -
Forfeited (1,169) 12.09
------- -----
Outstanding at end of year 278,023 $13.33
======= =====
Options exercisable at year-end 146,083 $13.77
======= =====
Weighted-average fair value of
options granted during the year N/A
===
26
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE L - STOCK OPTION PLAN (continued)
The following information applies to options outstanding at December 31,
1999:
Number outstanding 278,023
Range of exercise prices $10.00-$14.01
Weighted-average exercise price $13.33
Weighted-average remaining contractual life 7.85 years
NOTE M - WESTWOOD HOMESTEAD FINANCIAL CORPORATION CONDENSED
FINANCIAL INFORMATION
The following condensed financial statements summarize the financial
position of the Corporation as of December 31, 1999 and the results of its
operations and its cash flows for the year ended December 31, 1999:
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
STATEMENT OF FINANCIAL CONDITION
December 31, 1999
(In thousands)
ASSETS
<S> <C>
Interest-bearing deposits in other financial institutions $ 5,075
Investment in Westwood Homestead Savings Bank 17,950
Accrued interest 2
Prepaid federal income taxes 40
------
Total assets $23,067
======
LIABILITIES AND STOCKHOLDERS' EQUITY
Stockholders' equity
Common stock 28
Additional paid-in capital 18,768
Retained earnings - substantially restricted 15,776
Unrealized gains on securities designated as
available for sale, net of related tax effects 5
Shares acquired by Employee Stock Ownership Plan (2,198)
Shares acquired by Management recognition plan (1,023)
Treasury stock - at cost (8,289)
------
Total stockholders' equity 23,067
------
Total liabilities and stockholders' equity $23,067
======
</TABLE>
27
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE M - WESTWOOD HOMESTEAD FINANCIAL CORPORATION CONDENSED
FINANCIAL INFORMATION (continued)
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
STATEMENT OF EARNINGS
Year ended December 31, 1999
(In thousands)
<S> <C>
Revenue:
Interest and other income $ 41
Equity in undistributed net earnings
of subsidiary 1,117
-----
Total revenue 1,158
General, administrative and other expense 2
-----
Earnings before federal income taxes 1,156
Federal income taxes 13
-----
Net earnings $1,143
=====
</TABLE>
Westwood Homestead Financial Corporation
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
Year ended December 31, 1999
(In thousands)
<S> <C>
Cash flows from operating activities:
Net earnings for the year $1,143
Adjustments to reconcile net earnings to net cash
flows provided by operating activities:
Excess distributions from subsidiary 6,083
-----
Net cash provided by operating activities 7,226
Cash flows used in financing activities:
Dividends paid (882)
Purchase of treasury shares (1,642)
-----
Net cash used in financing activities (2,524)
-----
Net increase in cash and cash equivalents 4,702
Cash and cash equivalents at beginning of year 373
-----
Cash and cash equivalents at end of year $5,075
=====
</TABLE>
28
<PAGE>
Westwood Homestead Financial Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
NOTE N - BUSINESS COMBINATION
During 1999, the Corporation agreed to be acquired by Camco Financial
Corporation ("Camco") utilizing the purchase method of accounting. The
Corporation was dissolved upon consummation in January 2000 and Westwood
Homestead Savings Bank continued operations as a wholly-owned subsidiary of
Camco. Camco paid $11.1 million in cash and issued 1,304,875 of its common
shares in connection with the acquisition, resulting in recognition of
goodwill totaling approximately $212,000.
29
<PAGE>
Camco Financial Corporation
<TABLE>
<CAPTION>
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
December 31, 1999
Westwood Pro-forma
Camco Homestead adjustments Combined
<S> <C> <C> <C> <C>
Cash and cash equivalents $ 16,954 $ 8,043 $(11,105)(1) $ 13,892
Investment and mortgage-backed securities 29,556 5,170 - 34,726
Loans receivable 726,225 141,859 (1,566)(2) 866,518
Other assets 40,747 5,149 212 46,108
------- ------- ------- -------
Total assets $813,482 $160,221 $(12,459) $961,244
======= ======= ======= =======
Deposits $461,787 $100,536 $ (238)(2) $562,561
Advances from the Federal Home Loan Bank 279,125 35,239 598 (2) 313,766
Other liabilities 9,961 1,379 (35)(2) 11,375
------- ------- ------- -------
Total liabilities 750,873 137,154 325 887,702
Stockholders' equity 62,609 23,067 23,067 73,542
(10,933)(1)
------- ------- ------- -------
Total liabilities and stockholders' equity $813,482 $160,221 $ 12,459 $961,244
======= ======= ======= =======
</TABLE>
(1) Cash and stock consideration paid.
(2) Purchase price adjustments.
30
<PAGE>
Camco Financial Corporation
<TABLE>
<CAPTION>
PRO-FORMA CONDENSED CONSOLIDATED STATEMENT OF EARNINGS
December 31, 1999
Westwood Pro-forma
Camco Homestead adjustments Combined
<S> <C> <C> <C> <C>
Total interest income $51,093 $10,914 $520(1) $62,527
Total interest expense 29,907 6,170 - 36,014
------ ------ -- ------
Net interest income 21,186 4,807 520 26,513
Provision for losses on loans 247 341 - 588
Other income 5,190 368 - 5,558
General, administrative and other expense 17,113 3,127 11(2) 20,251
------ ------ --- ------
Earnings before income taxes 9,016 1,707 509 11,232
Federal income taxes 3,076 564 178 3,818
------ ------ --- ------
Net earnings $ 5,940 $ 1,143 $331 $ 7,414
====== ====== === ======
Basic earnings per share $1.06
====
Diluted earnings per share $1.04
====
</TABLE>
(1) Net accretion of purchase price adjustments on interest-earning assets.
(2) Amortization of goodwill totaling $212,000 using the straight-line method
over a twenty year period.
31
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description
23.3 Consent of Grant Thornton LLP
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAMCO FINANCIAL CORPORATION
By: /s/ Larry A. Caldwell
Larry A. Caldwell, President
Date: March 20, 2000
ACCOUNTANTS' CONSENT
We have issued our report dated March 2, 2000, accompanying the December 31,
1999 consolidated financial statements of Westwood Homestead Financial
Corporation. We hereby consent to the incorporation of said report in Camco's
Form 8-K/A.
/s/GRANT THORNTON LLP
Cincinnati, Ohio
March 20, 2000
