WARREN First Place to acquire bank in Michigan

First Place expands outside Ohio for the first time.
THE VINDICATOR
By DON SHILLING
VINDICATOR BUSINESS EDITOR
WARREN -- First Place Financial Corp. is acquiring a Michigan bank, which will make it the 45th largest publicly traded savings and loan in the country.
The Warren-based parent company of First Place Bank is acquiring Franklin Bancorp of Southfield, Mich., for $82.2 million in cash and stock.
Franklin Bank, a subsidiary of Franklin Bancorp, would be merged into First Place Financial Corp. but its five branches would continue to use the Franklin name.
The deal is expected to close in the spring of next year. It has been approved by both boards of directors but needs approval from regulators and Franklin shareholders.
This would be First Place's first move outside of Ohio. In recent years, First Place has opened 12 loan production offices throughout the state, in addition to its 24 branches in the Mahoning Valley.
It also just opened a new type of office, called a First Place Financial Center, in Solon. The office doubles the 12-member staff of a loan office but doesn't have tellers. Workers offer a variety of loan and wealth management services.
First Place said it is interested in Franklin because it has branches in Oakland County, Mich., which is a high-growth area.
Diversifying
The deal also would help First Place diversify because Franklin is a commercial bank. First Place has been working to increase its percentage of commercial loans.
"Oakland County, Michigan, has a growing population that in total exceeds that of nine states," said Steven Lewis, First Place president and chief executive.
"Our assessment of the demand for banking products is very encouraging, especially in view of the expanded product lines that will soon be available to Franklin's markets and our current customers."
David Simon, Franklin chairman and founder, said he and the company's board of directors like the culture of the First Place organization and the products and services it offers.
Franklin shareholders are to receive either $21 in cash or 1.137 shares of First Place stock, or any combination of the two. No more than half of the Franklin shares, however, can be exchanged for First Place stock.
The 10-day average closing price for First Place stock as of Friday was $19.34. Franklin shareholders who elect to receive 50 percent cash and 50 percent stock would have a value of $21.49.
Franklin stock closed Monday at $19.10 a share. In the past year, it has traded between $15.65 to $20.40.
Franklin's outlook
The transaction would give First Place $2.2 billion in assets and $306 in market capitalization, which is the number of outstanding shares multiplied by the value of those shares.
First Place said the deal will add 4 percent to its earnings per share in the first full year of operations, excluding transaction and merger costs of $7 million.
Increased earnings will come partly from reducing Franklin's expenses by $4.3 million, or 22 percent.
First Place was created from the 2000 merger of First Federal Savings and Loan Association of Warren and FFY Bank of Boardman. It also has acquired Ravenna Savings Bank.
shilling@vindy.com