Lender convinces analysts that profits should keep growing

The Warren-based company has a small amount of loans with Delphi employees.
By DON SHILLING
VINDICATOR BUSINESS EDITOR
HOWLAND -- First Place Financial Corp. has convinced stock analysts that its profits should continue to grow despite the Delphi Corp. bankruptcy.
Research firms that cover the Warren-based company either raised or maintained earnings projections after talking with First Place officials recently about the impact of Delphi's planned cutbacks on wages and jobs.
Analysts also attended the company's annual meeting Thursday at Avalon Inn.
Steven Lewis, First Place president, told shareholders that First Place and its subsidiary, First Place Bank, won't face much of a direct impact from Delphi's plans. First Place has $1.9 billion in loans, but just $14 million, or less than 1 percent, are related to Delphi.
Lewis said these loans are mostly mortgages to Delphi employees, so the bank has the homes as collateral.
The bank has just two business loans worth about $120,000 to business customers who are owed money by Delphi.
Positive outlook
Research firms have issued reports saying First Place's profits should rise. Per-share profits for fiscal year 2005, which ended June 30, were $1.30, which was up 21 cents from the year before.
Keefe, Bruyette & amp; Woods of New York last week raised its earnings estimate for the current fiscal year by 2 cents to $1.67.
Friedman, Billings, Ramsey & amp; Co. of Arlington, Va., last week raised its profit projections a penny to $1.71 for the fiscal year.
Sandler O'Neill & amp; Partners of New York maintained its estimate of $1.78 per share for earnings this calendar year.
The reports said First Place is a favorable investment because of its transition from a traditional savings and loan to a commercial bank. First Place has 45 percent of its lending in real estate loans, compared with 79 percent in 1998.
Much of the commercial loan growth came from the acquisition of Franklin Bank in Michigan. Lewis said First Place is working to bring its expertise in real estate lending to Franklin's offices in Michigan and bringing Franklin's commercial lending techniques to this area.
Lewis said First Place stock is gaining more attention from research firms, and others may soon begin following the stock. Increasing the number of research reports could lead to more institutional investors becoming interested in the stock, he added. About 26 percent of the company's stock is owned by institutions.
Friedman, Billings, Ramsey & amp; Co. has the highest expectations for First Place's stock. It has a 12-month price target of $26 a share. The others have targets of $23 and $25.
First Place's stock closed Thursday at $21.59, down 57 cents.
Regional considerations
Even though First Place doesn't have many Delphi-related loans, Lewis said the auto supplier's cutbacks would hurt both of First Place's main territories -- the Mahoning Valley and southeast Michigan. Housing markets and the entire economies of both areas could be damaged, he said.
Bank officials have discussed expanding in areas that are not so heavily dependent on the auto industry, he said.
The Columbus and Indianapolis areas could be expansion targets, he said. The company has opened up loan offices in each area.
In the meantime, First Place is investing in new offices in this area and Michigan. Construction on a new Howland office is to start soon, and the current office will be razed when construction is complete.
The bank is planning two new offices in Michigan.
Shareholders re-elected these men to the First Place board of directors: Lewis, Donald Cagigas, Samuel Roth and Dr. Ronald Volpe.
Besides the bank, First Place also is the holding company for real estate, title, insurance and wealth management companies.
shilling@vindy.com