Banks call off planned merger

By Don Shilling

Executives want to focus on their own operations during difficult times.

WARREN — First Place Financial Corp. and another Ohio-based banking company have agreed to call off their planned merger.

Despite tumbling stock prices, the deal had been approved by shareholders of both Warren-based First Place and Cambridge-based Camco Financial Corp.

Steve Lewis, president and chief executive of First Place, said the deteriorating conditions of the banking industry led both organizations to agree to cancel the deal.

“We are each better off minding our own store,” he said.

If First Place was to acquire Camco, so much work would have been required from executives of the local bank, he said.

All of Camco’s computer systems, product offerings and marketing would have to have been changed, he said.

Larger organizations have acquisition teams that do nothing but oversee such changes, but First Place relies on its executives to take on additional duties to get that work done. It has completed seven acquisitions.

Lewis said First Place executives must focus on managing the company in a difficult environment and not have their attention diverted by a merger.

First Place is struggling with loan losses caused by the downturn in the economy. First Place earnings were trimmed to $10.8 million in fiscal year 2008, compared with $25.6 million in the previous year.

Also, the nation’s credit system has collapsed this fall.

First Place and Camco agreed that there will be no termination fees connected to the merger, and they released each other from any liability claims.

The deal included a provision that allowed Camco to call off the deal if First Place’s average stock price fell under $11.20. The stock was trading at $11.86 when the deal was announced in May but has dipped under $5 a share as the stock and credit markets collapsed this fall.

Camco didn’t exercise that option, however.

The deal called for Camco shareholders to receive cash or First Place stock.

First Place said the merger would have made it stronger in areas such as Cambridge, Columbus and Cincinnati. Camco is the parent company of Advantage Bank, which has 23 branches.

First Place has 46 branches and 18 lending offices, mostly in northern Ohio and southeast Michigan.

shilling@vindy.com