First Place makes $97M acquisition

By Don Shilling

First Place Bank gains branches in some major Ohio cities.

WARREN — The parent company of First Place Bank has reached a deal that would expand its presence in Ohio as well as push the bank into Kentucky and West Virginia.

First Place Financial Corp. said Wednesday that it has reached a $97.2 million agreement to acquire Camco Financial Corp., which is the holding company for Advantage Bank. The Cambridge, Ohio-based bank has 22 bank branches in three states, plus a title company with four offices.

Steven Lewis, president and chief executive of Warren-based First Place, said the combination would help the company evolve “into a formidable statewide competitor.”

First Place will gain branches in Columbus, Cincinnati and Dayton, which are areas where it has loan offices.

First Place now has 33 branches. These are primarily located in the Mahoning Valley and southeast Michigan, but the company has expanded into the Cleveland area.

The company also has 33 loan offices, including locations in Charlotte, N.C., and Indianapolis.

The acquisition has been approved by the boards of directors of both companies but needs the backing of shareholders of each company. The transaction is expected to close in the fourth quarter of this year.

It calls for Camco shareholders to receive $13.58 in cash or 0.97 share of First Place stock for each of their shares. Allocation procedures are in place to ensure that 26.5 percent of Camco shares will be exchanged for cash and the rest for stock.

The cash offer represents a 36 percent premium over Camco’s closing price of $9.95 per share Tuesday. It gained $1.59, or 16 percent, to close at $11.54 Wednesday. The stock has traded between $8.16 and $13.50 in the past year.

Investors were cool toward First Place stock, which fell Wednesday by $1.43, or 11 percent, to close at $11.86. The stock has traded between $9.85 and $22.22 in the past year.

Camco can call off the deal if First Place’s average stock price falls under $11.20.

Richard Baylor, president and chief executive of Camco, said the company’s board was impressed with First Place’s strategic vision, commitment to growth and earnings performance.

“We also believe that First Place’s stock will offer considerable upside potential over the next several years,” he said.

In the first quarter of this year, Camco reported a $1 million loss, compared with a $1.5 million profit in the same quarter of 2007.

Last quarter, it charged off $1.1 million in unpaid loans, most of which was a commercial loan to a home builder. In the first quarter, its nonperforming loans — those that have had three or more missed payments — increased from $25.5 million to $28.4 million.

Camco has $1 billion in assets, while First Place has $3.4 billion.

First Place has been working through its own credit quality issues. It charged off $2.2 million in loans in the first quarter. Its nonperforming assets — loans that aren’t being paid plus real estate owned by the bank — increased from $40.7 million to $70.7 million in the nine months ending March 31.

First Place returned to profitability last quarter, however. It earned $4.8 million, compared with a loss of $3.1 million in the previous quarter.

shilling@vindy.com