First Place CEO: Camco takeover makes sense

By Don Shilling

First Place shareholders approved the transaction.

VIENNA — Steve Lewis knew what was foremost on the minds of shareholders at the annual meeting of First Place Financial Corp.

“Who’s not happy with the stock price?” the company president and chief executive said as he opened his remarks Wednesday at Squaw Creek Country Club.

Nearly all of the 150 shareholders, employees and board members raised their hands.

“You are clearly at the right meeting,” Lewis said.

Amid the collapse of the nation’s credit system, First Place stock has lost more than half of its value since the end of September. It closed down 51 cents, or 7 percent, Wednesday at $6.37.

“It clearly has been an unprecedented year for the financial industry,” Lewis said.

For the next hour, Lewis and David Gifford, chief financial officer, explained the state of the Warren-based company, which is the parent of First Place Bank and related insurance, title and investment companies.

Notably, the company’s earnings have been down.

First Place earned $10.8 million in fiscal year 2008, which ended June 30, compared with $25.6 million the previous year. Also, it recorded a $6.2 million loss in the first quarter of this fiscal year as it wrote down $9.3 million in investment losses.

Lewis noted that reports indicate the country could be faced with a two-year recession, plus an additional three years of weak economic growth.

First Place’s executive team is managing its operations as best as it can, including negotiating what stands to be the company’s biggest acquisition to date, Lewis said.

“This team has rededicated itself to take this organization as far as it can possibly take it,” he said.

That may start with the takeover of Camco Financial Corp., the parent company of Advantage Bank in Cambridge.

First Place shareholders approved the stock transaction Wednesday, and Camco shareholders are to vote on it today.

The transaction was valued at $97 million in May based on a price of $13.58 for First Place stock. Its shares have fallen so low that Camco could have backed out of the deal but did not. Lewis said First Place is not putting up any more cash or stock to make up for its fallen stock price.

The deal continues to make sense for both companies, he said. Annual cost savings in combining operations is expected to be between $8 million and $10 million a year as the companies combine back office staffs. Lewis did not want to be specific about planned personnel cuts.

The move would strengthen First Place because it would add 23 branches in areas such as Cambridge, Columbus and Cincinnati where it doesn’t have any, he said. First Place operates lending offices in the larger cities, which would complement Advantage Bank’s branches, he said.

The acquisition also would help diversify First Place geographically, he said. Now, the company primarily operates in northern Ohio and southeast Michigan, which are heavily dependent on the auto industry. First Place has 46 branches and 18 lending offices.

Also, First Place is considering applying for an investment from the U.S. Treasury under the federal bailout plan, Lewis said. First Place is eligible for $75 million, which could be given in exchange for preferred stock that would pay interest to the government.

Lewis said First Place could use the money to make loans, cover expenses related to foreclosed homes or make acquisitions.

shilling@vindy.com