Butler Wick: 30 jobs at risk

By Don Shilling

Last fall’s stock market crash ruined a local takeover of Youngstown’s Butler Wick & Co.

YOUNGSTOWN — The president of Butler Wick & Co. said dozens of downtown jobs could have been saved if the company’s financial advisers had succeeded in buying the stock brokerage.

Before they could reach a deal, however, stock markets crashed in September and October, and the financial advisers no longer had assets they wanted to commit to the deal, said Tom Cavalier, chairman, chief executive and president of Butler Wick.

United Community Financial Corp., a Youngstown-based holding company that also owns Home Savings and Loan Co., then reached a deal to sell Butler Wick & Co. to St. Louis-based Stifel Financial Corp. for $12 million. The deal closed two weeks ago.

Cavalier estimated that between 30 and 35 of Butler Wick & Co.’s downtown staff are in jeopardy of losing their jobs once the systems of the two companies are merged in March. The office in the City Centre One building has 45 employees, including managers and support staff, in areas such as accounting and information technology.

Most of those jobs won’t be needed because much of that work will be done by staff in St. Louis, Cavalier said.

The local company’s financial advisers and sales assistants were moved to branch offices a few years ago, and all of them will remain on staff, he said. Butler Wick moved the financial advisers to the suburbs out of concern that they would have switched companies in order to avoid the city’s 2.75 percent income tax, he said.

The local staff now operates as the Butler Wick division of Stifel and has 23 offices in Ohio, Pennsylvania and New York, employing 175.

Cavalier said he is talking about the local attempt to buy the company because of questions he is receiving. People are calling him and stopping him on the street to ask why local managers didn’t buy the company before it was sold to an out-of-state owner.

Cavalier said local managers had discussed a purchase for a few years and put together an offer last June. The offer was made because Butler Wick staff knew that United Community needed to reduce its debt and build its working capital, Cavalier said.

Each of the company’s financial advisers gave an amount that they would be willing to invest in the purchase, he said.

United Community officials issued a counterproposal to the Butler Wick staff in October, he said. At that point, investments held by those making the purchase offer had fallen between 30 percent and 50 percent, and there was no longer enough cash for the offer, he said.

Butler Wick officials had been talking to outside parties about joining as investors, but that interest also dried up in October, he said.

Cavalier added, however, that he thinks Butler Wick will benefit from the merger with Stifel. Clients still will be working with the same financial advisers, and the local office will have more resources to recruit financial advisers and offer more corporate finance programs to customers.

The sale to Stifel did not include Butler Wick Trust Co. United Community said Thursday, however, that it has reached a deal to sell the trust company to Farmers National Bank of Canfield for $12.1 million.

Officials said the trust company will keep its offices downtown and in Howland, and all 27 employees will keep their jobs.

shilling@vindy.com