First Place Bank restates loan losses for 2010 annual report

WARREN — Plagued by bad commercial loans and facing increased scrutiny from federal regulators, the parent company of First Place Bank plans to restate its 2010 annual report with a $14 million increase in loan losses.

The move, announced Monday night, is an attempt to mollify regulators’ concerns over the way First Place Financial Corp. accounts for its troubled debt restructurings.

An October audit by the Office of Thrift Supervision, which oversees community banking, found that First Place’s previously reported results did not account for downgrades in the bank’s commercial real estate loan portfolio and increases in the company’s troubled debt restructurings. As a result, the OTS determined that First Place had understated its loan-loss allowance for the fiscal year ending June 30.

The OTS audit indicates that federal regulators are taking a more-stringent approach to annual examinations, said Steven Lewis, the First Place chief executive. First Place’s amended 2010 financial results will reflect the OTS’ “more conservative approach” to accounting for loan losses, he said.

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