WARREN - First Place Bank will continue offering loans and normal services during its parent's voluntary Chapter 11 bankruptcy designed to set the stage for Troy, Mich.-based Talmer Bancorp Inc. - or a higher bidder - to buy the lender, a spokeswoman said Monday.
"The agreement outlines that First Place Bank will keep its name, charter and management team. There will be no impact on branches or accounts or customers in any way," spokeswoman Debra Bish said in discussing Talmer's $45 million bid for First Place stock announced Monday.
Talmer, which operates 45 bank branches throughout the Midwest, also is expected to provide not more than $205 million in capital to First Place Bank to satisfy regulatory capital requirements, strengthen the bank's capital structure and support lending, according to the announcement.
First Place Bank isn't part of First Place Financial's bankruptcy case, which was filed Monday in the U.S. Bankruptcy Court for the District of Delaware.
All deposits held by First Place Bank continue to be insured by the Federal Deposit Insurance Corporation to the maximum legal limit, the company said.
Holders of a company's common shares typically get no cash, or little, in a bankruptcy case, but Bish said she couldn't speculate on the outcome. She said the court will determine repayment of the federal bailout as part of the distribution of funds.
The bank has 850 workers in 41 branches in Ohio and Michigan, along with loan offices, ATMs and service centers. It employs 200 in eight Trumbull County offices. The bank has 11 Mahoning County offices.
Bish said the acquisition, if approved by the court, attracted Talmer because it has no presence in First Place's markets.
"They'll need resources. Their commitment is no change in employees," she said.
Bish declined to say how long the proposed deal has been in the works. First Place's filing Monday with the U.S. Securities and Exchange Commission stated it and Talmer entered into the agreement Friday.
The bankruptcy process will allow other qualified bidders to bid for First Place, according to the news release. As the "stalking horse," Talmer's offer sets the minimum that other bidders must exceed. If another bid is consummated, Talmer will be eligible for a break-up fee of $5 million.
Any bidder would also be required to recapitalize the bank to an appropriate level and show its ability to promptly win the required regulatory approvals, officials said.
The bidding and sale approval process is expected to take about 60 to 90 days, the companies said.
Talmer's bid comes after a couple of years of turmoil at First Place, beginning in 2010 when the company said it could no longer issue earnings reports due to questions about its accounting for the value of loans, chiefly commercial loans in southeastern Michigan.
Samuel A. Roth, chairman of First Place Bank, is one of three directors who will continue to serve on the board. Donald Cagigas and Jeffrey Rossi also will stay on the board. Talmer will name four other directors.
"We will continue to process loan applications, fund commitments and conduct all other banking operations as we do every day," Roth said in the news release. "In addition, customers will have full access to their accounts, as all customer deposits remain FDIC insured."
David T. Provost, president and chief executive officer of Talmer Bancorp Inc. and Talmer Bank and Trust, said, "We are excited about this potential acquisition given the strategic fit of our two banking organizations."
President and Chief Executive Officer Steven Lewis, who took the thrift public, was fired by the board in April of this year.
Shares of company stock closed at $1 on July 13, 2011, from $1.28 the day before. The stock later was delisted from the Nasdaq. It closed Friday at 79 cents after hitting a 52-week low of 15 cents. Markets were closed Monday due to Hurricane Sandy and are to be closed today as well.
First Place also announced in a government filing Monday that Louis J. Dunham is no longer employed as the bank's chief executive officer. Dunham was brought in to replace Lewis, but his employment hinged on approval from the Office of the Comptroller of the Currency.
The regulator notified the bank Wednesday that it wouldn't do so, according to the filing.