DEAR EDITOR:
I write this as a former resident of the Warren area, and the proud son, grandson, nephew, and brother of First Place Bank/First Federal employees and directors.
I grew up in a house that lived and breathed First Federal Savings culture through the difficult economic times in the 1970s and 1980s. The bank's profitability sometime suffered through those times as its customers often experienced financial hardship, but its capital was always strong.
The clear focus of the entire organization was service to the Warren-area customers. In 1999, First Place raised more than $100 million through a stock offering, switching its primary financial focus away from local customers to stockholders. Thus began a series of acquisitions to put that newly raised capital to work and to grow the franchise and generate higher profitability for the stockholders.
At first, the acquisitions in Youngstown and Ravenna seemed logical for both customers and stockholders, expanding into markets contiguous to Warren. With the retirement of most long-term directors in the early 2000s, the board and CEO became more aggressive in their search for stockholder returns with acquisitions in Michigan, west Cleveland and Columbus. In the best interest of First Place customers - hardly. Outside of the CEO's comfort zone operationally and financially - clearly.
Now, $100 million of stockholder equity is gone (likely much more) and First Place Bank, originally chartered in 1922, is being acquired. Who benefits? Investment bankers, lawyers and consultants none from Warren or Ohio. The acquisition's press release talks of First Place's loyal customers and hard-working staff. If only the CEO and current board would have made all of their decisions based on the best interest of the bank's loyal customers rather than stockholders, the outcome would have been much different. This is a sad end to a franchise that has been supported by its customers for 90 years, and an unbefitting finale to a Watson family banking tradition in Warren.
David Watson
Columbus