First Place Financial defers preferreds, trust preferreds dividends

By Angela McDaniels

Tacoma, Wash., April 8 - First Place Financial Corp. elected to defer quarterly interest payments on its $62 million of 30-year floating-rate junior subordinated deferrable interest debentures beginning with the payment that was going to be made April 25.

The debentures are owned by three affiliated trusts and were funded by the trust's issuance of trust preferred securities, according to an 8-K filing with the Securities and Exchange Commission.

The deferral of interest on the debentures results in the deferral of distributions on the trust preferreds. Neither is an event of default.

The company can defer interest on the debentures for up to 20 consecutive quarters. Interest will continue to accrue during the deferral period, and the deferred interest will also accrue interest. When the deferred interest is paid, a corresponding amount of distributions will be paid on the trust preferreds.

The deferral means the company must also defer quarterly dividend payments on its $72.93 million of series A fixed-rate cumulative perpetual preferred stock beginning with the payment that was scheduled to be made on May 16.

The series A preferreds were issued to the U.S. Treasury in conjunction with the company's participation in Treasury's Capital Purchase Program.

First Place recently completed a review of the loan portfolio of its subsidiary, First Place Bank, to help determine the appropriate level of the bank's allowance for loan losses and the related impact on capital. The company said it elected to defer the interest and dividend payments to preserve cash at the holding company while it determines the impact of this process on its financial condition and results of operations.

Once the level of the allowance has been determined, the company plans to restate its periodic filings with the SEC for the periods affected by the adjustment to the allowance and to file its 10-Q reports for the periods ended Sept. 30, 2010 and Dec. 31.

Although the final amount of the adjustment has not yet been determined, the company anticipates that the adjustment as of June 30, 2010 will exceed its previously anticipated increase of $14 million.

First Place Financial is a bank holding company based in Warren, Ohio.

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