Banking & Finance

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Regulators Fine Former First Place Bank CEO $50,000

September 20, 2016

YOUNGSTOWN, Ohio – Steve Lewis, the former CEO of what was First Place Financial Corp. and First Place Bank of Warren, has been fined $50,000 by the Office of the Comptroller of the Currency, according to a consent order dated Aug. 25.

Lewis, CEO and a director of the bank and its holding company from 2008 to 2012, “failed to ensure that the bank properly identified and accounted for problem assets and troubled debt restructurings, to accurately report its income and capital, and to ensure an adequate allowance for loan and lease losses balance,” according to the comptroller’s findings.

As a result, the consent order states, the bank filed “materially inaccurate [financial reports] for years 2008, 2009, 20120 and 2011, and [incurred] substantial expenses to restate its financials and correct its misstated books and records.”

Moreover, the comptroller found, “As CEO of the bank, [Lewis] participated in restructuring a cash-out refinance mortgage loan to a troubled borrower of the bank, who was a partner in [his] outside business.”

And, in addition to “[using] bank resources for his own personal use,” the findings state, Lewis “failed to timely disclose to the board a $9.8 million judgment against him and a troubled borrower of the bank.”

The consent order does not identify those involved with Lewis in the transactions and lawsuit it refers to.

Lewis was ordered to pay the $50,000 fine in full by Feb. 25, 2017.

In signing the consent order, he also agreed to a cease and desist order that stipulates notification and compliance procedures should he again be employed by a financial institution governed the federal law.

Lewis is the co-owner of Landers-Lewis Insurance & Consulting LLC, based in Boardman.

First Place Financial Corp. filed Chapter 11 bankruptcy in October 2012 and sold its assets to Talmer Bancorp Inc., based in Troy, Mich., for $45 million as part of the restructuring. At the time, the chairman of First Place Financial Corp., Samuel A. Roth, said in a statement, “First Place Bank has faced significant issues for a number of years, and today’s agreement with Talmer will enable us to meet the capital requirements set out by our regulator in July 2011.”

The Office of Thrift Supervision issued a cease and desist order July 14, 2011 to First Place.

As of this posting, Lewis had not responded to an email from The Business Journal seeking comment on his fine and the consent order.

Crain’s Cleveland Business, which first reported the comptroller’s findings, quotes Lewis as describing the regulator’s administrative process as “tainted” and “very biased.”

Stating there is “more to the story,” Lewis told Crain’s that he signed the consent decree to put the process behind him.

“You’re really not in a position to defend yourself,” he said. “The OCC can say or do what they want.”

In December 2015, Albert Blank, former First Place president and chief operating officer, was fined $45,000 by regulators, Crain’s reported.

In November 2013, Eric C. Diamond, former senior vice president, was fined $5,000.

Pictured: Steve Lewis

UPDATED at 11:46 a.m:
Lewis Responds to $50K Fine: ‘So Much for Due Process’

Published by The Business Journal, Youngstown, Ohio.