##### Table of Contents

---

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549



---



FORM 10-Q



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------



For the quarterly period ended September 30, 2003



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | -----------------------------------------------------------------------------------------



For the transition period from  to



Commission File Number 0-25049



---



FIRST PLACE FINANCIAL CORP.

(Exact name of registrant as specified in its charter)



|Delaware                                       |  | 34-1880130                          
|---------------------------------------------- |  | ------------------------------------
|(State or other jurisdiction of incorporation) |  | (IRS Employer Identification Number)



185 E. Market
Street, Warren, OH 44481

(Address of principal executive offices)



---



(330) 373-1221

(Registrants telephone number, including area code)



Not Applicable

(Former name, former address and former fiscal year, if change since last report)



---



Indicate by check mark whether the
registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.    Yes  x    No ̈



Indicate by check mark
whether the registrant is an accelerated filer (as defined in Rule 126-2 of the Securities Exchange Act).    Yes  x    No ̈



Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practicable date.



13,285,510 common shares as of October 31, 2003



---



---

##### Table of Contents

TABLE OF CONTENTS



|                              |  |         |  |                                                                                                                             |  | PageNumber
|----------------------------- |  | ------- |  | --------------------------------------------------------------------------------------------------------------------------- |  | ----------
|PART I. FINANCIAL INFORMATION |  |        
|                              |  |         | 
|                              |  | Item 1. |  | Financial Statements                                                                                                        |  |           
|                              |  |         | 
|                              |  |         |  | Condensed Consolidated Statements of Financial Condition As of September 30, 2003 and June 30, 2003                         |  | 3         
|                              |  |         | 
|                              |  |         |  | Condensed Consolidated Statements of Income for the Three Months Ended September 30, 2003 and 2002                          |  | 4         
|                              |  |         | 
|                              |  |         |  | Condensed Consolidated Statements of Changes in Shareholders Equity For the Three Months Ended September 30, 2003 and 2002 |  | 5         
|                              |  |         | 
|                              |  |         |  | Condensed Consolidated Statements of Cash Flows for the Three Months Ended September 30, 2003 and 2002                      |  | 6         
|                              |  |         | 
|                              |  |         |  | Notes to Unaudited Condensed Consolidated Financial Statements                                                              |  | 7         
|                              |  |         | 
|                              |  | Item 2. |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                       |  | 9         
|                              |  |         | 
|                              |  | Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk                                                                  |  | 13        
|                              |  |         | 
|                              |  | Item 4. |  | Controls and Procedures                                                                                                     |  | 14        
|                              | 
|PART II. OTHER INFORMATION    |  |        
|                              |  |         | 
|                              |  | Item 1. |  | Legal Proceedings                                                                                                           |  | 14        
|                              |  |         | 
|                              |  | Item 2. |  | Changes in Securities and Use of Proceeds                                                                                   |  | 14        
|                              |  |         | 
|                              |  | Item 3. |  | Defaults Upon Senior Securities                                                                                             |  | 14        
|                              |  |         | 
|                              |  | Item 4. |  | Submission of Matters to a Vote of Security Holders                                                                         |  | 14        
|                              |  |         | 
|                              |  | Item 5. |  | Other Information                                                                                                           |  | 15        
|                              |  |         | 
|                              |  | Item 6. |  | Exhibits and Reports on Form 8-K                                                                                            |  | 15        
|                              | 
|SIGNATURES                    |  | 16     



2



---

##### Table of Contents

Part I. FINANCIAL INFORMATION

Item 1. Financial Statements



FIRST PLACE FINANCIAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL
CONDITION

(Dollars in thousands, except share data)



|                                                                                             |  | September30, 2003 |           |   | June 30,2003 |  
|-------------------------------------------------------------------------------------------- |  | ----------------- | --------- | - | ------------ | -
|                                                                                             |  | (Unaudited)       |           |   |              |  
|ASSETS                                                                                       |  |                   |           |   |              |  
|Cash and cash equivalents                                                                    |  | $                 | 31,262    |   |              | $
|Federal funds sold                                                                           |  |                   | 1,500     |   |              |  
|Securities available for sale                                                                |  |                   | 353,902   |   |              |  
|Loans held for sale                                                                          |  |                   | 90,633    |   |              |  
|Loans                                                                                        |  |                   |           |   |              |  
|Mortgage and construction                                                                    |  |                   | 710,610   |   |              |  
|Commercial                                                                                   |  |                   | 131,044   |   |              |  
|Consumer                                                                                     |  |                   | 169,965   |   |              |  
|                                                                                             |  |                   |           |   |              |  
|Total loans                                                                                  |  |                   | 1,011,619 |   |              |  
|Less allowance for loan losses                                                               |  |                   | 10,526    |   |              |  
|                                                                                             |  |                   |           |   |              |  
|Loans, net                                                                                   |  |                   | 1,001,093 |   |              |  
|Federal Home Loan Bank stock                                                                 |  |                   | 22,750    |   |              |  
|Premises and equipment, net                                                                  |  |                   | 19,506    |   |              |  
|Goodwill                                                                                     |  |                   | 18,418    |   |              |  
|Core deposits and other intangibles                                                          |  |                   | 4,650     |   |              |  
|Accrued interest receivable and other assets                                                 |  |                   | 131,553   |   |              |  
|                                                                                             |  |                   |           |   |              |  
|TOTAL ASSETS                                                                                 |  | $                 | 1,675,267 |   |              | $
|                                                                                             |  |                   |           |   |              |  
|LIABILITIES                                                                                  |  |                   |           |   |              |  
|Deposits                                                                                     |  |                   |           |   |              |  
|Non-interest bearing                                                                         |  | $                 | 40,836    |   |              | $
|Interest bearing checking                                                                    |  |                   | 70,596    |   |              |  
|Savings                                                                                      |  |                   | 134,076   |   |              |  
|Money market                                                                                 |  |                   | 304,259   |   |              |  
|Certificates of deposit                                                                      |  |                   | 552,082   |   |              |  
|                                                                                             |  |                   |           |   |              |  
|Total deposits                                                                               |  |                   | 1,101,849 |   |              |  
|Securities sold under agreements to repurchase                                               |  |                   | 31,248    |   |              |  
|Federal Home Loan Bank advances                                                              |  |                   | 334,334   |   |              |  
|Advances by borrowers for taxes and insurance                                                |  |                   | 4,430     |   |              |  
|Accrued interest payable and other liabilities                                               |  |                   | 19,497    |   |              |  
|                                                                                             |  |                   |           |   |              |  
|TOTAL LIABILITIES                                                                            |  |                   | 1,491,358 |   |              |  
|                                                                                             |  |                  
|SHAREHOLDERS EQUITY                                                                         |  |                   |           |   |              |  
|Preferred stock, $.01 par value:                                                             |  |                   |           |   |              |  
|3,000,000 shares authorized, no shares issued and outstanding                                |  |                   |           |   |              |  
|Common stock, $.01 par value:                                                                |  |                   |           |   |              |  
|33,000,000 shares authorized; 18,128,272 shares issued                                       |  |                   | 181       |   |              |  
|Additional paid-in capital                                                                   |  |                   | 177,172   |   |              |  
|Retained earnings                                                                            |  |                   | 86,454    |   |              |  
|Unearned employee stock ownership plan shares                                                |  |                   | (6,070    | ) |              |  
|Unearned recognition and retention plan shares                                               |  |                   | (1,717    | ) |              |  
|Treasury stock: 4,842,762 shares at September 30, 2003 and 4,819,567 shares at June 30, 2003 |  |                   | (66,900   | ) |              |  
|Accumulated other comprehensive income (loss)                                                |  |                   | (5,211    | ) |              |  
|                                                                                             |  |                   |           |   |              |  
|TOTAL SHAREHOLDERS EQUITY                                                                   |  |                   | 183,909   |   |              |  
|                                                                                             |  |                   |           |   |              |  
|TOTAL LIABILITIES AND SHAREHOLDERS EQUITY                                                   |  | $                 | 1,675,267 |   |              | $
|                                                                                             |  |                   |           |   |              |  



See accompanying notes to
consolidated financial statements.



3



---

##### Table of Contents

FIRST PLACE FINANCIAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)

(Dollars in thousands, except per share data)



|                                                       |  | Three months endedSeptember 30, |       
|------------------------------------------------------ |  | ------------------------------- | ------
|                                                       |  | 2003                            |       
|INTEREST INCOME                                        |  |                                 |       
|Loans, including fees                                  |  | $                               | 17,726
|Securities:                                            |  |                                 |       
|Taxable                                                |  |                                 | 2,981 
|Tax exempt                                             |  |                                 | 478   
|                                                       |  |                                 |       
|TOTAL INTEREST INCOME                                  |  |                                 | 21,185
|INTEREST EXPENSE                                       |  |                                 |       
|Deposits                                               |  |                                 | 6,507 
|Borrowed funds                                         |  |                                 | 2,626 
|Repurchase agreements                                  |  |                                 | 52    
|                                                       |  |                                 |       
|TOTAL INTEREST EXPENSE                                 |  |                                 | 9,185 
|                                                       |  |                                 |       
|NET INTEREST INCOME                                    |  |                                 | 12,000
|PROVISION FOR LOAN LOSSES                              |  |                                 | 1,486 
|                                                       |  |                                 |       
|NET INTEREST INCOME AFTER                              |  |                                 |       
|PROVISION FOR LOAN LOSSES                              |  |                                 | 10,514
|                                                       |  |                                 |       
|NONINTEREST INCOME                                     |  |                                 |       
|Service charges                                        |  |                                 | 1,357 
|Security gains, net                                    |  |                                 | 0     
|Gain on sale of loans, net                             |  |                                 | 3,992 
|Loan servicing income                                  |  |                                 | (861  
|Other  bank income                                    |  |                                 | 263   
|Other  non-bank income                                |  |                                 | 1,671 
|                                                       |  |                                 |       
|TOTAL NONINTEREST INCOME                               |  |                                 | 6,422 
|                                                       |  |                                 |       
|NONINTEREST EXPENSE                                    |  |                                 |       
|Salaries and benefits                                  |  |                                 | 5,257 
|Occupancy and equipment                                |  |                                 | 1,522 
|Professional fees                                      |  |                                 | 463   
|Loan expenses                                          |  |                                 | 563   
|Franchise taxes                                        |  |                                 | 394   
|Intangible amortization                                |  |                                 | 249   
|Other                                                  |  |                                 | 1,763 
|                                                       |  |                                 |       
|TOTAL NONINTEREST EXPENSE                              |  |                                 | 10,211
|                                                       |  |                                 |       
|INCOME BEFORE INCOME TAX                               |  |                                 | 6,725 
|Provision for income tax                               |  |                                 | 2,169 
|Minority interest in income of consolidated subsidiary |  |                                 | 47    
|                                                       |  |                                 |       
|NET INCOME                                             |  | $                               | 4,509 
|                                                       |  |                                 |       
|Basic earnings per share                               |  | $                               | 0.36  
|                                                       |  |                                 |       
|Diluted earnings per share                             |  | $                               | 0.35  
|                                                       |  |                                 |       



See accompanying notes to
consolidated financial statements.



4



---

##### Table of Contents

FIRST PLACE FINANCIAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS EQUITY (Unaudited)

(Dollars in thousands, except per share data)



|                                                                                                           |  | Three months endedSeptember 30, |        
|---------------------------------------------------------------------------------------------------------- |  | ------------------------------- | -------
|                                                                                                           |  | 2003                            |        
|Balance at beginning of period                                                                             |  | $                               | 182,681
|Comprehensive income:                                                                                      |  |                                 |        
|Net income                                                                                                 |  |                                 | 4,509  
|Change in unrealized gain on interest rate swaps, net of tax                                               |  |                                 | 0      
|Loss on termination of interest rate swaps, net of tax                                                     |  |                                 | 0      
|Loss on termination of interest rate swaps reclassified into income, net of tax                            |  |                                 | 423    
|Change in unrealized gain (loss) on securities available for sale, net of reclassification and tax effects |  |                                 | (1,828 
|                                                                                                           |  |                                 |        
|Total comprehensive income                                                                                 |  |                                 | 3,104  
|Cash dividends declared                                                                                    |  |                                 | (1,860 
|Commitment to release employee stock ownership plan shares                                                 |  |                                 | 258    
|Commitment to release recognition and retention plan shares                                                |  |                                 | 170    
|Treasury shares acquired                                                                                   |  |                                 | (679   
|Stock options exercised                                                                                    |  |                                 | 189    
|Tax benefit related to exercise of stock options                                                           |  |                                 | 35     
|Stock issued as employee compensation                                                                      |  |                                 | 11     
|                                                                                                           |  |                                 |        
|Balance at end of period                                                                                   |  | $                               | 183,909
|                                                                                                           |  |                                 |        
|Cash dividends per share                                                                                   |  | $                               | 0.14   
|                                                                                                           |  |                                 |        



See accompanying notes to
consolidated financial statements.



5



---

##### Table of Contents

FIRST PLACE FINANCIAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

(Dollars in thousands)



|                                                                       |  | Three months endedSeptember 30, |         
|---------------------------------------------------------------------- |  | ------------------------------- | --------
|                                                                       |  | 2003                            |         
|Cash flows from operating activities:                                  |  |                                 |         
|Net cash from (used in) operating activities                           |  | $                               | (12,777 
|Cash flows from investing activities:                                  |  |                                 |         
|Securities available for sale                                          |  |                                 |         
|Proceeds from sales                                                    |  |                                 | 17,759  
|Proceeds from maturities, calls and principal paydowns                 |  |                                 | 19,892  
|Purchases                                                              |  |                                 | (48,253 
|Net change in federal funds sold                                       |  |                                 | 150     
|Net change in loans                                                    |  |                                 | (107,933
|Proceeds from other loans sold                                         |  |                                 | 19,350  
|Premises and equipment expenditures                                    |  |                                 | (398    
|Additional investment in Coldwell Banker First Place Real Estate, Ltd. |  |                                 | 0       
|                                                                       |  |                                 |         
|Net cash from (used in) investing activities                           |  |                                 | (99,433 
|                                                                       |  |                                 |         
|Cash flows from financing activities:                                  |  |                                 |         
|Net change in deposits                                                 |  |                                 | (6,601  
|Net change in advances by borrowers for taxes and insurance            |  |                                 | 45      
|Net change in repurchase agreements                                    |  |                                 | 21,701  
|Cash dividends paid                                                    |  |                                 | (1,860  
|Proceeds and tax benefit from stock options exercised                  |  |                                 | 224     
|Purchase of treasury stock                                             |  |                                 | (679    
|Proceeds from Federal Home Loan Bank borrowings                        |  |                                 | 277,420 
|Repayment of Federal Home Loan Bank borrowings                         |  |                                 | (178,984
|Termination of interest rate swaps                                     |  |                                 | 0       
|                                                                       |  |                                 |         
|Net cash from (used in) financing activities                           |  |                                 | 111,266 
|                                                                       |  |                                 |         
|Net change in cash and cash equivalents                                |  |                                 | (944    
|                                                                       |  |                                
|Cash and cash equivalents at beginning of period                       |  |                                 | 32,206  
|                                                                       |  |                                 |         
|Cash and cash equivalents at end of period                             |  | $                               | 31,262  
|                                                                       |  |                                 |         
|Supplemental cash flow information:                                    |  |                                 |         
|Cash payments of interest expense                                      |  | $                               | 7,695   
|Cash payments of income taxes                                          |  |                                 | 350     
|                                                                       |  |                                
|Supplemental noncash disclosures:                                      |  |                                 |         
|Transfer of loans to other real estate                                 |  | $                               | 356     



See accompanying notes to
consolidated financial statements.



6



---

##### Table of Contents

Notes to Unaudited Condensed Consolidated Financial Statements



1. Principles of Consolidation:



The
interim unaudited condensed consolidated financial statements include the accounts of First Place Financial Corp. (Company) and its wholly owned subsidiaries, First Place Bank (Bank) and First Place Holdings, Inc. The condensed consolidated
financial statements also include subsidiaries of First Place Holdings, Inc.First Place Insurance Agency, Ltd. (FPI), Coldwell Banker First Place Real Estate, Ltd. (CBFPRE), APB Financial Group, Ltd. (APB), and TitleWorks Agency, LLC
(TitleWorks). TitleWorks Agency, LLC is a 75% owned affiliate of First Place Holdings, Inc. All significant intercompany balances and transactions have been eliminated in consolidation.



Stock Options. Employee compensation expense under stock options is reported using the intrinsic value method. No stock-based
compensation cost is reflected in net income, as all options granted had an exercise price equal to or greater than the market price of the underlying common stock at date of grant. The following table illustrates the effect on net income and
earnings per share if expense was measured using the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, Accounting for Stock-Based Compensation.



|                                                                                  |  | Three months endedSeptember 30,
|--------------------------------------------------------------------------------- |  | -------------------------------
|(Dollars in thousands, except per share data)                                     |  | 2003                           
|Net income as reported                                                            |  | $                              
|Deduct: Stock-based compensation expense determined under fair value based method |  |                                
|                                                                                  |  |                                
|Pro forma net income                                                              |  | $                              
|                                                                                  |  |                                
|Basic earnings per share as reported                                              |  | $                              
|Pro forma basic earnings per share                                                |  | $                              
|                                                                                  |  |                                
|Diluted earnings per share as reported                                            |  | $                              
|Pro forma diluted earnings per share                                              |  | $                              



2. Basis of Presentation:



The unaudited condensed consolidated financial statements have been
prepared in conformity with generally accepted accounting principles in the United States of America (US GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. The financial statements should
be read in conjunction with the consolidated financial statements and notes thereto included in First Place Financial Corp.s 2003 Annual Report to Shareholders incorporated by reference into First Place Financial Corp.s 2003 Annual
Report on Form 10-K. The interim condensed consolidated financial statements include all adjustments (consisting of only normal recurring items), which, in the opinion of management, are necessary for a fair presentation of the financial position
and results of operations for the periods presented. The results of operations for the interim periods disclosed herein are not necessarily indicative of the results that may be expected for a full year.



Certain reclassifications have been made to prior periods condensed consolidated
financial statements and related notes in order to conform to the current period presentation.



3. Use of Estimates:



The preparation
of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements.
Actual results could differ from those estimates. The allowance for loan losses and fair values of financial instruments, such as mortgage servicing rights, are particularly subject to change.



7



---

##### Table of Contents

4. Earnings per Share:



The computation of basic and diluted earnings per share is shown in the following table:



|(Dollars in thousands, except per share data)                    |  | Three months ended September 30, |           
|---------------------------------------------------------------- |  | -------------------------------- | ----------
|                                                                 |  | 2003                             |           
|Basic earnings per share computation:                            |  |                                  |           
|Net Income                                                       |  | $                                | 4,509     
|                                                                 |  |                                  |           
|Weighted average shares outstanding                              |  |                                  | 13,295,981
|Less: Average unearned ESOP shares                               |  |                                  | (618,169  
|Less: Average unearned RRP shares                                |  |                                  | (139,344  
|                                                                 |  |                                  |           
|Weighted average shares                                          |  |                                  | 12,538,468
|                                                                 |  |                                  |           
|Basic earnings per share                                         |  | $                                | 0.36      
|                                                                 |  |                                  |           
|Diluted earnings per share computation:                          |  |                                  |           
|Net Income                                                       |  | $                                | 4,509     
|                                                                 |  |                                  |           
|Weighted average shares outstanding for basic earnings per share |  |                                  | 12,538,468
|Add: Dilutive effects of assumed exercises of stock options      |  |                                  | 222,276   
|Add: Dilutive effects of unearned RRP shares                     |  |                                  | 7,473     
|                                                                 |  |                                  |           
|Weighted average shares and dilutive potential shares            |  |                                  | 12,768,217
|                                                                 |  |                                  |           
|Diluted earnings per share                                       |  | $                                | 0.35      
|                                                                 |  |                                  |           



There were no stock options that were
antidilutive for the quarters ended September 30, 2003 and September 30, 2002, therefore all stock options were considered in computing diluted earnings per share.



5. Effect of New Accounting Standards:



In April 2003, the Financial Accounting Standards Board (FASB) issued SFAS No. 149 Amendment of Statement 133 on Derivative Instruments and Hedging Activities
which amends SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities for decisions made by the Derivatives Implementation Group, other FASB projects dealing with financial instruments, and in connection with the
application of the definition of a derivative.



In May 2003, the FASB issued
SFAS No. 150 Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity which establishes standards for how an issuer classifies and measures certain freestanding financial instruments that have
characteristics of both liabilities and equity.



The adoption of these two
statements on July 1, 2003 did not have a material impact on the Company.



6. Other Events:



On October 20, 2003 the Company adopted new
procedures for proof and check clearing processes. The procedures eliminated timing differences associated with processing on us checks by combining those checks with in-transit items sent to the Federal Reserve Bank for processing.
Subsequent to the change in procedures, the Company determined that certain aged in-transit and other reconciling items could be impaired. The Company is devoting ongoing resources in determining the status of these items, including the use of third
party expertise. If the review determines that recoverability of the reconciling items is not likely, an impairment of approximately $450,000, after-tax, could occur.



On November 6, 2003 the Company issued a press release and announced the opening by the Bank of a new concept financial center in Solon,
Ohio. The First Place Financial Center (Center) is not designed for traditional walk-in banking and will provide commercial and commercial real estate lending services, mortgage and real estate lending, insurance, and wealth management
services for businesses and individuals. First Place has



8



---

##### Table of Contents

had a loan production office in Solon that will be consolidated into the Center.



7. Subsequent Event  Pending Business Combination:



On November 10, 2003 First Place Financial Corp. announced it had entered into a definitive agreement to acquire Franklin Bancorp, Inc.,
(Franklin) headquartered in Southfield, Michigan, the holding company for Franklin Bank, N.A. in a cash and stock merger transaction valued at approximately $82.2 million. Under the terms of the agreement, Franklin shareholders will be entitled to
receive for each share of Franklin common stock either $21.00 in cash or 1.137 shares of the Companys common stock, or any combination thereof, subject to election and allocation procedures which are intended to ensure that, in the aggregate,
50% of the Franklin shares will be exchanged for the Companys common stock. The transaction has been approved by the respective boards of directors of the Company and Franklin and is subject to approval by regulatory authorities and by
Franklins shareholders. The transaction is expected to close in the second calendar quarter of 2004.



Franklin had total assets of $528 million, deposits of $417 million, and equity of $45 million at September 30, 2003. Franklin conducts business in Michigan from four offices in Oakland County and one office in
adjacent Wayne County.



On a pro forma basis, assuming the merger had been
effective as of September 30, 2003, the Company would have assets of approximately $2.2 billion and total equity of $222 million. The Company expects to issue up to $30 million of trust preferred securities to fund the transaction.



Item 2. Managements Discussion and Analysis of Financial Condition And Results of Operations



The following analysis discusses changes in the Companys financial condition and results of operations during the periods included in the Condensed Consolidated
Financial Statements which are part of this filing.



Forward-Looking
Statements



When used in this Form 10-Q, or in future filings with the
Securities and Exchange Commission, in press releases or other public or shareholder communications, or in oral statements made with the approval of an authorized executive officer, the words or phrases will likely result, are
expected to, will continue, is anticipated, estimate, project or similar expressions are intended to identify forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors, which may cause the Companys actual results to be materially different from those indicated. Such statements are
subject to certain risks and uncertainties including changes in economic conditions in the market areas the Company conducts business, which could materially impact credit quality trends, changes in policies by regulatory agencies, fluctuations in
interest rates, demand for loans in the market areas the Company conducts business, and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to
caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to publicly release the result of any revisions that may be made to any forward-looking
statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.



Results of Operations

Comparison of the Three Months Ended
September 30, 2003 and 2002



General. Net income for the first
fiscal quarter ended September 30, 2003 totaled $4.5 million, or $0.35 per diluted share compared to net income of $3.0 million, or $0.23 per diluted share for the quarter ended September 30, 2002. Return on average equity for the quarter was 9.85%
compared to 6.65% for the quarter ended September 30, 2002. Return on average assets for the quarter was 1.12% compared to 0.76% for the quarter ended September 30, 2002.



9



---

##### Table of Contents

Net Interest Income.Net interest income for the quarter ended September 30, 2003 totaled $12.0 million, an
increase of $1.6 million, or 15.6% from $10.4 million for the quarter ended September 30, 2002. The increase in net interest income resulted primarily from a 48 basis points (bp) increase in the net interest margin, from 2.89% for the
quarter ended September 30, 2002 to 3.37% for the quarter ended September 30, 2003. The improvement was primarily due to a favorable shift in the mix of interest-earning assets and interest-bearing liabilities and a reduction of interest cost
associated with interest rate swaps that were terminated in August 2002. Average interest-earning assets declined slightly by 0.8% to $1.5 billion. Average loan balances increased by $136.4 million or 14.3% to $1.1 billion. Lower yielding securities
and short-term investment balances declined by $147.3 million. The increase in loan balances offset by the reduction in securities and short-term investments resulted in a favorable shift in the mix of interest-earning assets. Reflective of the low
market interest rates that were present during the current fiscal quarter, the yield on interest-earning assets decreased to 5.90% from 6.39% for the prior year first fiscal quarter. Average interest-bearing liabilities increased by $17.3 million or
1.3% compared to the prior year quarter ended September 30, 2002. Average deposit balances increased $12.2 million. Growth in money market balances was offset by a decline in certificates of deposit, resulting in a favorable shift in the mix of
interest-bearing liabilities. The average rate paid on interest-bearing liabilities was 2.70% for the quarter ended September 30, 2003 compared to 3.80% for the prior year quarter, a decrease of 110 bp. Contributing to this decrease was a reduction
of the cost associated with interest rate swaps that were terminated in August 2002. The cost of the interest rate swaps included in interest expense for the current fiscal quarter was a non-cash charge of $651,000. The cost of these interest rate
swaps in the same quarter of the prior year was $1.3 million including non-cash charges of $578,000. Additional information regarding the interest rate swaps is contained in the Companys 2003 Annual Report on Form 10-K and also in the section
titled Managements Discussion and Analysis of Financial Condition and Results of Operations of the 2003 Annual Report to Shareholders.



Provision for Loan Losses. The provision for loan losses was $1.5 million for the quarter ended September 30, 2003 compared to $511,000 for the quarter ended
September 30, 2002. The increase in provision expense was primarily attributable to growth in the loan portfolio, which increased $110.2 million during the quarter ended September 30, 2003 compared to an increase of $19.9 million during the quarter
ended September 30, 2002. Net charge-offs for the current fiscal quarter totaled $564,000 compared to $538,000 for the prior year period. Annualized net charge-offs to average loans were 0.22% for the current fiscal quarter compared to 0.23% for the
first fiscal quarter in the prior year. The loan loss reserve ratio was 1.04% at September 30, 2003 compared to 1.02% at September 30, 2002.



Noninterest Income. Noninterest income totaled $6.4 million for the quarter ended September 30, 2003, an increase of $3.5 million or 23.5% from $2.9 million in the
prior year quarter ended September 30, 2002. Gains on sale of loans were $4.0 million for the current fiscal quarter compared to $2.2 million for the prior year fiscal quarter. An increase in mortgage originations to $403.3 million in the current
quarter compared to $214.3 million for the previous year quarter contributed to the increase in loan gains, as the majority of mortgage originations were subsequently sold to the secondary market. Due to recent volatility in interest rates the
Company has experienced a decrease in mortgage application volume and a lower level of mortgage banking activity is anticipated in the next fiscal quarter compared to the quarter ended September 30, 2003. The opening of two loan production offices
during the fourth quarter of fiscal 2003 is expected to generate incremental volume that may partially offset the effect of the lower mortgage application volume.



Amortization of the mortgage servicing rights (MSRs) is netted against servicing revenue in noninterest income. Accelerated amortization
caused by rapid prepayment of loans in a lower rate environment combined with the non-cash impairment adjustment described below resulted in a net servicing loss of $861,000 in the current year quarter compared to a net servicing loss of $1.2
million in the quarter ended September 30, 2002. The Company monitors the effect of changing interest rates and prepayment speeds on the estimated value of the MSRs and recorded as part of the net loan servicing loss a partial recapture of $400,000
of previously recorded impairment charges to MSRs during the current fiscal quarter. The net loss for the prior year quarter included a non-cash charge of $834,000 for impairment. The process used to arrive at the estimated aggregate fair value of
the Companys MSRs is a material estimate that is particularly susceptible to significant changes in the near term. The value of the MSRs portfolio is analyzed quarterly by considering critical assumptions for prepayment speeds, the targeted
investor yield to a buyer of MSRs, and float on escrows. Market interest rates are an external factor that can have a material influence on this valuation process, as interest rates influence prepayment speeds and targeted investor yield. At
September 30, 2003, the value of the MSRs was 0.85% of the loans being serviced.



Service charges increased 15.0% or $177,000 to $1.4 million in the current fiscal quarter compared to $1.2 million for the prior year. The improvement was due primarily to an increase in servicing fees on loans such as prepayment or
delinquent charges, loan application withdrawal fees, and certain other fees for loan information requests.



10



---

##### Table of Contents

Income from non-bank subsidiaries increased $1.1 million to $1.7 million for the quarter ended September 30, 2003 due
primarily to the previously announced acquisitions of APB and TitleWorks, both of which occurred in January, 2003. Other income increased $269,000 from the prior fiscal quarter net loss of $6,000 due primarily to revenue from an investment in bank
owned life insurance.



Noninterest Expense.The change in noninterest
expense was primarily attributable to expenses incurred by the non-bank acquisitions and higher expense levels associated with increased mortgage banking activity. Noninterest expense increased 22.0% to $10.2 million for the quarter ended September
30, 2003 from $8.4 million for the quarter ended September 30, 2002, an increase of $1.8 million. The increase attributable to the non-bank acquisitions was $787,000. Higher mortgage banking activity resulted in higher variable compensation costs
reduced by a higher deferral of loan origination costs and also higher loan expenses. The efficiency ratio improved to 54.69% in the current quarter compared to 61.92% for the prior year.



Income Taxes. Income tax expense totaled $2.2 million for the quarter ended September 30, 2003, an increase of $826,000 compared to
the prior year quarter ended September 30, 2002 due to the higher net income in the current quarter. The effective tax rate for the quarter ended September 30, 2003 was 32.3% compared to 30.7% for the quarter ended September 30, 2002. The higher
effective tax rate was due to the impact of the marginal tax rate of 35% being applied to higher pre-tax income in the current fiscal quarter.



Financial Condition



General. Assets totaled $1,675.3 million at September 30, 2003, an increase of $116.7 million, or 7.5% from $1,558.6 million at June 30, 2003. Capital ratios remain strong, as supported by the ratio of equity
to total assets at September 30, 2003 of 10.98%.



Securities. Securities
available for sale increased $7.5 million, or 2.2% during the quarter and totaled $353.9 million at September 30, 2003 compared to $346.4 million at June 30, 2003. The increase was primarily due to the purchase of mortgage related securities offset
by principal payments received on mortgage related securities and the sale, at par, of a trust preferred security. The security purchases occurred late in the current quarter and as a result the average balance of securities available for sale for
the quarter ended September 30, 2003 decreased by $22.3 million or 6.2% to $338.9 million from the quarter ended June 30, 2003.



Loans Held for Sale.Loans held for sale totaled $90.6 million at September 30, 2003 compared to $65.7 million at June 30, 2003, an increase of 38.0% or $24.9
million attributable to higher mortgage banking activity as previously discussed.



Loans. Loans receivable totaled $1,011.6 million at September 30, 2003, an increase of $110.2 million, or 12.2% from $901.4 million at June 30, 2003. The growth in loan balances during the three months since June 30, 2003 was
primarily in mortgage and construction loans, which increased $95.1 million. Average loan balances of $1,090.6 million for the quarter ended September 30, 2003 increased $94.0 million from $996.6 million for the quarter ended June 30, 2003.



Nonperforming Assets.Nonperforming assets, including nonperforming
loans and real estate owned, totaled $15.7 million at September 30, 2003 compared to $13.8 million at June 30, 2003 and $15.4 million at September 30, 2002. Nonperforming assets as a percent of total assets declined slightly to 0.94% at September
30, 2003 from 0.97% twelve months ago. Nonperforming loans at September 30, 2003 were $14.5 million, an increase of 3.5% or $487,000 compared to the year ago level. Nonperforming loans at June 30, 2003 were $12.8 million or $1.7 million lower than
at September 30, 2003. The increase in nonperforming loans during the current fiscal quarter was primarily in one-to-four family mortgage loans, loans that historically have not resulted in a high level of losses for the Company. The ratio of the
allowance for loan losses to nonperforming loans improved to 72.39% from 67.09% at September 30, 2002 but decreased from 75.14% at June 30, 2003.



Allowance for Loan Losses. The ratio of the allowance for loan losses to portfolio loans was 1.04% at the end of the current fiscal quarter compared to 1.02% at
the end of the prior year quarter and 1.07% at June 30, 2003. Management analyzes the adequacy of the allowance for loan losses regularly through reviews of the performance of the loan portfolio considering economic conditions, changes in interest
rates and the effect of such changes on real estate values, changes in the composition of the loan portfolio, and trends in past due and nonperforming loans. The allowance for loan losses is a material estimate that is particularly susceptible to
significant changes in the near term and is established through a provision for loan losses based on managements



11



---

##### Table of Contents

evaluation of the risk inherent in the Companys loan portfolio and the general economy. Such evaluation, which includes a review of all loans for which
full collectibility may not be reasonably assured, considers among other matters, the estimated fair value of the underlying collateral, economic conditions, historical loan loss experience and other factors that warrant recognition in providing for
an adequate loan loss allowance. Future additions to the allowance for loan losses will be dependent on these factors. The Company maintains an allowance for loan losses at a level adequate to absorb managements estimate of probable losses
inherent in the loan portfolio.



Other Assets.Other assets totaled
$131.6 million at September 30, 2003, a decrease of $23.6 million from $155.2 million at June 30, 2003. The decrease was due primarily to a decrease in trade receivables for mortgage loans originated and sold into the secondary market but not yet
settled as of the last day of the quarter.



Deposits.Deposits decreased
$6.6 million, or 0.6%, during the quarter and totaled $1,101.8 million at September 30, 2003 compared to $1,108.5 million at June 30, 2003. Interest bearing accounts decreased $7.9 million or 0.7% to $1,061.0 million at September 30 primarily due to
a decrease in certificates of deposit partially offset by an increase in money market accounts. Average deposit balances during the quarter ended September 30, 2003 were $1,067.2 million compared to $1,057.2 million for the quarter ended June 30,
2003, an increase of 0.9% or $10.0 million.



Borrowings.Repurchase
agreements increased $21.7 million to $31.2 million at September 30, 2003 compared to $9.5 million at June 30, 2003. The increase was due to borrowings obtained to support certain security purchases as referenced above. Federal Home Loan Bank
advances increased $98.3 million or 41.7% during the quarter and totaled $334.3 million at September 30, 2003 compared to $236.0 million at June 30, 2003 due primarily to an increase of short term floating rate advances to provide funding for
mortgage loan activity, including loans held for sale.



During the prior year
quarter the Company redeemed interest rate swaps and the effect of that transaction on interest expense is described in more detail in the section above titled Net Interest Income.



Capital Resources. Total shareholders equity increased $1.2 million, or 0.7%
during the quarter and totaled $183.9 million at September 30, 2003 compared to $182.7 million at June 30, 2003. The overall increase in shareholders equity was due to current period earnings partially offset by an increase in the net
unrealized loss on securities caused by the disparate effect of an increase in market interest rates during the current fiscal quarter on the available for sale securities portfolio. During the current fiscal quarter the Company repurchased 40,000
shares of common stock at an average price of $16.98 per share. Stock repurchase programs are a component of the companys strategy to reduce/invest excess capital after consideration of market and economic factors, the effect on shareholder
dilution, adequacy of capital, effect on liquidity and an assessment of alternative investment returns. Shares repurchased by the Company are for use in its stock option plan and for general corporate purposes.



Office of Thrift Supervision (OTS) regulations require savings institutions to maintain
certain minimum levels of regulatory capital. Additionally, the regulations establish a framework for the classification of savings institutions into five categories: well-capitalized; adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized. Generally, an institution is considered well-capitalized if it has a core (Tier 1) capital ratio of at least 5.0% (based on average total assets); a core (Tier 1) risk-based capital ratio of a least
6.0%; and a total risk-based capital ratio of at least 10.0%. The Bank had capital ratios above the well-capitalized levels at September 30, 2003 and June 30, 2003.



Critical Accounting Policies



The Company follows financial accounting and reporting policies that are in accordance with generally accepted accounting principles in the United States of America and
conform to general practices within the banking industry. These policies are presented in Note 1 to the consolidated audited financial statements in First Place Financial Corp.s 2003 Annual Report to Shareholders incorporated by reference into
First Place Financial Corp.s 2003 Annual Report on Form 10-K. Some of these accounting policies are considered to be critical accounting policies. Critical accounting policies are those policies that require managements most difficult,
subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain. Application of assumptions different than those used by management could result in material changes in the
Companys financial position or results of operations. The Company has identified two accounting polices that are critical accounting policies and an understanding of these policies is necessary to understand the financial



12



---

##### Table of Contents

statements. These two policies relate to determining the adequacy of the allowance for loan losses and the valuation of the mortgage servicing rights.
Additional information regarding these policies is included in the aforementioned notes to the consolidated financial statements and in the sections captioned Noninterest Income and Allowance for Loan Losses, respectively.
Management believes that the judgments, estimates and assumptions used in the preparation of the consolidated financial statements are appropriate given the factual circumstances at the time.



Liquidity and Cash Flows



In general terms, liquidity is a measurement of the Companys ability to meet its cash
needs. The Companys objective in liquidity management is to maintain the ability to meet loan commitments, purchase securities or to repay deposits and other liabilities in accordance with their terms without an adverse impact on current or
future earnings. The Companys principal sources of funds are deposits; sales, amortization and prepayments of loans; maturities, sales and principal receipts of securities; borrowings, repurchase agreements and operations.



The Bank is required by regulation to maintain sufficient liquidity to ensure its safe and
sound operation. Thus, adequate liquidity may vary depending on the Banks overall asset/liability structure, market conditions, the activities of competitors, and the requirements of its own deposit and loan customers. Management believes that
the Banks liquidity is sufficient.



Liquidity management is both a daily
and long-term responsibility of management. The Bank adjusts its investments in liquid assets, primarily cash, short-term investments and other assets that are widely traded in the secondary market, based upon managements assessment of (i)
expected loan demand, (ii) expected deposit flows, (iii) yields available on interest-earning deposits and securities and (iv) the objective of its asset/liability management program. Along with its liquid assets, the Bank has additional sources of
liquidity available including, but not limited to, the ability to obtain deposits by offering above-market interest rates and access to advances from the Federal Home Loan Bank.



The primary investing activities of the Bank are originating loans and purchasing securities. For the quarter ended September 30, 2003
proceeds from the securities portfolio provided $37.7 million, offset by the purchase of securities totaling $48.3 million. Growth in the loan portfolio used $107.9 million. Proceeds from other loans sold for interest rate risk and liquidity
management and to offset an increase in borrowings were $19.4 million. Generally, during periods of declining interest rates, the Bank would be expected to experience increased loan and mortgage related security prepayments, which would likely be
reinvested at lower interest rates. During periods of increasing interest rates, loan and mortgage related security prepayments would be expected to decline, reducing funds available for investment at higher interest rates. Market interest rates
during the current quarter displayed volatility but overall increased slightly during the quarter.



The primary financing activities of the Bank are deposits, repurchase agreements and borrowings. For the quarter ended September 30, 2003, a slight decrease in deposit accounts used $6.6 million, an increase in
repurchase agreements provided $21.7 million and an increase of borrowings provided $98.4 million, net of scheduled repayments. As previously discussed, the Bank experienced a high level of mortgage banking activity during the quarter. The loan
balances generated by this activity were funded by an increase in short-term borrowings. It is anticipated that the recent rise in interest rates, as evidenced by a decrease in loan applications, will reduce the balance of loans held for sale and
therefore reduce the need for short-term funding. The Bank will continue to monitor the effect of interest rates and other factors on liquidity and cash flows and take the appropriate actions to continue to meet cash needs.



|Item 3. |  | Quantitative and Qualitative Disclosures About Market Risk
|------- |  | ----------------------------------------------------------



The Companys ability to maximize net income is dependent, in part, on managements ability to plan and control net interest income through management of the
pricing and mix of assets and liabilities. Because a large portion of assets and liabilities of the Company are monetary in nature, changes in interest rates and monetary or fiscal policy affect its financial condition and can have significant
impact on the net income of the Company.



The Company monitors its exposure to
interest rate risk on a quarterly basis through simulation analysis which measures the impact changes in interest rates can have on net income. The simulation technique analyzes the effect of a presumed 100 and 200 basis points shift in interest
rates and takes into account prepayment speeds on amortizing financial instruments, reinvestment of security and loan cash flows, loan and deposit volumes and rates, nonmaturity deposit assumptions, reinvestment of certificate of deposit maturities,
and capital requirements. The



13



---

##### Table of Contents

results of the simulation indicate that in an environment where interest rates rise or fall 100 and 200 basis points over a 12 month period, using September
2003 amounts as a base case, the Companys net interest income would be impacted by less than the board mandated limits.



The Company hedges the interest rate risk inherent in its pipeline of mortgage loans held for sale. In a period of declining interest rates, hedging values decline and
have the effect of reducing the rising gain attributable to the lower rates on sale of the Companys mortgage loans. However, in a period of rising rates, hedging protects the Company from deterioration in the net margin from loan sales.



Item 4. Controls and Procedures



As of the
end of the period covered by this quarterly report, the Company carried out an evaluation, under the supervision and with the participation of the Companys management, including the Companys Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Companys disclosure controls and procedures. Based on that evaluation, the Companys Chief Executive Officer and Chief Financial Officer concluded that the Companys
disclosure controls and procedures were effective to ensure that the financial and nonfinancial information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, including this
Form 10-Q for the period ended September 30, 2003, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms.



There have been no significant changes in the Companys internal controls or in other
factors that could significantly affect internal controls subsequent to the date of their evaluation or any significant deficiencies or material weaknesses in such internal controls requiring corrective actions. As a result, no corrective actions
were taken.



|PART II. |  | OTHER INFORMATION
|-------- |  | -----------------



Item 1. Legal Proceedings  Not applicable.



Item 2. Changes in Securities and Use of Proceeds  Not applicable.



Item 3. Defaults Upon Senior Securities  Not applicable.



Item 4. Submission of Matters to a Vote of Security Holders



The Company held its annual meeting of shareholders on October 23, 2003. The matters approved by shareholders at the annual meeting and the voting results as to each matter are set forth below.



Election of Directors for a three-year term:



|Name                  |  | For       |  | Withheld
|--------------------- |  | --------- |  | --------
|Marie Izzo Cartwright |  | 9,776,840 |  | 636,501 
|Robert P. Grace       |  | 9,916,040 |  | 497,301 
|Thomas M. Humphries   |  | 9,854,604 |  | 558,737 
|W. Terry Patrick      |  | 9,771,685 |  | 641,656 



Those members who continue to serve as
Directors of the Company after the annual meeting are as follows:



|A. Gary Bitonte     |  | E. Jeffrey Rossi   
|------------------- |  | -------------------
|Donald Cagigas      |  | Samuel A. Roth     
|Jeffrey L. Francis  |  | William A. Russell 
|George J. Gentithes |  | Ronald P. Volpe    
|Earl T. Kissell     |  | Robert L. Wagmiller
|Steven R. Lewis     |  |                    



14



---

##### Table of Contents

Ratification of the appointment of Crowe Chizek and Company LLC as independent auditors for the fiscal year ending June
30, 2004:



|For        |  | Against |  | Abstain
|---------- |  | ------- |  | -------
|10,230,678 |  | 128,891 |  | 53,772 



|Item 5. |  | Other Information  Not applicable.
|------- |  | -----------------------------------



|Item 6. |  | Exhibits and Reports on Form 8-K
|------- |  | --------------------------------



| | (a) | Exhibits
| | --- | --------



Exhibit 31.1 CEO certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



Exhibit 31.2 CFO certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



Exhibit 32.1 CEO certification pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002



Exhibit 32.2 CFO certification
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



| | (b) | Reports on Form 8-K
| | --- | -------------------



Report on Form 8-K dated July 16, 2003 announcing the hiring of Kenton A. Thompson as Regional President and President of Wealth Management Services of
First Place Bank.



Report on Form 8-K dated July 22, 2003
announcing the Companys results of operations for the three and twelve months ended June 30, 2003.



Report on Form 8-K dated July 22, 2003 announcing the declaration of a regular quarterly dividend.



Report on Form 8-K dated July 28, 2003 announcing a presentation by the
President and Chief Executive Officer, Steven R. Lewis and Chief Financial Officer, David L. Mead at the Keefe, Bruyette & Woods 4thAnnual Community Bank Investor Conference.



Report on Form 8-K dated September 3, 2003 announcing that the annual meeting of shareholders of First Place Financial Corp will be held on October 23, 2003.



Report on Form 8-K dated October 21, 2003 announcing the Companys results of operations for the three months ended
September 30, 2003 and announcing the declaration of a regular quarterly dividend.



Report on Form 8-K dated November 6, 2003 announcing the opening by First Place Bank of its new concept First Place Financial Center in Solon, Ohio.



Report on Form 8-K dated November 10, 2003 announcing that the Company and
Franklin Bancorp, Inc. have entered into an Agreement and Plan of Merger under which the Company has agreed to acquire Franklin.



15



---

##### Table of Contents

Signatures



Pursuant to the requirements of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



FIRST PLACE FINANCIAL CORP.



|Date: November 14, 2003 |  | /s/ Steven R. Lewis                                   |  | /s/ David L. Mead                    
|----------------------- |  | ----------------------------------------------------- |  | -------------------------------------
|                        |  | Steven R. Lewis President and Chief Executive Officer |  | David L. Mead Chief Financial Officer



16