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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended December 31, 2004

For the transition period from              to             

Commission File Number 0-25049

FIRST PLACE FINANCIAL CORP.

(Exact name of registrant as specified in its charter)

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 12b-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.

14,999,076 common shares as of January 31, 2005

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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)

See accompanying notes to condensed consolidated financial statements.

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FIRST PLACE FINANCIAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

(Dollars in thousands, except per share data)

See accompanying notes to condensed consolidated financial statements.

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FIRST PLACE FINANCIAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(Unaudited)

(Dollars in thousands, except per share data)

See accompanying notes to condensed consolidated financial statements.

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FIRST PLACE FINANCIAL CORP. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in thousands)

See accompanying notes to condensed consolidated financial statements.

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FIRST PLACE FINANCIAL CORP. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Significant Accounting Policies

Basis of Presentation. The unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted 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 issued by the Securities and Exchange Commission. The financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in First Place Financial Corp.’s 2004 Annual Report to Shareholders incorporated by reference into First Place Financial Corp.’s 2004 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.

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 the subsidiaries of First Place Bank, Franklin Safe Deposit Corporation and Franklin Mortgage Services LLC. The condensed consolidated financial statements also include subsidiaries of First Place Holdings, Inc. - First Place Insurance Agency, Ltd., Coldwell Banker First Place Real Estate, Ltd., APB Financial Group, Ltd., American Pension Benefits, Inc. and TitleWorks Agency, LLC. TitleWorks Agency, LLC is a 75% owned affiliate of First Place Holdings, Inc. The investments of the Company in First Place Capital Trust and First Place Capital Trust II have been accounted for under the equity method. This accounting treatment is based on the purpose of First Place Capital Trust and First Place Capital Trust II as protecting the interests of the holders of the securities they have issued. All significant intercompany balances and transactions have been eliminated in consolidation.

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 the valuation of mortgage servicing rights are particularly subject to change.

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 the date of grant. The following table illustrates the effect on net income and earnings per share if expense had been measured using the fair value recognition provisions of Statement of Financial Accounting Standards (SFAS) No. 123, “Accounting for Stock-Based Compensation.”

Segment Information. While the Company’s chief decision-makers monitor the revenue streams of the Company’s various products and services, the identifiable segments are not material, and operations are managed and financial performance is evaluated on a Company-wide basis. Accordingly, all of the Company’s financial service operations are considered by management to be aggregated in one reportable operating segment, community banking.

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

2. Earnings per Share

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

There were no stock options that were antidilutive for the three or six-month periods ended December 31, 2004 or December 31, 2003. Therefore, all stock options were considered in computing diluted earnings per share.

3. Impairment of Securities

During the Quarter ended December 31, 2004, the Company determined that certain Fannie Mae and Freddie Mac preferred stock experienced impairment that was other-than-temporary. Analysis of activity for the six months ended December 31, 2004 follows.

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4. Short-term and Long-term Borrowings

5. Business Combination

On May 28, 2004, the Company completed the acquisition of Franklin Bancorp, Inc., a bank holding company headquartered in Southfield, Michigan and its wholly owned subsidiary, Franklin Bank N.A. The acquisition was accounted for as a purchase and the results of operations of Franklin Bancorp, Inc. have been included in the consolidated financial statements since the acquisition date. Concurrent with the acquisition, Franklin Bank N.A. converted from a federally chartered national association to a federally chartered savings association and changed its name to Franklin Bank. Franklin Bank was subsequently merged with First Place Bank effective July 2, 2004.

6. Financial Instruments with Off-Balance-Sheet Risk

The Company regularly enters into transactions that generate off-balance-sheet risk. These transactions include commitments to originate loans, commitments to sell loans, loans with future commitments to disburse funds such as construction loans and lines of credit, recourse obligations for loans sold and letters of credit. The Company enters into these transactions to meet customer needs or facilitate the sale of assets. These transactions are recorded on the books of the Company based on their fair value. The nominal values of these types of transactions as of December 31, 2004 are shown below.

The loans sold with recourse were sold to government sponsored enterprises beginning in 2001. This recourse is limited and is eliminated when the loans reach certain loan to value ratios. The Company is able to reasonably estimate credit losses associated with sold loans where recourse currently exists. Therefore, a liability has been established to recognize those credit losses.

7. Effect of New Accounting Standards

In March 2004, the Emerging Issues Task Force (EITF) arrived at a Consensus regarding EITF 03-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments. This Consensus provided additional

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guidance and originally required additional disclosure for annual reporting periods ending after June 15, 2004 and for other reporting periods beginning after June 15, 2004. The EITF has delayed implementation of this guidance to a later date. The Company has recorded other-than-temporary impairment on certain securities as of December 31, 2004 as discussed in Note 3. The Company currently has other investments where the current market value is less than the amortized cost. As of December 31, 2004, management believed that substantially all of the impairment other than the securities discussed in Note 3 was related to the current level of interest rates and therefore, was considered to be temporary. While management does not believe that this Consensus will have any material impact on the Company’s results of operations or financial condition at this time, a final determination cannot be made until the final guidance is issued.

In December 2004, the Financial Accounting Standards Board issued a revised version of Statement of Financial Accounting Standards No. 123. It requires that the fair value of stock options and other share-based compensation be measured as of the date the grant is awarded and expensed over the period of employee service, typically the vesting period. It will be required for the Company as of July 1, 2005. Compensation cost will also be recorded for prior options to the extent that they vest after the effective date. The effect of this pronouncement on future operations will depend on the fair value of options issued after July 1, 2005 and therefore can not be determined at this time. Existing options that will vest after July 1, 2005 will result in expense of $60, $60, $59 and $8 in fiscal 2006, 2007, 2008 and 2009 respectively.

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

The following analysis discusses changes in the Company’s results of operations and financial condition 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 laws, 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 and Six Months Ended December 31, 2004 and 2003

General. Net income for the quarter ended December 31, 2004 totaled $1.6 million or $0.11 per diluted share compared to net income of $4.3 million, or $0.34 per diluted share for the quarter ended December 31, 2003. A charge for other-than-temporary impairment of securities of $5.2 million or $3.4 million after-tax was included in the current quarter results of operations. This impairment charge was the reason that net income, return on assets, return on equity and the efficiency ratio were all less favorable than they were for the same quarter in the prior year. This charge was to recognize impairment of Fannie Mae and Freddie Mac preferred stocks where the market value had been below the cost for more than three years and where that situation is expected to continue for an indefinite period into the future. Return on average equity for the quarter was 2.88% compared with 9.30% for the quarter ended December 31, 2003. Return on average assets for the quarter was 0.28% compared with 1.02% for the quarter ended December 31, 2003. The efficiency ratio for the current year quarter was 79.2% compared to 60.2% for the prior year quarter. Net income for the

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quarter reflected the positive impact of an increase in noninterest income and net interest income from the Franklin Bancorp, Inc. (Franklin) acquisition in May 2004 partially offset by increases in noninterest expense also from the Franklin acquisition.

Net income for the six months ended December 31, 2004 totaled $6.4 million compared with $8.8 million for the six months ended December 31, 2003. Return on average equity for the first half of fiscal 2005 was 5.65%, compared with 9.57% for the first half of fiscal 2004. Return on average assets for the first half of fiscal 2005 was 0.55% compared with 1.07% for the first half of fiscal 2004. The negative impact of the second quarter impairment charge and the positive impact of the Franklin acquisition also had a significant impact on the first half of fiscal 2005 compared with the first half of fiscal 2004.

Explanation of Certain Non-GAAP Measures This Form 10-Q contains certain financial information determined by methods other than with Generally Accepted Accounting Principles (GAAP). Specifically, the Company has provided financial measures that are based on core earnings rather than net income. Ratios and other financial measures with the word Core in their title were computed using core earnings rather than net income. Core earnings excludes merger, integration and restructuring expense, extraordinary income or expense, income or expense from discontinued operations, and income, expense, gains and losses that are not reflective of ongoing operations or that we do not expect to reoccur. Management of the Company believes that this information is useful to both investors and to management and can aid them in understanding the Company’s current performance, performance trends and financial condition. While core earnings can be useful in evaluating current performance and projecting current trends into the future, Management does not believe that core earnings are a substitute for GAAP net income. We encourage investors and others to use core earnings as a supplemental tool for analysis and not as a substitute for GAAP net income. The Company’s non-GAAP measures may not be comparable to the non-GAAP numbers of other companies. In addition, future results of operations may include nonrecurring items that would not be included in core earnings. A reconciliation from GAAP net income to the non-GAAP measure of core earnings is shown below.

Core earnings for the quarter ended December 31, 2004 were $5.0 million, a 16.5% increase over core earnings of $4.3 million for the same quarter in the prior year. Diluted core earnings per share were $0.35 for the quarter ended December 31, 2004 compared with $0.34 for the prior year quarter. Core earnings for the six months ended December 31, 2004 were $9.8 million, a 10.9% increase from core earnings of $8.8 million for the same period in the prior year. Diluted core earnings per share were $0.67 for the six months ended December 31, 2004 compared with $0.69 for the same period in the prior year. The increase in core earnings during the second quarter and first half of the current fiscal year compared with the same periods in the prior year were primarily due to the Franklin Bancorp, Inc acquisition in May 2004. Diluted core earnings per share for the current quarter and first half of the current fiscal year were near prior year levels as the effect of the shares issued as consideration in the Franklin acquisition substantially offset the increase in core earnings.

Net Interest Income. Net interest income for the quarter ended December 31, 2004 totaled $17.5 million, an increase of $5.6 million, or 46.8% from $11.9 million for the quarter ended December 31, 2003. The increase in net interest income resulted from an increase of $629 million or 41.5% in average interest-earning assets compared to the same quarter a year ago and was primarily due to the Franklin acquisition. Historically, Franklin Bancorp, Inc had significant balances of noninterest-bearing checking accounts. This trend has continued during the first half of fiscal 2005 for the Franklin Division of First Place Bank. As a result, the ratio of average interest-earning assets to average interest-bearing liabilities increased to 116.3% for the current quarter compared to 107.1% for the same quarter in the prior year. The net interest margin for the current quarter was 3.30% up from 3.21% in the prior year quarter primarily due to the improvement in the ratio of average interest-earning assets to average interest-bearing liabilities. All individual categories of interest-earning assets and interest-bearing liabilities except securities increased primarily due to the

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Franklin acquisition. In addition, there was significant growth in loans and short-term borrowings during the current quarter. The average yield on interest-earning assets was 5.50% for the quarter ended December 31, 2004 compared with 5.66% for the same quarter in the prior year. .The decrease was due to a decrease in the yield on loans to 5.80% from 6.15% a year earlier. That decrease was partially offset by a shift in the mix of interest earning assets to include more loans and relatively less securities. The average rate paid on interest-bearing liabilities was 2.53% for the quarter ended December 31, 2004 compared to 2.61% for the prior year quarter, a decrease of 8 basis points. This decrease was primarily due to a 27 basis point decrease in the average cost of certificates of deposit but was substantially offset by growth of $102 million in long-term borrowings.

Net interest income for the six months ended December 31, 2004 was $34.3 million, an increase of $10.3 million or 43.3% from the quarter ended December 31, 2003.. Substantially all of the increase was due to a $618 million or 41.6% increase in average interest earning assets compared to the same period in the prior year. That increase was primarily due to the Franklin acquisition. The Franklin acquisition also resulted in a significant increase in noninterest-bearing checking accounts, which was the primary factor in the increase in average interest-earning assets as a percent of average interest-bearing liabilities to 115.86% for the six months ended December 31, 2004 compared with 107.27% for the same period in the prior year. Net interest margin was 3.30% for the current year six-month period, an increase of only 1 basis point from 3.29% for the same period in the prior year. The positive effect of the increase in the ratio of average interest-earning assets to average interest-bearing liabilities was substantially offset by the decrease in the interest rate spread of 14 basis points to 2.98% from 3.12%. The average yield on interest-earning assets for the six months ended December 31, 2004 was 5.48%, down 30 basis points from 5.78% for the same period in the prior year. The decrease was due to a 51 basis point decrease in the yield on loans to 5.82% from 6.33% for the same period in the prior year. The average cost of interest-bearing liabilities for the six months ended December 31, 2004 was 2.50%, down 16 basis points from 2.66% for the same period in the prior year.

The following schedule details the various components of net interest income for the quarters and semiannual periods indicated. All asset yields are calculated on tax-equivalent basis where applicable. Security yields are based on amortized historic cost.

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