Tuesday's Internet Edition, 05:23 AM, May 13, 2008.

Last Thursday, May 1, was the first day Traders officially came under the umbrella of Premier Financial Bancorp Inc. in Huntington after Traders shareholders approved the merger last month.

That morning, at least seven people were terminated and told to clean out their desks immediately.

One of those was Kathy Ford, who had worked at the bank more than 17 years, handling credit cards and loan services.

“It’s kind of a shock,” Ford said. “You work someplace that long, and in 10 minutes it’s over with. They escorted me to my desk and watched me clean it out.”

According to unofficial sources, others who received the bad news from new Traders CEO Martha Haymaker and a human relations specialist from Premier were Lisa Allen (loan review), D.J. Brown (customer service) and Donna Greathouse (accounting) in the bank in Spencer, along with the manager of the Ripley branch, Jeanean Fisher, and a vice president at the Mineral Wells branch, Gene Damalis and his assistant, Sheila Vogel.

“They just said they were overstaffed compared to their other banks,” Ford said. “They’re successful, so they know better than me.”

Haymaker said some functions performed at the local bank would now be done by the holding company. “There’s no longer a need for those positions at the local bank,” she said.

She would not confirm the number of positions cut in the merger.

Before becoming Traders CEO in the merger, Haymaker served as executive vice president and chief financial officer.

Three senior officers knew at the time the merger was approved they would be leaving, including then-CEO Gary Brown, executive vice president Elta K. Cottrell and vice president Marshall McNeer. They had buyout agreements that paid Brown $411,717 Cottrell $97,537 and McNeer $78,750. The agreement also called for Haymaker to receive $101,310.

Ford, who was in Kentucky visiting her three grandsons this week, said the change was not completely unexpected.

“We knew none of our jobs were safe,” she said. “And from what we understand, they are going to merge again with Citizens First, so there could be more.”

The same day Traders shareholders approved the merger with Premier, so did shareholders of Citizens First Bank in Jackson County. Citizens First is headquartered in Ravenswood with a branch in Ripley.

Both meetings with shareholders took place April 15. Of the Traders shareholders who attended, the vote was more than 99 percent in favor of the sale.

Haymaker also would not confirm that there was any planned merger involving Traders and Citizens First.

“That’s not been confirmed at this point,” she said.

She did say that Traders customers should see no difference in service at any of the three banks.

“We’re keeping our local bank charter and we will offer the same products and services we offered before,” she said. “And we’re keeping the name Traders Bank.”

Haymaker did confirm that two members had resigned from the Traders board of directors, Wayne Harris and Doug Bentz. Haymaker joined the six-member board as did Premier president and CEO Robert W. Walker.

As part of the transaction, Traders shareholders were to receive $50 in cash and 3.75 shares of Premier stock for each share of Traders stock, bringing the total value of the deal to $18.1 million.

An announcement from Premier said the $9 million in cash paid to Traders shareholders was borrowed from First Guaranty Bank in Hammond, La.

Citizens First shareholders were to receive a total of $11.7 million in stock and cash.

Premier Financial is a bank holding company that, prior to the recent mergers, operated five bank subsidiaries with 10 offices in Kentucky, six in West Virginia and three in Ohio.

Premier owns the Boone County Bank in Madison and First Central Bank in Philippi as well as Citizens Deposit Bank and Farmers Deposit Bank, both in Kentucky, and Ohio River Bank in Ohio.

Traders reported total assets of $106 million last year, while Citizens First recently listed its assets at $59 million. Prior to the mergers, Premier had assets of $547 million.

Traders had been operating under an agreement with the Federal Reserve Bank since July 2004, when the bank agreed to take several corrective actions regarding its loan programs and make regular reports to state and federal regulatory agencies.

Around the same time, several of the bank’s officers left and were replaced with officers from other banks.