-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Hq647D7wCOwmGXEoutB0VQfhoaEuTEb05j7hyHomNg7D2f/9lW3j3v9R41PWcrnJ ANOYBi8xPN1N7nekquTRTw== 0000950152-03-001832.txt : 20030214 0000950152-03-001832.hdr.sgml : 20030214 20030214102034 ACCESSION NUMBER: 0000950152-03-001832 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030212 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO LEGACY CORP CENTRAL INDEX KEY: 0001096654 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 341903890 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-31673 FILM NUMBER: 03563300 BUSINESS ADDRESS: STREET 1: 305 WEST LIBERTY STREET CITY: WOOSTER STATE: OH ZIP: 44691 BUSINESS PHONE: 3302620437 MAIL ADDRESS: STREET 1: P O BOX 959 CITY: WOOSTER STATE: OH ZIP: 44691 8-K 1 l98985ae8vk.txt OHIO LEGACY CORP. FORM 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported) FEBRUARY 12, 2003 ----------------- OHIO LEGACY CORP ------------------------------------------------------ (Exact name of registrant as specified in its charter) OHIO 000-31673 34-1903890 ---------------------------- ----------- ------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 305 WEST LIBERTY STREET, WOOSTER, OHIO 44691 - ---------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (330) 263-1955 -------------- N/A ------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS AND REGULATION FD DISCLOSURE. On February 12, 2003, Ohio Legacy Corp (the "Company") issued a press release regarding its fourth quarter and full-year 2002 earnings. The Company hereby incorporates by reference the information set forth in its Press Release dated February 12, 2003, entitled "Ohio Legacy Corp Announces Earnings of $.07 Per Share Versus Loss of ($.22) Per Share," a copy of which is attached hereto as Exhibit 99.1. Any statement in the attached press release that is not a statement of historical fact may be deemed to be a forward-looking statement, which involves known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially and significantly different from any future results, performance or achievements expressed or implied by such forward-looking statements. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (a) Financial Statements. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits. Exhibit Number Description -------------- ----------- 99.1 Press Release dated February 12, 2003, entitled "Ohio Legacy Corp Announces Earnings of $.07 Per Share Versus Loss of ($.22) Per Share" 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 hereunto duly authorized. OHIO LEGACY CORP - ------------------------------------ (Registrant) By: /s/ L. DWIGHT DOUCE -------------------------------- L. Dwight Douce President, Chief Executive Officer and Director Date: FEBRUARY 14, 2003 ----------------- EX-99.1 3 l98985aexv99w1.txt EX-99.1 EXHIBIT 99.1 OHIO LEGACY CORP ANNOUNCES EARNINGS OF $.07 PER SHARE VERSUS LOSS OF ($.22) PER SHARE Wooster, Ohio - February 12, 2002 - Ohio Legacy Corp (Nasdaq: OLCB) today reported net earnings for the three months ended December 31, 2002, of $71,000 or $.07 per share. The fourth quarter results represented a significant improvement over the comparable period in the prior year when Ohio Legacy Corp reported a net loss of ($216,000), or ($.22) per share. The fourth quarter results also improved from the net earnings of the September 30, 2002, quarter of $44,000, or $.05 per share. For the year ended December 31, 2002, Ohio Legacy Corp ("Ohio Legacy" or the "Company") reported a net loss of ($51,000), or ($.05) per share, compared to a loss in 2001 of ($1.1 million), or ($1.16) per share. At December 31, 2002, the Company's book value per share was $7.63, compared to $7.16 per share at December 31, 2001. Total assets at the end of 2002 were $136.0 million, an increase of 73.2% over the $78.6 million in assets at December 31, 2001. During 2002, net loans increased 52.2% to $78.3 million, as compared to $51.4 million at December 31, 2001. Deposit growth was even stronger, as deposits increased by 62.9% from $70.5 million at the end of 2001 to $114.9 million at the end of 2002. Total shareholders' equity increased from $6.9 million at December 31, 2001, to $15.0 million at December 31, 2002. On December 24, 2002, the Company completed a common stock offering, resulting in the issuance of 1.0 million new shares of Ohio Legacy stock. An additional 150,000 shares were issued at $8.50 per share in January 2003 to cover over-allotments, but those shares and the related net proceeds are not included in the year-end results. Coupled with the over-allotment issuance, the offering infused approximately $8.5 million of capital to the Company, the majority of which is being contributed to Ohio Legacy Bank to support continued growth in loans and deposits. Ohio Legacy Chairman, CEO and President L. Dwight Douce said, "We are very pleased with the progress of Ohio Legacy in both earnings and asset growth after just two years of operations. We continue to focus on managing the balance sheet by adding quality assets and deposits to provide a sound foundation which will drive the future earnings of Ohio Legacy. Our employees have accepted the challenges of organizing a new company, and their ability to meet those challenges is reflected in our operating results." "We believe that the market is continuing to validate our business model. Our strategy is to provide a high level of community banking service to small businesses and consumers in Wayne, Stark and Holmes counties in Ohio," Douce continued. "As a result of the high level of acceptance of Ohio Legacy Bank in the marketplace, our growth since formation in October 2000 has exceeded our expectations. We are pleased that our new capital will give us the ability to continue our growth and serve a greater number of customers in the years ahead." "While we are pleased with our growth, we are very mindful of the need to maintain excellent asset quality," Douce continued. "We are particularly proud of the fact that, despite a 52% increase in net loans during the year and a sluggish economy, we had only $2,000 of charge-offs during the year, and we had no non-performing assets at December 31, 2002. While we realize that our portfolio is still relatively unseasoned and that loan losses will be incurred in the future, we feel very good about our asset quality in this environment." KEY ISSUE REVIEW AND OUTLOOK NET INTEREST MARGIN - Net interest margin improved to 2.84% in the fourth quarter of 2002, compared to 2.28% in the fourth quarter of 2001 and 2.73% in the third quarter of 2002. In the declining interest rate environment experienced during the year, the Company's net interest spread increased to 2.69% for the fourth quarter of 2002, compared to 1.87% for the fourth quarter of 2001 and 2.57% for the third quarter of 2002. For the year ended December 31, 2002, the Company's net interest margin improved to 2.60% from 2.56% during 2001, and the interest rate spread improved to 2.41% in 2002 from 1.75% in 2001. While the increase in the spread was significant, the impact on the net interest margin was muted by the fact that the Company's average equity-to-assets ratio declined from 17.23% during 2001 to 6.24% during 2002. Although the current interest rate environment is volatile, management believes that general interest rates will increase in late 2003. With Ohio Legacy Bank's asset/liability portfolios currently being somewhat "asset sensitive," net interest margin should improve if interest rates increase. The Company also believes that its net interest margin will increase as a result of the new capital infusion, and as the Company is able to increase its loan-to-deposit ratio somewhat over the next year, thereby substituting higher yielding loans on the balance sheet for investment securities. NONINTEREST INCOME - Noninterest income increased to $73,000 in the three months ended December 31, 2002, as compared to $47,000 in the prior year period and $67,000 in the three months ended September 30, 2002. Noninterest income as a percentage of average assets remained relatively consistent, on an annualized basis, at 0.24% for the three months ended December 31, 2002, compared to 0.28% for the three months ended December 31, 2001, and 0.23% for the three months ended September 30, 2002. For the year ended December 31, 2002, noninterest income increased 143.0%, from $107,000 to $261,000. Noninterest income to average assets was 0.23% in 2002 and 0.25% in 2001. In all periods, the increase in noninterest income was attributable to a higher level of service fees, commensurate with the increase in demand deposit balances during the respective periods. NONINTEREST EXPENSE - Noninterest expense increased to $731,000 for the quarter ended December 31, 2002, as compared to $493,000 in the prior year period and $678,000 in the three months ended September 30, 2002. The annualized ratio of noninterest expenses to average assets was 2.35% in the fourth quarter of 2002, as compared to 2.90% in the fourth quarter of 2001 and 2.28% in the third quarter of 2002. For the year ended December 31, 2002, noninterest expense totaled $2.6 million, an increase of 35.7% from $1.9 million in 2001. However, the efficiency ratio (noninterest expense to net interest income and noninterest income) declined from 167.5% in 2001 to 86.6% in 2002, and the ratio of noninterest expense to average assets declined from 4.42% in 2001 to 2.32% in 2002. The largest nominal increase in noninterest expense was in the salaries and benefits component, as the Company launched its third full-service banking office in Millersburg, Ohio, in March 2002. Management expects noninterest expense to continue to increase in the future through controlled growth in employees and banking facilities. However, management expects the ratio of noninterest expense to average assets to continue to decline somewhat in the next year, as the Company can attain asset growth without a commensurate increase in noninterest expenses. As a result, the Company's efficiency ratio should improve. ASSET QUALITY - The Company's provision for loan losses was $98,000 in the three months ended December 31, 2002, compared to $135,000 during the quarter ended December 31, 2001, and $104,000 during the quarter ended September 30, 2002. As a result of the Company's capital constraints prior to the completion of the offering in late December, loan growth during the fourth quarter of 2002 was at a slower pace than growth during the prior year period and during the third quarter of 2002, leading to a slightly lower provision. The Company did not have any charge-offs during the three months ended December 31, 2002, December 31, 2001, or September 30, 2002. Also, the Company did not have any nonperforming assets during these periods. The allowance for loan losses increased to $837,000 at December 31, 2002, an increase from $386,000 at December 31, 2001, and $739,000 at September 30, 2002. The allowance for loan losses as a percentage of loans increased to 1.06% at December 31, 2002, as compared to 0.75% at December 31, 2001, and 0.98% at September 30, 2002. Management expects that the allowance for loan losses as a percentage of loans will continue to increase as residential loans will comprise a smaller portion of the total loan portfolio over the next year. REGULATORY MATTERS - On June 18, 2002, Ohio Legacy Bank entered into an agreement with the Office of the Comptroller of the Currency ("OCC") to address certain issues identified during the Bank's examination in January 2002. Management has worked toward resolving the issues identified in the agreement, including adoption of a strategic plan, a capital plan, a staffing plan and improved internal controls related to operations and information technology security. Commenting on management's progress thus far, Mr. Douce said, "We look forward to continued success in 2003 in meeting the goals and objectives we set forth in our strategic plan. We are pleased to have the infusion of new capital as a result of our December offering, and we will work with the OCC to ensure we continue to grow profitably, in a safe and sound manner." ABOUT OHIO LEGACY CORP Ohio Legacy Corp is a bank holding company headquartered in Wooster, Ohio. Through its subsidiary, Ohio Legacy Bank N.A., it provides financial services to small businesses and consumers in Stark, Holmes and Wayne counties with three full-service banking locations in Canton, Millersburg and Wooster, Ohio FORWARD-LOOKING STATEMENTS DISCLOSURE This release contains certain forward-looking statements related to the future performance and condition of Ohio Legacy Corp. These statements, which are subject to numerous risks and uncertainties, are presented in good faith based on the Company's current condition and management's understanding, expectations, and assumptions regarding its future prospects as of the date of this release. Actual results could differ materially from those projected or implied by the statements contained herein. The factors that could affect the Company's future results are set forth in the periodic reports and registration statements filed by the Company with the Securities and Exchange Commission. Contact: L. Dwight Douce, Chairman, CEO and President Eric S. Nadeau, Chief Financial Officer, Vice President (330) 263-1955 OHIO LEGACY CORP CONSOLIDATED BALANCE SHEETS December 31, 2002 and 2001 - --------------------------------------------------------------------------------
2002 2001 ------------- ------------ ASSETS Cash and due from banks $ 5,301,451 $ 2,102,438 Federal funds sold 10,418,000 6,596,000 ------------- ------------ Cash and cash equivalents 15,719,451 8,698,438 Securities available for sale 38,722,169 16,177,938 Loans, net 78,291,832 51,426,133 Federal Reserve Bank stock 318,900 221,300 Premises and equipment, net 2,185,108 1,592,977 Accrued interest receivable and other assets 810,017 452,771 ------------- ------------ Total assets $ 136,047,477 $ 78,569,557 ============= ============ LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Non-interest bearing $ 4,992,413 $ 2,466,958 Interest bearing demand 10,864,605 9,434,851 Savings 36,229,165 14,830,102 Certificates of deposit 62,805,167 43,784,548 ------------- ------------ Total deposits 114,891,350 70,516,459 Redeemable capital securities of subsidiary trust 3,325,000 -- Other borrowings 105,000 -- Capital lease obligation 983,439 541,130 Accrued interest payable and other liabilities 1,739,633 595,618 ------------- ------------ Total liabilities 121,044,422 71,653,207 SHAREHOLDERS' EQUITY Preferred stock -- -- Common stock 16,546,465 8,988,710 Accumulated deficit (2,164,585) (2,114,024) Accumulated other comprehensive income 621,175 41,664 ------------- ------------ Total shareholders' equity 15,003,055 6,916,350 ------------- ------------ Total liabilities and shareholders' equity $ 136,047,477 $ 78,569,557 ============= ============ Book value per outstanding common share $ 7.63 $ 7.16 Common shares outstanding 1,965,700 965,500 Common stock warrants outstanding, $10.00 per share 339,600 339,800 Common stock options outstanding, $10.00 per share 87,000 --
OHIO LEGACY CORP CONSOLIDATED STATEMENTS OF OPERATIONS For the quarters and years ended December 31, 2002 and 2001 - --------------------------------------------------------------------------------
For the quarter ended For the year ended December 31, December 31, ------------------------- --------------------------- 2002 2001 2002 2001 ---------- ----------- ----------- ----------- Interest income: Loans $1,405,469 $ 837,011 $ 5,034,267 $ 2,033,780 Securities 362,427 158,499 1,411,037 298,834 Federal funds sold and other 32,197 41,700 127,209 370,036 ---------- ----------- ----------- ----------- Total interest income 1,800,093 1,037,210 6,572,513 2,702,650 Interest expense: Deposits 860,691 651,359 3,476,439 1,615,869 Other borrowings 112,900 21,861 356,397 51,046 ---------- ----------- ----------- ----------- Total interest expense 973,591 673,220 3,832,836 1,666,915 ---------- ----------- ----------- ----------- Net interest income 826,502 363,990 2,739,677 1,035,735 Provision for loan losses 97,500 134,700 452,456 349,798 ---------- ----------- ----------- ----------- Net interest income after provision for loan losses 729,002 229,290 2,287,221 685,937 Noninterest income: Service charges and other fees 70,772 45,498 251,845 99,756 Other income 2,625 1,846 8,858 7,531 ---------- ----------- ----------- ----------- Total other income 73,397 47,344 260,703 107,287 Noninterest expense: Salaries and benefits 328,634 212,813 1,149,196 868,927 Occupancy and equipment 136,826 90,444 483,451 323,738 Professional fees 54,993 36,966 234,382 134,683 Franchise tax 20,028 21,006 88,424 104,569 Data processing 64,644 45,085 233,199 155,945 Marketing and advertising 28,028 32,072 81,183 96,276 Stationery and supplies 19,195 15,342 85,979 65,427 Other expenses 79,301 39,020 242,671 164,852 ---------- ----------- ----------- ----------- Total noninterest expense 731,649 492,748 2,598,485 1,914,417 ---------- ----------- ----------- ----------- Net income (loss) $ 70,750 $ (216,114) $ (50,561) $(1,121,193) ========== =========== =========== =========== Basic and diluted net loss per share $ 0.07 $ (0.22) $ (0.05) $ (1.16) ========== =========== =========== ===========
OHIO LEGACY CORP QUARTERLY BALANCE SHEET INFORMATION (Dollars in thousands) - --------------------------------------------------------------------------------
2002 2001 --------------------------------------------------- -------- March 31 June 30 Sept. 30 Dec. 31 Dec. 31 --------- --------- --------- --------- -------- Cash and cash equivalents $ 12,421 $ 9,615 $ 9,816 $ 15,719 $ 8,698 Securities 25,807 35,847 30,750 38,722 16,178 Loans 64,678 70,604 75,509 79,129 51,812 Allowance for loan losses (512) (635) (739) (837) (386) Premises and equipment, net 2,187 2,287 2,231 2,185 1,593 Other assets 1,082 1,147 1,183 1,129 674 --------- --------- --------- --------- -------- Total assets $ 105,663 $ 118,865 $ 118,750 $ 136,047 $ 78,569 ========= ========= ========= ========= ======== Noninterest-bearing demand $ 2,876 $ 5,620 $ 3,882 $ 4,992 $ 2,467 Interest-bearing demand 9,994 8,677 5,823 10,864 9,435 Savings 34,419 38,774 38,208 36,229 14,830 Certificates of deposit 46,648 53,861 58,188 62,806 43,784 --------- --------- --------- --------- -------- Total deposits 93,937 106,932 106,101 114,891 70,516 Other borrowings, leases and capital securities 4,527 4,416 4,415 4,413 541 Other liabilities 627 576 847 1,740 596 --------- --------- --------- --------- -------- Total liabilities 99,091 111,924 111,363 121,044 71,653 Shareholders' equity 6,572 6,941 7,387 15,003 6,916 --------- --------- --------- --------- -------- Total liabilities and shareholders' equity $ 105,663 $ 118,865 $ 118,750 $ 136,047 $ 78,569 ========= ========= ========= ========= ======== LOAN PORTFOLIO: Commercial $ 10,695 $ 8,924 $ 10,323 $ 10,206 $ 9,599 1-4 family residential 27,090 29,376 29,965 31,346 22,052 Multifamily residential 3,413 4,268 5,702 6,732 1,990 Commercial real estate 14,707 17,469 18,262 18,385 11,575 Construction 2,979 3,751 3,985 4,636 1,313 Consumer 5,882 6,908 7,371 7,926 5,363 Net deferred loan fees (88) (92) (99) (102) (80) --------- --------- --------- --------- -------- Loans $ 64,678 $ 70,604 $ 75,509 $ 79,129 $ 51,812 ========= ========= ========= ========= ======== CAPITAL: Tier 1 to risk-weighted assets 15.3% 13.6% 13.3% 17.5% 13.4% Tier 1 to average assets 10.8% 8.7% 8.6% 11.4% 10.1% Total to risk-weighted assets 16.1% 14.5% 14.2% 18.5% 14.1% AVERAGE BALANCES: Fed funds and securities $ 27,896 $ 39,063 $ 38,039 $ 40,816 $ 19,302 Loans, net 58,418 68,945 73,068 75,692 44,437 Total interest-earning assets 86,314 108,008 111,107 116,508 63,739 Total assets 91,746 113,814 118,736 124,255 68,044 Total assets, full year 112,138 43,305 Deposits 80,052 98,515 101,680 107,062 57,510 Other borrowings and leases 777 4,420 4,416 4,414 542 Total interest-bearing liabilities 80,829 102,935 106,096 111,476 58,052 Shareholders' equity 6,744 6,757 7,164 7,325 7,182 Shareholders' equity, full year 6,998 7,463
OHIO LEGACY CORP QUARTERLY STATEMENT OF OPERATIONS INFORMATION (Dollars in thousands, except per share data) - --------------------------------------------------------------------------------
2002 2001 --------------------------------------------------- --------- March 31 June 30 Sept. 30 Dec. 31 Dec. 31 --------- --------- --------- --------- --------- Interest income $ 1,350 $ 1,682 $ 1,740 $ 1,800 $ 1,037 Interest expense (837) (1,041) (981) (973) (673) --------- --------- --------- --------- --------- Net interest income 513 641 759 827 364 Provision for loan losses (126) (125) (104) (98) (135) Noninterest income 58 62 67 73 47 Noninterest expense (547) (642) (678) (731) (492) --------- --------- --------- --------- --------- Net income (loss) $ (102) $ (64) $ 44 $ 71 $ (216) ========= ========= ========= ========= ========= Net income (loss) per share $ (0.11) $ (0.07) $ 0.05 $ 0.07 $ (0.22) ========= ========= ========= ========= ========= SELECTED RATIOS: Net interest margin (1) 2.38% 2.37% 2.73% 2.84% 2.28% Yield on interest-earning assets 6.26% 6.23% 6.27% 6.18% 6.51% Cost of funds 4.14% 4.05% 3.70% 3.49% 4.64% Interest rate spread (2) 2.12% 2.18% 2.57% 2.69% 1.87% Efficiency ratio (3) 95.8% 91.3% 82.0% 81.2% 120.0% Allowance as a percent of loans 0.79% 0.90% 0.98% 1.06% 0.75% Net loans as a percent of deposits 68.3% 65.4% 70.5% 68.1% 72.9% Annualized net charge-offs to loans 0.0% 0.0% 0.0% 0.0% 0.0% Annualized noninterest income to average assets 0.28% 0.25% 0.22% 0.23% 0.24% Annualized noninterest expense to average assets 2.38% 2.26% 2.28% 2.35% 2.90% Annualized return on average assets NM NM 0.15% 0.23% NM Annualized return on average equity NM NM 2.46% 3.86% NM
- -------------- (1) Net interest income, annualized, divided by average interest-earning assets for the period (2) Difference between the yield on interest-earning assets and the cost of funds (3) Noninterest expense divided by net interest income and noninterest income NM Not meaningful -----END PRIVACY-ENHANCED MESSAGE-----