10-K

UNITED STATES

 SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2012

OR

¨ 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: 000-31673

OHIO LEGACY CORP

 (Exact name of registrant as specified in its charter)

Ohio	34-1903890
(State or other jurisdiction of incorporation or organization)	(I.R.S Employer Identification No.)
600 South Main Street, North Canton, Ohio	44720
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (330) 499-1900

Securities registered pursuant to Section 12(b) of the Act:

Title of each class     Name of each exchange on which registered

Securities registered pursuant to Section 12(g) of the Act:

Common stock, without par value

 (Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by sections 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 has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨	Smaller reporting company x

(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

As of June 30, 2012, the aggregate market value of the registrant’s common stock held by non-affiliates was $5,158,241, based on the closing sale price as reported on the NASDAQ Stock Market.

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

Class	Outstanding as of March 29, 2013
Common stock, without par value	1,971,431

Documents Incorporated by Reference

None.

Index to Exhibits begins on page 83.

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TABLE OF CONTENTS

PART I		Page
Item 1	Business.	4
Item 1A	Risk Factors	18
Item 1B	Unresolved Staff Comments.	18
Item 2	Properties.	18
Item 3	Legal Proceedings.	18
Item 4	Mine Safety Disclosures	18
PART II
Item 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	19
Item 6	Selected Financial Data	19
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	19
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 8	Financial Statements and Supplementary Data.	29
Item 9	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.	69
Item 9A	Controls and Procedures.	69
Item 9B	Other Information.	70
PART III
Item 10	Directors, Executive Officers and Corporate Governance.	70
Item 11	Executive Compensation.	74
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	78
Item 13	Certain Relationships and Related Transactions, and Director Independence.	81
Item 14	Principal Accountant Fees and Services.	81
PART IV
Item 15	Exhibits and Financial Statement Schedules	81
SIGNATURES		82
INDEX TO EXHIBITS		84

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PART I

Item 1. Business.

Background

Ohio Legacy Corp (“Ohio Legacy”) is a bank holding company incorporated in July 1999 under the laws of the State of Ohio. Ohio Legacy has one wholly-owned subsidiary, Premier Bank & Trust, National Association (“Bank”) (formerly known as Ohio Legacy Bank, National Association). On March 23, 2010, the Bank received approval from the Comptroller of the Currency of its application to commence fiduciary powers pursuant to 12 USC 92a. Subsequently, the Bank opted to include “Trust” in its name and announced a name change to Premier Bank and Trust, N.A. effective April 2010. Unless otherwise noted, the “Company,” “us,” “we,” and “our” refer to Ohio Legacy, together with the Bank. The Bank opened for business on October 3, 2000.

Ohio Legacy’s principal executive offices are located at 600 South Main Street, North Canton, Ohio 44720, and its telephone office is (330) 499-1900. Shares of Ohio Legacy’s common stock, each without par value, are quoted on the over the counter bulletin board under the symbol “OLCB.” Prices are available at OTCMarkets.com or OTCBB.com.

Ohio Legacy maintains an Internet Web site at www.ohiolegacycorp.com (this uniform resource locator, or URL, is an inactive textual reference only and is not intended to incorporate Ohio Legacy’s Internet Web site into this Annual Report on Form 10-K (this “Form 10-K”)). Ohio Legacy makes available free of charge on or through its Internet Web site Ohio Legacy’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as well as Ohio Legacy’s definitive proxy statements filed pursuant to Section 14 of the Exchange Act, as soon as reasonably practicable after Ohio Legacy electronically files such material with, or furnishes it to, the Securities and Exchange Commission (the “SEC”). Ohio Legacy intends to deregister its common shares under the Exchange Act and suspend its reporting obligations under the Exchange Act shortly after the filing of this Form 10-K. When it does so it will no longer file reports, proxy statements, or other materials with the SEC. Although Ohio Legacy will continue to make previously filed materials available at its Web site, it undertakes no duty to update the disclosures in those materials. As a result, investors and potential investors in the securities of Ohio Legacy will have less access to current information. Following deregistration of its common stock under the Exchange Act, the Company intends to make public its quarterly and annual financial results as well as any significant corporate developments by posting such information on its website. However the extent of future disclosure will be less than the SEC requirements in quarterly and annual report filings.

On February 1, 2013, the Bank entered into a Branch Office Purchase and Assumption Agreement (the “Agreement”), with First National Bank, N.A. located in Orrville, Ohio (“FNB”), and a wholly owned subsidiary of National Bancshares Corporation and with NBOH Properties, LLC, an Ohio limited liability company, for the purchase of certain assets and the assumption of certain liabilities of FNB’s Fairlawn branch located at 3085 West Market Street, Akron, Ohio. Under the terms of the Agreement, the Bank will purchase $10 million to $12 million in loans and will assume $13 million to $16 million in deposits and will pay a deposit premium of approximately 5.25% based on the average amount of assumed deposits during a specified period prior to the closing, with a minimum premium of $682,500. The Bank will also purchase real estate owned by NBOH Properties, LLC for $1.1 million and other assets including fixtures and equipment associated with the branch location. The transaction, which is subject to regulatory approvals and certain closing conditions, is expected to be completed during the second quarter of 2013.

Products and Services

The Company, through the Bank’s three branch offices, provides retail and commercial banking services to its customers located primarily in Stark and Belmont Counties in Ohio. The Bank opened a full service branch in Belmont County, Ohio, in February 2012, expanding the services previously offered since 2010 in this market for trust and brokerage services. Product offerings include demand, savings, and time deposit accounts, cash management and electronic funds transfer services, safe deposit box facilities, courier services, online internet banking with bill pay service, commercial loans, real estate mortgage loans, installment and personal loans and night depository facilities to customers. The Bank also began to offer trust, wealth management and investment brokerage services in April 2010.

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Commercial and Construction Lending Products

Commercial loans are primarily variable rate and include operating lines of credit and term loans made to small businesses based primarily on their ability to repay the loan from cash flows. These loans typically are secured by business assets such as equipment or inventory. For entity borrowers, the Bank generally obtains a personal guarantee of the business owner. Compared to retail lending for residential real estate, personal installment loans and automobile loans, commercial lending entails significant additional risks. These loans typically involve larger loan balances and are generally dependent on the businesses’ cash flows and may be subject to adverse conditions in the general economy or in a specific industry. Management reviews the borrower’s cash flows when deciding whether or not to grant the credit. Management also evaluates if estimated future cash flows will be adequate to service principal and interest of the new obligation in addition to existing obligations. Additionally, the company’s historical performance, business principles and industry are reviewed prior to the extension of credit. Commercial loans, including loans principally used for commercial purposes and secured by trust assets, comprised 10.2% of the Bank’s loan portfolio at December 31, 2012.

Commercial real estate loans are secured primarily by borrower-occupied business real estate or multifamily residential real estate, such as apartment buildings, and are dependent on the ability of the related business to generate adequate cash flow to service the debt. These loans primarily carry variable interest rates. Commercial real estate loans generally are originated with a loan-to-value ratio of 80% or less. Management performs much the same analysis when deciding whether to grant a commercial real estate loan as it performs when deciding whether to grant a commercial loan. Commercial real estate and multifamily real estate loans comprised 43.5% of the Bank’s loan portfolio at December 31, 2012.

Construction loans are secured by residential and business real estate. Construction loans generally involve greater underwriter and default risks than loans on existing real estate due to the inherent uncertainties in construction costs and the difficulty in valuing property under construction. The Bank’s construction lending program is established in a manner to minimize risk of this type of lending by not making a significant number of loans on speculative projects located outside its geographic marketplace. While not required to do so contractually, the Bank may finance the permanent loan at the end of the construction phase. Construction loans also are generally made in amounts of 80% or less of the value of collateral. Construction loans comprised 5.1% of the Bank’s loan portfolio at December 31, 2012.

Certain risks are involved in granting loans that primarily relate to the borrower’s ability and willingness to repay the debt. Before the Bank extends a new loan to a customer, these risks are assessed through a review of the borrower’s past and current credit history, the collateral used to secure the transaction in case the customer does not repay the debt, cash flows of any related businesses, the availability of personal guarantees and other factors. Once the decision is made to extend credit, the Bank’s credit officers monitor these factors throughout the life of the loan.

Loans to nondepository financial institutions consist of indirect financing provided to a nationwide network of qualified mortgage brokers that originate mortgage loans for sale to third-party investors. The Bank has a loan participation agreement with another financial institution (the “Direct Lender”) which purchases mortgage loans from the mortgage brokers. The Bank purchases a 75% interest in each mortgage loan offered to the Bank by the Direct Lender for purchase subject to appropriate underwriting requirements up to an aggregate limit of $10 million. Since the loans are returned to the mortgage broker for sale to the third party investor, the transactions do not meet the definition of a participating interest under generally accepted accounting principles and the financing arrangement is classified as loans to nondepository financial institutions (the originating mortgage brokers). The financing arrangement is collateralized by first mortgages on single family homes. If the loan has not been sold to the third-party investor, the mortgage broker must repurchase the mortgage loan from the Direct Lender. The mortgage broker must pay the Direct Lender an amount equal to 10% of the mortgage loan purchase price sixty days after the purchase date and an equal amount ninety days after the purchase date. The mortgage broker, at the Direct Lender’s sole discretion, must repurchase each mortgage loan from the Direct Lender within 120 days after the date of purchase. There is no agreement between the third party investor and the Direct Lender or the Bank. The Bank receives interest on the mortgage loans equivalent to the fixed coupon rates of the underlying mortgage loans. The Direct Lender and the Bank review each underlying mortgage loan to reasonably ensure conformity with U.S. Agency-sponsored underwriting qualifications prior to the advancement of funds. The underwriting package includes an approved investor commitment to purchase the loan. Loans to nondepository financial institutions comprised 4.9% of the Bank’s loan portfolio at December 31, 2012

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Retail Lending Products

Residential real estate loans, primarily fixed rate, and home equity lines of credit, primarily variable rate, are secured by the borrower’s residence. These loans are made based on the borrower’s ability to make repayment from employment and other income. Using secondary market approval standards, management assesses the borrower’s ability to repay the debt through a review of credit history and ratings, verification of employment and other income, review of debt-to-income ratios and other measures of repayment ability. The Bank generally makes these loans in amounts of 95% or less of the value of collateral. An appraisal is obtained from a qualified real estate appraiser for substantially all loans secured by real estate. Beginning in November 2006, the Bank began originating residential real estate loans and selling these loans to the secondary market. The Company typically originates its mortgage loans in accordance with secondary market guidelines and sells long term, fixed rate loans.

Consumer installment loans to individuals include loans secured by automobiles and other consumer assets, including home equity loans on personal residences. Consumer loans for the purchase of new automobiles do not exceed 100% of the purchase price of the car. Loans for used cars generally do not exceed the average wholesale or trade-in value of the car as stipulated in a recent auto industry used car price guide. Overdraft protection loans are unsecured personal lines of credit to individuals of demonstrated good credit character with reasonably assured sources of income and satisfactory credit histories. Consumer loans generally involve more risk than residential mortgage loans because of the type and nature of collateral and, in certain types of consumer loans, the absence of collateral. Since these loans generally are repaid from ordinary income of an individual or family unit, repayment may be adversely affected by job loss, divorce, ill health or a general decline in economic conditions. The Bank assesses the borrower’s ability to make repayment through a review of credit history, credit ratings, debt-to-income ratios and other measures.

At December 31, 2012, residential real estate loans comprised 22.1% and consumer and home equity loans comprised 10.3% of the Bank’s total loans.

Deposit Products

The Bank offers a broad range of deposit products, such as personal and business checking, savings and money market accounts, certificates of deposit, internet banking, cash management and direct-deposit services. Deposit accounts are tailored to each market area at rates competitive with those offered in Stark and Belmont Counties in Ohio and consistent with the Bank’s asset-liability management goals. All deposit accounts are insured by the Federal Deposit Insurance Corporation (the “FDIC”) up to the maximum amount permitted by law. The Bank solicits deposit accounts from individuals, businesses, associations, financial institutions, credit unions, government entities, and an internet listing service for certificates of deposit. The Bank is not significantly affected by seasonal activity or large deposits of any individual depositor.

Employees

At December 31, 2012, the Bank had 59 employees, including 48 full-time employees. The Bank provides a number of benefits to its employees, such as health, disability and life insurance for all qualified employees. No employee is represented by a union or collective bargaining group. Management considers its employee relations to be good. Ohio Legacy has no employees who are not also employed by the Bank.

Competition

The Bank operates in a highly competitive industry. In its primary market areas of Stark and Belmont Counties in Ohio, the Bank competes for new deposit accounts and loans with numerous other commercial banks, both large regional banks and smaller community banks, as well as savings and loan associations, credit unions, finance companies, insurance companies, brokerage firms and investment companies. Many of our competitors enjoy the benefits of greater financial resources, advanced technology, fewer regulatory constraints and lower cost structures. The Bank’s ability to generate earnings is impacted in part by interest rates offered on loans and deposits, and by changes in the rates on loans and various other securities which comprise the Bank’s investment portfolio. The Bank is competitive with respect to the interest rates and loan fees it charges, as well as in the variety of accounts and interest rates it offers to customers. The dominant pricing mechanisms on loans are the Prime interest rate as published in the Wall Street Journal, U.S. Treasury Note rates with three-year or five-year maturities, and the London Interbank Offered Rate (“LIBOR”). The interest margin in excess of the applicable base rate depends on the overall account relationship and the creditworthiness of the borrower. Deposit rates are regularly reviewed and established by management. The Bank’s primary objective in setting deposit rates is to remain competitive in the market area while maintaining an adequate interest rate spread (the difference between the yield earned on interest-earning assets and the rates paid on deposits and borrowed funds) to meet overhead costs and provide a profitable return.

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Supervision and Regulation

The Bank is subject to supervision, regulation and periodic examination by the Office of the Comptroller of the Currency (the “OCC”) and Ohio Legacy is supervised by the Board of Governors of the Federal Reserve System (the “Federal Reserve Board”). Earnings of the Company are affected by state and federal laws and regulations and by policies of various regulatory authorities. These policies include, for example, statutory maximum lending rates, loan loss reserves, requirements on maintenance of reserves against deposits, domestic monetary policies of the Federal Reserve Board, United States federal government fiscal policy, international currency regulations and monetary policies, certain restrictions on banks’ relationships with the securities business, capital adequacy requirements and liquidity restraints.

Regulation of Ohio Legacy

Bank Holding Company Act. As a bank holding company, Ohio Legacy is subject to regulation under the Bank Holding Company Act of 1956, as amended (the “BHCA”). Under the BHCA, Ohio Legacy is subject to periodic examination by the Federal Reserve Board and is required to file periodic reports regarding its operations and any additional information that the Federal Reserve Board may require.

The BHCA generally limits the activities of a bank holding company to banking, managing or controlling banks, furnishing services to or performing services for its subsidiaries and engaging in any other activities that the Federal Reserve Board has determined to be so closely related to banking or to managing or controlling banks as to be incidental to those activities. In addition, the BHCA requires bank holding companies to obtain the approval of the Federal Reserve Board prior to acquiring substantially all the assets of another bank or bank holding company, acquiring direct or indirect ownership or control of more than 5% of the voting shares of a bank or merging or consolidating with another bank holding company.

The Federal Reserve Board has extensive enforcement authority over bank holding companies, including, among other things, the ability to: (i) assess civil money penalties; (ii) issue cease and desist or removal orders; and (iii) require that a bank holding company divest subsidiaries (including its subsidiary banks). In general, the Federal Reserve Board may initiate enforcement actions for violations of laws and regulations and unsafe or unsound practices.

Under Federal Reserve Board policy, a bank holding company is expected to act as a source of financial strength to each subsidiary bank and to commit resources to support those subsidiary banks. Under this policy, the Federal Reserve Board may require a bank holding company to contribute additional capital to an undercapitalized subsidiary bank and may disapprove of the payment of dividends to shareholders if the Federal Reserve Board believes the payment of such dividends would be an unsafe or unsound practice. These provisions could have the effect of limiting Ohio Legacy’s ability to pay dividends on its common stock.

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Capital Guidelines. The OCC and the Federal Reserve Board each have adopted risk-based and leverage capital guidelines to evaluate the adequacy of capital of national banks and bank holding companies. The guidelines involve a process of assigning various risk weights to different classes of assets, then evaluating the sum of the risk-weighted balance sheet structure against the capital base. Most of the bank holding company capital requirements do not apply to the Ohio Legacy based on its current size and circumstances. Actual and required capital amounts for the Bank are disclosed in Note 12 of the consolidated financial statements. Failure to meet capital guidelines could subject a banking institution to various penalties, including termination of FDIC deposit insurance. In addition, the OCC and the FDIC may take various corrective actions against any undercapitalized bank and any bank that fails to submit an acceptable capital restoration plan or fails to implement a plan accepted by the OCC or the FDIC. These powers include, but are not limited to, requiring the institution to be recapitalized, prohibiting asset growth, restricting interest rates paid, requiring prior approval of capital distributions by any bank holding company that controls the institution, requiring divestiture by the institution of its subsidiaries or by the holding company of the institution itself, requiring new election of directors, and requiring the dismissal of directors and officers.

Regulation of the Bank

The Bank is also subject to federal regulation regarding such matters as reserves, limitations on the nature and amount of loans and investments, issuance or retirement of its securities, limitations on the payment of dividends and other aspects of banking operations.

The Bank is a member of the Federal Reserve System and, as a national bank, is regulated and subject to periodic examination by the OCC. These examinations are designed primarily for the protection of the depositors of the Bank and not for its shareholder, Ohio Legacy, or for the shareholders of Ohio Legacy. The OCC has broad enforcement powers over national banks, including the power to impose fines and other civil and criminal penalties and to appoint a conservator or receiver if any of a number of conditions is met.

Dividend Restrictions. The Bank is a legal entity separate and distinct from Ohio Legacy, although Ohio Legacy owns 100% of the outstanding stock of the Bank. Virtually all of Ohio Legacy’s revenues result from dividends paid by the Bank. The Bank is subject to laws and regulations that limit the amount of dividends it can pay to Ohio Legacy. Under OCC regulations, a national bank may not declare a dividend in excess of its undivided profits. Additionally, the Bank may not declare a dividend if the total amount of all dividends declared by the Bank in any calendar year, including the proposed dividend, exceeds the total of the Bank’s retained net income of that year to date, combined with its retained net income of the preceding two years. However, a dividend that does not meet this measurement may be approved by the OCC in certain circumstances. In addition, the Bank may not declare or pay any dividend if, after making the dividend, the Bank would be undercapitalized under applicable federal regulations.

FDIC. The FDIC is an independent federal agency that insures the deposits of federally-insured banks and savings associations up to prescribed limits. In July 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, which, in part, permanently raises the current standard maximum deposit insurance amount to $250,000. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category.

In November 2010, the FDIC issued a Final Rule implementing section 343 of the Dodd-Frank Wall Street Reform and Consumer Protection Act that provides for unlimited insurance coverage of noninterest-bearing transaction accounts. Beginning December 31, 2010, through December 31, 2012, all noninterest-bearing transaction accounts were fully insured, regardless of the balance of the account, at all FDIC-insured institutions through the Transaction Account Guarantee Program (“TAG”).  The unlimited insurance coverage was available to all depositors, including consumers, businesses, and government entities. This unlimited insurance coverage was separate from, and in addition to, the insurance coverage provided to a depositor’s other deposit accounts held at an FDIC-insured institution. The term “noninterest-bearing transaction account” included a traditional checking account or demand deposit account on which the insured depository institution pays no interest.  It also included Interest on Lawyers Trust Accounts (“IOLTAs”).  It did not include other accounts, such as traditional checking or demand deposit accounts that may earn interest, NOW accounts and money-market deposit accounts. The Company did not experience a material change to its affected deposits as a result of the TAG Program’s expiration at December 31, 2012.

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The FDIC is required to maintain designated levels of reserves. The FDIC may increase assessment rates if necessary to restore the ratio of reserves to insured deposits to its target level within a reasonable time and may decrease rates if the target level has been met. Assessments vary based on the risk the institution poses to the deposit insurance fund and the FDIC may alter its method of determining risk at any time. The risk level is determined based on the institution's capital level and the FDIC's level of supervisory concern about the institution. The FDIC may, in its discretion, impose special assessments on insured institutions at any time. In July 2011, the FDIC changed the method used to calculate the assessments charged to insured depository institutions to an assessment based on total assets, net of Tier 1 capital, instead of a deposit-based formula.

The FDIC safeguards the safety and soundness of financial institutions through examinations of insured institutions. The Bank is subject to examination by the FDIC, and the Bank’s deposits are assessed deposit insurance premiums by the Bank Insurance Fund of the FDIC. Under the FDIC’s deposit insurance assessment system, the assessment rate for any insured institution may vary according to regulatory capital levels of the institution and other factors such as supervisory evaluations.

The FDIC is authorized to prohibit any insured institution from engaging in any activity that poses a serious threat to the insurance fund and may initiate enforcement actions against banks. The FDIC may also terminate the deposit insurance of any institution that has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, order or condition imposed by the FDIC. If deposit insurance is terminated, the deposits at the institution at the time of termination, less subsequent withdrawals, will continue to be insured for a period from six months to two years, as determined by the FDIC. The Company is not aware of any existing circumstances that could result in termination of the Bank’s deposit insurance.

Dodd-Frank Wall Street Reform and Consumer Protection Act. The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) marks the greatest legislative change to financial supervision since the 1930s. It affects the regulatory environment in the areas of securities, derivatives, executive compensation, consumer protection and corporate governance that will grow out of the general framework established by the Act. The Act was designed to become effective in stages following the regulatory implementation phase during which an intense period of rulemaking will occur. Agency rulemaking will largely establish the parameters of the new regulatory framework and is expected to occur for an extended period. While much of the Act will directly affect large, complex financial institutions, smaller community banks will also face a more complicated and expensive regulatory framework.

The following changes that have or will be implemented pursuant to the Dodd-Frank Act may have an effect on the Company’s business:

· the Dodd-Frank Act creates a Consumer Financial Protection Bureau with broad powers to adopt and enforce consumer protection regulations;

· new capital regulations for bank holding companies will be adopted, which may impose stricter requirements, and any new trust preferred securities will no longer constitute Tier I capital (although these new requirements do not apply to Ohio Legacy based on its current size and circumstances);

· the federal law prohibiting the payment of interest on commercial demand deposit accounts was eliminated in July 2011;

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· the standard maximum amount of deposit insurance per customer was permanently increased to $250,000, and non-interest bearing transaction accounts have unlimited insurance through December 31, 2012;

· the assessment base for determining deposit insurance premiums was expanded and the assessment base was changed from deposits to average assets minus average tangible equity; and

· new corporate governance requirements applicable generally to all public companies in all industries will require new compensation practices and disclosure requirements, including requiring companies to “claw back” incentive compensation under certain circumstances, to provide shareholders the opportunity to cast a non-binding vote on executive compensation and to consider the independence of compensation advisers.

While the ultimate effect of the Dodd-Frank Act on the Company cannot yet be determined, the law is likely to increase compliance costs and fees paid to regulators, along with possible restrictions on the operations of the Company and its subsidiaries.

Community Reinvestment Act. The Community Reinvestment Act (the “CRA”) requires depository institutions to assist in meeting the credit needs of their market areas, including low and moderate-income areas, consistent with safe and sound banking practice. Under the CRA, each institution is required to adopt a statement for each of its marketing areas describing the depository institution’s efforts to assist in its communities’ credit needs. Depository institutions are examined periodically for compliance and are assigned ratings. Banking regulators consider these ratings when considering approval of a proposed transaction by an institution.

Privacy Provisions of Gramm-Leach-Bliley Act

Under the Gramm-Leach-Bliley Act, federal banking regulators were required to adopt rules that limit the ability of banks and other financial institutions to disclose non-public information about consumers to nonaffiliated third parties. These limitations require disclosure of privacy policies to consumers and, in some circumstances, allow consumers to prevent disclosure of certain personal information to a nonaffiliated third party.

Patriot Act

In response to the terrorist events of September 11, 2001, the Uniting and Strengthening of America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the “Patriot Act”) was signed into law in October 2001. The Patriot Act gives the United States Government powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing and broadened anti-money laundering requirements. Title III of the Patriot Act takes measures intended to encourage information sharing among bank regulatory agencies and law enforcement bodies. Further, certain provisions of Title III impose affirmative obligations on a broad range of financial institutions. Among other requirements, Title III and related regulations require regulated financial institutions to establish a program specifying procedures for obtaining identifying information from customers seeking to open new accounts and establish enhanced due diligence policies, procedures and controls designed to detect and report suspicious activity. The Company has established policies and procedures that are believed to be compliant with the requirements of the Patriot Act.

Transactions with Affiliates, Directors, Executive Officers and Shareholders

Section 23A and 23B of the Federal Reserve Act and Regulation W restrict transactions by banks and their subsidiaries with their affiliates. An affiliate of a bank is any company or entity which controls, is controlled by or is under common control with the bank. Ohio Legacy, Excel Bancorp and the Bank are affiliates. Generally, Sections 23A and 23B and Regulation W: (i) limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with any one affiliate to an amount equal to 10% of that bank’s capital stock and surplus (i.e., tangible capital); (ii) limit the extent to which a bank or its subsidiaries may engage in “covered transactions” with all affiliates to 20% of that bank’s capital stock and surplus; and (iii) require that all such transactions are on terms substantially the same, or at least as favorable to the bank subsidiary, as those provided to a non-affiliate.

The term “covered transaction” includes the making of loans to the affiliate, the purchase of assets from the affiliate, issuance of a guarantee on behalf of the affiliate, the purchase of securities issued by the affiliate, and other similar types of transactions.

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A bank’s authority to extend credit to executive officers, directors and greater than 10% shareholders, as well as entities such persons control, is subject to Sections 22(g) and 22(h) of the Federal Reserve Act and Regulation O promulgated thereunder by the Federal Reserve Board. Among other things, these loans must be made on terms substantially the same as those offered to unaffiliated individuals or be made as part of a benefit or compensation program and on terms widely available to employees, and must not involve a greater than normal risk of repayment. In addition, the amount of loans a bank may make to these persons is based, in part, on the bank’s capital position, and specified approval procedures must be followed in making loans which exceed specified amounts.

Effects of Government Monetary Policy

The earnings of the Company are affected by general and local economic conditions and by the policies of various governmental regulatory authorities. In particular, the Federal Reserve Board regulates monetary policy, credit conditions and interest rates that may influence general economic conditions primarily through open market acquisitions or dispositions of United States government securities, varying the discount rate on member bank borrowings and setting reserve requirements against member and nonmember bank deposits. The Federal Reserve Board’s monetary policies have historically had a significant effect on the interest income and interest expense of commercial banks, including the Bank, and are expected to continue to do so in the future.

Future Regulatory Uncertainty

Federal regulation of bank holding companies and financial institutions changes regularly and is the subject of constant legislative debate. Future legislation and policies may have a significant influence on overall growth and distribution of loans, investments and deposits and may affect interest rates charged on loans or paid on time and savings deposits. Such legislation and policies have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. As a result of the continuous changes in legislation related to the financial services industry, the Company cannot forecast how federal regulation of financial institutions may change in the future or its impact on the Company’s operations and profitability.

Statistical Disclosures

The following schedules present, for the periods indicated, certain financial and statistical information of the Company as required under the SEC’s Industry Guide 3, “Statistical Disclosure by Bank Holding Companies.”

Industry Guide 3 - Item I. Distribution of Assets, Liabilities and Stockholders’ Equity; Interest Rates and Interest Differential

A. & B. Average Balance Sheets and Related Analysis of Net Interest Earnings

The following table sets forth information relating to the Company’s average balance sheet and reflects the average yield on interest-earning assets and the average cost of interest-bearing liabilities for the periods indicated. These yields and costs are derived by dividing income or expense by the average balances of interest-earning assets or interest-bearing liabilities for the periods presented.

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	For the Year Ended December 31,
	2012							2011
			Interest							Interest
	Average		Earned/		Yield/			Average		Earned/		Yield/
(Dollars in Thousands)	Balance		Paid		Rate			Balance		Paid		Rate
Assets
Interest-earning assets:
Interest-bearing deposits in
other financial institutions and federal funds sold	$	12,116	$	25		0.21	%	$	34,159	$	80		0.23	%
Securities available for sale		11,898		272		2.29	%		15,682		426		2.72	%
Securities held to maturity		0		0		0.00	%		1,173		45		3.87	%
Federal agency stock		1,584		79		4.99	%		1,541		75		4.84	%
Loans (1)		128,643		5,951		4.63	%		105,136		5,529		5.26	%
Total interest-earning assets		154,241		6,327		4.10	%		157,691		6,155		3.90	%
Noninterest-earning assets		6,112							7,977
Total assets	$	160,353						$	165,668
Liabilities and Shareholders' Equity
Interest-bearing liabilities:
Interest-bearing demand deposits	$	6,143	$	16		0.27	%	$	8,695	$	25		0.29	%
Savings accounts		5,529		20		0.36	%		11,844		44		0.37	%
Money market accounts		33,432		152		0.46	%		46,341		272		0.59	%
Certificates of deposit		46,060		425		0.92	%		50,205		696		1.39	%
Total interest-bearing deposits		91,164		613		0.67	%		117,085		1,037		0.89	%
Other Borrowings		24,576		71		0.29	%		9,116		87		0.95	%
Total Interest-bearing liabilities		115,740		684		0.59	%		126,201		1,124		0.89	%
Noninterest-bearing demand deposits		25,139							22,129
Noninterest-bearing liabilities		921							768
Total liabilities		141,800							149,098
Shareholders' equity		18,553							16,570
Total liabilities and
shareholders' equity	$	160,353						$	165,668
Net interest income; interest rate spread (2)			$	5,643		3.51	%			$	5,031		3.01	%
Net earning assets	$	38,501						$	31,490
Net interest margin (3)						3.66	%						3.19	%
Average interest-earning assets to interest-bearing liabilities		1.33	X						1.25	X

(1) Average loans are net of net deferred loan fees and costs and loans in process. Nonaccrual loans are included in noninterest-earning assets. Fee income is included in interest earned.

(2) Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(3) Net interest margin represents net interest income divided by average interest-earning assets.

C. Interest Differential

The table below describes the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities have affected the Company’s interest income and interest expense during the years indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (1) changes in volume (change in balances multiplied by prior year rate), (2) changes in rate (change in rates multiplied by prior year balance) and (3) total changes in rate and volume. The combined effects of changes in both volume and rate, which are not separately identified, have been allocated proportionately to the change due to volume and the change due to rate.

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	For the Year Ended December 31,
	2012 vs. 2011			2011 vs. 2010
	Increase (Decrease) due to			Increase (Decrease) due to
(Dollars in thousands)	Volume	Rate	Total	Volume	Rate	Total
Change in interest income attributable to:
Interest-bearing deposits and federal funds sold	($46)	($8)	($54)	$3	$1	$4
Securities available for sale	(93)	(61)	(154)	(333)	(139)	(472)
Securities held to maturity	(23)	(23)	(46)	(71)	2	(69)
Federal bank stock	2	2	4	4	-	4
Loans	1,139	(717)	422	568	(785)	(217)
Total assets	$979	($807)	$172	$171	($921)	($750)
Change in interest expense attributable to:
Interest-bearing demand deposits	($7)	($2)	($9)	($3)	($24)	($27)
Savings accounts	(22)	(2)	(24)	(28)	(54)	(82)
Money market accounts	(66)	(54)	(120)	26	(119)	(93)
Certificates of deposit	(54)	(217)	(271)	(111)	(497)	(608)
Other borrowings	74	(90)	(16)	(86)	(194)	(280)
Total interest-bearing liabilities	($75)	($365)	($440)	($202)	($888)	($1,090)
Change in net interest income			$612			$340

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Industry Guide 3 - Item II. Investment Portfolio

A. This information is contained in Note 2 to the consolidated financial statements, which is incorporated herein by reference.

B. Other securities consist of preferred stock issued by the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”) that has a stated rate and an initial call date of five years from the date of issuance. Based on actions taken by the Treasury Department on September 7, 2008, the dividend on the preferred stock has been suspended indefinitely.

Maturities of Investment Securities
	No Stated Maturity					Due after onethrough five years					Due after fivethrough ten years
	Amount		Weighted Average Yields			Amount		Weighted Average Yields			Amount		Weighted Average Yields
U.S. Government sponsored enterprises	$	0				$	0				$	1,006,655		0.30	%
Mortgage-backed securities issued by U.S. Government-sponsored enterprises: residential		0					0					5,607,814		1.28	%
Other residential mortgage-backed securities		0					0					0
State and political		0					861,103		5.85	%		2,012,701		5.78	%
Other securities		192,850		0.00	%		0					0
Total securities	$	192,850		0.00	%	$	861,103		1.82	%	$	8,627,170		3.49	%

	Due after ten years					Total
	Amount		Weighted Average Yields			Amount		Weighted   Average   Yields
U.S. Government sponsored enterprises	$	0				$	1,006,655		0.30	%
Mortgage-backed securities issued by U.S. Government-sponsored enterprises: residential		1,853,039		2.93	%		7,460,853		1.69	%
Other residential mortgage- backed securities		178,882		5.29	%		178,882		5.29	%
State and political		0					2,873,804		5.80	%
Other securities		0					192,850		0.00	%
Total securities	$	2,031,921		4.13	%	$	11,713,044		2.61	%

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

C. At December 31, 2012, there were no holdings of securities, other than securities issued by U.S. Government sponsored enterprises, in amounts greater than 10% of shareholders’ equity.

Industry Guide 3 - Item III. Loan Portfolio

A. Types of Loans

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This information is contained in Note 3 to the consolidated financial statements, which is incorporated herein by reference.

B. Maturities and Sensitivities of Loans to Changes in Interest Rates

The following is a schedule of maturities of loans based on contractual terms and assuming no amortization or prepayments, excluding residential real estate and consumer loans, as of December 31, 2012:

	Maturing
			After one
	One year		through		After five
(Dollars in thousands)	or less		five years		years		Total
Commercial	$	7,441	$	7,625	$	187	$	15,253
Secured by trust assets		5,778		42		0		5,820
Commercial real estate:
Non-owner occupied		197		10,943		15,533		26,673
Owner occupied		3,213		9,139		16,187		28,539
Loans to nondepository financial institutions		7,346		0		0		7,346
Construction and development		1,885		2,216		3,501		7,602
Total	$	25,860	$	29,965	$	35,408	$	91,233

The amount of loans reported above due after one year was as follows (dollars in thousands):

Fixed Rate	$	12,982
Adjustable Rate		52,391
Total	$	65,373

C. Risk Elements

1. Nonaccrual, Past Due and Restructured Loans - This information is contained in Note 3 to the consolidated financial statements, which is incorporated herein by reference.

The Bank’s policy for placing loans on nonaccrual status is to cease accruing interest on loans when management believes that collection of interest is doubtful or when loans are past due as to principal and interest for 90 days or more, except that, in certain circumstances, interest accruals are continued on loans deemed by management to be fully collectible. In such cases, loans are evaluated individually in order to determine whether to continue income recognition after 90 days beyond the due dates. When loans are placed on nonaccrual status, any accrued interest is charged against interest income.

When an analysis of a borrower's operating results and financial condition indicates the borrower’s underlying cash flows are not adequate to meet debt service requirements and the collateral securing the loan may become the principal source of repayment, the loan is evaluated for impairment. Smaller-balance homogeneous loans are evaluated for impairment in total, however these loans are evaluated for impairment individually if placed on nonaccrual status. Homogeneous loans include residential first mortgage and construction loans secured by one- to four-family residences, consumer loans, credit card loans and home equity loans. Commercial, agricultural and commercial real estate loans are evaluated individually for impairment. In addition, loans held for sale and leases are excluded from consideration of impairment.

Loans individually considered impaired are carried at (a) the present value of expected cash flows, discounted at the loan’s effective interest rate, or (b) the fair value of collateral, if the loan is collateral dependent. A portion of the allowance for loan losses may be allocated to impaired loans. Impaired loans, or portions thereof, are charged off when deemed uncollectible.

2. Potential Problem Loans - At December 31, 2012, management did not identify any loans with serious doubts about the borrowers’ ability to comply with present loan repayment terms other than those included above in Industry Guide 3 - Item III.C., except for $3,261,420 of loans not included in nonaccrual loan balances but classified as substandard assets for regulatory purposes that continue to accrue interest. This substandard and accruing interest classification includes $2,887,856 in loans identified as troubled debt restructurings.

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3. Foreign Loans Outstanding - There were no foreign loans outstanding during any period presented.

4. Loan Concentrations – The table below depicts loans outstanding at December 31, 2012, by loan type:

	Total Loans		% of total
1-4 family residential mortgage	$	28,833,397		19.2	%
1-4 family rental property		4,390,713		2.9	%
Home equity		12,795,480		8.5	%
Consumer		2,687,368		1.8	%
Commercial		15,253,309		10.2	%
Secured by trust assets		5,820,705		3.9	%
Commercial real estate:
Non-owner occupied		26,672,937		17.8	%
Owner occupied		28,538,686		19.0	%
Multi-unit		9,998,614		6.7	%
Loans to nondepository financial institutions		7,345,540		4.9	%
Construction and development		7,601,563		5.1	%
Total	$	149,938,312		100.0	%

D. Other Interest-bearing Assets

At December 31, 2012, there were no other interest-bearing assets required to be disclosed under Industry Guide 3 - Items III.C.1. or 2 if such assets were loans.

Industry Guide 3 - Item IV. Summary of Loan Loss Experience

A. Analysis of the Allowance for Loan Losses

Activity in the allowance for loan losses for the years ended December 31 2012 and 2011 was as follows:

	2012			2011
Balance, January 1	$	2,484,478		$	3,055,766
Provision for loan losses		13,466			152,905
Reclassification for loans sold		0			(600,000	)
Loans charged-off:
Commercial		(1,100	)		(81,263	)
Commercial real estate		(33,817	)		(252,904	)
Residential real estate		(175,794	)		(180,512	)
Construction		(50,000	)		(1,205	)
Consumer and home equity		(55,104	)		(23,614	)
Total loans charged-off		(315,815	)		(539,498	)
Recoveries:
Commercial		118,267			38,276
Commercial real estate		12,737			95,387
Residential real estate		6,133			0
Construction		20,803			279,833
Consumer and home equity		7,595			1,809
Total recoveries		165,535			415,305
Balance, December 31	$	2,347,664		$	2,484,478
Balance as a percentage of total loans		1.57	%		2.24	%
Ratio of net charge offs during the period to average loans outstanding		0.12	%		0.12	%

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The allowance for loan losses balance and the provision for loan losses charged to operating expense are determined by management based on periodic reviews of the Bank’s loan portfolio, economic conditions and various other circumstances that are subject to change over time. In making this judgment, management reviews selected large loans as well as loans individually considered impaired, other delinquent, nonaccrual and problem loans and loans to industries experiencing economic difficulties. The collectability of these loans is evaluated after considering the current operating results and financial position of the borrower, estimated market value of collateral, guarantees and the Company’s collateral position versus other creditors. Judgments, which are necessarily subjective, as to the probability of losses and the amounts of such losses are formed on these loans, as well as other loans taken together.

B. Allocation of the Allowance for Loan Losses

While management’s periodic analysis of the adequacy of the allowance for loan losses may allocate portions of the allowance to specific problem loan situations, the entire allowance is available for any loan charge-offs that occur. The following schedule is a breakdown of the allowance for loan losses allocated by type of loan and related ratios at December 31 2012 and 2011:

	2012					2011
	Allowance Amount		% of loans in each category to total loans			Allowance Amount		% of loans in each category to total loans
Commercial	$	16,301		10.2	%	$	284,961		9.1	%
Secured by trust assets		11,641		3.9	%		13,600		6.1	%
Real estate loans:
Commercial real estate
Non-owner occupied		257,067		17.8	%		278,699		20.6	%
Owner occupied		744,981		19.0	%		662,269		17.9	%
Multi-family real estate		255,001		6.7	%		423,031		8.2	%
Residential real estate
1-4 family residential mortgage		306,425		19.2	%		202,699		21.5	%
1-4 family rental property		237,065		2.9	%		235,523		3.8	%
Construction and development		116,207		5.1	%		234,590		3.8	%
Loans to nondepository financial institutions		0		4.9	%		0		0.0	%
Home equity loans		339,723		8.5	%		139,419		8.1	%
Other consumer loans		63,253		1.8	%		9,687		0.9	%
Total	$	2,347,664		100.0	%	$	2,484,478		100.0	%

Industry Guide 3 - Item V. Deposits

A. Average Amount and Average Rate Paid On Deposits.

	2012			2011
(Dollars in thousands)	Average Balances		Average Rate	Average Balances		Average Rate
Noninterest-bearing demand deposits	$	25,139	N/A	$	22,129	N/A
Interest-bearing demand deposits		6,143	0.27%		8,695	0.29%
Savings accounts		5,529	0.36%		11,844	0.37%
Money market accounts		33,432	0.46%		46,341	0.59%
Certificates of deposit		46,060	0.92%		50,205	1.39%
Total deposits	$	116,303		$	139,214

B. Other categories – not applicable.

C. Foreign deposits – not applicable.

D. The following is a schedule of maturities of certificates of deposit in amounts of $100,000 or more as of December 31, 2012:

17

(Dollars in thousands)
Three months or less	$	3,061
Over three through six months		4,595
Over six through twelve months		24,021
Over twelve months		6,399
Total	$	38,076

E. Time deposits greater than $100,000 issued by foreign offices – not applicable.

Industry Guide 3 - Item VI. Return on Equity and Assets

	2012			2011
Return on average assets		0.07	%		1.10	%
Return on average equity		0.61	%		11.00	%
Dividend payout ratio		0.00	%		0.00	%
Average shareholders’ equity to average assets		11.57	%		10.00	%

Industry Guide 3 - Item VII. Short-Term Borrowings

During 2012, the Company entered into repurchase agreements as a funding source for its operations. The Company also has available credit with the Federal Home Loan Bank (“FHLB”) and advances from that will mature within the next twelve months. This information is contained in Notes 7 and 8 to the consolidated financial statements, which are incorporated herein by reference.

Item 1A. Risk Factors

Not required.

Item 1B. Unresolved Staff Comments.

None.

Item 2. Properties.

The Bank currently owns or leases and operates three banking offices, including its main office, and an operations center:

· North Canton Main Office, 600 South Main Street, North Canton, Ohio 44720 (own)

· Belden Village Branch Office, 6141 Whipple Ave NW, North Canton, OH 44720 (operating lease)

· St. Clairsville Wealth Office, 107 Plaza Drive, Suite J, St. Clairsville, OH 43950 (operating lease)

· Wooster Operations Center, 2375 Benden Drive, Suite C, Wooster, Ohio, 44691 (operating lease)

The Bank considers the physical properties it occupies to be suitable and adequate for the purposes for which they are being used. See Note 5 to the consolidated financial statements for additional information regarding our properties.

Item 3. Legal Proceedings.

The Company is not a party to any material pending legal proceedings, other than ordinary routine litigation incidental to the business of the Company. No routine litigation in which the Company is involved is expected to have a material adverse impact on the financial position or results of operations of the Company.

Item 4. Mine Safety Disclosures

Not applicable

18

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market for the Company’s Common Stock

Ohio Legacy’s common stock is currently quoted on the over-the-counter market. Prior to October 8, 2012 the stock was listed on the NASDAQ Capital Market under the symbol “OLCB.” As of March 21, 2013, there were 1,971,431 shares of Ohio Legacy’s common stock issued and outstanding and there were 272 holders of record. The following table summarizes the highest and lowest sales prices for Ohio Legacy’s common stock for each quarter during 2012 and 2011. The Company completed a One for Ten reverse stock split effective September 17, 2012. For periods prior to September 18, 2012, the stock prices are restated to reflect the effect of the reverse stock split.

	2012				2011
	HIGH		LOW		HIGH		LOW
First Quarter	$	17.70	$	8.52	$	19.80	$	16.00
Second Quarter		12.20		7.80		18.20		12.20
Third Quarter		11.00		7.00		16.80		9.22
Fourth Quarter		7.87		2.00		16.40		10.20

No cash dividends were declared or paid by Ohio Legacy during 2012 or 2011. The payment of dividends by the Bank to Ohio Legacy and by Ohio Legacy to its shareholders is subject to restrictions by regulatory agencies. The Company is currently not able to declare or pay dividends without prior approval from its regulators. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources” and Note 12 to the consolidated financial statements for information regarding the restrictions on the Company’s ability to pay dividends.

Issuer Purchases of Equity Securities

There were no purchases made by or on behalf of the Company or any affiliated purchaser of shares of Ohio Legacy’s common stock during the fourth quarter of 2012.

Item 6. Selected Financial Data

Not required.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not required.

Item 7. Management’s Discussion and Analysis.

In the following section, management presents an analysis of Ohio Legacy Corp's financial condition and results of operations as of and for the years ended December 31, 2012 and 2011. This discussion is provided to give shareholders a more comprehensive review of the issues facing management than could be obtained from an examination of the financial statements alone. This analysis should be read in conjunction with the consolidated financial statements and the accompanying notes included in this Form 10-K.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Form 10-K, including Management’s Discussion and Analysis of Financial Condition and Results of Operations, includes “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act which can be identified by the use of forward-looking terminology, such as “may”, “might”, “could”, “would”, “believe”, “expect”, “intend”, “plan”, “seek”, “anticipate”, “estimate”, “project“, or “continue” or the negative version of such terms or comparable terminology. All statements other than statements of historical fact included in this Form 10-K, including statements regarding our outlook, financial position, results of operation, liquidity, capital resources and interest rate sensitivity are forward-looking statements.

19

The Private Securities Litigation Reform Act provides a “safe harbor” for forward-looking statements to encourage companies to provide prospective information so long as those statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those discussed in the forward-looking statements. We desire to take advantage of the “safe harbor” provisions of that Act.

Forward-looking statements speak only as of the date on which they are made and, except as may be required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances occurring after the date on which the statement is made.

Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results to be materially different from any future results expressed or implied by such forward-looking statements. Although we believe the assumptions, judgments and expectations reflected in such forward-looking statements are reasonable, we can give no assurance such assumptions, judgments and expectations will prove to have been correct. Important factors that could cause actual results to differ materially from those in the forward-looking statements included in this Form 10-K include, but are not limited to:

· competition in the industry and markets in which we operate;

· rapid changes in technology affecting the financial services industry;

· changes in government regulation;

· general economic and business conditions and real estate valuations in our primary market areas could adversely impact results of operations, financial condition and cash flows;

· changes in industry conditions created by state and federal legislation and regulations;

· changes in interest rates and the impact of future interest rate changes on our profitability, capital adequacy and the fair value of our financial assets and liabilities;

· our ability to retain existing customers and attract new customers;

· our development of new products and services and their success in the marketplace;

· the adequacy of our allowance for loan losses;

· deposit insurance premiums assessed on the Bank may increase and have a negative impact on earnings;

· our ability to seek additional capital in the future;

· our anticipated loan and deposit account growth, expense levels, liquidity and capital resources and projections of earnings; and

· our potential acquisitions of assets or whole banks and the related assumptions of deposits and other liabilities, which may increase the demands on our financial, management, and other resources and may accelerate or magnify the consequences of other factors listed above.

20

OVERVIEW OF STRATEGIC DEVELOPMENTS

The Company’s management focused on a number of initiatives during 2012 and 2011 including the following:

· Improve the Company’s criticized asset levels.

· Improve core earnings.

· Evaluate opportunities to expand or reposition the Bank’s branch network to areas where the demographics fit the Bank’s business plan. As a result, the following events occurred:

o Following discussions begun in 2012, on February 1, 2013 the Bank announced a definitive agreement with another financial institution to acquire its Fairlawn office located in Akron, Ohio. Under the terms of the agreement, the Bank will purchase $10 million to $12 million in loans and will assume $13 million to $16 million in deposits. The transaction is expected to close in the second quarter of 2013.

o The Bank sold two branch offices located in Wayne County, Ohio during 2011. The sale included deposits of $74.3 million and net loans of $9.1 million including $2.3 million in criticized loans.

· Develop fee-based revenue through the wealth management business started by the Bank in 2010.

o Assets under management by the trust department totaled $109 million at year-end 2012 and $105 million at year-end 2011.

o The Utica and Marcellus shale exploration and drilling activities located within the Bank’s market and surrounding areas are providing opportunities to attract new wealth attained by landowners through lease agreements with energy companies.

· Completion of a core processing system conversion in April 2012 to reduce costs while expanding product offerings to remain technologically competitive.

· Deliver efficient and premier service and products for current and prospective clients and develop a sales culture throughout the Company.

The following key factors summarize the Company’s financial condition at year-end 2012 compared to year-end 2011:

· Total assets increased by $28.1 million from $146.6 million to $174.7 million;

· Total deposits increased by $27.5 million from $104.0 million to $131.5 million;

· Total shareholders’ equity increased $324,000 to $18.9 million; and

· Net loans increased $39.4 million to $147.7 million;

The following key factors summarize our results of operations for 2012 compared to 2011:

· Net income for 2012 was approximately $114,000, an increase of $1.8 million from 2011 results excluding the impact of the branch sale. The Company would have incurred a net loss for 2011 of approximately $1.7 million excluding the gains and related expenses generated by the 2011 branch sale which netted $3.5 million. Net income for 2011 was $1.8 million.

· Net interest income increased by $612,460 to $5.6 million for 2012;

· Trust and brokerage revenue increased $159,524, or 21.5%, to $903,374 in 2012 from $743,850 in 2011;

· Loan loss provision expense for 2012 totaled $13,466 compared to provision expense of $152,905 for 2011;

· Gains on the sale of available-for-sale securities totaled $55,016 for 2012 compared to $358,030 for 2011;

· The realized loss and direct write-down of assets acquired in settlement of loans totaled $205,417 for 2012 compared to $268,117 for 2011;

· Total noninterest expenses decreased $1.7 million to $6.7 million in 2012 from $8.4 million in 2011.

The following forward-looking statements describe our near term outlook:

· Margins may decline as interest earning assets continue to adjust to lower rates given the Federal Open Market Committee’s expectation to maintain a highly accommodative stance for monetary policy to support a stronger economic recovery. The FOMC has maintained the target range for the federal funds rate at 0 to ¼ percent and currently anticipates that exceptionally low levels for the federal funds rate are likely to be warranted at least as long as the unemployment rate remains above 6-1/2 percent. The FOMC also has the ability to influence longer term interest rates through its open market operations.

21

· It will be difficult to reduce our cost of funds significantly below current levels.

· Commercial lending, with an emphasis on commercial and industrial lending, and new services in trust, brokerage and wealth management are expected to expand;

· Credit quality will remain a primary focus of the Company, and costs associated with credit administration and collection efforts could remain high.

CRITICAL ACCOUNTING POLICIES

The preparation of consolidated financial statements and related disclosures in accordance with U.S. generally accepted accounting principles requires us to make judgments, assumptions and estimates at a specific point in time that affect the amounts reported in the accompanying consolidated financial statements and related notes. In preparing these financial statements, we have utilized available information including our past history, industry standards and the current economic environment, among other factors, in forming our estimates and judgments of certain amounts included in the consolidated financial statements, giving due consideration to materiality. It is possible that the ultimate outcome as anticipated by management in formulating our estimates inherent in these financial statements may not materialize. Application of the critical accounting policies described below involves the exercise of judgment and the use of assumptions as to future uncertainties and, as a result, actual results could differ from these estimates. In addition, other companies may utilize different estimates, which may impact the comparability of our results of operation to similar businesses.

Allowance for loan losses. The allowance for loan losses is a valuation allowance for probable incurred credit losses, increased by the provision for loan losses and recoveries and decreased by charge-offs. We estimate the allowance balance by considering the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in our judgment, should be charged off. Loan losses are charged against the allowance when we believe the loan balance cannot be collected.

We consider various factors, including portfolio risk, historical loan losses, the economic environment and loan delinquencies, when determining the level of the provision for loan losses. We monitor loan quality monthly and engage an independent third party each quarter to help monitor and confirm our loan grading conclusions.

Valuation allowance for deferred tax assets. Another critical accounting policy relates to valuation of the deferred tax asset for net operating losses. Net operating loss carryforwards of approximately $8,405,000 will expire as follows: $1,257,000 on December 31, 2027, $132,000 on December 31, 2028, $1,532,000 on December 31, 2029, $5,105,000 on December 31, 2030, and $379,000 on December 31, 2032. A valuation allowance has been recorded for the related deferred tax asset for these carryforwards and other net deferred tax assets recorded by the Company to reduce the carrying amount of these assets to zero. Additional information is included in Notes 1 and 10 to our audited consolidated financial statements.

FINANCIAL CONDITION – DECEMBER 31, 2012, COMPARED TO DECEMBER 31, 2011

Assets. At December 31, 2012, assets totaled $174.7 million, up $28.1 million from $146.6 million at December 31, 2011. The increase in assets was funded by an increase deposits.

Cash and Cash Equivalents. Cash and Cash Equivalents decreased $14.3 million to $5.7 million at year-end 2012 compared to $20.0 million at year-end 2011. The Company deployed liquidity during 2012 to fund loan growth.

Securities. The securities portfolio increased $1.0 million to $11.7 million at year-end 2012 compared to year-end 2011. At December 31, 2012, the effective duration of the portfolio excluding equity investments was approximately 1.9 compared to 1.6 at December 31, 2011. At year-end 2012, the net unrealized gain on the securities portfolio was $465,575 compared to a net unrealized gain of $452,816 at year-end 2011. Investment purchases during 2012 totaled $6.2 million and consisted of $5.2 million in 10 year, fixed rate U.S. Government-sponsored agency residential mortgage-backed securities and a $1.0 million callable U.S. agency bond. A GNMA 5.0% mortgage-backed bond was sold during 2012 netting proceeds of $806,000 and a gain on sale of approximately $55,000. Cash flow from the portfolio also included approximately $2.6 million in called bonds.

22

Loans. Total portfolio loans, net of the allowance for loan loss and deferred loan fees, increased $39.4 million at December 31, 2012 to $147.7 million, compared to $108.3 million at year-end 2011. Loans classified by management as special mention, substandard or doubtful and not deemed impaired represented 2.0% of total loans at December 31, 2012 compared to 5.0% of total loans at December 31, 2011. Impaired loans totaled $6.1 million and represented 4.0% of total loans at December 31, 2012 compared to $4.1 million, or 3.7% of total loans, at year-end 2011. Impaired loans included $2.9 million of trouble debt restructurings (TDRs) that accrue interest at year-end 2012 and $2.7 million of accruing TDRs at year-end 2011. Improving asset quality is a prime objective for management. Outstanding loan balances are expected to increase through business development efforts.

Allowance for Loan Losses and Asset Quality. The allowance for loan losses totaled $2.3 million at December 31, 2012, a decrease of $137,000 compared to $2.5 million at December 31, 2011. The amount of the allowance is based on a combination of actual experiential factors such as historical losses for each category of loans and information about specific borrowers as well as considerations of various other factors, including delinquencies, general economic conditions and the outlook for specific industries, which are more subjective in nature. During 2012, the Company recognized loan charge-offs totaling $316,000 and recoveries totaling $166,000. The provision for loan loss was $13,000 for 2012.

During 2011, the Company recognized loan charge-offs totaling $539,000 and recoveries totaling $415,000. A reclassification of $600,000 reduced the Allowance for Loan Losses for those loans transferred to held-for-sale as part of the Disposal Group in connection with the branch sale. The provision for loan loss was $153,000 for 2011.

As a percentage of total loans, the allowance for loan losses decreased from 2.24% at year-end 2011 to 1.57% at the end of 2012. We continue to closely monitor credit quality and delinquencies as our loan portfolio ages, and will increase the allowance for loan losses if we believe losses have been incurred.

Nonperforming loans consist of loans on nonaccrual status. Nonperforming loans, excluding overdrafts, totaled $3.2 million at December 31, 2012 compared to $1.3 million at December 31, 2011. At year-end 2012, nonperforming loans included one loan with a recorded investment of $2.3 million representing the Bank’s 2.45% participation interest. Sixty-six participants share in the credit. At December 31, 2012, the loan had matured and was included as an impaired, nonaccrual loan because it was more than ninety days past its maturity date. The participating banks agreed to extend the maturity date of the loan with new terms for the borrower. The closing for the loan extension was completed during March 2013, and the Bank has reinstated the loan to accrual status with a loan grade of a pass credit.

During 2012, reductions to nonaccrual loans included transfers to assets acquired through settlement of loans of $324,000, principal payments and payoffs of $903,000, charge-offs of $220,000 and upgrades of $173,000. Additions to nonaccrual loans totaled $3,473,000 including the $2.3 million participation loan discussed above. During 2011, reductions to nonaccrual loans included transfers to assets acquired through settlement of loans of $745,000, principal payments and payoffs of $1,492,000, and charge-offs of $479,000. Additions to nonaccrual loans totaled $642,000.

Assets acquired in settlement of loans. These assets include OREO and an interest in a limited liability company acquired during 2010 that owns the real estate and operations of an indoor waterpark and resort obtained through a U.S. Bankruptcy Code 363 sale. The limited liability company was formed by the lead bank for the banks participating in the project financing to acquire title to the real estate, conduct the operation of the facility, and market the real estate and the operations of the business for sale. The carrying value of its interest is $1.2 million and is based upon the estimated fair value of the real estate less costs to sell. OREO consisted of eight properties and totaled $809,000 at year-end 2012 compared to $757,000 and nine properties at year-end 2011. During 2012, eight properties were sold from OREO for sales proceeds of $326,000. During 2011, nine properties were sold from OREO for sales proceeds of $820,000.

23

Deposits. Total deposits decreased $27.6 million from year-end 2011 to $131.5 million at December 31, 2012. Branch deposits sold during the fourth quarter of 2011 totaled $74.3 million resulting in a gain on the deposit sale totaling $3.5 million. During 2011, the Company began using a national certificate of deposit listing service to gather deposits from other financial institutions as a source of additional funding and liquidity. Individual deposits raised through this program typically are issued for amounts that approximate the FDIC insurance limit of $250,000 and at rates usually less than certificates issued through its retail offices. Certificates of deposits issued through the listing service totaled $20.8 million and $15.5 million at year-end 2012 and 2011, respectively.

Federal Home Loan Bank Advances. The balance of outstanding advances at year-end 2012 were unchanged from year-end 2011. The advances, totaling $19 million, were borrowed to partially fund the sale of branch deposits in the fourth quarter of 2011.

RESULTS OF OPERATIONS – YEARS ENDED DECEMBER 31, 2012 AND 2011

The Company recorded net income of $114,180, or $.06 per share for the year ended 2012 compared to $1,820,122, or $0.92 per share, for the year ended 2011. Average common shares outstanding were 1,971,449 for 2012 and 1,971,456 for 2011. Outstanding shares and per share amounts for 2011 were adjusted to reflect the effect of the One for Ten reverse stock split effected during September 2012.

Net income for 2011 included a gain for the sale of two banking offices in Wayne County, Ohio in October 2011 which netted $3.5 million. Excluding the impact of the gain on the sale of the banking offices and costs related to the transaction, the Company would have incurred a loss of approximately $1.7 million.

Net interest income. Net interest income increased $612,000 in 2012 compared to 2011, and the Company’s net interest margin increased to 3.66% for 2012 compared to 3.19% for 2011. Low interest rates prevailed during 2012 and 2011 as the Federal Reserve Bank used various measures to reduce interest rates across the yield curve to assist an economic recovery.

Interest income. Interest income increased $173,000 from $6.2 million in 2011 to $6.3 million in 2012 on a slightly smaller average earning asset base of $154.2 million in 2012 compared to $157.7 million in 2011. The yield on earning assets increased from 3.90% in 2011 to 4.10% in 2012. Average balances for loans increased $23.5 million, the securities portfolio decreased $3.8 million and interest-bearing deposits and federal funds sold decreased by $22.0 million. The increase in interest income was driven by higher loan balances, although declining yields in the loan portfolio and other interest-earning assets reduced the positive impact of higher loan balances.

Interest expense. Total interest expense declined $440,000 from $1.1 million in 2011 to $684,000 in 2012, a decrease of 39.1%. The cost of interest bearing funds averaged 0.59% for 2012 compared to 0.89% for 2011. Interest expense on deposits decreased $424,000 to $613,000 in 2012 compared to $1.0 million in 2011. Average deposit balances decreased in 2012 for all deposit categories due to the sale of branch deposits during the fourth quarter of 2011. The lower deposit volumes caused interest expense to decline by approximately $149,000. Lower rates paid on deposits caused interest expense to decline by approximately $275,000 with $217,000 of this reduction from lower rates paid on time deposits. Other borrowing costs declined by $16,000 even as the average balance for other borrowings increased to $24.6 million in 2012 compared to $9.1 million in 2011. It is unlikely that the Company will be able to continue to reduce its cost of funds significantly particularly at the pace realized during the past two years of declining interest rates.

Provision for loan losses. The allowance for loan loss is composed of components for homogenous and pass-rated loans, classified loans, impaired loans, and other subjective factors that may influence expected losses. Provision expense is recorded to increase the allowance for loan loss, and a negative provision for loan loss reflects a decrease in the estimate of loan losses in the loan portfolio.

24

Provision expense of $13,466 was recorded for 2012. The change in the balance of the allowance for loan loss from 2011 to 2012 that impacted provision expense consisted of a decrease of approximately $249,000 in the allowance for loan losses for pass-rated and homogeneous loan pools estimated based on the three year historical average charge off rate, a decrease of approximately $58,000 in the allowance allocated to impaired loans, a decrease of $488,000 in the allowance for classified loan balances, and an increase of approximately $658,000 for other factors used to estimate the allowance for loan losses. The decrease in the allowance for pass-rated and homogeneous loan pools was principally driven by lower three year historical average charge off rates for commercial and construction and development loan categories and for lower charge off rates for criticized assets. These reductions were offset by the allowance required to support a larger loan portfolio as well as the increase in the allowance allocated to other subjective factors. The increase in the allowance allocated to other factors is consistent with loan growth, changes to delinquency and charge-off trends within portfolio classes, the economic climate in which the Company operates including unemployment trends, and portfolio management.

Provision expense of $152,905 was recorded for 2011. The change in the balance of the allowance for loan loss from 2010 to 2011 that impacted provision expense consisted of an increase of approximately $284,000 in the allowance for loan losses for pass-rated and homogeneous loan pools estimated based on the three year historical average charge off rate, an increase of approximately $113,000 in the allowance allocated to impaired loans, a decrease of $786,000 in the allowance for classified loan balances, and a decrease of approximately $182,000 for other factors used to estimate the allowance for loan losses.

Noninterest income. Noninterest income for 2011 was $5,297,086 compared to $1,241,781 for 2012. The sale of deposits in the Wayne County, Ohio market contributed a total of $3,743,602 toward noninterest income based on the gain on the sale of branch deposits of $3,526,070 and a gain on the assignment of a capital lease agreement for one of the branch offices for $217,532. Noninterest income in 2011 also included deposit-related fee income for $74.3 million in deposits until the sale closed in October 2011.

Service charges and other fees decreased $265,935 to $285,426 in 2012 compared to $551,361 for 2011. The decrease was principally caused by the reduced number of accounts following the sale of branch deposits in the fourth quarter of 2011. Those accounts generated approximately $284,000 in service charges and other fees during 2011. Overdraft fee income has also been pressured due to changes in customer behavior and legislation enacted during 2010 requiring banks to ensure that customers “opt in” to bank-offered overdraft protection programs.

Trust and brokerage fee income increased $159,524 to $903,374 for 2012 compared to $743,850 for 2011. Managed trust assets increased to $109 million at year-end 2012 compared to $105 million at year-end 2011.

Securities gains recorded for 2011 totaled $55,016, down from $358,030 in securities gains for 2011. The gain recorded during 2012 was for the sale of a GNMA mortgage-backed security with an original maturity of 30 years. The Company sold half of its position in this 5% coupon bond to realize some gain and mitigate prepayment risk due to refinancing activity. The gains recorded during 2011 were principally for sales of GNMA mortgage-backed securities with an original maturity of 30 years. The sales were completed to raise funds to complete the disposition of branch deposits during the fourth quarter of 2011 and to reduce the price sensitivity of the investment portfolio.

Gains on the sale of loans increased $50,244 to $159,873 from $109,629 in 2011. Refinance activity in the mortgage market contributed to the improvement in mortgage lending volumes, and purchase activity showed signs of improvement during 2012.

In 2012 and 2011, the Company recognized loss on the disposition or direct write-down of assets acquired in settlement of loans. For 2012, the loss on disposition or direct write-down of assets acquired in settlement of loans totaled $205,417 on eight properties. For 2011, the loss on disposition or direct write-down of assets acquired in settlement of loans totaled $268,117 on twelve properties.

25

Noninterest expense. Total noninterest expenses decreased $1,621,988, or 19.4%, to $6,732,871 during 2012 compared to $8,354,859 for 2011. Lower expenses were principally the result of the reduction in overhead associated with the banking offices sold during the fourth quarter of 2011 and the absence of branch disposal expenses totaling $212,383 in 2011. Other changes are described below.

Compensation costs, excluding severance benefits classified as part of branch disposal expenses, decreased $552,687 to $3,675,562 in 2012, or a decrease of 13.1%, compared to $4,228,249 in 2011. Incentive compensation costs paid or accrued during the fourth quarter of 2011 totaled approximately $322,000 and was principally related to the successful completion of the branch deposit and loan sale during the fourth quarter. Salaries and benefits costs associated with the sold banking offices totaled approximately $290,000 in 2011. Compensation cost deferrals increased $102,300 based on higher lending volumes for the comparative periods; these expenses are deferred and reflected as a component of loan yield over the loan term in accordance with ASC 310-20-25, Receivables-Nonrefundable Fees and Other Costs.

Occupancy and equipment costs decreased $173,647, or 18.2%, in 2012. Costs associated with the banking offices sold in 2011 totaled approximately $257,000 for 2011. Occupancy and equipment costs associated with the St. Clairsville branch opened in early 2012 totaled approximately $120,000.

Professional fees decreased $76,259 or 13.2%, in 2012. These costs include legal, accounting and auditing, regulatory examination and consulting fees. Legal expenses declined by approximately $57,000, accounting and audit fees decreased $31,000 and consulting expenses increased $12,000.

Franchise tax increased $24,801 to $234,625 for 2012. Ohio franchise tax for financial institutions for the current year is based on the Bank’s net worth on the last day of the prior calendar year-end; higher capital levels at year-end 2011 compared to year-end 2010 resulted in higher costs for 2012.

Marketing and advertising expenses increased by $18,251 to $92,920, or an increase of 24.4% for 2012. The Bank participates in business development activities through sponsorships, special events, speaking engagements, print articles, and other advertisements promoting the experience and expertise of its staff and the advantages of community banking for its clients.

Data processing expenses include costs for internet banking, core systems data processing and courier charges. This expense decreased $233,601 to $494,642 for 2012. This cost is principally driven by the costs associated with core processing and is largely driven by transaction volumes which declined as a result of the branch sale in October 2011. The Bank converted its core systems processing to a different provider during 2012 to reduce costs and expand products used by the Bank.

Deposit expense and insurance fees decreased $97,550, or 25.0%, in 2012. The change in methodology in FDIC assessments implemented in April 1, 2011 and the reduction in the Bank’s asset size related to the branch deposit sale during the fourth quarter of 2011 contributed to the reduction in FDIC insurance cost by approximately $40,000. Lower costs were also realized for cash letter processing, check printing, and other deposit account related expenses.

Non-recurring costs incurred for the completed sale of the Wayne County, Ohio branch offices totaled $212,383 in 2011. These costs included severance costs associated with terminated employees in the market totaling $134,078, legal expenses of $40,771, data processing costs of $21,168, and other costs of $16,366.

Other expenses decreased $310,877, or 34.3%, in 2012. Loan-related expenses decreased $148,238 including lower legal expense of $75,847. OREO expenses decreased $125,354. Insurance for fidelity bond and directors and officers insurance decreased $27,751.

Income tax expense for 2012 totaled $24,524 for estimated alternative minimum tax. No income tax expense was recorded for 2011 because the valuation allowance for deferred tax assets was relieved to the extent that federal income taxes were applied to net income before taxes.

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OFF-BALANCE SHEET ARRANGEMENTS

At December 31, 2012 the Company had no unconsolidated, related special purpose entities, nor did the Company engage in derivatives and hedging contracts, such as interest rate swaps, that may expose us to liabilities greater than the amounts recorded on the consolidated balance sheet. The investment policy prohibits engaging in derivatives contracts for speculative trading purposes; however, in the future, the Company may pursue certain contracts, such as interest rate swaps, in an effort to execute a sound and defensive interest rate risk management policy.

LIQUIDITY

Liquidity refers to the ability to fund loan demand and customers’ deposit withdrawal needs and to meet other commitments and contingencies. The purpose of liquidity management is to ensure sufficient cash flow to meet all financial commitments and to capitalize on opportunities for business expansion in the context of managing interest rate risk exposure. This ability depends on the financial strength, asset quality and the types of deposit and loan instruments offered to our customers.

The Company’s principal sources of funds are deposits, repurchase agreements, loan and security repayments and maturities, sales of securities, capital transactions and borrowings from the FHLB. While scheduled loan repayments and maturing investments are relatively predictable, deposit flows and early loan and security prepayments are more influenced by interest rates, general economic conditions, and competition. Investments in liquid assets are maintained based upon our assessment of the need for funds, expected deposit flows, yields available on short-term liquid assets and the objectives of the asset/liability management program.

The Company’s liquidity contingency funding plan identifies liquidity thresholds and raises red flags that may evidence liquidity issues. The contingency plan details specific actions to be taken by management and the Board of Directors and identifies sources of emergency liquidity, both asset and liability-based, should the Company encounter a liquidity crisis. Liquidity risk is actively monitored and various scenarios are analyzed that could impact the Company’s ability to access emergency funding in conjunction with asset/liability and interest rate risk management activities.

Cash and cash equivalents decreased $14.3 million from $20.0 million at December 31, 2011 to $5.7 million at December 31, 2012. Cash and cash equivalents represented 3.3% of total assets at year-end 2012, compared to 13.7% of total assets at year-end 2011. The decrease was due to the use of cash to fund loan growth. Total loans, including loans held for sale, increased by approximately $40.4 million from year-end 2011 to year-end 2012. Loan growth was also funded by deposit growth. Non-maturity core deposits increased $10.8 million to $76.5 million at year-end 2012. Retail time deposits increased $11.6 million to $34.3 million at year-end 2012, and time deposits collected through an internet CD listing service increased $5.2 million to $20.8 million at year-end 2012.

The Company monitors the liquidity position on a regular basis in conjunction with asset/liability and interest rate risk management activities. Our current liquidity level, including contingency funding available through borrowing facilities at the Federal Home Loan Bank and the Federal Reserve Bank, is sufficient to meet anticipated future growth in loans and general liquidity needs.

CAPITAL RESOURCES

Total shareholders’ equity was $18.9 million at December 31, 2012, compared to $18.6 million at December 31, 2011. Comprehensive income of $127,000 and the adjustment to equity for stock-based compensation expense of approximately $198,000 increased equity during 2012.

During 2012 the Company’s shareholders approved an amendment to the Articles of Incorporation to effect a one-for-ten reverse stock split. The purpose of the amendment was to increase the market value of the Company’s stock above $1.00 per share to make the shares more attractive to a broader range of institutional and other investors. Many brokerage houses and institutional investors have internal policies and practices that either prohibit them from investing in low-priced stocks or tend to discourage individual brokers from recommending low-priced stocks to their customers. The amendment was effective with the close of business on September 17, 2012.

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Banks are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities and certain off balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can result in regulatory action.

Current regulations require a total risk-based capital ratio of 8.0%, at least half of which must be Tier 1 capital, and a leverage ratio of 4.0%. The Bank’s total risk-based capital is made up of Tier 1 capital and Tier 2 capital. Tier 1 capital is total shareholders’ equity, less any intangible assets. Tier 2 capital includes the allowance for loan losses up to a maximum of 1.25% of risk-weighted assets.

The payment of dividends by the Bank to Ohio Legacy and by Ohio Legacy to its shareholders is subject to restrictions by regulatory agencies. These restrictions generally limit the Bank’s dividends to the sum of its current year and the prior two years of retained earnings. In addition, dividends may not reduce capital levels below the minimum regulatory requirements as described above. The Company is not able to declare dividends without prior approval from its regulators.

INTEREST RATE SENSITIVITY

The following table details the variable rate composition of our interest-earning assets at December 31, 2012 and 2011:

	Percent variable rate
	2012			2011
Interest-bearing deposits and federal funds sold		100	%		100	%
Securities		11	%		14	%
Loans		82	%		73	%
Federal bank stock		100	%		100	%
Total interest-earning assets		73	%		72	%

The Company performs regular liquidity risk analysis and quarterly interest rate risk analysis. This information is used to assist in managing the balance sheet to reduce the impact of changes in interest rates on earnings and equity. Approximately 50.4% of the interest-earning assets and 89.4% of the interest-bearing liabilities on our balance sheet at December 31, 2012 were scheduled to mature or subject to repricing during 2012.

We believe that the Bank is "asset" sensitive over a twelve-month horizon at December 31, 2012. Usually, this would mean an increasing interest rate environment would cause an increase in net interest income and a falling interest rate scenario would have the inverse effect. However, we cannot be certain that our net interest income would contract if interest rates increased because the composition of our assets and liabilities is constantly changing due to the variability of our loan prepayment experience, the behavior of core deposit customers and other factors.

IMPACT OF INFLATION AND CHANGING PRICES

The majority of our assets and liabilities are monetary in nature; therefore, we differ greatly from most commercial and industrial companies that have significant investments in fixed assets or inventories. However, inflation does have an important impact on the growth of total assets in the banking industry and the resulting need to increase equity capital at higher than normal rates in order to maintain appropriate capital ratios. Inflation significantly affects noninterest expense, which tends to rise during periods of general inflation. Deflation, or a decrease in overall prices from one period to the next, could have a negative impact on the Company’s operations and financial condition. Deflationary periods impute a higher borrowing cost to debtors as the purchasing power of a dollar increases with time. This may decrease the demand for loan products offered by the Bank.

We believe the most significant impact on our financial results is our ability to react to changes in interest rates. While we seek to maintain a fairly balanced position between interest rate sensitive assets and liabilities and to actively manage our balance sheet in order to protect against the effects of wide interest rate fluctuations on our net income and shareholders’ equity, constraints on capital and other factors may also affect our ability to minimize the impact of changes in interest rates.

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Item 8. Financial Statements and Supplementary Data.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2012 and 2011

	2012			2011
ASSETS
Cash and due from banks	$	1,103,974		$	778,689
Federal funds sold and interest-bearing deposits in financial institutions		4,603,077			19,267,467
Cash and cash equivalents		5,707,051			20,046,156
Certificate of deposit in financial institution		100,000			100,000
Securities available for sale		11,713,044			10,677,644
Loans held for sale		2,040,395			895,610
Loans, net of allowance of $2,347,664and $2,484,478 at December 31, 2012 and December 31, 2011		147,684,318			108,277,319
Federal bank stock		1,577,750			1,597,850
Premises and equipment, net		2,429,076			2,452,627
Assets acquired in settlement of loans		1,980,755			2,012,752
Accrued interest receivable and other assets		1,508,788			541,409
Total assets	$	174,741,177		$	146,601,367
LIABILITIES
Deposits:
Noninterest-bearing demand	$	24,765,857		$	21,017,215
Interest-bearing demand		9,290,531			6,190,520
Savings		42,457,581			38,537,916
Certificates of deposit, net		55,028,379			38,216,813
Total deposits		131,542,348			103,962,464
Repurchase agreements		4,359,837			4,213,612
Short-term Federal Home Loan Bank advances		13,000,000			13,000,000
Long-term Federal Home Loan Bank advances		6,000,000			6,000,000
Accrued interest payable and other liabilities		926,524			837,203
Total liabilities		155,828,709			128,013,279
Commitments and contingent liabilities		0			0
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 500,000 shares authorized, none outstanding		0			0
Common stock, no par value;
December 31, 2012 and December 31, 2011: 22,500,000 shares authorized, 1,971,431 shares issued and outstanding at December 31, 2012 and 1,971,456 issued and outstanding at December 31, 2011		36,004,103			35,806,662
Accumulated deficit		(17,354,709	)		(17,468,889	)
Accumulated other comprehensive income		263,074			250,315
Total shareholders' equity		18,912,468			18,588,088
Total liabilities and shareholders' equity	$	174,741,177		$	146,601,367

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF OPERATIONS

For the years ended December 31, 2012 and 2011

	2012			2011
Interest and dividend income:
Loans, including fees	$	5,951,183		$	5,529,061
Securities, taxable		164,911			363,817
Securities, tax-exempt		107,308			107,608
Interest-bearing deposits, federal funds sold and other		25,049			79,554
Dividends on federal bank stock		79,089			74,566
Total interest and dividend income		6,327,540			6,154,606
Interest expense:
Deposits		613,168			1,037,267
Short-term Federal Home Loan Bank advances		25,293			4,381
Long-term Federal Home Loan Bank advances		34,199			21,156
Repurchase agreements and federal funds purchased		11,620			11,036
Capital leases		0			49,966
Total interest expense		684,280			1,123,806
Net interest income		5,643,260			5,030,800
Provision for loan losses		13,466			152,905
Net interest income after provision for loan losses		5,629,794			4,877,895
Noninterest income:
Service charges and other fees		285,426			551,361
Trust and brokerage fee income		903,374			743,850
Gain on sales of securities available for sale, net		55,016			358,030
Gain on sale of loans		159,873			109,629
Gain on sale of branch deposits		0			3,526,070
Gain on assignment of branch lease		0			217,532
Loss on disposition or direct write-down of assets acquired in settlement of loans		(205,417	)		(268,117	)
Loss on disposition of fixed assets		(441	)		(3,818	)
Other income		43,950			62,549
Total noninterest income		1,241,781			5,297,086
Noninterest expense:
Salaries and benefits		3,675,562			4,228,249
Occupancy and equipment		781,225			954,872
Professional fees		503,232			579,491
Franchise tax		234,625			209,824
Data processing		494,642			728,243
Marketing and advertising		92,920			74,669
Stationery and supplies		63,326			71,362
Deposit expense and insurance		291,959			389,509
Branch disposal expenses		0			212,383
Other expenses		595,380			906,257
Total noninterest expense		6,732,871			8,354,859
Net income before income taxes		138,704			1,820,122
Income tax expense		24,524			0
Net income	$	114,180		$	1,820,122
Basic income per share	$	0.06		$	0.92
Diluted income per share	$	0.06		$	0.92

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the years ended December 31, 2012 and 2011 

	2012			2011
Net income	$	114,180		$	1,820,122
Other comprehensive income:
Unrealized gains on securities:
Unrealized holding gains arising during the period		67,775			452,621
Reclassification adjustment for gains included in net income		(55,016	)		(358,030	)
Tax effect		0			0
Total other comprehensive income		12,759			94,591
Comprehensive income	$	126,939		$	1,914,713

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

For the years ended December 31, 2012 and 2011

	Outstanding Shares of Common Stock			Common Stock			Accumulated Deficit			Accumulated Other Comprehensive Income		Total Shareholders' Equity
Balance, January 1, 2010		19,714,564		$	35,603,803		$	(19,289,011	)	$	155,724	$	16,470,516
Stock based compensation expense					202,859								202,859
Net income								1,820,122					1,820,122
Other comprehensive income											94,591		94,591
Balance, December 31, 2011		19,714,564			35,806,662			(17,468,889	)		250,315		18,588,088
Stock based compensation expense					197,692						197,692
One for ten reverse stock split		(17,743,107.6	)
and cash paid for fractions shares		(25.4	)		(251	)							(251	)
Net income								114,180					114,180
Other comprehensive income											12,759		12,759
Balance, December 31, 2012		1,971,431		$	36,004,103		$	(17,354,709	)	$	263,074	$	18,912,468

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2012 and 2011

	2012			2011
Cash flows from operating activities:
Net Income	$	114,180		$	1,820,122
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses		13,466			152,905
Depreciation and amortization		277,738			334,529
Loss on disposition of fixed assets		441			3,818
Gain on sale of branch deposits		0			(3,526,070	)
Securities amortization and accretion, net		125,582			210,426
Gain on lease assignment		0			(217,532	)
Origination of loans held for sale		(19,132,413	)		(9,196,955	)
Proceeds from sales of loans held for sale		18,133,831			9,947,343
Loss on disposition or direct write-down of assets acquired in settlement of loans		205,417			268,117
Gain on sale of securities available for sale		(55,016	)		(358,030	)
Gain on sale of loans held for sale		(159,873	)		(109,629	)
Stock based compensation expense		197,692			202,859
Net change in:
Accrued interest receivable and other assets		(967,379	)		117,370
Accrued interest payable and other liabilities		89,321			(294,760	)
Deferred loan fees		(62,113	)		104,001
Net cash from operating activities		(1,219,126	)		(541,486	)
Cash flows from investing activities:
Purchases of securities available for sale		(6,209,677	)		(6,539,002	)
(Purchases) or redemptions of federal bank stock		20,100			(40,150	)
Maturities, calls and paydowns of securities available for sale		4,310,301			13,355,600
Sales of securities available for sale		806,170			10,770,482
Proceeds from sale of assets acquired in settlement of loans		326,041			820,055
Participation loans sold		9,278,619			5,099,496
Participation loans purchased		(6,829,351	)		(1,674,216	)
Net change in loans		(42,293,412	)		(12,462,508	)
Proceeds from sale of premises and equipment		6,722			1,250,464
Acquisition of premises and equipment		(261,350	)		(362,451	)
Net cash from investing activities		(40,845,837	)		10,217,770
Cash flows from financing activities
Net change in deposits		27,579,884			38,583,982
Sale of branch deposits		0			(74,311,095	)
Net change in repurchase agreements		146,225			(177,640	)
Repayment of capital lease obligations		0			(38,126	)
Assignment of capital lease obligation		0			(369,467	)
Proceeds from short term FHLB advances, net of repayments		0			13,000,000
Proceeds from long term FHLB advances		0			6,000,000
Repayments of long term FHLB advances		0			(5,000,000	)
Cash paid in lieu of fractional shares for reverse stock split		(251	)		0
Net cash from financing activities		27,725,858			(22,312,346	)
Net change in cash and cash equivalents		(14,339,105	)		(12,636,062	)
Cash and cash equivalents at beginning of period		20,046,156			32,682,218
Cash and cash equivalents at end of period	$	5,707,051		$	20,046,156

- continued -

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CONSOLIDATED STATEMENTS OF CASH FLOWS

For the years ended December 31, 2012 and 2011

	2012		2011
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	679,166	$	1,185,674
Federal income taxes		40,000		0
Non-cash transactions:
Transfer of loans to assets acquired in settlement of loans		499,461		749,624
Transfer of securities to available-for-sale from held-to-maturity		0		2,816,058

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Principles of Consolidation: The consolidated financial statements include Ohio Legacy Corp (“Ohio Legacy”) and its wholly-owned subsidiary, Premier Bank & Trust, National Association (the “Bank”, formerly Ohio Legacy Bank, N.A.). Intercompany transactions and balances are eliminated in consolidation. References to the “Company” include Ohio Legacy, consolidated with its subsidiary, the Bank. The Company is 76.09% owned by Excel Bancorp, LLC.

Ohio Legacy is a bank holding company, incorporated in July 1999 under the laws of the State of Ohio. The Bank provides financial services through three full-service banking offices in North Canton and St. Clairsville, Ohio. The Bank provides trust, private banking, investment and other banking services to its clients. Its primary deposit products are checking, savings and certificate of deposit accounts, and its primary lending products are residential mortgage, commercial real estate, commercial and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by residential and commercial real estate. Concentrations of credit are evaluated based on the North American Industry Classification System (“NAICS”) code assignments. At December 31, 2012, concentrations of credit risk exceeding 25% of Tier 1 capital plus the Allowance for Loan Losses included the following:

	Recorded Investment ($000s)		% of Tier 1 Capital plus the Allowance for Loan Loss
Commercial Real Estate/ Rental & Leasing	$	26,803		129.16	%
Residential Real Estate/ Rental & Leasing		17,180		82.79	%
Retail Trade		7,222		34.80	%
Contractors/Developers		6,085		29.32	%

The Bank’s credit policy includes various concentration limits expressed as a percentage of Tier 1 capital plus the Allowance for Loan Loss and as a percentage of total loans. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions and federal funds sold.

Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The allowance for loan losses, judgments about the other than temporary impairment of securities, fair value of financial instruments, valuation of deferred tax assets and the fair value of other real estate owned are particularly subject to change.

Cash Flows: Cash and cash equivalents includes cash, deposits with other financial institutions with original maturities of less than 90 days and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, repurchase agreements, and short term FHLB advances.

Interest–Bearing Deposits in Other Financial Institutions: Interest-bearing deposits in other financial institutions mature within one year and are carried at cost.

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank of $550,000 and $1,514,000 was required to meet regulatory reserve and clearing requirements at December 31, 2012 and 2011, respectively.

Securities: Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax when appropriate.

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Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

In order to determine OTTI for purchased beneficial interests that, on the purchase date, were not highly rated, the Company compares the present value of the remaining cash flows as estimated at the preceding evaluation date to the current expected remaining cash flows. OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows.

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Mortgage loans held for sale are sold with servicing rights released. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses.

Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on loans is generally discontinued at the time the loan becomes 90 days delinquent unless the credit is well-secured and in process of collection. For 1-4 family owner occupied mortgages or home equity lines of credit where the loan balance is 60% or less of the appraised value, the Bank may maintain accrual status. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Delinquency status is based on contractual payment due date.

All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status upon approval of the Credit Committee or the Asset Quality Committee when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

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Allowance for Loan and Lease Losses: The allowance for loan and lease losses (“ALLL”) is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired and assigned a probable loss amount. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impairment is measured on a loan by loan basis for all loans other than consumer loans and residential mortgage loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures unless the loan is on nonaccrual status.

Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The Company divides loans not individually evaluated for impairment by risk into four grades: pass, special mention, substandard, and doubtful. Loans with a pass grade and loans not rated are divided into ten separate segments. Total charge-offs for a specified time period, currently three years, are divided into the same segments and used as a starting point to estimate credit losses in each segment. Other subjective factors, such as industry conditions, local economic trends and similar items are assigned a numeric value by segment and are also applied to the balances in the pass grade. Historic loss percentages are applied separately to the special mention and substandard pools of loans based on actual charge-offs for each pool in total regardless of the segment.

A description of each segment of the loan portfolio, along with the risk characteristics of each segment, is included below

One to Four Family Residential Mortgages: The Company defines residential real estate loans as first mortgages on individuals’ primary residence. Credit approval for residential real estate loans requires demonstration of sufficient income to repay the principal and interest and the real estate taxes and insurance, stability of employment, an established credit record and an appropriately appraised value of the real estate securing the loan that generally requires that the residential real estate loan amount be no more than 85% of the purchase price or the appraised value of the real estate securing the loan, whichever is less, unless private mortgage insurance is obtained by the borrower. Loans made for the Bank’s portfolio are generally adjustable rate, fully amortized mortgages. The rates used are generally fully-indexed rates and are not priced using low introductory “teaser” rates.

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Home Equity Loans: These loans are either lines of credit or closed-end loans secured by second mortgages. The maximum amount of a home equity line of credit is generally limited to 95% (with acceptable credit scores) of the appraised value of the property less the balance of the first mortgage.

One to Four Family Rental Property: These loans are secured by residential real estate rental properties. The principal source of repayment generally is dependent upon satisfactory occupancy of the building by tenants.

Multi-family Real Estate: These loans consist of residential rental properties and generally consist of buildings with rental units for five or more families. The principal source of repayment generally is dependent upon satisfactory occupancy of the building by tenants.

Consumer Loans: The Company originates direct consumer loans, primarily automobile loans, personal lines of credit, and unsecured consumer loans in its primary market areas. Credit approval for consumer loans requires income sufficient to repay principal and interest due, stability of employment, an established credit record and sufficient collateral for secured loans. Consumer loans typically have shorter terms and lower balances with higher yields as compared to real estate mortgage loans, but generally carry higher risks of default. Consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances.

Commercial Loans: Commercial loans are made for a wide variety of general corporate purposes, including financing for industrial and commercial properties, financing for equipment, inventories and accounts receivable. The term of each commercial loan varies by its purpose. Repayment terms are structured such that commercial loans will be repaid within the economic useful life of the underlying asset. The commercial loan portfolio includes loans to a wide variety of corporations and businesses across many industrial classifications in the areas where the Bank operates.

Loans Secured by Trust Assets: These loans, principally used for commercial activities, are secured by cash or marketable securities and have substantially less credit risk than other types of commercial loans.

Commercial Real Estate:  Commercial real estate loans (“CRE loans”) are divided into two classes—owner occupied and non-owner occupied—and include mortgage loans to developers and owners of commercial real estate. The collateral for these CRE loans is the underlying commercial real estate. The Bank generally requires that the CRE loan amount be no more than 90% of the purchase price or 80% of the appraised value of the commercial real estate securing the CRE loan, whichever is less. Non-owner occupied CRE loans typically exhibit higher risk.

Construction and Development: Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost (including interest) of construction. If the estimate of construction cost proves to be inaccurate, the Bank may be required to advance funds beyond the amount originally committed to permit completion of the project. If the estimate of value proves inaccurate, the Bank may be confronted, at or prior to the maturity of the loan, with a project having a value insufficient to assure full repayment, should the borrower default. In the event a default on a construction loan occurs and foreclosure follows, the Bank must take control of the project and attempt either to arrange for completion of construction or to dispose of the unfinished project. Additional risk exists with respect to loans made to developers who do not have a buyer for the property, as the developer may lack funds to pay the loan if the property is not sold upon completion. Generally the Bank attempts to reduce such risks on loans to developers by requiring personal guarantees and reviewing current personal financial statements and tax returns.

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Loans to Nondepository Financial Institutions: Loans to nondepository financial institutions consist of indirect financing provided to a nationwide network of qualified mortgage brokers that originate mortgage loans for sale to third-party investors. The Bank has a loan participation agreement with another financial institution (the “Direct Lender”) which purchases mortgage loans from the mortgage brokers. The Bank purchases a 75% interest in each mortgage loan offered to the Bank by the Direct Lender for purchase subject to appropriate underwriting requirements up to a an aggregate limit of $10 million. Since the loans are returned to the mortgage broker for sale to the third party investor, the transactions do not meet the definition of a participating interest under generally accepted accounting principles and the financing arrangement is classified as loans to nondepository financial institutions (the originating mortgage brokers). The financing arrangement is collateralized by first mortgages on single family homes. If the loan has not been sold to the third-party investor within 120 days, the mortgage broker must repurchase the mortgage loan from the Direct Lender. The mortgage broker must pay the Direct Lender an amount equal to 10% of the mortgage loan purchase price sixty days after the purchase date and an equal amount ninety days after the purchase date. The mortgage broker, at the Direct Lender’s sole discretion, must repurchase each mortgage loan from the Direct Lender within 120 days after the date of purchase. There is no agreement between the investor and the Direct Lender or the Bank. The Bank receives interest on the mortgage loans equivalent to the fixed coupon rates of the underlying mortgage loans. The Direct Lender and the Bank review each underlying mortgage loan to reasonably ensure conformity with U.S. Agency-sponsored underwriting qualifications prior to the advancement of funds. The underwriting package includes an approved investor commitment to purchase the loan.

Management utilizes past due information as a credit quality indicator across the loan portfolio. The past due information is the primary credit quality indicator within both the 1-4 family residential real estate loan portfolio (including first liens, home equity loans, and construction loans in the 1-4 family real estate segment) and consumer loans.

The primary credit quality indicator for loans to nondepository financial institutions, loans secured by trust assets, commercial and commercial real estate loans (including non-owner occupied, owner occupied, multi-family real estate, 1-4 family rental property, and construction and development loans not included in the residential real estate segment) is based on an internal grading system. Credit grades are monitored regularly by the respective loan officer and independently by credit administration, and adjustments are made when appropriate. The frequency of loan review with respect to credit grades is dependent upon the size and grade of the loan. A description of credit quality indicators is included in Note 3.

Commercial and commercial real estate loans that are graded “doubtful” are shown as nonperforming and management generally charges these loans down to their fair value by taking a partial charge-off or recording a specific allocation of the allowance. Loans classified as “doubtful” have all the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Any commercial loan graded “loss” is immediately charged-off.

When collection of principal and interest is in doubt or a loan is 90-days past due, the loan is placed on non-accrual status and is specifically reviewed for impairment. Impairment is measured based on one of three methods: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) at the observable market price of the loan; or (3) the fair value of the collateral less estimated disposal costs. Individually impaired loans include all nonaccrual and restructured loans. U.S. generally accepted accounting principles (“GAAP”) require a specific allocation to be established as a component of the allowance for loan losses for certain loans when it is probable that all amounts due pursuant to the contractual terms of the loans will not be collected, and the recorded investment exceeds fair value.

For all loan segments, the Bank will initiate a charge-off or a partial charge-off based on the status of the loan. If the loan is not fully collateralized and is in the process of collection, the Bank will charge off the amount of the uncollectable account balance as a loss. The designated workout officer is generally responsible for calculating and recommending the charge-off amount. All charge-offs must be approved by the Credit Committee whose members consist of the Chief Credit Officer, the Chief Executive Officer, the Chief Operating Officer, the Workout Officer, and the Senior Lending Officer.

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Charge offs are recorded when consumer loans are 120 days past due and real estate loans are 180 days past due. This may be extended if management believes that the risk of loss is minimal, and the Bank is in the process of collection with a reasonable prospect of full collection. Management conducts reviews of impaired loans regularly and assesses the requirement for specific allocations or charge-offs. When a loss has not been confirmed and payments are current, a specific allocation is generally recorded. Charge-offs (either full or partial) are recognized when loss is confirmed (for example, upon receipt of a current appraisal) and is generally based on the amount that the loan balance exceeds the estimated net realizable value of the collateral. For unsecured loans, the full balance is charged-off at the time the loan is deemed impaired. The Company did not revise its charge-off policy during the periods presented.

The amount and timing of full or partial charge-offs is important since charge-offs are factored into the calculation of the three-year historical loan loss experience rates used to estimate the adequacy of the allowance for loan losses. Failure to record charge-offs in a timely manner could result in lower historical loss rates and potentially understate the estimate of the amount of probable incurred losses within the portfolio and distort coverage ratios such as the allowance for loan losses to nonaccrual loans used by management to evaluate the adequacy of the allowance for loan losses.

Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Federal Bank Stock: The Bank is a member of the Federal Home Loan Bank (the “FHLB”) system. Members are required to own a certain amount of stock based on the level of borrowing and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as federal bank stock on the balance sheet, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Federal Reserve Bank stock is also carried at cost. Cash dividends are reported as income. At December 31, 2012, federal bank stock consisted of Federal Home Loan Bank stock of $1,021,000 and Federal Reserve Bank stock of $556,750. As of December 31, 2011, federal bank stock consisted of Federal Home Loan Bank stock of $1,021,000 and Federal Reserve Bank stock of $576,850.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed over an asset’s useful life, primarily using the straight line method. Leasehold improvements and office buildings under a capital lease are amortized over the original term of the lease or the life of the asset, whichever is shorter. Furniture, fixture and equipment have useful lives ranging from 3 to 7 years. Buildings have useful lives ranging from 15 to 20 years. Premises and equipment and other long-lived assets are reviewed for impairment when events indicate their carrying amount may not be recoverable through future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Assets Acquired in Settlement of Loans: These assets include other real estate owned and a limited liability interest in an indoor waterpark and resort obtained through a U.S. Bankruptcy Code 363 sale. The limited liability company was formed by the lead bank for the banks participating in the project financing to acquire title to the real estate, conduct the operation of the facility, and market the real estate and the operations of the business for sale. The carrying value of its interest is based upon the estimated fair value of the real estate less costs to sell.

Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, direct write-downs are recorded through expense to the carrying amount of the asset. Costs incurred after acquisition are expensed. Improvements that improve the fair value of the property are capitalized.

Long-Term Assets: Premises and equipment, intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

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Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

The issuance of common stock to Excel Bancorp during 2010 resulted in an “ownership change” of the Company, as broadly defined in Section 382 of the Internal Revenue Code. As a result of the ownership change, utilization of the Company’s net operating loss carryforwards and certain built-in losses under federal income tax laws will be subject to annual limitation. The annual limitation placed on the Company’s ability to utilize these potential tax deductions will equal the product of an applicable interest rate mandated under federal income tax laws and the Company’s value immediately before the ownership change. The annual limitation imposed under Section 382 would limit the deduction for both the carryforward tax attributes and the built-in losses realized within five years of the date of the ownership change to approximately $91,683 per year. Given the limited carryforward period assigned to these tax deductions in excess of this annual limit, some portion of these potential deductions will be lost and, consequently, the related tax benefits will not be recorded in the financial statements. See Note 10 for additional information regarding net operating loss carryforwards.

Earnings Per Share: Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares that may be issued upon the exercise of stock options. On September 17, 2012, the Company completed a one for ten reverse stock split approved by its shareholders at the annual shareholders’ meeting in May 2012. Outstanding shares and per share amounts for 2011 were retroactively restated for the reverse stock split. The following table details the calculation of basic and diluted earnings per share for the years ended December 31:

	2012		2011
BASIC:
Net income	$	114,180	$	1,820,122
Weighted average common shares outstanding		1,971,449		1,971,456
Basic income per share	$	0.06	$	0.92
DILUTED:
Net income	$	114,180	$	1,820,122
Weighted average common shares outstanding		1,971,449		1,971,456
Dilutive effect of stock options		-		-
Total common shares and dilutive potential common shares		1,971,449		1,971,456
Diluted income per common share	$	0.06	$	0.92

The computation of diluted income per share excludes potential dilutive common shares if the effect of their exercise would be anti-dilutive. Potential dilutive common shares which were excluded totaled 128,025 for 2012 and 131,120 for 2011.

Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

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Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The face amount for these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale, which are also recognized as a separate component of equity, net of tax.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the financial statements.

Dividend Restriction: Banking regulations require the Bank to maintain certain capital levels and may limit the dividends paid by the Bank to Ohio Legacy and by Ohio Legacy to shareholders. See Note 12 for a further description of regulatory restrictions.

Fair Values of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 9. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or market conditions could significantly affect the estimates.

Operating Segments: 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 services operations are considered by management to be aggregated into one reportable operating segment.

Reclassifications: Some items in the prior-year financial statements were reclassified to conform to the current year’s presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

Adoption of New Accounting Pronouncements:

In June 2011, the FASB amended existing guidance and eliminated the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity. The amendment requires that comprehensive income be presented in either a single continuous statement or in two separate consecutive statements. The amendments in this guidance are effective as of the beginning of a fiscal reporting year, and interim periods within that year, that began after December 15, 2011. The adoption of this amendment changed the presentation of the components of comprehensive income for the Company as part of the consolidated statement of changes in shareholders’ equity.

In May 2011, the FASB issued an amendment to achieve common fair value measurement and disclosure requirements between U.S. and International accounting principles. Overall, the guidance is consistent with existing U.S. accounting principles; however, there are some amendments that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this guidance were effective for interim and annual reporting periods beginning after December 15, 2011. The effect of adopting this standard did not have a material effect on the Company’s operating results or financial condition.

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NOTE 2 – SECURITIES

The fair values of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale, carried at fair value:
December 31, 2012
U.S. Government-sponsored enterprises	$	1,006,648	$	7	$	0		$	1,006,655
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		7,309,579		151,274		0			7,460,853
Other mortgage-backed securities-residential		188,430		0		(9,548	)		178,882
Municipal securities		2,702,912		170,892		0			2,873,804
Equity securities		39,900		152,950		0			192,850
Total	$	11,247,469	$	475,123	$	(9,548	)	$	11,713,044
December 31, 2011
U.S. Government-sponsored enterprises	$	2,514,982	$	952	$	(28	)	$	2,515,906
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		4,663,733		201,434		0			4,865,167
Other mortgage-backed securities-residential		250,748		0		(60,877	)		189,871
Municipal decurities		2,755,465		205,885		0			2,961,350
Equity securities		39,900		105,450		0			145,350
Total	$	10,224,828	$	513,721	$	(60,905	)	$	10,677,644

At June 30, 2011, the Company reclassified its municipal securities to the available-for-sale category from held-to-maturity since management no longer intends to hold these securities to maturity. At the time of the transfer, the municipal securities were carried at amortized cost totaling $2,816,058 and the estimated fair value was $2,950,608. The unrealized gain included as a component of accumulated other comprehensive income related to the reclassification was $134,550. The securities were reclassified because management considered selling the municipal securities to assist in funding the sale of two branch offices in October 2011. No purchases will be classified as held-to-maturity before June 30, 2013.

Proceeds from sales of securities available for sale were $806,170 for 2012 and $10.8 million for 2011. Gross gains of $55,016 and $358,030 and no gross losses were realized on the sales during 2012 and 2011, respectively.

Securities with unrealized losses for less than one year and one year or more were as follows:

	Less than 12 months				12 Months or More					Total
	Fair		Unrealized		Fair		Unrealized			Fair		Unrealized
December 31, 2012:	Value		Loss		Value		Loss			Value		Loss
Available for sale:
Other mortgage-backed securities-residential	$	0	$	0	$	178,882	$	(9,548	)	$	178,882	$	(9,548	)

43

	Less than 12 months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2011:	Value		Loss			Value		Loss			Value		Loss
Available for sale:
U.S. Government-sponsored enterprises	$	1,003,318	$	(28	)	$	-	$	-		$	1,003,318	$	(28	)
Other mortgage-backed securities		-		-			189,871		(60,877	)		189,871		(60,877	)
Total	$	1,003,318	$	(28	)	$	189,871	$	(60,877	)	$	1,193,189	$	(60,905	)

Other-Than-Temporary Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) in the fair value of its securities portfolio at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. As of December 31, 2012, the Company’s security portfolio consisted of twenty-seven securities. One security was in an unrealized loss position, discussed below under “Mortgage-backed securities”, for twelve months or longer.

Mortgage-backed securities

At December 31, 2012, 19% of the mortgage-backed securities held by the Company were issued by the Government National Mortgage Association (“GNMA”), which are backed by the full faith and credit of the U.S. government, and 79% were issued by the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”), institutions which the government has affirmed its commitment to support.

The Company’s mortgage-backed securities portfolio includes one non-agency security with a fair value of $178,882 which represents an unrealized loss of $9,548 at December 31, 2012 and $60,877 at December 31, 2011. The estimated fair value has been less than its amortized cost for twelve months or more. This non-agency mortgage-backed security is rated Caa2 by Moody’s rating service on December 4, 2012 and BB- by Standard & Poor’s rating service on October 16, 2012. It is senior to two subordinate classes of securities that together are collateralized by a pool of residential mortgages. No losses incurred on the mortgages in the pool have been assigned to the senior classes. Although the borrowers are not required to make principal payments during the initial 10 year period, 81% of the original principal has been repaid as of December 31, 2012. There are no negative amortization loans in the pool and none of the loans are subprime, Alt A or similar type of high-default product. Based on these factors, as of December 31, 2012, the Company believes there is no OTTI and does not have the intent to sell this security and it is not likely that it will be required to sell the security before its anticipated recovery.

The fair value of debt securities available for sale at year-end 2012 by contractual maturity were as follows. Securities not due at a single maturity date (mortgage-backed securities) are shown separately.

	Available for Sale
	Fair Value
Due in one year or less	$	0
Due from one to five years		861,103
Due from five to ten years		2,270,108
Due after ten years		749,248
Mortgage-backed securities-residential		7,639,735
Total	$	11,520,194

Available for sale securities with a fair value of $7,177,000 and $7,002,000 were pledged as collateral for repurchase agreements (see Note 7) as of December 31, 2012 and 2011, respectively. No securities were pledged as collateral to the Federal Home Loan Bank or for public fund deposits at December 31, 2012 and 2011.

44

At December 31, 2012 and at December 31, 2011, there were no holdings of securities of specific issuers, other than mortgage backed securities and debentures issued by U.S. Government-sponsored enterprises, in an amount greater than 10% of shareholders’ equity.

NOTE 3 – LOANS

Loans, by collateral type, were as follows:

	December 31, 2012						December 31, 2011
	Balance			Percent			Balance			Percent
Residential real estate	$	33,224,110			22.1	%	$	27,985,517			25.3	%
Multifamily real estate		9,998,614			6.7	%		9,140,672			8.2	%
Commercial real estate		55,211,623			36.8	%		42,622,961			38.5	%
Construction and development		7,601,563			5.1	%		4,219,420			3.8	%
Commercial		15,253,309			10.2	%		10,031,094			9.1	%
Secured by trust assets		5,820,705			3.9	%		6,798,929			6.1	%
Loans to nondepository financial institutions		7,345,540			4.9	%		0			0.0	%
Consumer and home equity		15,482,848			10.3	%		9,931,647			9.0	%
Total Loans		149,938,312			100.0	%		110,730,240			100.0	%
Less: Allowance for loan losses		(2,347,664	)					(2,484,478	)
Net deferred loan costs		93,670						31,557
Loans, net	$	147,684,318					$	108,277,319

Approximately $30,231,000 and $24,475,000 of residential real estate loans were pledged as collateral for FHLB advances at December 31, 2012 and 2011, respectively. Commercial and multi-family real estate loans pledged to the FHLB as of December 31, 2012 and 2011 totaled $39,117,000 and $23,827,000, respectively. Approximately $20,289,000 and $16,553,000 of commercial and home equity loans were pledged as collateral at the Federal Reserve Bank of Cleveland for available discount window borrowing at December 31, 2012 and 2011.

Activity in the allowance for loan loss by portfolio class for 2012 is depicted in the following two tables:

	1-4 Family Residential			1-4 Family Rental			Multi-Family Real Estate			Home Equity			Consumer			Commercial
Balance, January 1	$	202,699		$	235,523		$	423,031		$	139,419		$	9,687		$	284,961
Provision for loan losses		244,123			30,806			(168,030	)		247,178			54,201			(385,827	)
Charge-offs		(145,657	)		(30,137	)		0			(52,842	)		(2,262	)		(1,100	)
Recoveries		5,260			873			0			5,968			1,627			118,267
Balance, December 31, 2012	$	306,425		$	237,065		$	255,001		$	339,723		$	63,253		$	16,301

				Commercial real estate									Loans to Nondepository
	Secured by Trust Assets			Non-owner Occupied			Owner Occupied			Construction			Financial Institutions		Total
Balance, January 1	$	13,600		$	278,699		$	662,269		$	234,590		$	0	$	2,484,478
Provision for loan losses		(1,959	)		(552	)		82,712			(89,186	)		0		13,466
Charge-offs		0			(31,412	)		(2,405	)		(50,000	)		0		(315,815	)
Recoveries		0			10,332			2,405			20,803			0		165,535
Balance, December 31, 2012	$	11,641		$	257,067		$	744,981		$	116,207		$	0	$	2,347,664

45

Activity in the allowance for loan loss by portfolio class for 2011 is depicted in the following two tables:

	1-4 family residential			1-4 family rental			Multi-family real state			Home Equity			Consumer			Commercial
Balance, December 31, 2010	$	183,507		$	331,184		$	454,670		$	93,187		$	10,818		$	275,473
Provision for loan losses		73,014			(57,006	)		207,025			48,068			21,588			142,735
Charge-offs		(48,077	)		(26,737	)		(105,698	)		-			(23,614	)		(81,263	)
Recoveries		-			-			-			-			1,809			38,276
Reclassification of allowance for loans disposed of through branch sale		(5,745	)		(11,918	)		(132,966	)		(1,836	)		(914	)		(90,260	)
Balance, December 31, 2011	$	202,699		$	235,523		$	423,031		$	139,419		$	9,687		$	284,961

	Secured by Trust Assets		Non-owner occupied			Owner Occupied			Construction			Total
Balance, December 31, 2010	$	12,095	$	509,739		$	1,043,458		$	141,635		$	3,055,766
Provision for loan losses		1,505		(138,828	)		40,477			(185,673	)		152,905
Charge-offs		-		(86,246	)		(166,658	)		(1,205	)		(539,498	)
Recoveries		-		-			95,387			279,833			415,305
Reclassification of allowance for loans disposed of through branch sale		-		(5,966	)		(350,395	)		-			(600,000	)
Balance, December 31, 2011	$	13,600	$	278,699		$	662,269		$	234,590		$	2,484,478

The unpaid principal balance of loans reflects the borrowers’ principal balance and is not reduced by partial charge-offs previously recorded by the Company. For nonaccrual loans, the recorded investment in loans is reduced by the full amount of payments received from the borrower, whereas the unpaid principal balance will continue to reflect an allocation of the borrower’s payment between principal and interest. Generally accepted accounting principles define the recorded investment in loans as the sum of unpaid principal balance, accrued interest receivable, and deferred fees and costs minus partial charge-offs. Because accrued interest receivable, deferred fees and deferred costs are not material, the recorded investment in loans presented in the accompanying tables does not include these balances.

The following tables present the balance in the allowance for loan losses and the recorded investment of loans by portfolio class and based on impairment method.

	Loans Collectively Evaluated for Impairment				Loans Individually Evaluated for Impairment				Total
December 31, 2012	Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment
1-4 family residential mortgage	$	306,425	$	28,166,315	$	0	$	667,082	$	306,425	$	28,833,397
1-4 family rental property		230,376		4,340,427		6,689		50,286		237,065		4,390,713
Multi-family real estate		255,001		9,707,328		0		291,286		255,001		9,998,614
Home equity		303,860		12,531,704		35,863		263,776		339,723		12,795,480
Consumer		63,253		2,687,368		0		0		63,253		2,687,368
Commercial		15,252		15,252,260		1,049		1,049		16,301		15,253,309
Secured by trust assets		11,641		5,820,705		0		0		11,641		5,820,705
Commercial real estate:
Non-owner occupied		241,359		24,257,442		15,708		2,415,495		257,067		26,672,937
Owner occupied		743,758		25,831,947		1,223		2,706,739		744,981		28,538,686
Loans to nondepository financial institutions		0		7,345,540		0		0		0		7,345,540
Construction and development		116,207		7,601,563		0		0		116,207		7,601,563
Total	$	2,287,132	$	143,542,599	$	60,532	$	6,395,713	$	2,347,664	$	149,938,312

46

	Loans Collectively Evaluated for Impairment				Loans Individually Evaluated for Impairment				Total
December 31, 2011	Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment
1-4 family residential mortgage	$	202,699	$	23,645,009	$	0	$	108,877	$	202,699	$	23,753,886
1-4 family rental property		235,523		4,068,998		0		162,633		235,523		4,231,631
Multi-family real estate		423,031		9,132,775		0		7,897		423,031		9,140,672
Home equity		98,944		8,711,640		40,475		189,603		139,419		8,901,243
Consumer		9,687		1,030,404		0		0		9,687		1,030,404
Commercial		284,347		9,838,175		614		192,919		284,961		10,031,094
Commercial secured by trust assets		13,600		6,798,929		0		0		13,600		6,798,929
Commercial real estate:
Non-owner occupied		212,153		20,279,967		66,546		2,522,791		278,699		22,802,758
Owner occupied		650,824		19,208,688		11,445		611,515		662,269		19,820,203
Construction and development		234,590		3,931,523		0		287,897		234,590		4,219,420
Total	$	2,365,398	$	106,646,108	$	119,080	$	4,084,132	$	2,484,478	$	110,730,240

The following tables present loans individually evaluated for impairment by loan class:

	As of December 31, 2012						As of December 31, 2011
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
1-4 family residential mortgage	$	757,684	$	667,082	$	0	$	197,637	$	108,877	$	0
1-4 family rental property		62,552		13,323		0		288,674		162,633		0
Multi-family real estate		322,098		291,286		0		36,952		7,897		0
Home equity		66,273		66,273		0		32,337		32,337		0
Commercial		0		0		0		371,177		192,305		0
Commercial real estate:
Non-owner occupied		2,386,167		2,386,167		0		1,836,578		1,754,214		0
Owner occupied		2,750,965		2,705,516		0		613,495		533,746		0
Construction and development		0		0		0		716,657		287,897		0
Subtotal		6,345,738		6,129,647		0		4,093,506		3,079,906		0
With an allowance recorded:
1-4 family residential mortgage		0		0		0		0		0		0
1-4 family rental property		60,949		36,963		6,689		0		0		0
Multi-family real estate		0		0		0		0		0		0
Home equity		197,560		197,503		35,863		157,266		157,266		40,475
Commercial		1,140		1,049		1,049		2,849		614		614
Commercial real estate:
Non-owner occupied		61,518		29,328		15,708		773,028		768,577		66,546
Owner occupied		7,042		1,223		1,223		82,517		77,769		11,445
Subtotal		328,209		266,066		60,532		1,015,660		1,004,226		119,080
Total	$	6,673,947	$	6,395,713	$	60,532	$	5,109,166	$	4,084,132	$	119,080

47

	For the Year Ended December 31, 2012						For the Year Ended December 31, 2011
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
With no related allowance recorded:
1-4 family residential mortgage	$	452,767	$	0	$	0	$	210,111	$	590	$	590
1-4 family rental property		63,897		1,344		1,344		118,228		10,861		10,861
Multi-family real estate		100,417		17,337		14,889		28,081		0		0
Home equity		60,920		2,426		2,240		8,375		0		0
Commercial		118,406		8,004		7,486		164,449		20,874		20,874
Commercial real estate:
Non-owner occupied		2,445,154		142,465		137,741		524,417		4,490		4,490
Owner occupied		775,053		10,732		10,732		863,249		1,712		1,712
Construction and development		119,957						779,650		1,666		1,666
Subtotal		4,136,571		182,308		174,432		2,696,560		40,193		40,193
With an allowance recorded:
1-4 family residential mortgage		0		0		0		36,158		0		0
1-4 family rental property		35,012		0		0		76,017		0		0
Multi-family real estate		811		0		0		0		0		0
Home equity		121,703		7,699		7,174		12,011		0		0
Consumer		0		0		0		0		0		0
Commercial		0		0		0		22,158		0		0
Commercial real estate:
Non-owner occupied		9,170		0		0		133,958		0		0
Owner occupied		374,117		0		0		46,331		0		0
Subtotal		540,813		7,699		7,174		326,633		0		0
Total	$	4,677,384	$	190,007	$	181,606	$	3,023,193	$	40,193	$	40,193

The following tables present the aging of the recorded investment in loans by loan class:

			Days Past Due
December 31, 2012	Loans Not Past Due		30-59 Days		60-89 Days		90 Days or Greater		Total Past Due		Total
1-4 family residential mortgage	$	27,180,242	$	960,868	$	180,021	$	512,266	$	1,653,155	$	28,833,397
1-4 family rental property		4,340,427		6,143		7,180		36,963		50,286		4,390,713
Multi-family real estate		9,995,173		0		3,441		0		3,441		9,998,614
Home equity loans		12,676,103		39,802		29,643		49,932		119,377		12,795,480
Consumer		2,685,058		719		642		949		2,310		2,687,368
Commercial		15,252,260		1,049		0		0		1,049		15,253,309
Secured by trust assets		5,820,705		0		0		0		0		5,820,705
Commercial real estate:		0		0		0		0
Non-owner occupied		26,643,609		0		0		29,328		29,328		26,672,937
Owner occupied		26,048,546		0		191,894		2,298,246		2,490,140		28,538,686
Loans to nondepository financial institutions		7,345,540		0		0		0		0		7,345,540
Construction and development		7,601,563		0		0		0		0		7,601,563
Total	$	145,589,226	$	1,008,581	$	412,821	$	2,927,684	$	4,349,086	$	149,938,312

48

Loans past due 90 days or greater included one commercial real estate, owner occupied loan with a recorded investment of $2.3 million representing the Bank’s 2.45% participation interest. Sixty-six participants share in the credit. The loan has matured and the participating banks have agreed to extend the maturity date of the loan with new terms for the borrower. The closing for the loan extension was completed during March 2013, and the Bank has reinstated the loan to accrual status with a loan grade of a pass credit.

			Days Past Due
December 31, 2011	Loans Not Past Due		30-59 Days		60-89 Days		90 Days or Greater		Total Past Due		Total
1-4 family residential mortgage	$	23,161,060	$	454,167	$	138,659	$	0	$	592,826	$	23,753,886
1-4 family rental property		3,924,394		144,603		31,975		130,659		307,237		4,231,631
Multi-family real estate		9,132,775		0		0		7,897		7,897		9,140,672
Home equity loans		8,809,248		25,161		34,497		32,337		91,995		8,901,243
Consumer		1,017,062		0		11,670		1,672		13,342		1,030,404
Commercial		10,005,369		3,848		6,692		15,185		25,725		10,031,094
Secured by trust assets		6,798,929		0		0		0		0		6,798,929
Commercial real estate:
Non-owner occupied		22,762,810		0		0		39,948		39,948		22,802,758
Owner occupied		19,581,686		0		0		238,517		238,517		19,820,203
Construction and development		3,881,837		49,686		0		287,897		337,583		4,219,420
Total	$	109,075,170	$	677,465	$	223,493	$	754,112	$	1,655,070	$	110,730,240

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by loan class:

December  31, 2012	Nonaccrual Loans		90 Days or Greater & Still Accruing		Total
1-4 family residential mortgage	$	347,582	$	197,353	$	544,935
1-4 family rental property		50,286		0		50,286
Multi-family real estate		3,441		0		3,441
Home equity loans		49,932		0		49,932
Consumer		17,320		948		18,268
Commercial		1,049		0		1,049
Secured by trust assets		0		0		0
Commercial real estate:
Non-owner occupied		29,328		0		29,328
Owner occupied		2,706,739		0		2,706,739
Construction and development		0		0		0
Total	$	3,205,677	$	198,301	$	3,403,978

December 31, 2011	Nonaccrual loans		90 Days or Greater & Still Accruing		Total
1-4 family residential mortgage	$	108,877	$	-	$	108,877
1-4 family rental property		162,633		-		162,633
Multi-family real estate		7,897		-		7,897
Home equity loans		38,612		-		38,612
Consumer		6,309		1,672		7,981
Commercial		77,919		-		77,919
Commercial real estate:
Non-owner occupied		39,948		-		39,948
Owner occupied		611,515		-		611,515
Construction and development		287,897		-		287,897
Total	$	1,341,607	$	1,672	$	1,343,279

Troubled Debt Restructurings:

Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDRs”) and classified as impaired. TDRs are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

49

The following tables depict TDR activity for 2012 and 2011:

			For the Year Ended December 31, 2012
	Number of Loans		Pre-Modification		Post-Modification
Home equity		1	$	66,272	$	66,272
Commercial		0		0		0
Commercial real estate:
Non-owner occupied		1		253,218		290,500
Owner occupied		1		238,517		229,519
Total		3	$	558,007	$	586,291

			For the Year Ended December 31, 2011
	Number of Loans		Pre-Modification		Post-Modification
Home equity		1	$	150,991	$	150,991
Commercial		3		145,294		195,761
Commercial real estate:
Non-owner occupied		4		2,222,984		2,490,647
Owner occupied		2		120,403		120,403
Total		10	$	2,639,672	$	2,957,802

The home equity modifications related to a change in payment through the re-amortization of the remaining balance and an increase in the interest rate.  

The modifications of the commercial class generally relate to maturity date extensions as well as rate and payment modifications.  The payment modifications adjusted the remaining amortization of the outstanding loan balance.  Generally, interest rates are either maintained at the same rate or increased for modifications in the Commercial class.  The advance of funds “post-modification” related to equipment purchases.

The modifications of the non-owner occupied commercial real estate class related to a restructuring of payment, interest rate, term and amortization.  For each loan, the interest rate was either increased or was unchanged.  The loan term was left unchanged or shortened.  The amortization period was lengthened up to 7 years with the loan-to-value of each loan remaining within Bank credit policy limits. The increase in balances “post-modification” related to the advance of new funds to pay delinquent real estate taxes.

The Owner-Occupied Commercial Real Estate modifications were the result of shortening the maturity of loans so that the expiration date of the real estate holding company debt and the operating entity debt were the same.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

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The following table reports the balance of TDRs outstanding and related information as of year-end:

	December 31, 2012				December 31, 2011
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Home equity		2	$	213,844		1	$	150,991
Commercial real estate:
Non-owner occupied		5		2,674,012		4		2,482,844
Owner occupied		1		215,377		2		110,627
Commercial		1		78,990		3		177,120
TDR allocated specific reserves			$	30,780			$	100,746
TDR loan commitments outstanding				0				6,000

No loans were modified during the year ending December 31, 2012 or 2011 that had a significant payment delay and did not meet the definition of a troubled debt restructuring.

A loan is typically considered to be in payment default once it is eleven days contractually past due under the modified terms. During 2012, there was one non-owner occupied commercial real estate loan identified as a TDR with a balance of $287,845 as of December 31, 2012 for which a payment default occurred during the prior twelve months following the modification. The payment default did not result in a charge off or a change in the allowance for loan and lease losses.

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within the twelve months following the modification during the year ending December 31, 2011:

Troubled Debt Restructurings That Subsequently Defaulted	Number of Loans		Recorded Investment
Commercial		1	$	6,692

The troubled debt restructuring that subsequently defaulted described above did not increase the allowance for loan losses or result in any loan charge offs during the period ending December 31, 2011.

Credit Quality Indicators:

The Company classifies all non-homogeneous loans such as commercial and commercial real estate loans into risk classes based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk into four non-classified categories (i.e. passing grade loans) and three categories of classified loans. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings for classified loans:

Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

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Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans not analyzed as part of homogeneous groups include commercial, commercial real estate, multi-family real estate, most one to four family rental properties, construction and development loans (except for consumer construction loans for single family owner-occupied homes included as part of a homogeneous group), loans secured by trust assets, and loans to nondepository financial institutions. Loans secured by one to four family rental properties are not risk rated when the borrower owns less than four rental properties or units. Homogeneous groups of loans are not typically risk rated unless the loan is placed on nonaccrual status. A loan may also be separated from the homogeneous pool and individually risk rated due to recurrent delinquency problems, typically 60 to 89 days past due. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows:

December 31, 2012	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
1-4 family residential mortgage	$	28,181,932	$	187,140	$	116,743	$	347,582	$	0	$	28,833,397
1-4 family rental property		949,631		3,307,577		62,659		70,846		0		4,390,713
Multi-family real estate		279,367		8,387,924		907,951		423,372		0		9,998,614
Home equity loans		12,473,534		58,170		0		231,439		32,337		12,795,480
Consumer		2,687,368		0		0		0		0		2,687,368
Commercial		0		15,252,260		0		1,049		0		15,253,309
Secured by trust assets		0		5,820,705		0		0		0		5,820,705
Commercial real estate:
Non-owner occupied		0		22,949,712		1,307,730		2,415,495		0		26,672,937
Owner occupied		0		25,437,889		173,139		2,927,658		0		28,538,686
Loans to nondepository financial institutions		0		7,345,540		0		0		0		7,345,540
Construction and development		2,776,423		4,825,140		0		0		0		7,601,563
Total	$	47,348,255	$	93,572,057	$	2,568,222	$	6,417,441	$	32,337	$	149,938,312

December 31, 2011	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
1-4 family residential mortgage	$	23,441,682	$	-	$	203,327	$	1,680	$	107,197	$	23,753,886
1-4 family rental property		494,363		2,872,069		513,544		351,655		-		4,231,631
Multi-family real estate		303,587		7,240,618		254,823		1,341,644		-		9,140,672
Home equity loans		8,637,268		72,895		1,477		150,991		38,612		8,901,243
Consumer		1,030,404		-		-		-		-		1,030,404
Commercial		-		9,823,849		14,326		130,799		62,120		10,031,094
Secured by trust assets		675,626		6,123,303		-		-		-		6,798,929
Commercial real estate:
Non-owner occupied		5,000		19,005,683		759,562		3,032,513		-		22,802,758
Owner occupied		1,795		17,493,719		1,506,489		707,573		110,627		19,820,203
Construction and development		1,867,195		2,037,504		26,824		287,897		-		4,219,420
Total	$	36,456,920	$	64,669,640	$	3,280,372	$	6,004,752	$	318,556	$	110,730,240

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the current principal balance of residential and consumer loans based on payment activity:

	Residential
December 31, 2012	1-4 family		Home Equity		Consumer		Total
Performing	$	28,485,815	$	12,745,548	$	2,670,048	$	43,901,411
Nonperforming		347,582		49,932		17,320		414,834
Total	$	28,833,397	$	12,795,480	$	2,687,368	$	44,316,245

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	Residential
December 31, 2011	1-4 Family		Home Equity		Consumer		Total
Performing	$	23,645,009	$	8,862,631	$	1,024,095	$	33,380,744
Nonperforming		108,877		38,612		6,309		304,789
Total	$	23,753,886	$	8,901,243	$	1,030,404	$	33,685,533

Loans to principal officers, directors and their affiliates in 2012 were as follows:

Balance, January 1	$	5,387,226
New loans or advances		197,813
Repayments		(700,571	)
Balance, December 31	$	4,884,468

NOTE 4 – ASSETS ACQUIRED IN SETTLEMENT OF LOANS

Assets acquired in settlement of loans were as follows for the years ended December 31, 2012 and 2011:

	2012		2011
Interest in limited liability company	$	1,171,620	$	1,255,437
Residential real estate		51,690		201,154
Commercial real estate		251,000		292,251
Construction and development		506,445		263,910
Total	$	1,980,755	$	2,012,752

Direct write-downs of assets acquired in settlement of loans totaled $209,453 and $192,882 for the years ended December 31, 2012 and 2011, respectively.

The interest in the limited liability company was obtained through a U.S. Bankruptcy Code 363 sale. The limited liability company was formed by the lead bank for the banks participating in the project financing to acquire title to the real estate, conduct the operation of the facility, and market the real estate and the operations of the business for sale. The carrying value of its interest is based upon the estimated fair value of the real estate less costs to sell.

NOTE 5 - PREMISES AND EQUIPMENT

Premises and equipment were as follows at December 31 2012 and 2011:

	2012			2011
Land	$	524,559		$	524,559
Office building		996,183			996,183
Leasehold improvements		824,130			520,223
Furniture, fixtures and equipment		1,780,201			1,942,534
Premises and equipment, cost		4,125,073			3,983,499
Less:  Accumulated depreciation		(1,695,997	)		(1,530,872	)
Premises and equipment, net	$	2,429,076		$	2,452,627

The North Canton banking office is located at 600 South Main Street in North Canton, Ohio. The Bank owns the land and building, which was constructed during 2005. During 2010, the Company changed its main office to this location.

During the years ended December 31, 2012 and 2011, depreciation expense was $277,738 and $334,529, respectively. Depreciation expense includes amortization of assets leased under capital leases.

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In October 2011, the lease for the Company’s former banking office located at 305 West Liberty Street was assigned to the purchaser of the deposits associated with the Bank’s former branch offices located in Wooster, Ohio. Prior to the lease assignment, the building portion of the lease was accounted for as a capital lease while the land portion of the lease was accounted for as an operating lease, due to the land exceeding 25% of the total fair value of the property. The Company recognized a gain of $217,532 on the assignment of this lease based on the difference between the obligation for the lease payments for the remainder of the lease term and the net book value of the leasehold improvements for the office.

In October 2011, the Company also sold its Milltown banking office located at 3562 Commerce Parkway in Wooster, Ohio, in connection with the sale of branch deposits associated with its former Wooster, Ohio banking offices. The sales price for the building and real estate was equivalent to the Company’s net book value at the time of the sale.

The Bank’s operations center is located at 2375 Benden Drive, Suite C, Wooster, Ohio. The initial term of the current lease was three years beginning August 1, 2011 with an option to renew the lease for an additional three year term. The annual rent is $43,125.

The Belden banking office is located at 6141 Whipple Ave NW, North Canton, Ohio. The landlord for the Belden office is a related party. The original term of the current lease is twenty years commencing October 1, 2010. The rent for the first six months was $22,752 and increased to $45,396 for the second six months. Annual rent in year two through five is $90,792 increasing to $102,144 in year six through year ten, $114,912 in year eleven through year fifteen, and $129,276 in year sixteen through year twenty. The Company has the option to renew the lease for six successive periods of five years each.

In September 2011, the Bank entered into a lease agreement for office space located at 107 Plaza Drive, Suite A, St. Clairsville, Ohio, to expand the space previously leased under a separate agreement for purposes of opening a full service branch to complement the wealth services including trust and brokerage services offered at this location since 2010. The lease commenced following completion of construction on January 13, 2012. The initial lease term is ten years with annual rent of $38,040 for the first two years, $55,860 for years three through five, and $52,668 for years six through ten with additional rent in the amount of the tenant’s proportionate share of building operating expenses which includes real estate taxes, insurance, utilities, maintenance, and other costs associated with the maintenance and operation of the building.

A lease for office space for wealth services is located at 107 Plaza Drive, Suite J, St. Clairsville, Ohio. The initial term of the lease was three years beginning March 1, 2010. The minimum annual rent is $20,496 with additional rent in the amount of the tenant’s proportionate share of building operating expenses which includes real estate taxes, insurance, utilities, maintenance, and other costs associated with the maintenance and operation of the building. The lease provides for options to renew the lease for two additional one year terms. The lease was renewed in March 2013 for an annual rent of $21,521.

Rent expense was $232,615 and $215,264 for the years ended December 31, 2012 and 2011, respectively. Estimated rental commitments under all leases for their non-cancelable periods were as follows as of December 31, 2012:

	Operating Leases
2013	$	193,222
2014		177,188
2015		149,490
2016		158,004
2017		154,812
Thereafter		1,712,508
Total minimum lease payments	$	2,545,224

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NOTE 6 - DEPOSITS

Certificates of deposit in denominations of $100,000 or more were $38,075,582 and $25,383,342 at December 31, 2012 and 2011, respectively.

Scheduled maturities of certificates of deposit were as follows at December 31, 2012:

2013	$	41,190,195
2014		7,988,060
2015		5,625,702
2016		212,922
2017		11,500
	$	55,028,379

NOTE 7 – REPURCHASE AGREEMENTS

Repurchase agreements are financing arrangements that mature daily. Under the agreements, customers agree to maintain funds on deposit with the Bank and in return acquire an interest in a pool of securities pledged as collateral against the funds. The securities are held in a segregated safekeeping account at the Federal Home Loan Bank. Information concerning the repurchase agreements for 2012 and 2011 is summarized as follows:

	2012			2011
Average daily balance during the year	$	4,591,173		$	4,056,358
Average interest rate during the year		0.25	%		0.26	%
Maximum month-end balance during the year		5,845,256			6,978,179
Interest rate at year-end		0.25	%		0.25	%

NOTE 8 - FEDERAL HOME LOAN BANK ADVANCES

The following table details FHLB short term borrowings as of December 31, 2012 and 2011.

	2012		2011
Cash management interest only advance
.14% variable rate, maturing January 14, 2013	$	5,000,000	$	0
Cash management interest only advance
.18% fixed rate, maturing January 4, 2013		8,000,000		0
Cash management interest only advance
.14% variable rate, maturing January 11, 2012		0		5,000,000
Cash management interest only advance
.04% fixed rate, maturing January 6, 2012		0		8,000,000
Total	$	13,000,000	$	13,000,000

The cash management advances are prepayable without penalty.

The following table details FHLB long term advances as of December 31, 2012 and 2011:

	2012		2011
Two-year interest-only advance
.59% fixed rate, maturing November 27,2013	$	3,000,000	$	3,000,000
18-month interest-only advance
.55% fixed rate, maturing April 12, 2013		3,000,000		3,000,000
Total advances	$	6,000,000	$	6,000,000

Each interest-only advance is payable at its maturity date and has a prepayment penalty if repaid prior to maturity. The advances are collateralized by a blanket pledge of eligible residential real estate loans and a specific pledge of commercial and commercial real estate loans. At December 31, 2012, the Bank had approximately $21,055,000 in additional borrowing capacity available for future advances based upon current collateral and the Company’s holdings of FHLB stock. As of December 31, 2012, required principal payments on all FHLB advances are due during 2013.

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NOTE 9 – FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial asset:

Securities: The fair values for securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

Impaired Loans: The fair value of collateral dependent impaired loans with specific allocations of the allowance for loan losses and other real estate is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Assets Acquired in Settlement of Loans: The fair value of assets acquired in settlement of loans is generally based on real estate appraisals. Appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Annual appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. For commercial impaired loans and other real estate owned, if the carrying value is less than $250,000, the Company may obtain a property evaluation by an independent company instead of an appraisal. The Company uses an independent third party appraisal management company for the management of appraisal ordering and review. The appraisal management company reviews the assumptions and approaches, utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics and provides a written review report to the Company. On an annual basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraised value to arrive at fair value. The most recent analysis performed indicated that a discount of 10% should be applied. In some cases, and when justified through appropriate documentation, additional discounting is reflected to allow for changing market conditions, property condition or increasing vacancy.

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Assets measured at fair value on a recurring basis are summarized in the following table:

	Fair Value Measurements Using
			Significant
	Quoted Prices in		Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2012:
Equity securities	$	192,850	$	0	$	0	$	192,850
U.S. government sponsored enterprises		0		1,006,655		0		1,006,655
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		0		7,460,853		0		7,460,853
Other mortgage backed securities-residential		0		178,882		0		178,882
Municipal securities		0		2,873,804		0		2,873,804
Total securities available for sale	$	192,850	$	11,520,194	$	0	$	11,713,044
December 31, 2011:
Equity securities	$	145,350	$	0	$	0	$	145,350
U.S. government sponsored enterprises		0		2,515,906		0		2,515,906
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		0		4,865,167		0		4,865,167
Other mortgage backed securities-residential		0		189,871		0		189,871
Municipal securities		0		2,379,836		581,514		2,961,350
Total securities available for sale	$	145,350	$	9,950,780	$	581,514	$	10,677,644

Level 3 securities are priced by a third party vendor and consist of non-rated municipal bonds of a single issuer. The vendor uses internal quality ratings that are a proprietary, internal data management tool to group municipal securities into sectors by perceived credit quality and correlation to the overall municipal market. Data gathered can be categorized as indicative data (terms and conditions data) and market data which are inputs used in price generation. Market data is comprised of various inputs needed to generate or adjust the variables required by the vendors pricing system. Examples of these market inputs are trades, bid price or spread, two-sided markets, quotes, benchmark curves including but not limited to Treasury benchmarks and LIBOR and swap curves, market data feeds such as MSRB, new issues, financial statements, discount rate, capital rates, and trustee reports. They rely on the expertise and judgment of its pricing analysts to gather and identify relevant information to use in formulating pricing opinions.

The Company’s policy is to recognize transfers into or out of a level as of the end of the reporting period. There were no transfers between Level 1 and Level 2 securities during 2012 or 2011.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31.

	Municipal Securities
	2012			2011
Balance of recurring Level 3 assets at January 1	$	581,514		$	537,577
Total gains or losses (realized/unrealized):
Included in earnings – realized		0			0
Included in earnings – unrealized		0			0
Included in other comprehensive income		(17,794	)		43,937
Purchases		0			0
Sales		0			0
Issuances		0			0
Settlements		0			0
Transfers in and/or out of Level 3		(563,720	)		0
Balance of recurring Level 3 assets at December 31	$	0		$	581,514

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The fair value for two municipal bonds with a fair value of $563,720 as of December 31, 2012 was transferred from Level 3 to Level 2 because observable market data was available for the securities.

The following table summarizes changes in unrealized gains and losses recorded in earnings for the year ended December 31, 2011 for Level 3 assets and liabilities that are still held at December 31.

	2011
Interest income on securities	$	152
Other changes in fair value		43,785
Total	$	43,937

The following table depicts assets measured at fair value on a non-recurring basis.

	Fair Value Measurements Using
			Significant
	Quoted Prices in		Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2012:
Impaired loans:
1-4 family residential mortgage	$	0	$	0	$	471,501	$	471,501
1-4 family rental property		0		0		43,597		43,597
Home equity		0		0		161,640		161,640
Multi-family real estate		0		0		3,441		3,441
Commercial real estate:
Non-owner occupied		0		0		13,620		13,620
Assets acquired in settlement of loans:
Residential		0		0		25,989		25,989
Commercial real estate		0		0		150,000		150,000
Construction and development		0		0		145,684		145,684
Interest in limited liability company		0		0		1,171,620		1,171,620
December 31, 2011:
Impaired loans:
1-4 family residential mortgage	$	0	$	0	$	107,197	$	107,197
1-4 family rental property		0		0		130,659		130,659
Home equity		0		0		116,791		116,791
Multi-family real estate		0		0		7,897		7,897
Commercial		0		0		62,120		62,120
Commercial real estate:
Non-owner occupied		0		0		741,979		741,979
Owner occupied		0		0		66,324		66,324
Construction and development		0		0		287,897		287,897
Assets acquired in settlement of loans:
Residential		0		0		55,989		55,989
Commercial real estate		0		0		292,251		292,251
Construction and development		0		0		263,910		263,910
Interest in limited liability company		0		0		1,255,437		1,255,437

The above impaired loans, which are measured for impairment using the fair value of the collateral, had a carrying amount of $754,331 with a specific allocation of the allowance for loan losses of $60,532 at December 31, 2012. Provisions for loan losses as a result of charge-offs or write-downs to the fair value of collateral were $127,075 in 2012.

The above impaired loans, which are measured for impairment using the fair value of the collateral, had a carrying amount of $1,639,944 with a specific allocation of the allowance for loan losses of $119,080 at December 31, 2011. Provisions for loan losses as a result of charge-offs or write-downs to the fair value of collateral were $628,530 in 2011.

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The above assets acquired in settlement of loans, measured at fair value less costs to sell, had a carrying value of $1,493,293 at December 31, 2012. Gross write-downs totaling $209,453 were recorded on these assets during the year ended December 31, 2012. Gross write-downs totaling $192,882 were recorded on these assets during the year ended December 31, 2011.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2012:

	Fair value		Valuation Technique	Unobservable Inputs	Range		Weighted Average
Impaired loans
1-4 family residential	$	471,501	Sales comparison approach	Adjustment for differences between the comparable sales		8.56% to 9.03%		8.71	%
1-4 family rental property		43,597	Sales comparison approach	Adjustment for differences between the comparable sales		-32.00% to 1.00%		-9.43	%
Home equity		161,640	Sales comparison approach	Adjustment for differences between the comparable sales		-7.17% to -1.70%		-4.20	%
Multi-family real estate		3,441	Sales comparison approach	Adjustment for differences between the comparable sales		2.10% to 2.10%		2.10	%
Commercial real estate:
Non-owner occupied		13,620	Income approach	Capitalization rate		12.00% to 12.00%		12.00	%
Assets Acquired in Settlement of Loans
Residential	$	25,989	Sales comparison approach	Adjustment for differences between the comparable sales		-26.00% to -26.00%		-26.00	%
Commercial real estate		150,000	Sales comparison approach	Adjustment for differences between the comparable sales		-7.00% to -7.00%		-7.00	%
Construction and development		145,684	Sales comparison approach	Adjustment for differences between the comparable sales		0.00% to 0.00%		0.00	%
Interest in limited liability company		1,171,620	Income approach	Capitalization rate		10.25% to 10.25%		10.25	%

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The carrying amounts and estimated fair values of financial assets and liabilities at December 31 are as follows:

				Fair Value Measurements Using:
December 31, 2012	Carrying Value			Level 1			Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	5,707,000		$	5,707,000		$	0		$	0	$	5,707,000
Certificate of deposit in financial institution		100,000			0			100,000			0		100,000
Securities available for sale		11,713,000			193,000			10,956,000			564,000		11,713,000
Loans held for sale		2,040,000			0			2,066,000			0		2,066,000
Loans, net		147,684,000			0			0			149,843,000		149,843,000
Federal bank stock		1,578,000			NA			NA			NA		NA
Accrued interest receivable		422,000			0			51,000			371,000		422,000
Financial liabilities
Deposits		(131,542,000	)		(76,514,000	)		(55,213,000	)		0		(131,727,000	)
Repurchase agreements		(4,360,000	)		0			(4,360,000	)		0		(4,360,000	)
Federal Home Loan Bank advances		(19,000,000	)		0			(19,003,000	)		0		(19,003,000	)
Accrued interest payable		(29,000	)		(1,000	)		(28,000	)		0		(29,000	)

December 31, 2011	Carrying Value			Estimated Fair Value
Financial assets
Cash and cash equivalents	$	20,046,000		$	20,046,000
Certificate of deposit in financial institution		100,000			100,000
Securities available for sale		10,678,000			10,678,000
Loans held for sale		896,000			928,000
Loans, net		108,277,000			110,428,000
Federal bank stock		1,598,000			NA
Accrued interest receivable		340,000			340,000
Financial liabilities
Deposits		(103,962,000	)		(104,100,000	)
Repurchase agreements		(4,214,000	)		(4,214,000	)
Federal Home Loan Bank advances		(19,000,000	)		(19,055,000	)
Accrued interest payable		(24,000	)		(24,000	)

The methods and assumptions used to estimate fair value, not previously presented, are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Certificate of Deposit in Financial Institution: The fair value of certificates of deposit maintained with financial institutions is based upon discounted cash analyses, using interest rates currently offered for similar time deposits resulting in a Level 2 classification.

Loans: Fair values of loans, excluding loans held for sale, are estimated as follows: Fair values for loans are estimated using discounted cash flow analyses, using interest rates currently offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as previously described. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Loans Held For Sale: The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan resulting in Level 2 classification.

Federal Bank Stock: It is not practical to determine the fair value of federal bank stock due to restrictions placed on their transferability.

Deposits: The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e. their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

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Short-term Borrowings: The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Other Borrowings: The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Accrued Interest Receivable/Payable: The carrying amounts of accrued interest approximate fair value and its classification is correlated to the underlying financial instrument.

Off-balance Sheet Instruments: Fair values for off-balance sheet commitments are nominal and are not material.

NOTE 10 - INCOME TAXES

Income tax expense was as follows for the years ended December 31, 2012 and 2011:

	2012			2011
Current federal	$	24,524		$	-
Deferred federal		96,290			1,030,624
Change in valuation allowance		(96,290	)		(1,030,624	)
Total income tax expense	$	24,524		$	-

Effective tax rates differ from federal statutory rates applied to financial statement earnings due to the following:

	2012			2011
Federal statutory rate (34%) times financial statement income	$	47,159		$	618,841
Effect of:
Tax exempt income net of disallowed interest expense		(35,298	)		(35,292	)
Stock based compensation		67,215			68,972
Write-off of deferred tax benefits		0			376,753
Change in valuation allowance		(96,920	)		(1,030,624	)
Other, net		42,368			1,350
Total income tax expense	$	24,524		$	0

Deferred tax assets and liabilities were due to the following at December 31, 2012 and 2011:

	2012			2011
Deferred Tax Assets
Allowance for loan losses	$	202,594		$	425,824
Deferred and accrued compensation		6,154			30,306
Intangible asset amortization		113,275			130,266
REO valuation allowance		246,623			197,640
Net operating loss carryforward		2,857,894			2,729,009
Other than temporary impairment of securities		982,608			982,608
Depreciation		40,412			21,010
Tax credit carryforward		58,754			61,092
Nonaccrual interest adjustment		93,986			82,968
Other		22,950			16,563
Total deferred tax assets		4,625,250			4,677,286
Deferred tax liabilities
Unrealized gain on securities available for sale		(158,296	)		(153,957	)
Net deferred loan costs		(35,706	)		(9,976	)
Prepaid expense		(14,802	)		(23,511	)
Federal Home Loan Bank stock dividend		(58,480	)		(58,480	)
Partnership adjustments		(68,056	)		(40,245	)
Other		(292	)		(240	)
Total deferred tax liabilities		(335,632	)		(286,409	)
Net deferred tax assets		4,289,618			4,390,877
Less: valuation allowance		(4,289,618	)		(4,390,877	)
Net deferred tax assets (liabilities)	$	0		$	0

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A valuation allowance of $4,289,618 was recorded to reduce the carrying amount of the Company’s net deferred tax assets to zero due primarily to losses sustained in prior years.

Internal Revenue Code section 382 places a limitation on the amount of taxable income that can be offset by net operating loss carryforwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Accordingly, utilization of net operating loss carryforwards may be subject to an annual limitation regarding their utilization against future taxable income upon change in control.

At February 19, 2010, a Stock Purchase Agreement between Ohio Legacy Corp and Excel Bancorp resulted in a section 382 limitation against pre-transaction Ohio Legacy Corp net operating loss carryforwards. The Company reduced the deferred tax asset related to net operating loss carryforwards and the valuation allowance by $1,039,000 at December 31, 2010. At December 31, 2011, the Company further reduced the deferred tax asset related to net operating loss carryforwards and the valuation allowance by an additional $377,000 as a result of changes in the realizable amount of such net operating loss.

At December 31, 2012, after consideration of the reduction to pre-transaction net operating losses due to the section 382 limitation, the Company had net operating loss carryforwards of approximately $8,405,000 that will expire as follows: $1,257,000 on December 31, 2027, $132,000 on December 31, 2028, $1,532,000 on December 31, 2029, $5,105,000 on December 31, 2030 and $379,000 on December 31, 2032.

In addition, the Company has approximately $59,000 of alternative minimum tax credits that may be carried forward indefinitely.

At December 31, 2012 and 2011, the Company had no unrecognized tax benefits recorded. The Company does not expect the amount of unrecognized tax benefits to change significantly within the next twelve months.

The Company and the Bank are subject to U.S. federal income tax. The Company is no longer subject to examination by federal taxing authorities for tax years prior to 2009. The tax years 2009, 2010 and 2011 remain open to examination by the U.S. taxing authorities.

NOTE 11 - STOCK-BASED COMPENSATION

Shareholders adopted the Ohio Legacy Corp 2010 Cash and Equity Incentive Plan in May 2010. The Plan permits the grant of share-based awards for a maximum of 200,000 shares of common stock. The Plan provides for awards of options, restricted stock, stock appreciation rights, and other stock-based awards to employees, directors and consultants. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. Option awards have vesting periods as determined by the Compensation Committee of the Board of Directors. All options currently outstanding have an original vesting period of five years and a ten year contractual term.

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The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of options granted in 2010 was determined using the following weighted-average assumptions as of the grant date:

Risk-free interest rate	1.11% - 1.83%
Expected term (years)	6.5
Expected stock price volatility	0.298
Dividend yield	0	%

No options were granted during 2012 or 2011. Options and the related exercise price were adjusted for the 1 for 10 reverse stock split completed during September 2012. Options outstanding, exercise price and option activity occurring prior to the reverse stock split have been restated accordingly. The Company has a policy of using authorized but unissued common shares to satisfy option exercises.

The following table depicts the activity under the Plan:

	2012
	Options			Weighted Average Exercise Price
Outstanding, January 1		128,185		$	22.98
Granted		0			0
Forfeited or expired		(160	)		23.00
Exercised		0			0
Outstanding, December 31		128,025		$	22.98
Exercisable at December 31		51,910		$	22.98

The weighted average remaining contractual life of the options outstanding at December 31, 2012 was 7.53 years. The intrinsic value of options outstanding was $0. All nonvested options outstanding are expect to vest.

The follow table depicts vesting activity under the Plan.

	2012
	Options			Weighted Average Exercise Price
Nonvested at January 1, 2012		101,660		$	22.98
Granted		0			0
Vested		(25,385	)		23.00
Forfeited or expired		(160	)		23.00
Nonvested at December 31, 2012		76,115		$	22.98

As of December 31, 2012, there was $492,499 of total unrecognized compensation cost related to nonvested shares granted under the Plan. The cost is expected to be recognized over a weighted average period of 2.5 years. The total fair value of shares vested during the years ended December 31, 2012 and 2011 was $158,656 and $275,860.

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NOTE 12 – REGULATORY MATTERS

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes as of December 31, 2012, the Company and Bank meet all capital adequacy requirements to which they are subject. The consolidated capital amounts and ratios for the Company are materially similar to the Bank.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

At year-end 2012, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

Actual and required capital amounts and ratios are presented below at December 31, 2012 and 2011:

											To Be Well-
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2012
Total capital to risk-weighted assets
Premier Bank & Trust	$	20,307		13.4	%	$	12,146		8.0	%	$	15,182		10.0	%
Tier 1 capital to risk-weighted assets
Premier Bank & Trust		18,404		12.1	%		6,073		4.0	%		9,109		6.0	%
Tier 1 capital to average assets
Premier Bank & Trust		18,404		10.6	%		6,930		4.0	%		8,662		5.0	%
December 31, 2011:
Total capital to risk-weighted assets
Premier Bank & Trust	$	19,501		17.6	%	$	8,841		8.0	%	$	11,051		10.0	%
Tier 1 capital to risk-weighted assets
Premier Bank & Trust		18,106		16.4	%		4,420		4.0	%		6,631		6.0	%
Tier 1 capital to average assets
Premier Bank & Trust		18,106		12.1	%		5,965		4.0	%		7,457		5.0	%

The payment of dividends by the Bank to Ohio Legacy is subject to restrictions by regulatory agencies. These restrictions generally limit dividends to the sum of the current year and prior two years retained earnings. In addition, dividends may not reduce capital levels below the minimum regulatory requirements as described above. The Company is not able to declare dividends without prior approval from its regulators.

NOTE 13 - LOAN COMMITMENTS AND RELATED ACTIVITIES

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies used to make loans are also used to make such commitments, including obtaining collateral upon exercise of the commitment.

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Commitments to make loans are generally made for periods of 30 days or less. The contractual amount of loan commitments with off-balance sheet risk was as follows at December 31 2012 and 2011:

	2012		2011
Commitments to make loans:
Variable rate	$	4,994,469	$	2,061,725
Fixed rate		2,387,864		696,800
Unused lines of credit, variable-rate		42,043,782		34,106,820
Standby letters of credit		615,232		194,856

NOTE 14 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

CONDENSED BALANCE SHEETS
As of December 31
	2012		2011
ASSETS
Cash and cash equivalents	$	52,924	$	60,058
Investment in subsidiary, Premier Bank & Trust, N.A.		18,869,489		18,557,939
Other assets		4,795		5,414
Total assets	$	18,927,208	$	18,623,411
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities	$	14,740	$	35,323
Shareholders' equity		18,912,468		18,588,088
Total liabilities and shareholders' equity	$	18,927,208	$	18,623,411

CONDENSED STATEMENTS OF OPERATIONS
For the year ended December 31
	2012			2011
Dividends received from subsidiary	$	100,000		$	200,000
Professional fees		(11,575	)		(9,360	)
Other expense		(75,345	)		(65,526	)
Income before undistributed earnings of subsidiary		13,080			125,114
Equity in undistributed income of subsidiary		101,100			1,695,008
Income before income taxes		114,180			1,820,122
Income tax expense		0			0
Net income	$	114,180		$	1,820,122
Other comprehensive income		12,759			94,591
Comprehensive income	$	126,939		$	1,914,713

CONDENSED STATEMENT OF CASH FLOWS
For the year ended December 31,	2012			2011
Cash flows from operating activities:
Net income	$	114,180		$	1,820,122
Adjustments to reconcile net income to net cash from operating activities:
Equity in undistributed income of subsidiary		(101,100	)		(1,695,008	)
Net change in other assets and other liabilities		(19,963	)		(79,532	)
Net cash used for operating activities		(6,883	)		45,582
Cash flows from financing activities:
Reverse stock split - cash paid for fractional shares		(251	)		0
Net change in cash and cash equivalents		(7,134	)		45,582
Beginning cash and cash equivalents		60,058			14,476
Ending cash and cash equivalents	$	52,924		$	60,058

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NOTE 15 – SUBSEQUENT EVENTS - BRANCH PURCHASE (UNAUDITED)

On February 1, 2013, the Bank entered into a Branch Office Purchase and Assumption Agreement (the “Agreement”), with First National Bank, N.A. located in Orrville, Ohio (“FNB”), and a wholly owned subsidiary of National Bancshares Corporation and with NBOH Properties, LLC, an Ohio limited liability company, for the purchase of certain assets and the assumption of certain liabilities of FNB’s Fairlawn branch located at 3085 West Market Street, Akron, Ohio. Under the terms of the Agreement, the Bank will purchase $10 million to $12 million in loans and will assume $13 million to $16 million in deposits. The Bank will pay a deposit premium of approximately 5.25% based on the average amount of assumed deposits during a specified period prior to the closing, with a minimum premium of $682,500. The Bank will also purchase real estate owned by NBOH Properties, LLC for $1.1 million and other assets including fixtures and equipment associated with the branch location. The transaction, which is subject to regulatory approvals and certain closing conditions, is expected to be completed during the second quarter of 2013.

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  Crowe Horwath LLP  Independent Member Crowe Horwath International 

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Ohio Legacy Corp

North Canton, Ohio

We have audited the accompanying consolidated balance sheets of Ohio Legacy Corp as of December 31, 2012 and 2011, and the related consolidated statements of operations, comprehensive income, changes in shareholders' equity, and cash flows for the years then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Ohio Legacy Corp at December 31, 2012 and 2011, and the results of its operations and its cash flows for the years then ended in conformity with U.S. generally accepted accounting principles.

/s/Crowe Horwath LLP

Crowe Horwath LLP

Cleveland, Ohio

April 1, 2013

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EXECUTIVE OFFICERS OF OHIO LEGACY CORP AND OHIO LEGACY BANK, NATIONAL ASSOCIATION

Rick L. Hull, President and Chief Executive Officer

Denise M. Penz, Executive Vice President and Chief Operating Officer

Jane Marsh, Senior Vice President, Chief Financial Officer and Treasurer

DIRECTORS OF OHIO LEGACY CORP

Louis Altman Co-Managing Partner, A. Altman Company Canton, Ohio	Bruce A. Cassidy, Sr. Retired Business Executive Sarasota, Florida
Rick L. Hull Executive Officer North Canton, Ohio	Brian C. Layman Principal, Layman, D’Atri & Associates, LLC Canton, Ohio
Denise M. Penz Executive Officer St. Clairsville, Ohio	Wilbur R. Roat, Chairman Retired Bank Executive Kennett Square, Pennsylvania
James P. Tressel Vice President for Strategic Engagement, University of Akron Akron, Ohio	Francis P. Wenthur Retired Business Executive North Canton, Ohio
David B. Wurster  CEO, BookMasters, Inc. Ashland, Ohio

CORPORATE AND BANK LOCATIONS

Belden Village Banking Center 6141 Whipple Ave NW North Canton, Ohio 44720	North Canton Corporate Office and Banking Center 600 South Main Street North Canton, Ohio 44720
St. Clairsville Wealth Office 107 Plaza Drive, Suite J St. Clairsville, Ohio 43950	St. Clairsville Banking Center 107 Plaza Drive, Suite A St. Clairsville, Ohio 43950
Operations Center 2375 Benden Drive Suite C Wooster, Ohio 44691

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Management of Ohio Legacy Corp is responsible for establishing and maintaining effective disclosure controls and procedures, as defined under Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

As of the end of the period covered by this report, an evaluation was performed under the supervision, and with the participation of management, including the 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 Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures as of December 31, 2012, were effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (1) accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and (2) recorded, processed, summarized and reported within the time period required by the Securities and Exchange Commission's rules and forms.

Management’s Report on Internal Control Over Financial Reporting

Management of Ohio Legacy Corp is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures are made only in accordance with authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation or assessment of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The Company’s internal control over financial reporting system is designed to provide reasonable assurance of achieving its objectives.

Management of Ohio Legacy Corp, including the Chief Executive Officer and the Chief Financial Officer, has assessed the Company’s internal control over financial reporting as of December 31, 2012, based on criteria for effective internal control over financial reporting described in “Internal Control – Integrated Framework” issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2012, based on the specified criteria.

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission that permit non-accelerated filers to provide only management’s report in this annual report.

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Changes in Internal Control Over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the fourth quarter of 2012 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information.

There are no matters to be reported under this item.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

Class II Directors – Terms ending in 2013 and Nominees for Re-Election to Terms ending in 2016

RICK L. HULL (age 60)

Director since February 2010

Mr. Hull was appointed as President and Chief Executive of the Company and the Bank effective February 20, 2010. From August 2009 until February 2010, Mr. Hull served as a consultant for Excel Financial and Excel Bancorp and assisted them in evaluating opportunities to directly or indirectly acquire a financial institution. From January 2006 to August 2009, Mr. Hull served as the President of the Akron/Canton Region of Huntington National Bank (formerly Sky Bank). From January 1999 to December 2005, Mr. Hull served as the President of the Ohio Valley Region of Sky Bank. Mr. Hull is admitted to practice law in the State of Ohio, and previously served as General Counsel of The Citizens Banking Company and maintained a private real estate and commercial law practice. Mr. Hull provides the Board with nearly 30 years of experience in the commercial banking industry, including experience in an executive management capacity, and has extensive knowledge of legal compliance and corporate governance issues within the banking industry. Mr. Hull is also a director of the Bank.

DENISE M. PENZ (age 44)

Director since February 2010

Ms. Penz was appointed as Executive Vice President and Chief Operating Officer of the Company and the Bank effective February 20, 2010. From July 2008 until February 2010, Ms. Penz served as a consultant for Excel Financial and Excel Bancorp and assisted them in evaluating opportunities to directly or indirectly acquire a financial institution. From September 2000 to July 2008, Ms. Penz served as the Senior Vice President, Manager of Trust and Investment Services for the Ohio Valley Region of Huntington National Bank (formerly Belmont National Bank and Sky Bank), where she managed a staff of investment, trust and operational professionals in addition to maintaining client relationships. Ms. Penz provides the Board with several years of experience in the financial institutions and investment services industries, including experience in wealth management and strategic acquisitions. Ms. Penz is also a director of the Bank.

WILBUR R. ROAT (age 66)

Director and Chairman of the Board since February 2010, Independent, Member of the Compensation Committee (Chairman), the Corporate Governance and Nominating Committee (Chairman) and the Executive Committee (Chairman)

Since June 2005, Mr. Roat has been a private investor and consultant in the banking industry. From December 1999 to June 2005, Mr. Roat served as President and Chief Executive Officer and as a director of Belmont Bancorp. and Belmont National Bank. From September 1994 to March 1999, Mr. Roat served as President and Chief Executive Officer of First Lehigh Bancorp and First Lehigh Bank. From September 2009 until December 2010, Mr. Roat served on the board of directors of Northpointe Bank and Northpointe Bancshares. Mr. Roat, who has served as President and Chief Executive Officer of three financial institutions, provides the Board with more than 30 years of management experience in the banking industry. Mr. Roat is also a director of the Bank.

70

Class I Directors – Terms ending in 2014

LOUIS ALTMAN (age 44)

Director since February 2010, Independent, Member of the Compensation Committee, the Corporate Governance and Nominating Committee, the Executive Committee and the Trust Committee of the Bank (Chairman)

Mr. Altman is currently a co-managing partner of the A. Altman Company, a full service real estate development firm for commercial, residential, office, medical and hotel properties. He has been a partner of A. Altman Company since 1991 and a co-managing partner since 1999, where he is directly involved in all aspects of the business including acquisitions, site selection, development, financing, leasing, management and property disposition. From 2002 to 2007, Mr. Altman served as a Regional Director for the Western Reserve Region of Sky Bank. From 2006 to 2007, Mr. Altman served as a director of Sky Bank. Mr. Altman provides the Board with a strong background in managing, developing and financing commercial real estate ventures as well as experience in having served as a director of a financial institution. Mr. Altman is also a director of the Bank.

BRUCE A. CASSIDY, SR. (age 62)

Director since February 2010, Independent, Member of the Compensation Committee, the Corporate Governance and Nominating Committee, the Executive Committee, and the Audit Committee

Mr. Cassidy, who is currently retired, was the founder of Excel Mining Systems LLC (“EMS”), a manufacturer of roof support systems for the mining industry located in Bowerston, Ohio. Mr. Cassidy served as Chief Executive Officer of EMS from 1991 until its sale in 2007 to Orica Mining Services (“Orica”), an Australian-based company. In 2008, Mr. Cassidy became President and Chief Executive Officer of Minova North & South Americas, a subsidiary of Orica, and served in that position until his retirement in December 2009. Mr. Cassidy provides the Board with years of business management and governance experience. Mr. Cassidy is also a director of the Bank.

FRANCIS P. WENTHUR (age 67)

Director since March 2010, Independent, Member the of Audit Committee (Chairman)

Mr. Wenthur, who is currently retired, has four decades of experience in financial and accounting positions with different industries, during which time he has held various positions in the field. In 2009, Mr. Wenthur served as a consultant for Minova North & South Americas. Prior to that time, from 1995 to July 2008, Mr. Wenthur was the Vice President and Chief Financial Officer for EMS. Mr. Wenthur provides the Board with experience in a key financial role for a commercial business and with previous loan workout experience for a bank and several companies prior to his employment with EMS. Mr. Wenthur is also a director of the Bank.

Class III Directors – Terms ending in 2015

BRIAN C. LAYMAN (age 38)

Director since May 2012, Independent, Member of the Audit Committee, Financial Expert

Mr. Layman is a principal with the law firm, Layman, D’Atri & Associates, LLC. He has held this position since November 2007. Mr. Layman is admitted to practice law in Ohio and Florida and is also a licensed CPA in Ohio. Mr. Layman's practice focuses primarily on estate, tax, asset protection and business succession planning, corporate law, and trust and estate administration, and he is certified as a Specialist in Estate Planning, Trust and Probate Law by the Ohio State Bar Association. Mr. Layman earned his B.S. in Accounting, Master of Taxation and Juris Doctor from the University of Akron. Mr. Layman is a member of the American Bar Association, Ohio State Bar Association, Florida State Bar Association and Stark County Bar Association, the American Institute of Certified Public Accountants, and the Ohio Society of Certified Public Accountants. Mr. Layman provides the board with legal and accounting expertise and experience as a practicing attorney and businessman. Mr. Layman is also a director of the Bank.

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JAMES P. TRESSEL (age 60)

Director since May 2012, Independent, Member of the Trust Committee

Mr. Tressel is the Vice President for Strategic Engagement for The University of Akron, a position he has held since May 2012. From September 2011 to January, 2012, Mr. Tressel was a consultant for the Indianapolis Colts. From 2001 through May 2011, Mr. Tressel was the Head Football Coach for The Ohio State University. A sought after public speaker, he is also the author of two books, Life Promises for Success published in 2011, and The Winners Manual: For the Game of Life published in 2008. Mr. Tressel has participated in numerous events in support of the United States Armed Forces, and is currently involved in fundraising activities for many charitable and philanthropic causes both locally and nationally. Mr. Tressel earned a M.A. degree in Education from the University of Akron and a B.A. degree in Education from Baldwin-Wallace College. Mr. Tressel is also a director of the Bank.

DAVID B. WURSTER (age 37)

Director since March 2010, Independent, Member of the Audit Committee

Since 1994, Mr. Wurster has served as the Chief Executive Officer of BookMasters, Inc., a leading book manufacturing and distribution company. Mr. Wurster has many years of experience in handling financial matters for companies that he owns and provides the Board with a strong business background, extensive financial management experience and a unique perspective as an entrepreneur and businessman. Mr. Wurster is also a director of the Bank.

Executive Officers

The current executive officers of the Company are Rick L. Hull, Denise M. Penz and Jane Marsh. Biographical information and business experience with respect to each of the executive officers is set forth below. The Company’s executive officers are elected by, and serve at the pleasure of, the Board.

RICK L. HULL, age 60, was appointed as the President and Chief Executive Officer of the Company and the Bank effective February 20, 2010. Mr. Hull also serves as a director of the Company and the Bank. His biographical information and business experience appear above under “Board of Directors.”

DENISE M. PENZ, age 44, was appointed as the Executive Vice President and Chief Operating Officer of the Company and the Bank effective February 20, 2010. Ms. Penz also serves as a director of the Company and the Bank. Her biographical information and business experience appear above under “Board of Directors.”

JANE MARSH, age 51, was appointed as the Secretary, Treasurer and Chief Financial Officer of the Company and the Bank effective February 20, 2010. From December 2009 until February 20, 2010, Ms. Marsh served as a consultant for Excel Financial and Excel Bancorp and assisted them in evaluating opportunities to directly or indirectly acquire a financial institution. From August 2005 until December 2009, Ms. Marsh served as the Controller of Health Care Management Services, Inc., a private company that operates residential treatment and outpatient healthcare facilities. From 2003 until June 2005, Ms. Marsh served as the Chief Financial Officer of Belmont Bancorp and Belmont National Bank. Ms. Marsh is a certified public accountant and has over 26 years of experience in accounting and bank services, including extensive experience in corporate strategic direction, finance and accounting.

Section 16(a) Beneficial Ownership Reporting compliance

Section 16(a) of the Exchange Act requires the Company’s executive officers, directors and persons who beneficially own more than 10% of the Company’s common shares to file reports of ownership and changes in ownership of the common shares with the SEC. Based solely on a review of the reports filed on behalf of these persons and written representations from our executive officers and directors that no additional reports were required to be filed, the Company believes that, during 2012, its executive officers, directors and greater than 10% beneficial owners complied with such filing requirements.

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Code of Business Conduct and Ethics

The Board has adopted and implemented a Code of Business Conduct and Ethics for all directors, officers, and employees of the Company and the Bank. This document was adopted to assist our employees and directors in understanding and carrying out our mandate for honesty, integrity and high standards of ethical conduct. It is available, free of charge, on the “Corporate Governance” page of the Company’s website at www.ohiolegacycorp.com. We intend to satisfy the requirements under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of these documents that relate to elements listed under Item 406(b) of Regulation S-K and apply to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, by posting such information on our website discussed above.

Corporate Governance

Director Independence

Although the Company is no longer subject to the rules of The NASDAQ Stock Market LLC (“NASDAQ”), the Company has chosen, as permitted by SEC rules, to apply the rules of NASDAQ in evaluating the independence of its directors. The Board has determined that seven of its nine members (Messrs. Altman, Cassidy, Layman, Tressel, Roat, Wenthur and Wurster) qualify as independent directors under applicable rules of NASDAQ. When determining whether a director meets the criteria for independence required by NASDAQ rules, the Board broadly considers all relevant facts and circumstances to determine whether the director has any relationship which, in the Board’s opinion, interferes with the exercise of independent judgment in carrying out the responsibilities of a director. With respect to the seven independent directors, there are no transactions, relationships or arrangements requiring disclosure pursuant to Item 404(a) of Regulation S-K that were considered by the Board in determining that these individuals are independent under NASDAQ rules, except as described below.

In reviewing the independence of Messrs. Cassidy, Wenthur, Wurster and Altman, the Board considered that (1) Mr. Cassidy is the sole member of an entity that owns approximately 32% of the outstanding membership interests in Excel Bancorp, (2) Mr. Wenthur owns approximately 10% of the outstanding membership interests in Excel Bancorp, (3) Mr. Wurster owns approximately 6.7% of the outstanding membership interests in Excel Bancorp, (4) Mr. Altman is a member of an entity that owns approximately 7.0% of the outstanding membership interests in Excel Bancorp, and (5) Mr. Layman is a member of an entity that owns approximately 10% of the outstanding membership interests in Excel Bancorp. The Board also considered that each of Messrs. Cassidy, Wenthur, Wurster, Altman, and Layman serves on the board of managers of Excel Bancorp. The Board concluded that, at this time, such directors’ relationships with, and/or ownership of, Excel Bancorp do not interfere with the exercise of their independent judgment in carrying out the responsibilities of a director of the Company.

Mr. Hull, who serves as our President and Chief Executive Officer, and Ms. Penz, who serves as our Executive Vice President and Chief Operating Officer, do not qualify as independent directors as a result of their service as executive officers of the Company.

Audit and Compliance Committee Independence and Financial Expert

Each member of the Audit and Compliance Committee qualifies as independent and is financially literate under applicable SEC rules and NASDAQ rules. The Board has determined that Mr. Layman qualifies as an audit committee financial expert under applicable SEC rules by virtue of his background and experience as a certified public accountant and attorney, and as independent under NASDAQ rules. The Audit and Compliance Committee held twelve meetings during 2012.

The Audit and Compliance Committee is responsible for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters and for maintaining a process for receiving and investigating confidential, anonymous submission by employees of the Company or the Bank of concerns regarding questionable accounting or auditing matters. Any such submissions, as well as any other communications from shareholders, may be made to the Chairperson of the Audit and Compliance Committee at the following address and phone number: Ohio Legacy Corp, 600 South Main Street, North Canton, OH 44720, Attn: Audit and Compliance Committee Chairperson, (330) 499-1900.

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Item 11. Executive Compensation.

COMPENSATION OF EXECUTIVE OFFICERS

2012 Summary Compensation Table

The following table summarizes the total compensation for 2012, 2011 and 2010 for the Company’s current principal executive officer, and two other most highly compensated executive officers (the “named executive officers”):

(a)	(b)	(c)	(d)	(f)	(i)	(j)
	Year	Salary	Bonus	Option awards	All other compensation	Total
Name and principal position		($)	($)(1)	($)(2)	($)(3)	($)
Current executive officers:
Rick L. Hull, President & Chief Executive Officer	2012	225,000	0	0	17,379	242,379
	2011	225,000	100,000	0	15,458	340,458
	2010	189,309	50,000	390,000	12,029	641,339
Denise Penz, Executive Vice President, Chief Operating Officer and Wealth Manager	2012	200,000	0	0	6,822	206,822
	2011	200,000	50,000	0	6,583	256,583
	2010	168,981	50,000	390,000	3,859	612,840
Jane Marsh, Senior Vice President & Chief Financial Officer	2012	145,000	0	0	3,077	148,077
	2011	145,000	25,000	0	2,057	172,057
	2010	122,332	5,000	39,000	1,475	167,808

(1) The cash bonuses paid in 2011 to Mr. Hull, Ms. Penz, and Ms. Marsh were made completely discretionary and were in consideration and recognition of their roles and efforts in completing the transaction related to the disposition of the Bank’s branches in the Wayne County market. The cash bonuses paid in 2010 and the stock option awards granted to Mr. Hull, Ms. Penz, and Ms. Marsh were made in consideration and recognition of their roles and efforts in advising Excel Financial and Excel Bancorp regarding their investment opportunities for banks and bank holding companies, which culminated in the Company’s sale of 17.5 million common shares to Excel Bancorp and other local investors in February 2010, resulting in aggregate proceeds to the Company of $17.5 million. In addition, the stock option awards were granted to further align the interests of the executives with the interests of the Company’s shareholders, to motivate the executives to improve the Company’s performance, and for retention purposes.

(2) On July 9, 2010, the Compensation Committee granted incentive stock option awards to Mr. Hull, Ms. Penz and Ms. Marsh covering 50,000, 50,000 and 5,000 common shares, respectively, pursuant to the 2010 Incentive Plan. (The awards were adjusted to reflect a One for Ten reverse split effected on September 17, 2012.) The stock options vest in five equal annual installments beginning July 9, 2011, subject to the executive officer’s continued employment with the Company on the applicable vesting date, and expire on July 8, 2020. The current number of vested options are 20,000 shares for Mr. Hull, 20,000 shares for Ms. Penz, and 2,000 shares for Ms. Marsh.

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The amounts shown in the table reflect the aggregate grant date fair value of the stock option awards computed in accordance with FASB ASC Topic 718. The fair market value of options granted to the executives were determined using the Black-Scholes option valuation model and the following weighted-average assumptions as of the grant date: risk free interest rate equal to 1.83%; expected term of 6.5 years; expected price volatility of 0.298; and a dividend yield of 0%.

(3) “All Other Compensation” consists of the following:

Mr. Hull. For 2012, includes reimbursement for country club dues of $12,241, Company matching contribution under its 401(k) plan of $1,145, group term life insurance premiums of $450, short and long-term disability premiums of $1,203 and personal use of company vehicle of $2,340. For 2011, includes reimbursement for country club dues of $11,129, Company matching contribution under its 401(k) plan of $1,539, group term life insurance premiums of $450 and personal use of company vehicle of $2,340. For 2010, includes reimbursement for country club dues of $10,032, group term life insurance premiums of $1,075 and personal use of company vehicle of $922

Ms. Penz. For 2012, includes personal use of company vehicle of $2,080, Company matching contribution under its 401(k) plan of $1,710, reimbursement for country club membership of $1,379, group term life insurance premiums of $450, and short and long-term disability premiums of $1,203. For 2011, includes personal use of company vehicle of $2,080, Company matching contribution under its 401(k) plan of $2,500, reimbursement for country club membership of $1,553 and group term life insurance premiums of $450. For 2010, includes personal use of company vehicle of $1,618, Company matching contribution under its 401(k) plan of $1,555, reimbursement for country club membership of $436 and group term life insurance premiums of $360.

Ms. Marsh. For 2012, includes Company matching contribution under its 401(k) plan of $1,466, group term life insurance premiums of $432, and short and long-term disability premiums of $1,179. For 2011, includes Company matching contribution under its 401(k) plan of $1,625 and group term life insurance premiums of $432. For 2010, includes Company matching contribution under its 401(k) plan of $1,115 and group term life insurance premiums of $360.

2010 Incentive Plan

The Company’s shareholders adopted the 2010 Incentive Plan at the Company’s 2010 Annual Meeting of Shareholders held on May 18, 2010. The purpose of the 2010 Incentive Plan is to promote the Company’s long-term financial success and increase shareholder value by motivating performance through incentive compensation and aligning the interests of our executives, directors and employees with the interests of our shareholders. The 2010 Incentive Plan is intended to encourage participants to acquire ownership interests in the Company, attract and retain talented employees, directors and consultants and enable participants to participate in the Company’s long-term growth and financial success. The 2010 Incentive Plan serves these purposes by making equity-based and cash-based awards available for grant to eligible employees, non-employee directors and consultants in the form of: (1) non-qualified stock options; (2) incentive stock options; (3) stock appreciation rights; (4) restricted common shares; (5) other stock-based awards; and (6) cash-based awards. The 2010 Incentive Plan is administered by the Compensation Committee. Subject to adjustment as set forth in the 2010 Incentive Plan, the aggregate number of common shares with respect to which awards may be granted under the plan is 200,000.

No awards were made under the 2010 Incentive Plan during 2011 or 2012. During 2010, the Compensation Committee granted incentive stock options to Mr. Hull, Ms. Penz and Ms. Marsh and nonqualified stock options to Mr. Roat under the 2010 Incentive Plan. For more information concerning these awards, see the “Option Awards” columns and related footnote disclosure in the 2012 Summary Compensation Table above, and the Outstanding Equity Awards at 2012 Fiscal Year-End table below.

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Benefits and Perquisites

The Company provides certain limited benefits and perquisites to the named executive officers that it believes will enable these individuals to more efficiently and effectively perform their responsibilities. The Company reimburses Mr. Hull and Ms. Penz for their country club memberships and provides them with company-owned vehicles. For more information concerning the benefits and perquisites received by the named executive officers during 2012, 2011 and 2010, see the “All Other Compensation” column and related footnote disclosure in the 2012 Summary Compensation Table above.

The named executive officers are eligible to participate in the following Company benefit programs on the same terms as our other employees: (1) the Premier Bank & Trust 401(k) Retirement Plan (which includes a Company match); (2) short-term and long-term disability insurance; (3) life insurance; (4) medical insurance; and (5) vacation time.

The Company’s 401(k) plan is available to all of our employees and provides for a 1% Company match on the first 4% of cash contributed to the plan by employees. The Company matching contributions are fully vested when made. Participants are entitled to receive distributions of their accounts held under the 401(k) plan upon termination of their employment. The 401(k) plan provides investment alternatives in large-, mid-, and small-capitalization stock funds, international stock funds and fixed income funds.

Outstanding Equity Awards at 2012 Fiscal Year-End

The equity option awards and the option exercise price were adjusted for a One for Ten Reverse Stock Split that was effected on September 17, 2012. The number of securities underlying the options was divided by ten and the option exercise price was multiplied by ten for the awards outstanding on the date of the One for Ten Reverse Stock Split.

The following table provides information concerning outstanding equity awards held by the named executive officers as of December 31, 2012.

	Option awards
	Number of securities underlying unexercised options		Option exercise price	Option expiration date
Name	(#) exercisable	(#) unexercisable (1)	($)
Rick L. Hull	20,000	30,000	23.00	07/08/20
Denise M. Penz	20,000	30,000	23.00	07/08/20
Jane Marsh	2,000	3,000	23.00	07/08/20

(1)  20% of the option awards vest annually over a five year period

Potential Payments upon Termination of Employment or Change in Control

The Company is not party to any employment agreements or change in control agreements with its current executive officers. Other than the potential accelerated vesting of stock options granted to the executive officers under the 2010 Incentive Plan in connection with a change in control of the Company, we do not currently have any employment or severance agreements or other plans or arrangements that provide payments or enhanced benefits to our executive officers in connection with a termination of employment or change in control.

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Under the terms of the 2010 Incentive Plan and the related award agreements governing outstanding stock option awards granted under the plan: (1) if a participant’s employment is terminated other than for cause, the unvested portion of the participant’s outstanding stock option will be canceled and forfeited on the termination date and the vested portion of the option may be exercised at any time before the expiration date of the option; (2) if a participant’s employment is terminated due to death or disability, the unvested portion of the participant’s outstanding stock option will be canceled and forfeited on the termination date and the vested portion of the option may be exercised at any time before the earlier of the expiration date of the option or the first anniversary of the termination date; (3) if a participant’s employment is terminated for cause, the participant’s outstanding stock option (whether or not then exercisable) will be canceled and forfeited on the termination date; and (4) in the event of a change in control of the Company, the Compensation Committee may take such actions, if any, as it deems necessary or desirable with respect to any outstanding award, including, without limitation, (i) accelerating the vesting, settlement and/or exercisability of the award, (ii) paying a cash amount in exchange for the cancellation of the award or (iii) issuing a substitute award that substantially preserves the value, rights and benefits of the award.

COMPENSATION OF DIRECTORS

The Board of Directors annually reviews and determines the compensation for our non-employee directors, taking into account the recommendations of the Compensation Committee. In connection with its review and determination, the Board and the Compensation Committee consider information and reports provided by management, the compensation paid to the non-employee directors of companies within our peer group, past compensation practices and the current facts and circumstances relating to our business.

Each director of the Company also serves as a director of the Bank. All fees for Board and committee service are paid by the Bank. The Company presently pays no compensation to its directors for their service on the Board or committees of the holding company, although it may choose to do so in the future. Directors who are also employees of the Company or the Bank receive no additional compensation for their service on the Board of Directors or committees of the Company or the Bank.

We only pay cash fees to our directors, who receive no other form of compensation for their service. The following table details the fees paid to each non-employee director for attendance at meetings of the Bank’s Board of Directors and certain committees during 2012:

	Bank Board of Directors		Joint Company and Bank Audit and Compliance Committee		Bank Trust Committee
Non-employee director attendance fee per meeting	$	500	$	250	$	250

In addition to receiving the attendance fees set forth in the table above, the Chairman of the Board of Directors of the Bank, the Chairman of the Audit and Compliance Committee and the Chairman of the Trust Committee receive an annual retainer fee paid in quarterly installments at the beginning of each quarter as follows:

	Annual Retainer Fee
Chairman of the Board of Directors of the Bank	$     5,000
Company/Bank Audit and Compliance Committee Chairman	$     2,500
Bank Trust Committee Chairman	$     2,500

In addition to the annual retainer, the Compensation Committee approved a discretionary bonus payment to Mr. Roat during 2012 for his service as Chairman.

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Non-employee directors are also eligible to receive awards under the Company’s 2010 Cash and Equity Incentive Plan (the “2010 Incentive Plan”). All awards granted under the 2010 Incentive Plan are made at the discretion of the Compensation Committee. On July 9, 2010, Mr. Roat, the Chairman of the Board, received an incentive stock option award covering 7,500 common shares under the 2010 Incentive Plan, of which 3,000 are vested. No other director has received an award under the 2010 Incentive Plan, and no other director holds any outstanding stock awards or option awards.

2012 Director Compensation Table

The following table summarizes the total compensation paid by the Bank to each of the Company’s current non-employee directors during 2012. Mr. Hull and Ms. Penz are not included in this table because each was an employee of the Company during 2012 and received no additional compensation for service as a director. The compensation received by Mr. Hull and Ms. Penz as employees of the Company are shown in the “2012 Summary Compensation Table”.

	Fees Earned or Paid In Cash ($)(1)
Louis Altman	9,750
Robert F. Belden	3,250	(2)
Bruce A. Cassidy, Sr.	6,250
Heather L. Davis	250	(3)
J. Edward Diamond	2,000	(2)
Brian C. Layman	5,500
Wilbur R. Roat	21,000	(5)
Michael S. Steiner	500	(4)
James P. Tressel	4,250
Frank P. Wenthur	10,750
David B. Wurster	7,250

(1) Reflects fees paid by the Bank.  The Company does not pay any fees to its directors.

(2) Mr. Belden's and Mr. Diamond's terms ended at the annual meeting in 2012.

(3) Ms. Davis resigned from the Board effective January 17, 2012

(4) Mr. Steiner resigned from the Board effective January 18, 2012.

(5) Mr. Roat was paid a discretionary cash bonus of $10,000 in 2012 for his service as Chairman in addition to his retainer fee for that position.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Equity Compensation Plan Information

The following table sets forth information as of December 31, 2012 with respect to common shares issuable under the Company’s equity compensation plans:

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	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of  securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a)
Plan category	(a)	(b)	(c)
Equity compensation plans approved by shareholders (1)	128,025	$22.98	71,975
Equity compensation plans not approved by shareholders
	N/A	N/A	N/A

a) Consists of (a) options to purchase 128,025 common shares granted under the Ohio Legacy Corp 2010 Cash and Equity Incentive Plan

Security Ownership of Certain Beneficial Owners

The following table sets forth, as of March 29, 2013, information regarding the beneficial ownership of each person known by the Company to be the beneficial owner of more than 5% of the Company’s outstanding common shares.

Name and Address	Common Shares  Beneficially Owned	Percent of Class (2)
Excel Bancorp, LLC (1) 107 Plaza Drive, Suite J St. Clairsville, Ohio 43950	15,000,000	74.4%

(1) Based on information set forth in a Schedule 13D, dated March 1, 2010, filed on behalf of Excel Bancorp. Excel Bancorp has sole voting power and sole investment power with respect to all of such common shares. Five of the Company’s directors – Messrs. Cassidy, Altman, Layman, Wenthur and Wurster – serve on the board of managers of Excel Bancorp. Seven of the Company’s directors – Messrs. Cassidy, Altman, Layman, Hull, Penz, Wenthur and Wurster – own, directly or indirectly, outstanding membership interests in Excel Bancorp. For more information regarding these relationships, see “Information Regarding the Board of Directors, Its Committees and Corporate Governance—Director Independence” above and “Certain Relationships and Related Transactions” below.

(2) Includes common shares outstanding and exercisable stock options

Security Ownership of Management and Directors

The following table sets forth, as of March 29, 2013, information regarding the beneficial ownership of the Company’s common shares by each current director, each director nominee, each named executive officer and all directors and executive officers as a group. Except as otherwise noted, each person has sole voting and investment power as to the common shares shown.

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Name	Common Shares Beneficially Owned	Percent of Class
Louis Altman	0	--
Bruce A. Cassidy, Sr.	0	--
Rick L. Hull	20,000 (1)	*
Brian C. Layman	0	--
Denise M. Penz	20,000 (1)	*
Wilbur R. Roat	5,500 (2)	*
James P. Tressel	0	--
Frank P. Wenthur	0	--
David B. Wurster	0	--
Jane Marsh	2,000 (3)	*
All directors and executive officers as a group (10 persons)	47,500	2.36%

(*) - does not exceed 1% of the common shares outstanding plus exercisable options

(1) Includes options exercisable into 20,000 shares within 60 days of March 29, 2013.

(2) Includes options exercisable into 3,000 shares within 60 days of March 29, 2013.

(3) Includes options exercisable into 2,000 shares within 60 days of March 29, 2013.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Transactions with Related Persons, Promoters and Certain Control Persons

During 2011 and 2012, certain directors and executive officers and their associates were customers of, or had transactions with, the Bank. All outstanding loans that were part of such transactions were made in the ordinary course of business and on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated parties, and did not involve more than a normal risk of loss or present other unfavorable features. The Company expects that similar transactions will occur in the future.

Loans to individual directors and officers also must comply with the Bank’s lending policies, regulatory restrictions and statutory lending limits. Directors and officers with personal interests in any loan application are excluded from the consideration of that loan application. As of December 31, 2012, the aggregate balance of all such loans was approximately $4.9 million, or 3.3% of the total net loans then outstanding. As of December 31, 2011, the aggregate balance of all such loans was approximately $5.4 million, or 5.0% of the total net loans then outstanding.

During 2010, the Company executed a lease agreement as lessee with Whipple-Dressler, LLC, a limited liability company in which Mr. Altman has an ownership interest and for whom he is a managing member. The lease is for approximately 7,000 square feet of office space and three drive-thru lanes for the Bank’s Belden branch located at 6141 Whipple Avenue NW, Canton, Ohio. The landlord completed a remodel of the existing building to meet the specifications of the Bank at a cost of $482,077, for which the Bank reimbursed Whipple-Dressler, LLC the amount of $300,000. The lease commenced on October 1, 2010, with an original term of twenty years. Fixed monthly rents for the first six months were $3,792 per month; for the second six months, the monthly rents were $7,566. Annual rents for years two through five are $90,792. The Bank obtained an independent real estate market rent study regarding the lease payments to Whipple-Dressler, LLC.  This study concluded that the rents to be paid by the Bank to Whipple-Dressler, LLC during the term of the lease are equal to or below currently available market rates for equivalent terms at comparable properties.

Director Independence

Please refer to the subsection “Director Independence” within the section “CORPORATE GOVERNANCE” of Item 10 above.

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Item 14. Principal Accounting Fees and Services.

Independent Registered Public Accounting Firm Services and Fees

The Audit and Compliance Committee has the sole authority to select, compensate, oversee, evaluate and, where appropriate, replace the Company’s independent registered public accounting firm. Additionally, the Audit and Compliance Committee is required to review and approve in advance any audit and non-audit services to be provided by the Company’s independent registered public accounting firm. The Audit and Compliance Committee has the sole authority to make these approvals, although such approval has been delegated to the Chairman of the Audit and Compliance Committee. Any actions taken by the Chairman are subsequently presented to the Audit and Compliance Committee for review and ratification. The Audit and Compliance Committee pre-approved all services provided by the Company’s independent registered public accounting firm in 2012.

Crowe Horwath LLP (“Crowe Horwath”) has acted as the principal independent accountant of the Company since October 2000. The Audit and Compliance Committee has appointed Crowe Horwath to continue as the Company’s independent external auditors for fiscal year 2013. Representatives of Crowe Horwath will be at the Annual Meeting and will have an opportunity to make a statement if they so desire and will be available to respond to appropriate questions. During 2011 and 2012, the Company paid fees in the aggregate of $120,500 and $106,700, respectively, to Crowe Horwath for various accounting services. Those fees and services are detailed in the following table.

	2011		2012
Audit fees	$	102,000	$	96,000
Audit-related fees		0		0
Tax fees		15,200		10,700
All other fees		3,300		0
Total	$	120,500	$	106,700

Audit Fees. Audit Fees for 2011 and 2012 consisted of fees for professional services rendered by Crowe Horwath for the audit of the Company’s annual financial statements and the review of financial statements included in the Company’s Forms 10-Q.

Tax Fees. The Company engaged Crowe Horwath to assist management with the preparation of the Company’s 2011 and 2012 federal income tax returns and State of Ohio franchise tax returns. Crowe Horwath did not perform tax planning services on a contingency fee basis.

All Other Fees. All other fees for 2011 related to the branch deposit sale and other miscellaneous matters.

PART IV

Item 15. Exhibits

(a) (1) Financial Statements.

The following consolidated financial statements of Ohio Legacy Corp are contained in Item 8 of this Annual Report on Form 10-K and are incorporated herein by reference:

Consolidated Balance Sheets as of December 31, 2012 and 2011

Consolidated Statements of Operations for the years ended December 31, 2012 and 2011

Consolidated Statements of Comprehensive Income for the years ended December 31, 2012 and 2011

Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2012 and 2011

Consolidated Statements of Cash Flows for the years ended December 31, 2012 and 2011

Notes to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm

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(2) Financial Statement Schedules.

Financial statement schedules are omitted as they are not required or are not applicable, or the required information is included in the financial statements.

(3) Exhibits.

Reference is hereby made to the Index to Exhibits beginning on page 83 of this Annual Report on Form 10-K.

(b) Exhibits.

Reference is hereby made to the Index to Exhibits beginning on page 83 of this Annual Report on Form 10-K. The documents listed in the Index to Exhibits are filed with this Annual Report on Form 10-K as exhibits or incorporated into this Annual Report on Form 10-K by reference.

(c) Financial Statement Schedules.

None.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	OHIO LEGACY CORP
Date:  April 1, 2013
	By:	/s/ Rick L. Hull
		Rick L. Hull
		President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By:	/s/ Rick L. Hull
	Rick L. Hull, President and Chief Executive Officer and Director
	(principal executive officer)
Date:	April 1, 2013
By:	/s/ Jane Marsh
	Jane Marsh, Senior Vice President, Chief Financial Officer and Treasurer
	(principal financial officer and principal accounting officer)
Date:	April 1, 2013
By:	*
	Wilbur R. Roat, Chairman of the Board and Director

Date: April 1, 2013

82

By:	*
	Louis Altman, Director
Date: April 1, 2013
By:	*
	Bruce A. Cassidy, Director
Date: April 1, 2013
By:	*
	Brian C. Layman, Director
Date: April 1, 2013
By:	/s/  Denise M. Penz
	Denise M. Penz, Director
Date: April 1, 2013
By:	*
	James P. Tressel, Director
Date:  April 1, 2013
By:	*
	Francis P. Wenthur, Director
Date:  April 1, 2013
By:	*
	David B. Wurster, Director
Date:  April 1, 2013

Date: April 1, 2013

*The above-named directors of the Registrant sign this Annual Report on Form 10-K by Rick L. Hull, their attorney-in-fact, pursuant to the Power of Attorney signed by each of the above named directors, which Power of Attorney is filed as Exhibit 24 to the Form 10-K.

By: /s/ Rick L. Hull

Rick L. Hull, Attorney-in-Fact

83

INDEX TO EXHIBITS

The following exhibits are included in this Annual Report on Form 10-K or are incorporated herein by reference as noted in the following table:

Exhibit Number	Description of Exhibit
2.1	Stock Purchase Agreement, dated as of November 15, 2009, by and among Excel Financial, LLC, Ohio Legacy Corp and Ohio Legacy Bank, National Association (incorporated herein by reference to Exhibit 99.2 to Ohio Legacy Corp’s Current Report on Form 8-K filed on November 16, 2009 (File No. 0-31673))
3.1	Second Amended and Restated Articles of Incorporation of Ohio Legacy Corp as filed with the Ohio Secretary of State on August 5, 2003 , as amended February 5, 2010, as further amended April 30, 2010, as further amended September 17, 2012 (filed herewith)
3.2	Code of Regulations of Ohio Legacy Corp, as amended April 25, 2001 (filed herewith)
10.1*	Ohio Legacy Corp. 2010 Equity and Cash Incentive Plan (incorporated herein by reference to Exhibit 10.1 to Ohio Legacy Corp’s Current Report on Form 8-K filed May 20, 2010 (File No. 0-31673))
10.2*	Form of Incentive Stock Option Award Agreement under Ohio Legacy Corp. 2010 Equity and Cash Incentive Plan (incorporated herein by reference to Exhibit 10.1 to Ohio Legacy Corp’s Current Report on Form 8-K filed July 15, 2010 (File No. 0-31673))
10.3*	Form of Nonqualified Stock Option Award Agreement under Ohio Legacy Corp. 2010 Equity and Cash Incentive Plan (incorporated herein by reference to Exhibit 10.2 to Ohio Legacy Corp’s Current Report on Form 8-K filed July 15, 2010 (File No. 0-31673))
10.4*	Form of Stock Option and Warrant Cancellation and Surrender Agreement, effective as of February 19, 2010, by and between Ohio Legacy Corp and each of its directors and executive officers (incorporated herein by reference to Exhibit 10.7 to Ohio Legacy Corp’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (File No. 0-31673))
10.5	Branch Office Purchase and Assumption Agreement by and among First National Bank, National Association, NBOH Properties, LLC and Premier Bank & Trust, National Association dated February 1, 2013 (filed herewith)
10.6	Office Purchase and Assumption Agreement by and between Premier Bank & Trust, National Association and The Commercial and Savings Bank of Millersburg, Ohio (incorporated herein by reference to Ohio Legacy Corp’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2011) (File No. 000-31673)
21	Subsidiary of Ohio Legacy Corp
23	Consent of Independent Registered Public Accounting Firm
24	Power of Attorney
31.1	Rule 13a-14(a)/15d-14(a) Certification (Principal Executive Officer)
31.2	Rule 13a-14(a)/15d-14(a) Certification (Principal Financial Officer)
32.1	Section 1350 Certification (Principal Executive Officer and Principal Financial Officer)
101#	Interactive data files formatted in XBRL pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Balance Sheets as of December 31, 2012 and December 31, 2011; (ii) the Consolidated Statements of Operations for the two years ended December 31, 2012 and 2011; (iii) the Consolidated Statements of Comprehensive Income for the two years ended December 31, 2012 and 2011; (iv) the Consolidated Statements of Cash Flows for the two years ended December 31, 2012 and 2011; (v) the Consolidated Statements of Changes in Shareholders Equity for the two years ended December 31, 2012 and 2011; and (vi) the Notes to the  Consolidated Financial Statements (furnished herewith).

* Denotes management contract or compensatory arrangement.

# As provided in Rule 406T of SEC Regulation S-T, this information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933, as amended, and Section 18 of the Securities Exchange Act of 1934, as amended.

84

EX-3.1

Exhibit 3.1

SECOND AMENDED AND RESTATED
ARTICLES OF INCORPORATION OF
OHIO LEGACY CORP.

as amended February 5, 2010,

as further amended April 30, 2010,

as further amended September 17, 2012

First: The name of the corporation is: Ohio Legacy Corp.

Second: The place in the State of Ohio where its principal office is located is 600 South Main Street, Canton, Ohio 44720.

Third: The purposes of the corporation are as follows: The purposes for which the Corporation is formed is to be a bank holding company and to engage in any other lawful act or activity for which corporations may be formed under Sections 1701.01 to 1701.98, inclusive, of the Ohio Revised Code, as now in effect or hereinafter amended.

Fourth: The total number of shares of stock which the Corporation shall have authority to issue is Twenty Two Million Five Hundred Thousand (22,500,000) shares of Common Stock, without par value, and Five Hundred Thousand (500,000) shares of Serial Preferred Stock, without par value.

Effective at the date and time this amendment to the Second Amended and Restated Articles of Incorporation, as amended, to amend and replace this Article FOURTH is accepted by the Secretary of State of the State of Ohio [September 17, 2012] (the “Effective Time”), each ten shares of Common Stock of the Corporation then issued and outstanding shall be automatically converted into one validly issued, fully-paid and non-assessable share of Common Stock (the “Reverse Stock Split”). No fractional shares of Common Stock or scrip will be issued in connection with the Reverse Stock Split. Shareholders who otherwise would be entitled to receive fractional shares of Common Stock will be entitled to receive cash (without interest or deduction) in lieu of such fractional share interests, upon receipt by the Corporation’s transfer agent of the shareholder’s properly completed and duly executed transmittal letter and, where shares are held in certificated form, the surrender of the shareholder’s Old Certificates (as defined below), in an amount equal to the product obtained by multiplying (i) the closing price per share of the Corporation’s Common Stock on the NASDAQ Capital Market as of the close of business on the business day immediately preceding the Effective Time, by (ii) the number of shares of Common Stock that would have been exchanged for the fractional share. Each certificate that immediately prior to the Effective Time represented shares of Common Stock (“Old Certificates”), will thereafter represent that number of shares of Common Stock into which the shares of Common Stock represented by the Old Certificate will have been combined, subject to the elimination of fractional share interests as described above. This amendment to this Article FOURTH shall affect only issued and outstanding shares of Common Stock of the Corporation and shall not affect the total authorized number of shares. This Article FOURTH shall not change the stated capital or paid-in surplus referable to shares of Common Stock, if any.

No holder of shares of stock of any class of the Corporation shall, as such holder, have any rights to subscribe for or purchase (a) any shares of stock of any class, any warrants, options or other instruments that shall confer upon the holder thereof the right to subscribe for or purchase or receive from the Corporation any shares of stock of any class which the Corporation may issue or sell, whether or not such shares shall be exchangeable for any shares of stock of the Corporation of any class or classes and whether or not such shares shall be unissued shares, now or hereafter authorized, or shares acquired by the Corporation after the issue thereof, and whether or not such shares of stock, warrants, options or other instruments are issued for cash or services or property or by way of dividend or otherwise, or (b) any other security of the Corporation which shall be convertible into, or exchangeable for, any shares of stock of the Corporation or any class or classes, or to which shall be attached or appurtenant to any warrant, option or other instrument that shall confer upon the holder of such security the right to subscribe for or purchase or receive from the Corporation any shares of its stock or any class or classes, whether or not such shares shall be unissued shares, now or hereafter authorized, or shares acquired by the Corporation after the issue thereof, and whether or not such securities are issued for cash or services or property or by way of dividend or otherwise, other than such right, if any, as the Board of Directors, in its sole discretion, may from time to time determine. If the Board of Directors shall offer to the holders of shares of stock of any class of the Corporation, or any of them, any such shares of stock, options, warrants, instruments or other securities of the Corporation, such offer shall not, in any way, constitute a waiver or release of the right of the Board of Directors subsequently to dispose of other securities of the Corporation without offering the same to said holders.

The shares of such classes shall have the following express terms:

DIVISION A
EXPRESS TERMS OF THE PREFERRED STOCK

(1) The Preferred Stock may be issued from time to time in one or more series. All shares of Preferred Stock shall be of equal rank and shall be identical with all other shares except in respect of the matters that may be fixed by the Board of Directors as hereinafter provided, and each share of each series shall be identical with all other shares of such series, except, if dividends are to be cumulative, as to the date from which dividends are cumulative. Subject to the provisions of Sections 2 and 3 of this Division, which provisions shall apply to all Preferred Stock, the Board of Directors hereby is authorized to cause such shares to be issued in one or more series and with respect to each such series prior to the issuance thereof to fix:

a) The number of shares constituting such series, including the authority to increase or decrease such number, and the distinctive designation of such series.

b) The dividend rate of the shares of such series, whether the dividends shall be cumulative and, if so, the date from which they shall be cumulative, and the relative rights of priority, if any, of payment of dividends on shares of such series.

c) The right, if any, of the Corporation to redeem shares of such series and the terms and conditions of such redemption including the redemption price.

d) The rights of the shares in case of a voluntary or involuntary liquidation, dissolution, or winding up of the Corporation, and the relative rights of priority, if any, of payment of shares of such series.

e) The obligation, if any, of the Corporation to retire shares of such series pursuant to a retirement or sinking fund or fund of a similar nature and the terms and conditions of such obligation.

f) The terms and conditions, if any, upon which shares of such series shall be convertible into or exchangeable for shares of stock of any other class or classes of stock of the Corporation or other entity or of any other series of Preferred Stock, including the price or prices or the rate or rates of conversion or exchange and the terms of adjustment, if any.

g) Any other rights, preferences or limitations of the shares of such series as may be permitted by law.

The Board of Directors is authorized to adopt from time to time amendments to the Articles of Incorporation fixing, with respect to each such series, the matters described in clauses (a) through (g), inclusive, of this Section 1.

(2) The Preferred Stock shall be senior to the Common Stock in payment of dividends and payment in respect of liquidation or dissolution.

(3) The holders of Preferred Stock shall be entitled to one vote for each share of such stock upon all matters presented to the shareholders; and, except as otherwise required by law, the holders of Preferred Stock and the holders of Common Stock shall vote together as one class on all matters.

DIVISION B
EXPRESS TERMS OF THE COMMON STOCK

The Common Stock shall be subject to the express terms of the Preferred Stock and any series thereof and to the terms of Article EIGHTH. Each share of Common Stock shall be equal to every other share of Common Stock and the holders thereof shall be entitled to one vote for each share of such stock on all questions presented to the shareholders.

Fifth: Except as otherwise provided in these Articles of Incorporation or in the Regulations, the holders of a majority of the outstanding shares are authorized to take any action which, but for this provision, would require the vote or other action of the holders of more than a majority of such shares; provided, no action of shareholders can be taken except at a meeting called for that purpose.

Sixth: Except as otherwise provided in these Articles of Incorporation, to the extent permitted by law, the Corporation, by its Board of Directors, may deal in its own shares (including the purchase or redemption of any issued shares) and may issue options, rights or warrants, including any rights issued under a plan that prohibits the holder of a specified number or percentage of the outstanding shares from exercising rights or that requires certain directors to consent to the redemption of such rights.

Seventh: No holder of shares of the Corporation shall be entitled to vote cumulatively in the election of Directors of the Corporation.

Eighth: No person shall make a Control Share Acquisition without first obtaining the prior authorization of the Corporation’s shareholders at a special meeting of shareholders called by the Board of Directors in accordance with this Article EIGHTH.

(1) Procedure. Any Person who proposes to make a Control Share Acquisition shall deliver a notice (“Notice”) to the Corporation at its principal place of business that sets forth all of the following information:

a) The identity of the Person who is giving the Notice;

b) A statement that the Notice is given pursuant to this Article EIGHTH;

c) The number and class of shares of the Corporation owned, directly or indirectly, by the Person who gives the Notice;

d) The range of voting power (as specified in Section (6)(b)( 1) of this Article EIGHTH) under which the proposed Control Share Acquisition would, if consummated, fall;

e) A description in reasonable detail of the terms of the proposed Control Share Acquisition; and

f) Representations, supported by reasonable information, that the proposed Control Share Acquisition would be consummated if shareholder approval is obtained and, if consummated, would not be contrary to law and that the Person who is giving the Notice has the financial capacity to make the proposed Control Share Acquisition.

(2) Call of Special Meeting of Shareholders. The Board of Directors of the Corporation shall, within ten (10) days after receipt by the Corporation of a Notice that complies with Section (l), call a special meeting of shareholders to be held not later than fifty (50) days after receipt of the Notice by the Corporation, unless the Person who delivered the Notice agrees to a later date, to consider the proposed Control Share Acquisition; provided that the Board of Directors shall have no obligation to call such a meeting if they make a determination within ten (10) days after receipt of the Notice that (i) the Notice was not given in good faith; (ii) the proposed Control Share Acquisition would not be in the best interests of the Corporation and its shareholders or (iii) the proposed Control Share Acquisition could not be consummated for financial or legal reasons.

The Board of Directors may adjourn such special meeting of shareholders if prior to such meeting the Corporation has received a Notice from any other Person and the Board of Directors has determined that the Control Share Acquisition proposed by such other Person, or a merger, consolidation or sale of assets of the Corporation, should be presented to shareholders at an adjourned meeting or at a special meeting held at a later date.

For purposes of making a determination that a special meeting of shareholders should not be called pursuant to this Section (2), no such determination shall be deemed void or voidable with respect to the Corporation merely because one or more of its directors or officers who participated in deliberations regarding such determination may be deemed to be other than disinterested, if in any such case the material facts of the relationship giving rise to a basis for self-interest are known to the directors and the directors, in good faith reasonably justified by the facts, make such determination by the affirmative vote of a majority of the disinterested directors, even though the disinterested directors constitute less than a quorum. For purposes of this paragraph, “disinterested directors” shall mean directors whose material contacts with the Corporation are limited principally to activities as a director or shareholder. Persons who have material and recurring business or professional contacts with the Corporation shall not be deemed to be “disinterested directors” for purposes of this provision. A director shall not be deemed to be other than a “disinterested director” merely because he would no longer be a director if the proposed Control Share Acquisition were approved and consummated.

(3) Notice of Special Meeting. The Corporation shall, as promptly as practicable, give notice of the special meeting of shareholders called pursuant to Section (2) to all shareholders of record as of the record date set for such meeting. Such notice shall include or be accompanied by a copy of the Notice and by a statement of the Corporation, authorized by the Board of Directors, of its position or recommendation, or that it is taking no position or making no recommendation, with respect to the proposed Control Share Acquisition.

(4) Requirements for Approval. The Person who delivered the Notice may make the proposed Control Share Acquisition if both of the following occur:

a) The shareholders of the Corporation authorize such acquisition at the special meeting of shareholders called pursuant to Section (2), at which meeting a quorum is present, by the affirmative vote of a majority of the Voting Stock represented at such meeting in person or by proxy and by a majority of the portion of such Voting Stock represented at such meeting in person or by proxy excluding the votes of Interested Shares. A quorum shall be deemed to be present at such special meeting if at least a majority of the issued and outstanding Voting Stock, and a majority of such Voting Stock excluding Interested Shares, are represented at such meeting in person or by proxy.

b) Such acquisition is consummated, in accordance with the terms so authorized, not later than three hundred sixty (360) days following shareholder authorization of the Control Share Acquisition.

(5) Violations of Restriction. Any Voting Stock issued or transferred to any Person in violation of this Article EIGHTH shall hereinafter be called “Excess Shares.” In the event that any Person acquires Excess Shares, then, in addition to any other remedies which the Corporation may have at law or in equity as a result of such acquisition, the Corporation shall have the right to treat the issuance or transfer of any such Excess Shares as null and void. In the event the Corporation is not permitted to treat an issuance or transfer of Excess Shares as null and void, such Excess Shares will be treated as the equivalent of treasury shares of the Corporation and, as such, holders of Excess Shares will hold such Excess Shares as agent of the Corporation and shall have no right to exercise or receive the benefits of shareholder rights appurtenant to such Excess Shares. In such event, the Corporation may redeem any or all Excess Shares, arrange a sale to one or more purchasers who could acquire such Excess Shares without violating this Article EIGHTH, or seek other appropriate remedies. In addition, any Person who receives dividends, interest or any other distribution with respect to Excess Shares shall hold the same as agent for the Corporation and, following a permitted transfer, for the transferee thereof. Notwithstanding the foregoing, any person who holds Excess Shares may transfer the same (together with any distributions thereon) to any Person who, following such transfer, would not own shares in violation of this Article EIGHTH. Upon such permitted transfer, the Corporation shall pay or distribute to the transferee any distributions on the Excess Shares not previously paid or distributed.

(6) Definitions. As used in this Article EIGHTH:

a) “Person” includes, without limitation, an individual, a corporation (whether nonprofit or for profit), a partnership, an unincorporated society or association, and two or more persons having a joint or common interest.

b) (1) “Control Share Acquisition” means the acquisition, directly or indirectly, by any Person, of shares of the Corporation that, when added to all other shares of the corporation in respect of which such Person, directly or indirectly, may exercise or direct the exercise of voting power as provided in this paragraph, would entitle such Person, immediately after such acquisition, directly or indirectly, to exercise or direct the exercise of voting power of the Corporation in the election of directors within any of the following ranges of such voting power:

(i) One-fifth or more but less than one-third of such voting power;

(ii) One-third or more but less than a majority of such voting power; or

(iii) A majority of such voting power.

A bank, broker, nominee, trustee, or other Person who acquires shares in the ordinary course of business for the benefit of others in good faith and not for the purpose of circumventing this Article EIGHTH shall, however, be deemed to have voting power only of shares in respect of which such Person would be able to exercise or direct the exercise of votes at a special meeting of shareholders called pursuant to Section (2) of this Article EIGHTH without further instruction from others. For purposes of this Article EIGHTH, the acquisition of securities immediately convertible into shares of the Corporation with voting power in the election of directors shall be treated as an acquisition of such shares.

b)(2) The acquisition of any shares of the Corporation does not constitute a Control Share Acquisition for the purposes of this Article EIGHTH if the acquisition is consummated in any of the following circumstances:

(i) By underwriters in good faith and not for the purpose of circumventing this Article EIGHTH in connection with any offering to the public of securities of the Corporation;

(ii) By bequest or inheritance, by operation of law upon the death of any individual, or by any other transfer without valuable consideration, including a gift, that is made in good faith and not for the purpose of circumventing this Article EIGHTH;

(iii) Pursuant to the satisfaction of a pledge or other security interest created in good faith and not for the purpose of circumventing this Article EIGHTH;

(iv) Pursuant to a merger, consolidation, combination or majority share acquisition adopted or authorized by shareholder vote in compliance with the provisions of Article SEVENTH of these Articles of Incorporation and Sections 1701.78, 1701.79 or 1701.83 and Chapter 1704. of the Ohio Revised Code if the Corporation is a party to the agreement of merger, consolidation or acquisition, as the case may be; or

(v) Under such circumstances that the acquisition does not result in the Person acquiring shares of the Corporation being entitled, immediately thereafter and for the first time, directly or indirectly, to exercise or direct the exercise of voting power of the Corporation in the election of directors within the range of one-fifth or more but less than one-third of such voting power, or within any of the ranges of voting power specified in Section (6)(b)( l)(i), (ii) or (iii) which is higher than the range of voting power applicable to such Person immediately prior to such acquisition.

The acquisition by any Person of shares of the Corporation in a manner described under this Section (6)(b)(2) shall be deemed to be a Control Share Acquisition authorized pursuant to this Article EIGHTH within the range of voting power specified in Section (6)(b)(l)(i), (ii) or (iii) that such Person is entitled to exercise after such acquisition, provided that, in the case of an acquisition in a manner described under Section (6)(b)(l)(i), (ii) or (iii), the transferor of shares to such Person had previously obtained any authorization of shareholders required under this Article EIGHTH in connection with such transferor’s acquisition of shares of the Corporation.

b)(3) The acquisition of shares of the Corporation in good faith and not for the purpose of circumventing this Article EIGHTH from any Person whose Control Share Acquisition had previously been authorized by shareholders in compliance with this Article EIGHTH, or from any Person whose previous acquisition of shares would have constituted a Control Share Acquisition but for Section (6)(b)(2), does not constitute a Control Share Acquisition for the purpose of this Article EIGHTH unless such acquisition entitles any Person, directly or indirectly, alone or with others, to exercise or direct the exercise of voting power of the Corporation in the election of directors in excess of the range of such voting power authorized pursuant to this Article EIGHTH, or deemed to be so authorized under Section (6)(b)(2).

c) “Interested Shares” means Voting Stock with respect to which any of the following persons may exercise or direct the exercise of the voting power:

(1) any Person whose Notice prompted the calling of a special meeting of shareholders pursuant to Section (2);

(2) any officer of the Corporation elected or appointed by the directors of the Corporation;

(3) any employee of the Corporation who is also a director of the Corporation;

(4) any person that acquires such shares for valuable consideration during the period beginning with the date of the first public disclosure of a proposed Control Share Acquisition of the Corporation or any proposed merger, consolidation, or other transaction that would result in a change in control of the Corporation or a transfer of all or substantially all of its assets, and ending on the record date established by the directors pursuant to this Article EIGHTH, if either of the following applies:

(5) The aggregate consideration paid or given by the person who acquired the shares, and any other persons acting in concert with the person, for all such shares exceeds two hundred fifty thousand dollars;

(6) The number of shares acquired by the person who acquired the shares, and any other persons acting in concert with the person, exceeds one-half of one per cent of the outstanding shares of the corporation entitled to vote in the election of directors; and

(i) any person that transfers such shares for valuable consideration after the record date established pursuant to this Article EIGHTH as to shares so transferred, if accompanied by the voting power in the form of a blank proxy, an agreement to vote as instructed by the transferee, or otherwise.

d) “Voting Stock” means all securities of the Corporation entitled to vote generally in the election of directors, and, for purposes of Sections (5) and (10) of this Article EIGHTH, shall mean securities of the Corporation immediately convertible into securities entitled to vote generally in the election of the directors.

(7) Proxies. No proxy appointed for or in connection with the shareholder authorization of a Control Share Acquisition pursuant to this Article EIGHTH is valid if it provides that it is irrevocable. No such proxy is valid unless it is sought, appointed, and received both (a) in accordance with all applicable requirements of law and (b) separate and apart from the sale or purchase, contract or tender for sale or purchase, or request or invitation for tender for sale or purchase, of shares of the Corporation.

(8) Revocability of Proxies. Proxies appointed for or in connection with the shareholder authorization of a Control Share Acquisition pursuant to this Article EIGHTH shall be revocable at all times prior to the obtaining of such shareholder authorization, whether or not coupled with an interest.

(9) Amendments. Notwithstanding any other provisions of these Articles of Incorporation or the Regulations of the Corporation or any provision of law that might otherwise permit a lesser vote, but in addition to any affirmative vote of the holders of any particular class or series of stock required by law, the Articles of Incorporation or the Regulations of the Corporation, the affirmative vote of the holders of at least eighty percent (80%) of the Voting Stock, voting as a single class, shall be required to alter, amend or repeal this Article EIGHTH or adopt any provisions in these Articles of Incorporation or the Regulations of the Corporation which are inconsistent with the provisions of this Article EIGHTH.

(10) Legend on Share Certificates. Each certificate representing Voting Stock of the Corporation shall contain the following legend:

“Transfer of the securities represented by this Certificate is subject to the provisions of Article EIGHTH of the Corporation’s Articles of Incorporation as the same may be in effect from time to time. Upon written request delivered to the Secretary of the Corporation at its principal place of business, the Corporation will mail to the holder of this Certificate a copy of such provisions without charge within five (5) days after receipt of written request therefor. By accepting this Certificate the holder hereof acknowledges that it is accepting same subject to the provisions of said Article EIGHTH as the same may be in effect from time to time and covenants with the Corporation and each holder thereof from time to time to comply with the provisions of said Article EIGHTH as the same may be in effect from time to time.”

Ninth: The provisions of Section 1701.831 of the Ohio Revised Code, as amended from time to time, or any successor provision or provisions to said Section, shall not apply with respect to any particular Control Share Acquisition, as such is defined in said Section, regarding this Corporation so long as Article EIGHTH of these Articles of Incorporation, as such Articles of Incorporation may be amended from time to time, remains an Article of these Articles of Incorporation and remains substantially in full force and effect, disregarding any renumbering of such Article EIGHTH resulting from any amendment of these Articles of Incorporation.

Tenth: The Corporation reserves the right to amend, alter, change or repeal any provision contained in these Articles of Incorporation which may be contained in these articles of incorporation of a corporation organized under the laws of the State of Ohio, in the manner now or hereafter prescribed by statute or these Articles of Incorporation, and all rights conferred upon shareholders herein are granted subject to this reservation.

EX-3.2

Exhibit 3.2

CODE OF REGULATIONS
OF
OHIO LEGACY CORP

as amended April 25, 2001

MEETINGS OF SHAREHOLDERS

Section 1. Place of Meeting.

All meetings of the shareholders shall be held at the offices of the Corporation in [City], Ohio, or elsewhere, within or without the State of Ohio, as may be decided from time to time by the Board of Directors and indicated in the notice of the meeting.

Section 2. Annual Meeting.

The annual meeting of shareholders of the Corporation shall be held at 10:00 a.m., on the second Tuesday after the fifteenth day of April in each year, if not a legal holiday, but if a legal holiday, then on the next succeeding business day, or such other time and date as may be determined by the Board of Directors. Directors shall be elected thereat to succeed the directors whose terms are expiring that year, and such other business transacted as may be specified in the notice of the meeting, or as may properly be brought before the meeting. In the event that the annual meeting is not held or if directors are not elected thereat, a special meeting may be called and held for that purpose.

Section 3. Special Meetings.

Special meetings of the shareholders may be held on any business day when called by the Chairman of the Board, the President, the Board of Directors at a meeting, a majority of the directors acting without a meeting, or by holders of not less than fifty percent (50%) of the outstanding voting stock of the Corporation.

Section 4. Notice of Meetings.

A written or printed notice of every annual or special meeting of the shareholders stating the time, place and purposes thereof shall be given to each shareholder entitled to vote thereat and to each shareholder entitled to notice as provided by law, which notice unless served upon a shareholder in person shall be mailed to his last address appearing on the records of the Corporation, not less than seven (7) days nor more than sixty (60) days prior to the date of the meeting. It shall be the duty of the Secretary to give written notice of the annual meeting, and of each special meeting when requested to do so by the officer, directors or shareholders calling such meeting. Any shareholder may waive in writing any notice of any meeting required to be given by law or under these Regulations and, by attendance or voting at any meeting without protesting the lack of proper notice, shall be deemed to have waived notice thereof. Any person who, by operation of law transfer, or any other means whatsoever, shall become entitled to any shares, shall be bound by every notice in respect of such share or shares that was duly given to the person from whom he derives his title to such shares prior to the entering of his name and address on the records of the Corporation.

Section 5. Business to be Conducted at Meetings.

At any meeting of shareholders, only such business shall be conducted as shall have been properly brought before the meeting. To be properly brought before a meeting of shareholders, business must be specified in the notice of meeting (or any supplement thereto) given by or at the direction of the Directors, otherwise properly brought before the meeting by or at the direction of the directors or otherwise properly brought before the meeting by a shareholder. For business to be properly brought before a meeting of shareholders by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than seventy-five (75) days’ notice or prior public disclosure of the date of the meeting is given or made to the shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the fifteenth (15th) day following the earlier of the day on which such notice of the date of the meeting was mailed or such public disclosure was made. A shareholder’s notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the meeting (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting; (ii) the name and record address of the shareholder proposing such business; (iii) the class and number of shares of the Corporation which are beneficially owned by such shareholder; and (iv) any material interest of such shareholder in such business. Notwithstanding anything in the Regulations of the Corporation to the contrary, no business shall be conducted at a meeting of shareholders except in accordance with the procedures set forth in this Section 5. The Chairman of the meeting of shareholders may, if the facts warrant determine and declare to* the meeting that business was not properly brought before the meeting in accordance with the provisions of this Section 5, and if he should so determine, any such business shall not be transacted.

Section 6. Voting and Proxies.

At all meetings of shareholders, only such shareholders shall be entitled to vote, in person or by proxy, who appear upon the records of the Corporation as the holders of stock at the time possessing voting power, or if a record date be fixed as hereinafter provided, those appearing as such on such record date. Except as otherwise provided in the Corporation’s Articles of Incorporation, at each meeting of the shareholders, every shareholder having the right to vote shall be entitled to vote in person or by proxy appointed by an instrument in writing, subscribed by such shareholder and bearing a date not more than eleven (11) months prior to said meeting unless such instrument specifies the date on which it is to expire or the length of time it is to continue in force.

Section 7. Quorum and Adjournments.

Except as may be otherwise required by law or by the Articles of Incorporation or by these Regulations, the holders of a majority of the then outstanding shares entitled to vote at a shareholders’ meeting shall constitute a quorum to hold such meeting; provided, however, that any meeting duly called, whether a quorum is present or otherwise may, by vote of the holders of a majority of the voting stock represented thereat, adjourn from time to time and from place to place without notice other than by announcement at such meeting.

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DIRECTORS

Section 8. Number; Nomination.

The number of directors of the Corporation may be determined by the vote of the holders of a majority of the shares represented at any annual meeting or special meeting called for the purpose of electing directors or by resolution adopted by affirmative vote of a majority of the directors then in office, provided that the number of directors shall in no event be fewer than seven (7) nor more than sixteen (16). When so fixed, such number shall continue to be the authorized number of directors until changed by the shareholders or directors by vote as aforesaid. No decrease in the number of directors shall have the effect of removing any director prior to the expiration of the term for which he was elected. Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors. Nominations of persons for election as directors of the Company may be made at a meeting of shareholders by or at the direction of the directors, by any nominating committee or person appointed by the directors, or by any shareholder of the Company entitled to vote for the election of directors who complies with the notice procedures set forth in this Section 8. Nominations by shareholders shall be made pursuant to timely notice in writing to the Secretary of the Company. To be timely, a shareholder’s notice shall be delivered to or mailed and received at the principal executive offices of the Company not less than sixty (60) days nor more than ninety (90) days prior to the meeting; provided, however, that in the event that less than seventy-five (75) days’ notice or prior public disclosure of the date of the meeting is given or made to shareholders, notice by the shareholder to be timely must be so received not later than the close of business on the fifteenth (15th) day following the earlier of the day on which such notice of the date of the meeting was mailed or such public disclosure was made. Such shareholder’s notice shall set forth: (a) as to each person who is not an incumbent director whom the shareholder proposes to nominate for election as a director, (i) the name, age, business address and residence address of such person, (ii) the principal occupation or employment of such person, (iii) the class and number of shares of the Company which are beneficially owned by such person, and (iv) any other information relating to such person that is required to be disclosed in solicitations for proxies for election of directors pursuant to Regulation 14A under the Securities Exchange Act of 1934 (or any comparable successor rule or regulation under such Act); and (b) as to the shareholder giving the notice (i) the name and record address of such shareholder, and (ii) the class and number of shares of the Company which are beneficially owned by such shareholder. Such notice shall be accompanied by the written consent of each proposed nominee to serve as a director of the Company, if elected. No person shall be eligible for election as a director of the Company unless nominated in accordance with the procedures set forth in this Section 8. The Chairman of the meeting may, if the facts warrant, determine and declare to the meeting that a nomination was not made in accordance with the provisions of this Section 8, and if he should so determine the defective nomination shall be disregarded.

Section 9. Classification, Election and Term of Office.

Unless there shall be less than nine (9) directors, the directors shall be divided into three (3) classes, designated Class 1, Class II and Class III, as nearly equal in size as possible, and one of the classes shall be elected for a three-year term of office at each annual shareholders meeting. If there shall be less than nine (9) directors, the directors shall be divided into as many classes as permitted by applicable law and the number of directors shall be divided among the classes as nearly equal as possible. If the number of directors is changed, any increase or decrease shall be apportioned among the classes so as to maintain the number of directors in each class as nearly equal as possible, and any additional director of any class elected to fill a vacancy resulting from an increase in such class shall hold office for a term that shall coincide with the remaining term of such class, but in no case will a decrease in the number of directors in a particular class shorten the term of any incumbent director. A director shall hold office until the annual meeting for the year in which his term expires and his successor shall be elected and shall qualify, subject, however, to prior death, resignation, or removal from office.

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Section 10. Removal.

Except as otherwise provided by law, all the Directors or all the Directors of a particular class, or any individual Director, may be removed from office with or without assigning any cause, by the affirmative vote of at least eighty percent (80%) of the outstanding voting stock present in person or represented by proxy, entitled to vote in respect thereof, at an annual meeting or at any special meeting duly called.

Section 11. Vacancies.

Whenever any vacancy shall occur among the directors, the remaining Directors shall constitute the directors of the Corporation until such vacancy is filled or until the number of Directors is changed pursuant to Section 8 hereof. Except in cases where a Director is removed as provided by law and these Regulations and his successor is elected by the shareholders, the remaining directors may; by a vote of a majority of their number, fill any vacancy for the unexpired term. A majority of the Directors then in office may also fill any vacancy that results from an increase in the number of Directors.

Section 12. Organization Meeting.

Immediately after each annual meeting of the shareholders, or each special meeting held in lieu thereof, the Board of Directors, including the newly elected members, if a quorum thereof is present, shall hold an organization meeting at the same place or at such other place within a 10 mile radius as may have been fixed by the Chairman of the Board or the President prior to such meeting of the shareholders, provided that the Directors and nominees present are advised of the different location, for the purpose of electing officers and transacting any other business. Notice of such meeting need not be given. If for any reason such organization meeting is not held at such time, a special meeting for such purpose shall be held as soon thereafter as practicable.

Section 13. Regular Meetings.

Regular meetings of the Board of Directors for the transaction of any business may be held at such times and places as may be determined by the Board of Directors. The Secretary shall give to each director at least five (5) days written notice of each such meeting.

Section 14. Special Meetings.

Special meetings of the Board of Directors may be held at any time or place upon call by the Chairman of the Board, the President, or any five directors. Notice of each such meeting shall be given to each director by letter, telegram or telephone or in person not less than forty-eight (48) hours prior to such meeting; provided, however, that such notice shall be deemed to have been waived by the Directors attending or voting at any such meeting, without protesting the lack of proper notice, and may be waived in writing or by telegram by any Director either before or after such meeting. Unless otherwise limited in the notice thereof, any business may be transacted at any organization, regular or special meeting.

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Section 15. Quorum.

At all meetings of the Board of Directors a majority of the Directors in office at the time shall constitute a quorum for the transaction of business.

Section 16. Compensation.

If so determined by the Board of Directors, all or any members of the Board of Directors or of any committee of the Board shall be paid for their services and given such benefits as may be determined from time to time by the Board of Directors; and such compensation may be in addition to that received by any director or any member of a committee as an officer or employee of the Corporation. Non-resident members may be reimbursed for expenses reasonably incurred by them in attending such meetings.

Section 17. Appointment.

The Board of Directors may from time to time, by resolution passed by a majority of the whole Board, appoint certain of its members, but not less than three (3) in any case, to act as a committee or committees in the intervals between meetings of the Board and may delegate to such committee or committees any of the authority of the Board, however conferred (subject to the control and direction of the Board) other than the power to fill any vacancy among the Directors or in any committee of the Directors. The authority of any committee of the directors shall be subject to any limitations and conditions set by the Board. Any act or authorization of an act by any such committee within the authority delegated to it shall be as effective for all purposes, as the act or authorized action of the Directors. All action or authorization of action by any committee shall be reported to the Board of Directors at its first meeting thereafter, and, if the rights of third parties have not intervened, shall be subject to revision or rescission by the Board. In every case, the affirmative vote of a majority or the consent of all of the members of a committee shall be necessary for the approval of any action, but action may be taken by a committee without a formal meeting or written consent.

Section 18. Executive Committee.

In particular, the Board of Directors may create from its membership and define the powers and duties of an Executive Committee. During the intervals between meetings of the Board of Directors, the Executive Committee shall possess and may exercise under the control and direction of the Board all of the powers of the Board of Directors in the management and control of the business of the Corporation. All action taken by the Executive Committee shall be reported to the Board of Directors at its first meeting thereafter, and, if the rights of third parties have not intervened, shall be subject to revision or rescission by the Board. In every case, the affirmative vote of a majority or the consent of all of the members of the Executive Committee shall be necessary for the approval of any action, but action may be taken by the Executive Committee without a formal meeting or written consent. The Executive Committee shall meet at the call of any member thereof.

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OFFICERS

Section 19. Officers Designated.

The officers of the Corporation shall be elected by the Board of Directors at their organization meeting or at a special meeting held in lieu thereof. The officers of the Corporation shall consist of the President, a Secretary and a Treasurer, and, if so determined by the Board of Directors, a Chairman of the Board, one or more Vice Presidents, a Controller and such other officers and assistant officers as the Board may determine. The Chairman of the Board shall be elected from among the directors. The other officers may, but need not be, elected from among the Directors. Any two offices may be held by the same person, but in any case where the action of more than one officer is required no one person shall act in more than one capacity.

Section 20. Tenure of Office.

The officers of the Corporation shall hold office until the next organization meeting of the Board of Directors and until their respective successors are chosen and qualified, except in case of resignation, death or removal. The Board of Directors may remove any officer at any time with or without cause by a majority vote of the directors in office at the time. A vacancy, however created, in any office may be filled by the Board of Directors.

Section 21. Powers and Duties of Officers in General.

The powers and duties of the officers shall be exercised in all cases subject to such directions as the Board of Directors may see fit to give. The respective powers and duties hereinafter set forth are subject to alteration by the Board of Directors. The Board of Directors is also authorized to delegate the duties of any officer to any other officer, employee or committee and to require the performance of duties in addition to those provided for herein.

Section 22. Chairman of the Board.

The Chairman of the Board shall preside at meetings of the Board of Directors and, if the Chairman of the Board is the chief executive officer of the Corporation, at meetings of the shareholders.

Section 23. President.

The President shall preside at all meetings of the shareholders and directors where the Chairman of the Board does not preside.

Section 24. Vice Presidents.

In the absence or disability of the President, the Vice Presidents, in the order designated by the Board of Directors, shall perform the duties of the President. If so determined by the Board of Directors, a Vice President may be designated as being in charge of a specified function or of a specified division.

Section 25. Secretary, Treasurer and Controller.

The Secretary, the Treasurer and the Controller (if any) shall perform such duties as are indicated by their respective titles, subject to the provisions of Section 21 above. The Secretary shall have custody of the corporate seal, and shall have the duty to record the proceedings of the shareholders and directors in a book to be kept for that purpose.

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Section 26. Other Officers.

All other officers shall have such powers and duties as may be prescribed by the Board of Directors or, in the absence of their action, by the respective officers having supervision over them.

Section 27. Compensation.

The Board of Directors is authorized to determine, or to provide the method of determining, or to empower a special committee of its members to determine, the compensation of all officers.

Section 28. Signing Checks and Other Instruments.

The Board of Directors is authorized to determine, or to provide the method of determining, the manner in which deeds, contracts and other obligations and instruments of the Corporation shall be signed. However, persons doing business with the Corporation shall be entitled to rely upon the action of the Chairman of the Board, the President, any Vice President, the Secretary, the Treasurer or the Controller in executing deeds, contracts and other obligations and instruments in the name of the Corporation as having been duly authorized. The Board of Directors of the Corporation is authorized to designate depositories of the funds of the Corporation and to determine, or provide the method of determining, the manner in which checks, notes, bills of exchange and similar instruments shall be signed, countersigned or endorsed.

INDEMNIFICATION

Section 29. Indemnification of Directors and Officers.

The Corporation shall indemnify Directors or former Directors, and may indemnify any officer or former officer of the Corporation and any person who is or has served at the request of the Corporation as director, officer or trustee of another corporation, partnership, joint venture, trust or other enterprise (and his heirs, executors and administrators), against expenses, including attorneys’ fees, judgments, fines and amounts paid in settlement, actually and reasonably incurred by him by reason of the fact that he is or was such director, officer or trustee in connection with any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative to the fullest extent permitted by, and according to the procedures and requirements set forth in, the Ohio General Corporation Law as the same may be in effect from time to time. The indemnification provided for herein shall not be deemed to restrict the right of the Corporation to (i) indemnify employees, agents and others as permitted by such Law, (ii) purchase and maintain insurance or provide similar protection on behalf of directors, officers or such other persons against liabilities asserted against them or expenses incurred by them arising out of their service to the Corporation as contemplated herein, and (iii) enter into agreements with such directors, officers, employees, agents or others indemnifying them against any and all liabilities (or such lesser indemnification as may be provided in such agreements) asserted against them or incurred by them arising out of their service to the Corporation as contemplated herein. The Corporation shall pay Directors or former directors, and may pay any officer or former officer of the Corporation and any person who is or has served at the request of the Corporation as director, officer or trustee of another corporation, partnership, joint venture, trust or other enterprise (and his heirs, executors and administrators) expenses in defending the action, suit, or proceeding as they are incurred, in advance of the final disposition of the action, suit, or proceeding, upon receipt of an undertaking by or on behalf of such person in which he agrees (a) to repay such amount if it is proved by clear and convincing evidence in a court of competent jurisdiction that his action or failure to act involved an act or omission undertaken with deliberate intent to cause injury to the corporation or undertaken with reckless disregard for the best interests of the corporation and (b) Reasonably cooperate with the corporation concerning the action, suit, or proceeding.

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CORPORATE SEAL

Section 30. Corporate Seal.

The corporate seal of the Corporation shall be circular in form and shall have inscribed thereon the name of the Corporation.

PROVISIONS IN ARTICLES OF INCORPORATION

Section 31. Provisions in Articles of Incorporation.

These Regulations are at all times subject to the provisions of the Articles of Incorporation of the Corporation as the same may be in effect from time to time.

LOST CERTIFICATES

Section 32. Lost Certificates.

The Directors may direct, or establish procedures for, the issuance of a new certificate in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed, upon such terms and conditions as they may deem advisable.

RECORD DATES

Section 33. Record Dates.

For any lawful purpose, including, without limitation, the determination of the shareholders who are entitled to: (i) receive notice of or to vote at a meeting of shareholders; (ii) receive payment of any dividend or distribution; (iii) receive or exercise rights or purchase of or subscription for, or exchange or conversion of, shares or other securities, subject to contract rights with respect thereto; or (iv) participate in the execution of written consents, waivers, or releases, the directors may fix a record date which shall not be a date earlier than the date on which the record date is fixed and, in the cases provided for in clauses (i), (ii) and (iii) above, shall not be more than sixty (60) nor fewer than ten (10) days, unless the Articles of Incorporation specify a shorter or a longer period for such purpose, preceding the date of the meeting of the shareholders, or the date fixed for the payment of any dividend or distribution, or the date fixed for the receipt or the exercise of rights, as the case may be.

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FISCAL YEAR

Section 34. Fiscal Year.

The fiscal year of the Corporation shall end on December 31 each year unless and until the Board of Directors shall otherwise determine.

AMENDMENTS

Section 35. Amendments.

These Regulations may be altered, changed or amended in any respect or superseded by new Regulations in whole or in part, by the affirmative vote of the holders of a majority of the voting stock of the Corporation present in person or by proxy at an annual or special meeting called for such purpose. Notwithstanding and notwithstanding the fact that a lesser percentage may be specified by law or in any agreement with any national securities exchange or any other provision of these Regulations, the amendment, alteration, change or repeal of, or adoption of any provisions inconsistent with, Section 8, 9, or 10 of these Regulations shall require the affirmative vote of at least eighty percent (80%) of the outstanding voting stock of the Corporation, present in person or by proxy, at any annual meeting or special meeting duly called for the purpose of acting on any such amendment, alteration, change, repeal or adoption, unless such amendment, alteration, change, repeal or adoption has been recommended by at least two-thirds of the Board of Directors of the Corporation then in office.

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EX-10.5

BRANCH Office Purchase and Assumption Agreement

by and among

First National Bank, National Association

and

NBOH Properties, LLC

and

Premier Bank & Trust, National Association

Dated as of the 1st day of February, 2013

TABLE OF CONTENTS

			Page
1.	PURCHASE AND ASSUMPTION		1
	1.1	Purchase and Sale of Assets	1
	1.2	Transfer of Assets	1
	1.3	Acceptance and Assumption	3
	1.4	Payment of Funds	4
2.	CONDUCT OF THE PARTIES PRIOR TO CLOSING		6
	2.1	Covenants of SELLERS	6
	2.2	Covenants of BUYER	10
	2.3	Covenants of All Parties	10
3.	REPRESENTATIONS AND WARRANTIES		11
	3.1	Representations and Warranties of SELLERS	11
	3.2	Representations and Warranties of BUYER	14
4.	ACTIONS RESPECTING EMPLOYEES AND PENSIONS AND EMPLOYEE BENEFIT PLANS		15
	4.1	Employment of Employees	15
	4.2	Terms and Conditions of Employment	15
	4.3	Actions to be Taken by FNB	16
5.	CONDITIONS PRECEDENT TO CLOSING		17
	5.1	Conditions to SELLERS’ Obligations	17
	5.2	Conditions to BUYER's Obligations	18
	5.3	Waivers of Conditions Precedent	19
6.	CLOSING		20
	6.1	Closing and Closing Date	20
	6.2	SELLERS’ Actions at Closing	20
	6.3	BUYER's Actions at the Closing	21
	6.4	Method of Payment	22
7.	CERTAIN TRANSITIONAL MATTERS		22
	7.1	Transitional Action by BUYER	22
	7.2	Transitional Actions by SELLERS	24
	7.3	Overdrafts and Transitional Action	27
	7.4	ATMs and Debit Cards	28
	7.5	Environmental Matters	28
	7.6	Effect of Transitional Action	30
8.	GENERAL COVENANTS AND INDEMNIFICATION		31
	8.1	Confidentiality Obligations of BUYER	31
	8.2	Confidentiality Obligations of SELLERS	31
	8.3	Indemnification by SELLERS	32
	8.4	Indemnification by BUYER	33
	8.5	Solicitation of Customers by BUYER Prior to Closing	33
	8.6	Solicitation of Customers by FNB After the Closing	34
	8.7	Further Assurances	34
	8.8	Operation of the Office	34
	8.9	Information After Closing	35

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	8.10	Individual Retirement Accounts	35
	8.11	Covenant Not to Compete	35
	8.12	Non-solicitation of Employees	35
	8.13	Office-Originated Loans after Closing	36
9.	TERMINATION		36
	9.1	Termination by Mutual Agreement	36
	9.2	Termination by SELLERS	36
	9.3	Termination by BUYER	37
	9.4	Effect of Termination	37
10.	MISCELLANEOUS PROVISIONS		38
	10.1	Expenses	38
	10.2	Limitations on Indemnification	38
	10.3	Waivers	38
	10.4	Notices	39
	10.5	Parties in Interest; Assignment; Amendment	40
	10.6	Headings	40
	10.7	Terminology	40
	10.8	Press Releases	41
	10.9	Entire Agreement	41
	10.10	Governing Law	41
	10.11	Flexible Structure	42
	10.12	Counterparts	42
	10.13	Tax Matters	42
	10.14	Updating of Disclosure Schedules and Exhibits	42

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SCHEDULES
3.1(c)	Noncontravention
3.1(r)	Home Equity Loans
EXHIBITS
1.2(a)	Description of Real Estate
1.2(b)	Furniture, Fixtures and Equipment
1.2(e)	Office Loans
1.2(g)	Assumed Contracts
1.3(b)	Deposit Liabilities; Deposit Accounts
1.4(b)	Allocation of Acquisition Consideration
4.1(a)	Office Offered Employees
6.2(b)	Bill of Sale/Assignment and Assumption

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BRANCH OFFICE PURCHASE AND ASSUMPTION AGREEMENT

This Branch Office Purchase and Assumption Agreement (this "Agreement") is made and entered into this 1st day of February, 2013, by and among Premier Bank & Trust, N.A., a national banking association with its principal office at 6141 Whipple Avenue, N.W., North Canton, Ohio 44720 ("BUYER"), First National Bank, N.A., a national banking association with its principal office located at 112 West Market Street, Orrville, Ohio 44667 (“FNB”), and NBOH Properties, LLC, an Ohio limited liability company, with its principal office located at 112 West Market Street, Orrville, Ohio 44667 (“NBOH” and collectively with FNB, "SELLERS"; each of NBOH and FNB, a “SELLER”). Certain terms used but not otherwise defined herein shall have the meanings given such terms in Section 10.7 hereof.

WHEREAS, BUYER desires to purchase and assume from SELLERS, and SELLERS desire to sell and assign to BUYER, certain assets and liabilities associated with the Office (as defined below);

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, BUYER and SELLERS hereby agree as follows:

1.           PURCHASE AND ASSUMPTION.

1.1         Purchase and Sale of Assets. At the Closing (as defined in Section 6.1 hereof), BUYER shall purchase, acquire and assume, and SELLERS shall sell and assign, the real estate and other assets described in Section 1.2 hereof, including all leases for such real estate on which the Office (as defined below) and other premises are located (collectively, the "Assets"), all of which are used in and/or relate primarily to the business conducted by FNB at its branch office commonly known for street numbering purposes as 3085 West Market Street, Akron, Ohio 44333 and located at the site described in Exhibit 1.2(a) attached hereto and incorporated herein by reference, pursuant to the terms and conditions, and subject to the exceptions, set forth herein. The foregoing branch office is referred to as the "Office." The transactions contemplated by this Agreement and the purchase of the Assets and assumption of the Assumed Liabilities (as defined below) provided for herein is referred to herein as the "Acquisition." The parties hereby agree that, effective as of the Closing, that certain lease agreement between NBOH and FNB for the lease of the Office shall be terminated and shall not be assigned to or assumed by BUYER hereunder.

1.2         Transfer of Assets. Subject to the terms and conditions of this Agreement, SELLERS shall sell, assign, transfer, convey and deliver to BUYER, on the Closing Date (as defined in Section 6.1 hereof), free and clear of any liens, charges, mortgages, pledges, easements, encumbrances, impairments, security interests, claims, or any other title defects or restrictions whatsoever (collectively, “Liens”), except for the Permitted Exceptions, the Assets, which shall include the following:

(a)          Real Estate. All of NBOH's right, title and interest in and to the real estate described in attached Exhibit 1.2(a) on which the Office and other premises are situated, together with all of NBOH’s rights in and to all improvements thereon and all easements rights, privileges and appurtenances associated therewith (collectively, the "Real Estate"). Exhibit 1.2(a) identifies the Real Estate by street address, legal description and/or tax parcel number;

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(b)          Furniture and Equipment. All of SELLERS’ right, title and interest to the furniture, fixtures and equipment located at the Office and listed in Exhibit 1.2(b) attached hereto and incorporated herein by reference (collectively, the "Fixed Assets"), free and clear of any Liens, except for the Permitted Exceptions; provided, however, that such Fixed Assets shall specifically exclude, among other items, teller software, branch capture software, branch capture CPUs, controllers, servers, sign "skins" with FNB’s name, printed supplies and documents and other materials bearing any name and/or logo of FNB or any affiliate of FNB, network communications equipment and related devices, leased or licensed software, and marketing fixtures;

(c)          Cash on Hand. All cash on hand at the Office as of the close of business on the Closing Date, including vault cash, petty cash, ATM cash and tellers' cash;

(d)          Prepaid Expenses. All prepaid expenses recorded or otherwise reflected on the books of SELLERS and attributable to the Office as of the close of business on the Closing Date;

(e)          Office Loans. All right, title and interest in and to all of those loans attributable to the Office as of the close of business on the Closing Date, as set forth in Exhibit 1.2(e) attached hereto and incorporated herein by reference, together with such other loans that BUYER and FNB may mutually agree upon prior to the Closing, less (i) any loans that may be removed from the Office Loans by the mutual agreement of BUYER and FNB, free and clear of any and all Liens (other than interests of third parties that are subordinate to those of FNB), and (ii) any loans not over thirty (30) days outstanding that are automatically created as the result of an overdraft of a Deposit Account (as defined below) pursuant to an overdraft protection program offered by FNB (collectively, "Overdraft Loans"), except for those Overdraft Loans which are charged to credit card accounts not transferred to BUYER hereunder. Such loans shall be referred to herein individually and collectively as the "Office Loans;"

(f)          Records of the Office. All records and documents related to the Assets transferred or the Assumed Liabilities (as defined below) as exist and are available, whether or not physically maintained at the Office (in whatever form or medium then maintained by SELLERS) including, but not limited to, those relating to (i) the Deposit Accounts and (ii) the promissory notes, files and documents and instruments relating to the Office Loans; and

(g)          Contracts or Agreements. All of SELLERS’ right, title and interest in and to the contracts or agreements listed on Exhibit 1.2(g) attached hereto and incorporated herein by reference, including, but not limited to, the maintenance and service agreements related to the Office and those certain lease agreements between NBOH and any tenants occupying portions of the Real Estate, but excluding therefrom any listed contracts or agreements that are not assignable without cost to BUYER unless BUYER consents to the inclusion of such contracts or agreements in writing prior to the Closing (collectively, the "Assumed Contracts").

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Any other assets of SELLERS not included in the foregoing (a) through (g) shall remain the property of SELLERS and shall not be sold or transferred to BUYER pursuant to this Agreement.

1.3         Acceptance and Assumption. Subject to the terms and conditions of this Agreement, on and as of the Closing on the Closing Date, BUYER shall:

(a)          Assets. Receive and accept all of the Assets assigned, transferred, conveyed and delivered to BUYER by SELLERS pursuant to this Agreement, as identified in Section 1.2 above;

(b)          Deposit Liabilities. Assume and thereafter discharge, pay in full and perform all of FNB's obligations and duties relating to the Deposit Liabilities (as defined below) attributable to the Office as of the close of business on the Closing Date. The term "Deposit Liabilities" means all of FNB's obligations, duties and liabilities of every type and character relating to all Deposit Accounts (as defined below) attributable to the Office as of the close of business on the Closing Date, other than (i) KEOGH accounts, (ii) deposit accounts securing any loan of FNB which is not an Office Loan, for which BUYER assumes no liability, (iii) deposits of FNB’s employees who are not Transferred Employees (as defined below), and (iv) deposits of current directors of FNB and its affiliates (collectively (i)-(iv), the “Excluded Deposit Accounts”). The deposit accounts (other than the Excluded Deposit Accounts) referred to in the immediately preceding sentence, as set forth in Exhibit 1.3(b) attached hereto and incorporated herein by reference (collectively, the "Deposit Accounts"), include, without limitation, passbook, statement savings, checking, money market and negotiable order of withdrawal accounts, certificates of deposit and individual retirement accounts ("IRAs") for which FNB has not received, on or before the Closing Date, the written advice from the account holder of such account holder's objection or failure to accept BUYER as successor. The "obligations, duties and liabilities" referred to in the definition of Deposit Liabilities include, without limitation, the obligation to pay and otherwise process all Deposit Accounts in accordance with applicable law and their respective contractual terms (including the accrual and payment of interest after the Closing Date), and the duty to supply all applicable reporting forms for periods following the Closing Date including, without limitation, IRS Form 1099 reports relating to the Deposit Accounts to be filed and provided after the Closing Date relating to interest accrued on and after the Closing Date;

(c)          Liabilities Under Assumed Contracts. Assume and thereafter fully and timely perform and discharge, in accordance with their respective terms, all of the liabilities and obligations of SELLERS arising after the Closing Date with respect to the Assumed Contracts, which are sold, assigned or transferred to BUYER by SELLERS pursuant to this Agreement; and

(d)          Other Liabilities. Except as otherwise provided herein, fully and timely perform and discharge, as the same may be or become due, the Assumed Contracts and all additional liabilities and obligations of SELLERS as of the date of this Agreement, which will be reflected on the books of SELLERS as being attributable to the Office as of the close of business on the Closing Date; provided, however, that, during the Pre-Closing Period (as defined below), SELLERS shall not incur any liabilities or obligations, other than the Deposit Liabilities of FNB, without the prior consent of BUYER, which consent shall not be unreasonably withheld or delayed.

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The liabilities and obligations of SELLERS assumed by BUYER pursuant to this Section 1.3 are collectively referred to as the “Assumed Liabilities.”

1.4         Payment of Funds.

(a)          Consideration. The total consideration payable by BUYER to SELLERS for the Assets (collectively, the “Acquisition Consideration”) shall be the aggregate of the following:

(i)          the amount of the Assumed Liabilities, as reflected on the books of SELLERS as of the close of business on the Closing Date;

(ii)         plus, the amount of cash on hand at the Office transferred to BUYER as of the close of business on the Closing Date pursuant to Section 1.2(c);

(iii)        plus, the sum of $1,100,000, as and for the purchase of the Real Estate (the “Real Estate Consideration”);

(iv)        plus, the net aggregate book value as reflected on SELLERS' books of the Fixed Assets, as of the last day of the month ending immediately prior to the month in which the Closing Date occurs, plus an amount equal to $25,000;

(v)         plus, a premium (the “Premium”) of five and twenty-five one hundredths percent (5.25%) of the aggregate "Eligible Deposits" (as hereinafter defined) of the Office as of the close of business on the Closing Date between $13,000,000 and $16,000,000, plus an amount equal to $20,000; provided, however, that the Premium shall not be less than $682,500. The term "Eligible Deposits" shall mean the average aggregate principal balance of all Deposit Liabilities of the Office for a period commencing ten (10) days prior to the Closing Date and ending at the close of business on the Closing Date, excluding any certificates of deposit with a deposit balance in excess of $100,000;

(vi)        plus, the amount of prepaid expenses described in Section 1.2(d) of this Agreement, prorated as of the close of business on the Closing Date;

(vii)       plus, an amount equal to 99.22% of the outstanding principal balance of the Office Loans, together with accrued and unpaid interest thereon and any and all late fees relating thereto computed as of the close of business on the Closing Date. The aggregate principal balance of the Office Loans shall be no less than $10,000,000 and no more than $12,000,000;

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(viii)      plus, the amount of any credits to SELLERS at the Closing under Sections 1.4(c) and 1.4(d) hereof, or minus any credits to BUYER at the Closing under Sections 1.4(c) and 1.4(d) hereof; and

(ix)         minus, the aggregate balance of all Deposit Accounts (including interest posted or accrued to such Deposit Accounts as of the close of business on the Closing Date) as of the close of business on the Closing Date, which balance shall be paid and transferred to BUYER at the Closing.

In the event that the Acquisition Consideration is positive (i.e., the aggregate of the amounts set forth in items (i) through (viii) of this Section 1.4(a) is greater than the amount of item (ix) of this Section 1.4(a)), the amount of such excess shall be due and paid by BUYER to SELLERS at the Closing in the manner specified in Section 6.4 hereof (collectively, the “Cash Consideration”). In the event that the Acquisition Consideration is negative (i.e., the amount of item (ix) of this Section 1.4(a) is greater than the aggregate of the amounts set forth in items (i) through (viii) of this Section 1.4(a)), the amount of such excess shall be due and paid by SELLERS to BUYER at the Closing in the manner specified in Section 6.4 hereof. The parties hereto shall execute a Preliminary Settlement Statement (as defined below) at the Closing and a Final Settlement Statement (as defined below) post-Closing in accordance with Section 6.4 hereof.

(b)          Allocation of Acquisition Consideration. The Acquisition Consideration shall be allocated in accordance with Exhibit 1.4(b) to be prepared by BUYER and SELLERS and attached to this Agreement and incorporated herein by reference prior to the Closing. BUYER and SELLERS agree that the Acquisition Consideration will be allocated to the Assets for all purposes (including tax and financial accounting) in a manner consistent with the fair market values set forth in Exhibit 1.4(b), as jointly determined by BUYER and SELLERS. BUYER and SELLERS shall file all tax returns (including amended returns and claims for refund) and information reports in a manner consistent with such allocation and no party shall take any position (whether in audits, tax returns or otherwise) that is inconsistent with such allocation unless required to do so by law.

(c)          Reimbursement and Proration of Certain Expenses. Except as otherwise expressly provided herein, all expenses (i) due and payable at times after the Closing Date for periods prior to the close of business on the Closing Date or (ii) paid prior to the close of business on the Closing Date for periods following the Closing Date, including the prepaid expenses described in Section 1.2(d) hereof and deferred expenses described in Section 1.3(d) hereof, including, without limitation, real estate Taxes (as defined below) which are a Lien but not yet due and payable, utility payments, payments due on leases assigned, payments due on assigned service and maintenance contracts and similar expenses relating to the Office, shall be prorated among SELLERS and BUYER as of the close of business on the Closing Date; provided, however, that all real estate Taxes, to the extent payable by SELLERS and/or BUYER, shall be prorated on the Closing Date on the basis of the most recent tax bill (or, if not available, the last available tax duplicate). All prorations shall be final. All utility payments and lease payments shall be prorated on the basis of the best information available on the Closing Date. SELLERS will contact all applicable utility providers to effectuate a reading on the Closing Date so that an appropriate transfer from SELLERS to BUYER can occur as of the Closing Date. SELLERS hereby agree to credit BUYER for security deposits relating to the leases included in the Assumed Contracts in an amount equal to Two Thousand Seven Hundred Thirty-Four Dollars and 46/100 ($2,734.46). Any credits to SELLERS at the Closing under this Section 1.4(c) will be added to the Acquisition Consideration, and any credits to BUYER at the Closing under this Section 1.4(c) shall be subtracted from the Acquisition Consideration.

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(d)          Expenses Relating to Real Estate and other Assets. The transfer (or conveyance) fees relating to the sale of the Real Estate and the costs, fees and expenses of the title examination relating to the procurement of the Title Commitment related to the Real Estate referred to in Sections 2.1(b) and 5.2(f) herein, shall be allocated to, and shall be borne, solely and exclusively by SELLERS. The costs, fees and expenses relating to the premiums, including any endorsements for extended coverage, for all title insurance policies (net of the costs of the Title Commitment and examination), recording costs and other similar costs, fees and expenses, if any, relating to the sale and transfer of the Real Estate, including, but not limited to, any conveyance fees, Taxes, recording costs and other similar fees and expenses relating to the sale and transfer of any other Assets, shall be allocated to, and shall likewise be borne, solely and exclusively, by SELLERS. To the extent BUYER requests SELLERS or their attorneys to seek certain title endorsements or removal of exceptions noted on the Title Commitment, BUYER shall reimburse SELLERS at Closing for their attorney fees related thereto. In no event shall SELLERS be required to undertake any negotiations with the Title Company (defined below) for any matters that relate to the scope of title insurance coverage or the Permitted Exceptions. BUYER shall be credited at the Closing for all the costs, fees and expenses allocated to SELLERS pursuant to this Section 1.4(d) but paid by BUYER, and SELLERS shall be credited at the Closing for all of the costs, fees and expenses allocated to BUYER pursuant to this Section 1.4(d) but paid by SELLERS. Any credits to BUYER at the Closing under this Section 1.4(d) shall be subtracted from the Acquisition Consideration, and any credits to SELLERS at the Closing under this Section 1.4(d) will be added to the Acquisition Consideration. If this transaction does not close by virtue of a breach of this Agreement, the breaching party shall be responsible for and shall, as appropriate, reimburse the other party for its expenses set forth in this Section 1.4(d). If this transaction does not close for any other reason after the date hereof, each party shall reimburse the other party upon termination of this Agreement for such party's share of expenses pursuant to this Section 1.4(d) so that each party shall pay the same share of expenses as it would have paid at Closing.

(e)          Insurance Premium Refunds. With respect to the Insured Office Loans (as defined in Section 7.2(l) herein), SELLERS shall provide a credit to BUYER equal to the sum of unearned premiums relating to the Insured Office Loans to compensate BUYER, in advance, for estimated refunds otherwise payable to FNB in conjunction with future payoffs of such Insured Office Loans prior to maturity (the "Premium Settlement Payment"). Such Premium Settlement Payment shall be calculated as of the Closing Date and shall appear as a credit to BUYER in the Final Settlement Statement referenced in Section 6.4 herein.

2.           CONDUCT OF THE PARTIES PRIOR TO CLOSING.

2.1           Covenants of SELLERS. SELLERS hereby covenant to BUYER that, from the date hereof until the Closing Date (the “Pre-Closing Period”):

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(a)          Operation of the Office. SELLERS shall continue to operate the Office in a manner substantially equivalent to that employed immediately prior to the date of this Agreement. Notwithstanding the foregoing, during the Pre-Closing Period, except as may be required to obtain the required authorizations, consents and approvals referred to in Section 2.3(a) of this Agreement and except as may be otherwise required by a regulatory authority, SELLERS shall not, without the prior consent of BUYER:

(i)          permit the Office to engage or participate in any transaction or incur or sustain any obligation except in the ordinary course of business;

(ii)         permit the Office to transfer to SELLERS' other operations any of the Assets, except for (A) supplies, if any, which have unique function in the business of SELLERS and its affiliates and ordinarily would not be useful to BUYER, (B) cash and other normal intrabank transfers which may be transferred in the ordinary course of business in accordance with normal banking practices, (C) any current loans not included among the Office Loans, and (D) any loans originated by the Office in the market served thereby during the Pre-Closing Period that are not included among the Office Loans;

(iii)        permit the Office to transfer to FNB’s other operations any Deposit Liabilities, other than (A) Deposit Liabilities securing loans made by FNB which are not Office Loans, (B) Deposit Liabilities owned in whole or in part by employees of FNB who are not Transferred Employees, or (C) Deposit Liabilities of current directors of FNB or its affiliates, except in the ordinary course of business at the unsolicited request of depositors, or cause any of FNB's other operations to transfer to the Office any Deposit Liabilities, except in the ordinary course of business at the unsolicited request of depositors; provided, however, that FNB shall be permitted to make such transfers of any Deposit Liabilities to or from the Office as are in the ordinary course of business;

(iv)        invest in any Fixed Assets on behalf of the Office, except for commitments made on or before the date of this Agreement which are disclosed to BUYER on Exhibit 1.2(b) of this Agreement and for replacements of furniture, furnishings and equipment and normal maintenance and refurbishing purchased or made in the ordinary course of business;

(v)         enter into or amend any continuing contract (other than those related to Deposit Liabilities and loans which are not included as Office Loans), which cannot be terminated without cause and without payment of any amounts as a penalty, bonus, premium or other compensation for termination;

(vi)        make any change to FNB’s customary policies for setting rates on deposits offered at the Office.

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(b)          Title Commitment for Real Estate. NBOH shall make commercially reasonable efforts to deliver to BUYER, at NBOH’s expense, as soon as reasonably practicable after the date of this Agreement but in no event later than forty-five (45) days after the date of this Agreement, a commitment (the "Title Commitment"), having an effective date as near as practicable to the date of delivery of such Title Commitment, from Kropf, Wagner, Hohenberger & Lutz, L.L.P. d.b.a. Kropf Title and Escrow (the “Title Company”), to issue to BUYER as soon as practicable after the Closing Date, an American Land Title Association ("ALTA") owners (6-17-06 Form) policy, having an effective date as of the Closing Date, covering the Real Estate, in an amount equal to the portion of the Acquisition Consideration allocated to the Real Estate in Section 1.4(a)(iii) hereof, subject to the exceptions specified in the Title Commitment. If title to all or part of the Real Estate is unmarketable or is subject to any Lien, other than the Permitted Exceptions (as defined below) (each a “Title Defect”), then BUYER shall provide written notice thereof to NBOH. NBOH shall have thirty (30) days after written notice thereof from BUYER, to notify BUYER in writing which of such Title Defects shall be cured by NBOH prior to or at Closing. With respect to any Title Defect not elected to be cured by NBOH, BUYER may elect to attempt to cure or remove such Title Defect, for a period of thirty (30) days thereafter. If NBOH elects not to cure any or all Title Defects or any such Title Defect is not cured by BUYER prior to or at the Closing, in addition to any other rights which BUYER may have hereunder, BUYER shall have the right (i) to reduce the Real Estate Consideration by an amount equal to the cost to remove or cure any such Title Defect, as reasonably estimated by BUYER, (ii) to negotiate with the Title Company for certain endorsements to the standard insurance coverage to address any such Title Defects, the cost of which shall be credited against and reduce the Real Estate Consideration, or (ii) to waive any objection to any such Title Defect in which event such Title Defect shall be deemed to be a Permitted Exception. The Real Estate is being sold by NBOH to BUYER hereunder free and clear of all Liens, except for the Permitted Exceptions, and the conveyance by limited warranty deed to be delivered by NBOH pursuant hereto shall be subject only to the Permitted Exceptions (the "Deed"). NBOH also shall execute and deliver to BUYER at the time of the Closing such affidavits and other instruments, if any, as the Title Company may reasonably require to delete any inapplicable standard exceptions appearing as "Schedule B" items in a standard ALTA owners title insurance policy, other than those which may only be deleted by a survey. NBOH also shall execute and deliver a so-called "FIRPTA" affidavit at Closing.

(c)          Required Authorizations. SELLERS shall obtain and procure all necessary consents, approvals and authorizations, if any, required by SELLERS to enable them to fully perform all obligations imposed on them hereunder which must be performed by them at or prior to the Closing.

(d)          Creation of Liens. With respect to the Real Estate, SELLERS shall not create or allow any Liens, other than the Permitted Exceptions.

(e)          Insurance Proceeds and Casualty Payments. SELLERS shall maintain adequate insurance on all of the Real Estate and Fixed Assets. In the event of any damage or destruction affecting such Assets during the Pre-Closing Period, SELLERS shall deliver to BUYER at the Closing any such insurance proceeds received by SELLERS as a result thereof (adding into such amount the amount of any deductible), to the extent of the applicable amount in Section 1.4(a)(iii) with respect to the Real Estate and to the extent of the amount set forth in Section 1.4(a)(iv) with respect to the Fixed Assets, as the case may be, unless SELLERS have repaired or replaced the damaged or destroyed property.

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(f)          IRAs. Not later than thirty (30) days prior to the Closing Date, FNB shall, at FNB's expense, mail notice of FNB's resignation as custodian and the appointment of BUYER as the successor custodian, effective upon the Closing Date, of each IRA maintained at the Office. The notice shall include such other information as is mutually agreed upon by FNB and BUYER.

(g)          Assignment of Leases. SELLERS shall obtain any consent necessary to assign or transfer to BUYER, or substitute BUYER as landlord under, the lease by which a third party leases space in the Real Estate, in form and content reasonably satisfactory to BUYER, it being understood that the assignments of said leases in their current forms or without material changes shall be acceptable to BUYER. In the event that any such assignment is not obtained or other arrangements reasonably satisfactory to BUYER are not made prior to the Closing, SELLERS shall indemnify, defend and hold BUYER harmless from and against any Losses arising from or relating to such lease and lessee.

(h)          BUYER Attendance. SELLERS shall permit representatives of BUYER to attend such meetings of SELLERS with regard to the Office and business of the Office as BUYER may reasonably request, to review such books and records of SELLERS (during normal business hours) as may reasonably be relevant to the transactions contemplated hereby (in SELLERS’ opinion), and to consult with FNB with regard to any of the Office Loans.

(i)          New Loans. FNB shall make available to BUYER the opportunity to participate in any new loans originated at the Office in the market served by it during the Pre-Closing Period (each such loan an “Interim Loan” and collectively with all other Interim Loans the “Interim Loans”). Prior to issuing a loan commitment for any such Interim Loan, FNB shall notify BUYER in writing of the terms of such Interim Loan and BUYER shall have the right, exercisable within ten (10) days after receipt of such notice, to agree to participate in such Interim Loan up to fifty percent (50%) of the principal amount of the Interim Loan. If BUYER so elects to participate, the parties hereby agree that BUYER shall be the originating lender and FNB shall be the participating lender and the Interim Loan shall be originated using BUYER’s forms.

(j)          Real Estate Documentation. SELLERS shall provide to BUYER copies of the following documents/information in its possession, if any, relating to the Real Estate: (i) blueprints and schematic drawings, and (ii) true and complete copies of all reports and results of any studies, analyses, tests, investigations or monitoring, possessed or initiated by SELLERS pertaining to the Real Estate, including, without limitation, any prior title commitments and title policies. In the event this Agreement terminates for any reason, BUYER shall promptly return to SELLERS any such documents/information received from SELLERS.

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2.2         Covenants of BUYER. BUYER hereby covenants to SELLERS that, during the Pre-Closing Period:

(a)          Regulatory Applications. BUYER shall prepare and submit for filing, at no expense to SELLERS, any and all applications, filings, and registrations with, and notifications to, all federal and state authorities, and all public notices, required on the part of BUYER or any affiliate of BUYER for the Acquisition to be consummated on the terms set forth herein and for BUYER to operate the Office following the Closing. BUYER shall provide SELLERS with a draft copy of each application, filing, registration, and notification for SELLERS' approval prior to filing, which approval by SELLERS will not be unreasonably withheld or delayed. Such applications will be submitted to SELLERS in draft form within thirty (30) days from the date of this Agreement and filed by BUYER without delay following SELLERS' approval of such applications; provided, however, that in no event will such applications be filed later than sixty (60) days from the date of this Agreement. Thereafter, BUYER shall pursue all such applications, filings, registrations, and notifications diligently and in good faith, and shall file such supplements, amendments, and additional information in connection therewith as may be reasonably necessary for the Acquisition to be consummated on the terms set forth herein and for BUYER to operate the Office following the Closing. BUYER shall deliver to SELLERS evidence of the filing of each and all of such applications, filings, registrations and notifications (except for any confidential portions thereof), and any supplement, amendment or item of additional information in connection therewith (except for any confidential portions thereof). BUYER shall also deliver to SELLERS a copy of each material notice, order, opinion and other item of correspondence received by BUYER from such federal and state authorities (except for any confidential portions thereof) and shall advise SELLERS, at SELLERS' request, of developments and progress with respect to such matters.

(b)          Required Authorizations. BUYER shall obtain and procure all necessary consents, approvals and authorizations, if any, required on its part to enable it to fully perform all obligations imposed on it hereunder which must be performed by it at or prior to the Closing.

(c)          Satisfaction of Conditions. BUYER shall not undertake any course of action inconsistent with the satisfaction of the requirements or the conditions applicable to it, or its agreements, undertakings, obligations, or covenants set forth in this Agreement, and it shall promptly do all such reasonable acts and take all such reasonable measures as may be appropriate to enable it to perform as early as possible the agreements, undertakings, obligations, and covenants herein provided to be performed by it, and to enable the conditions precedent to SELLERS' obligations to consummate the Closing of the Acquisition to be fully satisfied. Additionally, BUYER shall not, directly or through any existing or future subsidiary or affiliate, take any action that would be in conflict with, or result in the denial, delay, termination, or withdrawal of, any of the regulatory approvals referred to in this Agreement.

2.3         Covenants of All Parties.

(a)          SELLERS hereby covenant to BUYER, and BUYER hereby covenants to SELLERS that, during the Pre-Closing Period, each such party shall cooperate fully with the other party(ies) in attempting to obtain all consents, approvals, permits, or authorizations which are required to be obtained pursuant to any federal or state law, or any federal or state regulation thereunder, for or in connection with the transactions described and contemplated in this Agreement.

(b)          During the Pre-Closing Period, SELLERS and BUYER agree to consult with each another as to the form and substance of any press release or other public disclosure of matters related to this Agreement or any of the transactions contemplated hereby, except as may be required by applicable law or by any governmental authority or the rules of any stock exchange or trading system.

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3.           REPRESENTATIONS AND WARRANTIES.

3.1         Representations and Warranties of SELLERS. Except as set forth in the Disclosure Schedules, SELLERS, jointly and severally, represent and warrant to BUYER as follows:

(a)          Good Standing and Power of SELLERS. FNB is a banking association validly existing under the laws of the United States with corporate power to own its properties and to carry on its business as presently conducted. FNB is an "insured bank" as defined in the Federal Deposit Insurance Act. NBOH is a limited liability company existing under the laws of the State of Ohio with the power to own its properties and to carry on its business as presently conducted.

(b)          Authorization of Agreement and Transaction Documents. The execution and delivery of this Agreement and all other agreements, certificates, instruments and documents to be executed or delivered in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”), and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action, shareholder action (if any) and member action on the part of SELLERS, and this Agreement is, and each of the Transaction Documents will upon such delivery be, a valid and binding obligation of SELLERS, subject to the application of applicable bankruptcy, insolvency or other laws affecting creditors' rights generally.

(c)          Effective Agreement. Except as otherwise set forth on Schedule 3.1(c), the execution, delivery, and performance of this Agreement and each of the Transaction Documents by SELLERS and the consummation of the transactions contemplated hereby and thereby, will not conflict with, result in the breach of, constitute a violation or default, result in the acceleration of payment or other obligations, or create any Liens, under any of the provisions of the Articles of Association, Articles of Organization, By-Laws or other organizational documents or agreements of SELLERS (as applicable), under any judgment, decree or order, under any law, rule, or regulation of any government or agency thereof, or under any material contract, material agreement or material instrument to which SELLERS are subject, where such conflict, breach, violation, default, acceleration or Lien would have a material adverse effect on the Assets or SELLERS' ability to perform their respective obligations hereunder or under any of the Transaction Documents.

(d)          Title to Real Estate And Other Assets. FNB is the sole owner of the Assets (other than the Real Estate), free and clear of any Liens. As to the Real Estate, NBOH is the sole owner of a fee simple interest in, and has good and marketable title to, such Real Estate, free and clear of all Liens and rights of tenants in possession except for the Permitted Exceptions. FNB has a valid leasehold interest in the Office.

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(e)          Zoning Variations. In the past two (2) years, SELLERS have not received any written notice from any governmental authority of any uncorrected violations of zoning and/or building codes relating to the Real Estate.

(f)          Condemnation Proceedings. In the past two (2) years, SELLERS have not received any written notice of any condemnation proceeding affecting or relating to the Office or the Assets, nor, to SELLERS’ Knowledge, is there any pending or threatened condemnation proceeding affecting or relating to the Office or the Assets.

(g)          Taxes. All federal, state and local payroll, withholding, property, sales, use and transfer taxes and other assessments (collectively, “Taxes”), if any, which are due and payable by SELLERS relating to the Office or the Real Estate prior to the Closing Date (which are not being contested) shall be paid in full as of the Closing Date or SELLERS shall have made appropriate provision for such payment in accordance with ordinary business practices. Any claims for refunds of Taxes which have been paid by SELLERS shall remain the property of SELLERS.

(h)          Operations Lawful. The conduct of banking business at the Office, and, to SELLERS’ knowledge, the ownership and use of the Real Estate are in compliance in all material respects with all federal, state, county and municipal laws, ordinances and regulations applicable to conduct of such business or the ownership and use of the Real Estate.

(i)          Third-Party Claims. There are no actions, suits or proceedings, pending or, to SELLERS' Knowledge, threatened against or affecting SELLERS which, if determined adversely to SELLERS, could have a material adverse effect on the aggregate value of the Assets or the Real Estate.

(j)          Insurance. SELLERS maintain such insurance on the Office, the Fixed Assets and the Real Estate as may be required or as is customary in the business of banking and for such assets, real property and improvements.

(k)          Labor Relations. To SELLERS’ Knowledge, no employee located at the Office is represented, for purposes of collective bargaining, by a labor organization of any type. To SELLERS’ Knowledge, there have been no efforts during the past three years to unionize or organize any employees at the Office, and no material claim related to employees at the Office under the Fair Labor Standards Act, National Labor Relations Act, Civil Rights of 1964, Walsh-Healy Act, Davis Bacon Act, Civil Rights of Act of 1866, Age Discrimination in Employment Act, Equal Pay Act of 1963, Executive Order No. 11246, Federal Unemployment Tax Act, Vietnam Era Veterans Readjustment Act, Occupational Safety and Health Act, Americans with Disabilities Act or any state or local employment related law, order, ordinance or regulation, no unfair labor practice, discrimination or wage-and-hour claim is pending or, to SELLERS' Knowledge, threatened against or with respect to FNB.

(l)          Governmental Notices. SELLERS have not received any written notice from any federal or state governmental agency indicating that it would oppose or not approve, if required, the transactions contemplated by this Agreement.

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(m)          Environmental. There are no actions, proceedings or investigations pending, or, to SELLERS’ Knowledge, threatened, before any environmental regulatory body, federal or state court against SELLERS in respect of the Real Estate under any Environmental Law (as defined in Section 7.5) and in connection with any release of any Hazardous Substance (as defined in Section 7.5) with respect to the Real Estate, nor are there any such actions or proceedings or investigations in which SELLERS are a plaintiff or complainant. SELLERS are not responsible in any material respect under any applicable Environmental Law for any release caused by the spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing of Hazardous Substances into the environment by SELLERS, nor are SELLERS responsible for any material costs (as a result of the acts or omissions of SELLERS, or, to SELLERS’ Knowledge, as a result of the acts or omissions of any other person) of any material remedial action including, without limitation, costs arising out of security fencing, alternative water supplies, temporary evacuation and housing and other emergency assistance undertaken by any environmental regulatory body having jurisdiction over SELLERS to prevent or minimize any actual or threatened release by SELLERS on the Real Estate of any Hazardous Substances into the environment which would endanger the public health or the environment.

(n)          Access to Real Estate. In the past two (2) years, SELLERS have not received any written notice of any termination or impairment of access to the Real Estate from adjoining public or private streets or ways or discontinuation of necessary sewer, water, electric, gas, telephone, or other utilities or services, and sewage, sanitation, plumbing, refuse disposal, and similar facilities servicing the Real Estate.

(o)          Mechanic's Liens. SELLERS have paid or will pay in full prior to the Closing Date, all bills and invoices for labor and material of any kind (performed or requested by or on behalf of SELLERS) arising from SELLERS' ownership, operation, management, repair, maintenance, or leasing as tenant of the Real Estate, and no actual or potential mechanic's Lien or other claims are outstanding or available to any party in connection with SELLERS' ownership, operation, management, repair, maintenance, or leasing as tenant of the Real Estate and relating to any work or materials provided by or on behalf of SELLERS.

(p)          Personal Property. The Fixed Assets are sufficient to operate the business of the Office as presently conducted.

(q)          Assumed Contracts. Exhibit 1.2(g) is a true and accurate schedule of all Assumed Contracts. Each Assumed Contract is valid and subsisting and in full force and effect in accordance with its terms, and there is no actual or, to SELLERS’ Knowledge, threatened breach or termination of any such Assumed Contract or claims or defenses thereto by the other party(ies) thereto.

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(r)          Office Loans. FNB is the sole owner of each Office Loan and no Office Loan is subject to Lien superior to the rights of FNB in such Office Loan, except Liens for Taxes which are not yet due and payable and with respect to those home equity loans listed on Schedule 3.1(r). No consents of any third parties are required for transfer of the Office Loans to BUYER as provided in this Agreement, other than the consents or approvals of certain regulatory authorities as contemplated by Section 2.2(a) hereof. As of the date hereof, the Office Loans are not, and as of the Closing Date will not be, past due more than ninety (90) days in accordance with their respective terms or on non-accrual status on the books of FNB. FNB has provided BUYER with the current classification of each Office Loan as of the date hereof (corresponding to asset classifications by the Office of the Comptroller of the Currency). As to each Office Loan, such loan is adequately documented, is enforceable in accordance with its terms, and FNB has an enforceable security interest in collateral where applicable, in each instance, subject to general principles of equity, regardless of whether such enforceability is considered a proceeding in equity or at law, or is limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors’ rights generally. FNB has no Knowledge of any claims, defenses, or set-off rights by any third parties with respect thereto, including borrowers. SELLERS have no duty or obligation to BUYER to file any UCC financing statements, or amendments thereto or continuations thereof, or to take any other action, send any notice, or make any other filing as and from the Closing Date to perfect or continue any such security interest or the enforceability thereof.

For purposes of this Agreement, the term “Knowledge,” as to SELLERS or as to either SELLER, shall mean the actual knowledge of Mark Witmer and Jay VanSickle, as well as the knowledge such persons would have obtained after making reasonable inquiry of any employee of the Office who may have responsibility for the matter at hand.

3.2         Representations and Warranties of BUYER. BUYER represents and warrants to SELLERS as follows:

(a)          Good Standing and Power of BUYER. BUYER is a banking association validly existing under the laws of the United States with corporate power to own its properties and to carry on its business as presently conducted. BUYER is an "insured bank" as defined in the Federal Deposit Insurance Act.

(b)          Authorization of Agreement and Transaction Documents. The execution and delivery of this Agreement and all of the Transaction Documents, and the consummation of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action on the part of BUYER, and this Agreement is, and each of the Transaction Documents will upon such delivery be, a valid and binding obligation of BUYER, subject to the application of applicable bankruptcy, insolvency or other laws affecting creditors’ rights generally.

(c)          Effective Agreement. Subject to the receipt of any and all necessary regulatory approvals and required consents, the execution, delivery, and performance of this Agreement and each of the Transaction Documents by BUYER and the consummation of the transactions contemplated hereby and thereby, will not conflict with, result in the breach of, constitute a violation or default, result in the acceleration of payment or other obligations, or create any Liens, under any of the provisions of the Articles of Incorporation, Code of Regulations or other governing documents of BUYER, under any judgment, decree or order, under any law, rule or regulation of any government or agency thereof, or under any material agreement, material contract or material instrument to which BUYER is subject, where such conflict, breach, violation, default, acceleration or Lien would have a material adverse effect on BUYER's ability to perform its obligations hereunder or under any of the Transaction Documents.

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(d)          Governmental Notices. BUYER has not received any written notice from any federal or state governmental agency indicating that it would oppose or not approve, if required, the transactions contemplated by this Agreement and has no reason to believe any such agency may oppose or not approve the Acquisition.

4.           ACTIONS RESPECTING EMPLOYEES AND PENSIONS AND EMPLOYEE BENEFIT PLANS.

4.1         Employment of Employees.

(a)          BUYER shall extend offers of employment, to be effective as of the Closing Date, to those employees of the Office as BUYER, in its discretion, selects. No later than fifteen (15) days prior to the Closing Date, BUYER shall prepare and the parties shall attach to this Agreement as Exhibit 4.1(a) (incorporated herein by reference) a list of all such employees. Employees accepting employment with BUYER are referred to as the "Transferred Employees". Nothing contained in this Agreement shall create any rights in any third parties, including but not limited to FNB’s employees, or restrict or prohibit BUYER and any Transferred Employee from entering into an employment agreement satisfactory to both BUYER and the Transferred Employee.

(b)          FNB will cooperate with BUYER, to the extent reasonably requested and legally permissible, to provide BUYER with information about the employees of the Office including, without limitation, providing BUYER with the personnel files of those employees of the Office who provide FNB with their written consent thereto, and a means to meet with the subject employees. FNB's managerial and supervisory employees will not participate in any way in the hiring decisions of BUYER.

4.2         Terms and Conditions of Employment. Except as otherwise provided explicitly in this Agreement, the terms of employment for each Transferred Employee shall be determined solely by BUYER' s policies, procedures, and programs; provided, however, that BUYER agrees that each Transferred Employee shall be provided employment subject to the following terms and conditions:

(a)          Except as otherwise specifically provided herein, Transferred Employees shall be provided employee benefits that are no less favorable in the aggregate than those provided to similarly situated employees of BUYER. BUYER shall provide such Transferred Employees with credit for the Transferred Employee's period of service with FNB (including any service credited from predecessors by merger or acquisition to FNB) towards the calculation of eligibility and vesting for such purposes as vacation, sick days, personal days, severance and other benefits, and participation and vesting in BUYER's qualified pension and/or profit sharing 401(k) plans, as such plans may exist (but not for purposes of funding of any accrued pension or profit sharing plans for such Transferred Employees with respect to any period prior to the Closing Date).

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(b)          Each Transferred Employee shall be eligible to participate in the medical, dental, or other welfare plans of BUYER, as such plans may exist, on and after the Closing Date, and any pre-existing conditions or waiting period provisions of such plans shall be waived with respect to any such Transferred Employees.

(c)          Except as provided herein, FNB shall pay, discharge, and be responsible for (i) all salary and wages arising out of employment of the Transferred Employees through the Closing Date, and (ii) any employee benefits arising under FNB's employee benefit plans and employee programs prior to the Closing Date including but not limited to benefits with respect to claims incurred prior to the Closing Date but reported after the Closing Date and benefits inuring to any employees who may have been on leave prior to the Closing Date. BUYER shall pay, discharge, and be responsible for (i) all salary and wages arising out of employment of the Transferred Employees on or after the Closing Date, and (ii) any employee benefits arising under BUYER's employee benefit plans and employee programs on or after the Closing Date. From and after the Closing Date, Transferred Employees shall be considered "at will" employees of BUYER and BUYER shall pay, discharge, and be responsible for all salary, wages, and benefits arising out of or relating to the employment of the Transferred Employees by BUYER from and after the Closing Date, including, without limitation, all claims for welfare benefits plans incurred on or after the Closing Date. To the extent permitted under BUYER's applicable 401(k) plan, FNB and BUYER shall cooperate in arranging for the transfer to BUYER's 401(k) plan, as soon as practicable after the Closing Date and in a manner that satisfies sections 414(1) and 411(d)(6) of the Internal Revenue Code, as amended, of those accounts held under SELLERS’ 401(k) plan on behalf of Transferred Employees.

4.3         Actions to be Taken by FNB. FNB covenants to BUYER that it will do or cause the following to occur:

(a)          Compliance with Law. FNB agrees that it shall comply with any and all applicable requirements under the Worker Adjustment and Retraining Notification Act in connection with the transactions contemplated by this Agreement.

(b)          Employee Benefit Programs. During the Pre-Closing Period, FNB's obligations to employees of the Office, including Transferred Employees, will be as set forth in established policies of FNB, and FNB shall continue its employee benefit programs in full force and effect. After the Closing, FNB shall retain the responsibility and liability for the funding and payment of all claims incurred under such employee benefit programs through the Closing Date. BUYER shall have no obligation or liability to compensate Transferred Employees for benefits of any kind earned, accrued, promised and/or provided to Transferred Employees as employees of FNB, except with respect to eligibility and vesting as set forth in Section 4.2 above.

(c)          Employees of the Office. During the Pre-Closing Period, FNB shall not, without BUYER's prior written consent (i) hire any new employee of the Office or increase the aggregate full-time equivalent size of the work force at the Office above the aggregate normal staffing levels designated by FNB for the Office at the date hereof, (ii) terminate any employee of the Office, unless such person is terminated for cause as determined by FNB or otherwise pursuant to FNB’s existing policies or procedures, (iii) increase the compensation of any Transferred Employee except pursuant to FNB’s existing policies and procedures, (iv) promote any employee of the Office except pursuant to FNB’s existing policies and procedures or (v) transfer or reassign any employee of the Office (other than a transfer of any employee who is not or, as determined by BUYER, will not be a Transferred Employee).

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The obligations of SELLERS (or of either SELLER) and BUYER pursuant to Sections 4.1 through 4.3 shall survive the Closing in accordance with the terms of Sections 4.1 through 4.3.

5.           CONDITIONS PRECEDENT TO CLOSING.

5.1         Conditions to SELLERS’ Obligations. The obligations of SELLERS to consummate the Acquisition are subject to the satisfaction, or the waiver in writing by SELLERS to the extent permitted by applicable law, of the following conditions at or prior to the Closing:

(a)          Prior Regulatory Approval. All filings and registrations with, and notifications to, all federal and state authorities, and all public notices, required for the consummation of the Acquisition and the operation of the Office by BUYER shall have been made by BUYER, and all approvals, consents and authorizations of all federal and state authorities required to be obtained by BUYER for the consummation of the Acquisition and the operation of the Office by BUYER shall have been received and shall be in full force and effect, and any applicable waiting periods shall have expired.

(b)          Corporate Action. BUYER shall have furnished SELLERS with a certified copy of each such resolution duly adopted by the Board of Directors of BUYER evidencing the corporate action(s) taken to authorize (i) the execution and delivery of this Agreement and the Transaction Documents by BUYER and the consummation of the transactions contemplated hereby and thereby, and (ii) the Acquisition by BUYER.

(c)          Representations and Warranties. The representations and warranties of BUYER set forth in this Agreement shall be true and correct in all material respects on the Closing Date with the same effect as though all such representations and warranties had been made on and as of such date (unless a different date is specifically indicated in such representations and warranties), and BUYER shall have delivered to SELLERS a certificate to that effect, dated as of the Closing Date, in a form reasonably acceptable to SELLERS.

(d)          Covenants. Each and all of the covenants and agreements of BUYER to be performed or complied with at or prior to the Closing Date shall have been duly performed or complied with in all material respects by BUYER, or waived by SELLERS, and BUYER shall have delivered to SELLERS a certificate to that effect, dated as of the Closing Date, in a form reasonably acceptable to SELLERS.

(e)          No Proceedings or Prohibitions. At the time of the Closing, there shall not be any litigation, investigation, inquiry, or proceeding pending or threatened in or by any court or agency of any government or by any third party by which it is sought to restrain, enjoin, or prohibit consummation of the transactions contemplated by this Agreement, impose any conditions upon the Closing, or which might result in rescission in connection with such transactions.

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(f)          Consents and Approvals. SELLERS shall have received, in form and substance reasonably satisfactory to SELLERS, all consents, approvals, authorizations and waivers of third parties (other than regulatory approvals, consents and authorizations which are covered under Section 5.1(a) hereof) required to be obtained by BUYER in connection with the consummation of the transactions contemplated by this Agreement.

5.2         Conditions to BUYER's Obligations. The obligations of BUYER to consummate the Acquisition are subject to the satisfaction, or the waiver in writing by BUYER to the extent permitted by applicable law, of the following conditions at or prior to the Closing:

(a)          Prior Regulatory Approval. All filings and registrations with, and notifications to, all federal and state authorities, and all public notices, required for the consummation of the Acquisition and the operation of the Office by BUYER shall have been made by SELLERS, and all approvals, consents and authorizations of all federal and state authorities required to be obtained by SELLERS for the consummation of the Acquisition and the operation of the Office by BUYER shall have been received and shall be in full force and effect, and any applicable waiting periods shall have expired.

(b)          Corporate Action. SELLERS shall have furnished BUYER with a certified copy of each such resolution duly adopted by the Board of Directors and members or managers of SELLERS evidencing the corporate action(s) taken to authorize (i) the execution and delivery of this Agreement and the Transaction Documents by SELLERS and the consummation of the transactions contemplated hereby and thereby, and (ii) the Acquisition by SELLERS.

(c)          Representations and Warranties. The representations and warranties of SELLERS set forth in this Agreement shall be true and correct in all material respects on the Closing Date with the same effect as though all such representations and warranties had been made on and as of such date (unless a different date is specifically indicated in such representations and warranties), and SELLERS shall have delivered to BUYER a certificate to that effect, dated as of the Closing Date, in a form reasonably acceptable to BUYER.

(d)          Covenants. Each and all of the covenants and agreements of SELLERS to be performed or complied with at or prior to the Closing Date shall have been duly performed or complied with in all material respects by SELLERS, or waived by BUYER, and SELLERS shall have delivered to BUYER a certificate to that effect, dated as of the Closing Date, in a form reasonably acceptable to BUYER.

(e)          No Proceedings or Prohibitions. At the time of the Closing, there shall not be any litigation, investigation, inquiry, or proceeding pending or threatened in or by any court or agency of any government or by any third party by which it is sought to restrain, enjoin, or prohibit consummation of the transactions contemplated by this Agreement, impose any conditions upon the Closing, or which might result in rescission in connection with such transactions.

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(f)          Real Property. The Title Commitment (as defined in Section 2.1(b) herein) shall have been delivered to BUYER, and updated to or as close as practicable to, the Closing Date, in accordance with the terms of such Section, and such updated Title Commitment shall not include any special exceptions other than those set forth in the original Title Commitment or those caused by SELLERS' actions after execution of this Agreement or is a Lien that can be removed by the payment of a sum certain (unless caused by BUYER) and any other Permitted Exceptions. BUYER shall have been provided the opportunity to inspect the Real Estate and shall be reasonably satisfied that there are no material defects or damages to the Real Estate (normal wear and tear excepted) and, in the event there are material defects or damage, BUYER and SELLERS shall have negotiated corresponding adjustments to the value of such Real Estate under Section 1.4(a)(iii) above reasonably satisfactory to all of the parties.

(g)          Fixed Assets. Since the date hereof, there shall have been no material alteration in or material adjustment to the Fixed Assets except with the written consent of BUYER. It will not be considered to be a material alteration or material adjustment to the Fixed Assets if (i) there is damage or destruction to the Fixed Assets as contemplated by Section 2.1(e) hereof and SELLERS comply with said Section 2.1(e), (ii) SELLERS make additions to the Fixed Assets with the prior written consent of BUYER, (iii) SELLERS make additions to the Fixed Assets without BUYER's consent in order to correct emergency situations which are threatening to impair SELLERS’ operations at the Office, or (iv) SELLERS make additions to the Fixed Assets otherwise permitted by this Agreement.

(h)          Consents and Approvals. BUYER shall have received, in form and substance reasonably satisfactory to BUYER, all consents, approvals, authorizations and waivers of third parties (other than regulatory approvals, consents and authorizations which are covered under Section 5.2(a) hereof) required to be obtained by SELLERS in connection with the consummation of the transactions contemplated by this Agreement.

(i)          No Material Adverse Changes. There shall have been no material adverse change in the business of the Office or in the condition of the Office Loans from the date hereof.

(j)          Office Loans. The Office Loans as of the Closing Date shall have an outstanding principal balance of no less than $10,000,000 and no more than $12,000,000. No Office Loan shall have been downgraded from its risk rating classification as of the date of this Agreement and no Office Loan shall be in default as of the Closing Date where such default would permit acceleration under such Office Loan, and any such downgraded or delinquent Office Loans may, in the discretion of BUYER, be excluded from the Office Loans to be assumed by BUYER hereunder.

(k)          Integration/Conversion of Financial Technology Systems. The financial technology system for the Office shall be converted to BUYER's FiServ system, including all necessary integrations of software and hardware at the Office.

5.3         Waivers of Conditions Precedent. The conditions specified in Sections 5.1 and 5.2 herein shall be deemed satisfied or, to the extent not satisfied, waived if the Closing occurs, unless such failure of satisfaction is reserved in a writing executed by BUYER and SELLERS at or prior to the Closing.

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6.           CLOSING.

6.1         Closing and Closing Date. Subject to the satisfaction or waiver (to the extent permitted by applicable law) of all of the conditions set forth in Sections 5.1 and 5.2 hereof (other than those conditions that by their nature are to be satisfied at the Closing (as defined below), but subject to the satisfaction or waiver thereof), the consummation of the Acquisition contemplated by this Agreement shall be closed (the "Closing") on the date that is no later than May 1, 2013, or such other date as mutually agreed upon by the parties hereto. The date on which the Closing actually occurs is referred to herein as the "Closing Date." The transfers and deliveries described in Sections 5.1 and 5.2 hereof shall be mutually interdependent and shall be regarded as occurring simultaneously, and, any other provision of this Agreement notwithstanding, no such transfer or delivery shall become effective or shall be deemed to have occurred until all of the other transfers and deliveries provided for in Sections 5.1 and 5.2 hereof shall also have occurred or been waived in writing by the party entitled to waive the same. For purposes of allocation of expenses, adjustments, tax and other financial effects of the transactions contemplated hereby, the Closing shall be deemed to have occurred at 11:59 p.m. Eastern Standard Time on the Closing Date. For all other purposes, including passage of title and risk of loss, the effective time shall be at the Closing.

6.2         SELLERS’ Actions at Closing. At the Closing (unless another time is specifically stated), SELLERS shall, with respect to the Office:

(a)          deliver or make available to BUYER at the Office such of the Assets purchased hereunder as shall be capable of physical delivery;

(b)          execute, acknowledge and deliver to BUYER: (i) the Deed; (ii) a bill or sale and assignment and assumption agreement, substantially in the form attached hereto and incorporated herein by reference as Exhibit 6.2(b) (the “Bill of Sale/Assignment and Assumption”); (iii) other instruments of conveyance, assignment, and transfer as shall reasonably be necessary or advisable to consummate the sale, assignment, and transfer of the Assets hereunder; (iv) all such endorsements, other instruments of conveyance and other documents as the Title Company may reasonably require (including as set forth in Section 2.1(b) hereof); and (v) the originals of all blueprints, construction plans, specifications and plats relating to the Real Estate, which are now in SELLERS' possession;

(c)          execute, acknowledge and deliver to BUYER, any consent necessary to assign or transfer to BUYER, or substitute BUYER as landlord under, each lease by which a third party leases space in the Real Estate, in each case in form and content reasonably satisfactory to BUYER (it being understood that the assignment of said lease in its current form or without material changes shall be acceptable to BUYER); and

(d)          assign, transfer, and make available to BUYER such of the following records as exist and are available and maintained at the Office (in whatever form or medium then maintained by SELLERS) pertaining to the Deposit Liabilities and Office Loans:

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(i)          signature cards Deposit Account documents (which will be provided in electronic media form and format acceptable to BUYER and delivered directly to BUYER from FNB’s image storage vendor. BUYER shall contract directly with such vendor, at BUYER's expense, to obtain paper copies of electronically stored documents); and

(ii)         other orders, contracts, and agreements between FNB and depositors of the Office with respect to the Deposit Liabilities and borrowers with respect to Office Loans, and records of similar character (which may be provided, at the option of FNB, in electronic format on CD-ROM or otherwise) excepting, specifically (A) W8, and W9 forms which BUYER may obtain from customers, (B) internally generated CTR and SAR forms, and (C) retail loan credit information (for which no paper-based documents are maintained by FNB) and any relevant tax forms and documents; and

(iii)        a true and accurate trial balance listing of records of Deposit Accounts; and

(e)          make available and transfer to BUYER any funds required to be transferred to BUYER pursuant to the terms of this Agreement; and

(f)          execute, acknowledge and deliver to BUYER all certificates, instruments, agreements and documents required to be delivered to BUYER by SELLERS at the Closing pursuant to the terms of this Agreement; and

(g)          assign by endorsement in a form reasonably satisfactory to BUYER the documents and files pertaining to the Office Loans, including, but not limited to, any and all contracts, promissory notes and other evidence of indebtedness and Liens related to the Office Loans, together with the loan file and records (in whatever form or medium then maintained by FNB) pertaining to such Office Loans.

6.3         BUYER's Actions at the Closing. At the Closing (unless another time is specifically stated), BUYER shall:

(a)          execute, acknowledge and deliver to SELLERS, the Bill of Sale/Assignment and Assumption;

(b)          coordinate with the Title Company to effectuate the recording of the Deed on or after the Closing Date and secure gap insurance coverage in the event the Deed is recorded after the Closing Date, at BUYER'S sole cost and expense, and deliver any instruments, resolutions, documents or certificates as may be reasonably required to vest title to the Real Estate in BUYER; and

(c)          pay to SELLERS the Cash Consideration, if any, pursuant to the terms of this Agreement; and

(d)          execute, acknowledge and deliver to SELLERS all certificates, instruments, agreements and documents required to be delivered to SELLERS by BUYER at the Closing pursuant to the terms hereof.

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6.4         Method of Payment. Subject to the adjustment procedures set forth in this Section 6.4, (i) the payment of any sum required to be paid by SELLERS to BUYER under Section 1.4(a) hereof, and (ii) the payment of the Cash Consideration, if any, to be paid by BUYER to SELLERS under Section 1.4(a) hereof, shall be made on the Closing Date in immediately available United States Dollars. At least two (2) business days prior to the Closing, SELLERS and BUYER shall provide written notice to one another indicating the account(s) and bank(s) to which such payments shall be wire transferred. The parties agree that the amount of funds to be transferred on the Closing Date by SELLERS or BUYER, as the case may be, shall be computed as set forth in Section 1.4(a) hereof and shall be based, in part, upon (a) the outstanding balance of the Office Loans as of the close of business on the Closing Date, (b) cash on hand at the Office as of the close of business on the Closing Date, and (c) the aggregate balance of all Deposit Accounts (including interest posted or accrued to such accounts and individual retirement accounts which have become IRAs as a result of the written appointment of BUYER as the successor custodian and the failure of the account holders to object to such appointment) as of the close of business on the Closing Date, unless otherwise agreed to by the parties hereto. The parties hereto shall prepare a preliminary closing statement in a form mutually agreed upon by BUYER and SELLERS (the “Preliminary Closing Statement”) to reflect the calculation of the Cash Consideration. Furthermore, within ten (10) business days after the Closing, the parties shall make appropriate post-Closing adjustments, if any, consistent with the provisions of Section 1.4 hereof, based upon actual Deposit Accounts as of the Closing Date, Office Loans as of the Closing Date, and cash transactions which took place on the Closing Date or which took place prior to the Closing Date but which were not reflected in the Preliminary Closing Statement, and shall execute a final settlement statement in a form mutually agreed upon by BUYER and SELLERS (the “Final Settlement Statement”). In addition, prorations of prepaid and deferred income and expenses that cannot be reasonably calculated at the Closing shall be settled and paid based on actual amounts and calculations as soon as possible after the Closing.

7.           CERTAIN TRANSITIONAL MATTERS.

7.1         Transitional Action by BUYER. After the Closing, unless another time is otherwise indicated:

(a)          BUYER shall: (i) pay in accordance with the law and customary banking practices and applicable Deposit Account contract terms, all properly drawn and presented checks, negotiable orders of withdrawal, drafts, debits, and withdrawal orders presented to BUYER by mail, over the counter, through electronic media, or through the check clearing system of the banking industry, by depositors of the Deposit Accounts assumed by BUYER hereunder, whether drawn on checks, negotiable orders or withdrawal, drafts, or withdrawal order forms provided by BUYER or SELLERS; and (ii) in all other respects discharge, in the usual course of the banking business, the duties and obligations of FNB with respect to the balances due and owing to the depositors whose Deposit Accounts are assumed by BUYER hereunder; provided, however, that any obligations of BUYER pursuant to this Section 7.1 to honor checks, negotiable orders of withdrawal, drafts, and withdrawal orders on forms provided by FNB and carrying its imprint (including its name and transit routing number) shall not apply to any checks, drafts, withdrawal orders, or returned items (i) presented to BUYER more than one hundred eighty (180) days following the Closing Date, or (ii) on which a stop payment has been requested by the deposit customer. BUYER shall submit and file any required reports on IRS Form 1099 with respect to interest accrued on Deposit Liabilities after the Closing Date. The provisions of this subsection 7.1(a) shall in no way limit BUYER's duties or obligations arising under Section 1.3(b) hereof.

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(b)          Not earlier than the time of procurement of all applicable regulatory approvals, authorizations and consents required for consummation of the transactions contemplated by this Agreement nor later than ten (10) days prior to the Closing Date, BUYER shall notify all depositors of the Office by letter, acceptable to FNB, produced in, if appropriate, several similar, but different forms calculated to provide necessary and specific information to the owners of particular types of Deposit Accounts, of BUYER's pending assumption of the Deposit Liabilities hereunder, and, in appropriate instances, notify depositors that on and after the Closing Date certain FNB deposit-related services and/or FNB’s debit card and automatic teller machine ("ATM") services impacted by the transactions contemplated by this Agreement, will be terminated. As an enclosure to such notices, BUYER may furnish appropriate depositors with brochures, forms and other written materials related or necessary to the assumption of the Deposit Accounts by BUYER and the conversion of said accounts to BUYER accounts, including the provision of checks and debit and ATM cards to appropriate depositors using the forms of BUYER with instructions to such depositors to utilize such BUYER checks and debit and ATM cards on and after the Closing Date and thereafter to destroy any unused checks on FNB’s forms and any FNB debit and ATM cards. The expenses of the printing, processing and mailing of such letter notices and providing new BUYER checks and other forms and written materials and replacement debit and ATM cards to appropriate customers shall be borne by BUYER. Before Closing, except as provided in this Section, BUYER will not contact FNB’s customers except joint customers in the normal course of business and except as may occur in connection with advertising or solicitations directed to the public generally or in the course of obtaining the requisite regulatory approvals of the transaction. Anything to the contrary herein notwithstanding, BUYER shall provide, at no cost to SELLERS, any and all notices, communications, and filings which may be required by law, regulation, or otherwise, relating to any changes in terms and other matters relating to the Deposit Accounts and the Office Loans occurring subsequent to the Closing Date. Any and all such notices, communications, and filings which may be required to be provided prior to the Closing Date shall be submitted on a timely basis for review by FNB and shall be subject to the written approval of FNB prior to delivery to any third party. BUYER shall provide, at its sole cost and expense, that any and all customer and other notices, communications, and filings provided by BUYER hereunder, including the substance and timing of same, fully comply with the requirements of applicable law and regulation.

(c)          BUYER shall promptly pay to FNB an amount equivalent to the amount of any checks, negotiable orders of withdrawal, drafts, withdrawal orders, or returned items credited as of the close of business on the Closing Date to a Deposit Account assumed by BUYER hereunder which are returned uncollected to FNB or BUYER after the Closing Date. The foregoing shall include an amount equivalent to holds placed upon such Deposit Account for items cashed by FNB as of the close of business on the Closing Date.

(d)          All tasks and obligations concerning the provision of data processing services to or for the Office after the Closing, other than those specifically set forth in Section 7.2(b) herein, if any, are the sole and exclusive responsibility of, and shall be performed solely and exclusively by, BUYER.

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(e)          Not later than the close of business on the business day immediately following the Closing Date, BUYER shall supply suitable government-backed securities as security for any deposits of governmental units or other public deposits included among the Deposit Liabilities for which FNB had provided similar security.

(f)          As soon as practicable but not more than ten (10) business days after the Closing Date, BUYER shall prepare and transmit at BUYER's expense to each of the obligors on Office Loans transferred to BUYER pursuant to this Agreement a notice to the effect that such Office Loan has been transferred to BUYER and directing that payment be made to BUYER at the address specified by BUYER, with BUYER's name as payee on any checks or other instruments used to make payments, and, with respect to such Office Loan on which a payment notice or coupon book has been issued, to issue a new notice or coupon book reflecting the name and an address of BUYER as the person to whom and place at which payments are to be made. BUYER shall submit and file any required reports on IRS Form 1098 with respect to interest collected on Office Loans for the full calendar year in which the Closing Date occurs including interest collected during the period prior to the Closing Date.

(g)          If the balance due on any Office Loan transferred to BUYER pursuant to this Agreement has been reduced by FNB as a result of a payment by check or draft received prior to the close of business on the Closing Date, which item is returned unpaid to FNB after the day immediately preceding the Closing Date, the asset value represented by such Office Loan transferred shall be correspondingly increased and an amount in cash equal to such increase shall be promptly paid by BUYER to FNB.

(h)          BUYER shall use its reasonable best efforts to cooperate with SELLERS in assuring an orderly transition of ownership of the Assets and responsibility for the liabilities, including the Deposit Liabilities, assumed by BUYER hereunder.

(i)          BUYER hereby grants to FNB and its representatives access to the Office until the close of business on second business day following the Closing Date or such other later date and time as the parties may agree, at no cost or expense to FNB, for conduct of activities consistent with this Agreement in conjunction with the transactions contemplated hereby and to remove from the Office any assets of FNB not transferred to BUYER hereunder without cost to BUYER.

(j)          The duties and obligations of BUYER in this Section 7.1 shall survive the Closing in accordance with the terms of this Section 7.1.

7.2           Transitional Actions by SELLERS. After the Closing, unless another time is otherwise indicated herein:

(a)          SELLERS shall cooperate with BUYER in assuring an orderly transition of ownership of the Assets and responsibility for the liabilities, including the Deposit Liabilities, assumed by BUYER hereunder. FNB shall provide final statements as of the Closing Date, as appropriate, for the Deposit Liabilities, reflecting interest and service charges pro-rated to the close of business on the Closing Date. FNB shall submit and file any required reports on IRS Form 1099 with respect to interest paid on Deposit Liabilities through the Closing Date. FNB shall provide to BUYER information regarding interest collected on Office Loans during the calendar year in which the Closing Date occurs, up to and including the Closing Date.

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(b)          FNB’s sole and exclusive responsibilities concerning the provision of data processing services to or for the Deposit Accounts of the Office after the Closing Date, if any, shall be as set forth in this Section 7.2(b). As soon as practicable following the date of this Agreement, FNB shall provide BUYER with applicable product functions and specifications relating to the data processing support required for the Deposit Accounts and Office Loans (if such data processing support currently is provided with respect thereto) maintained at the Office (such Deposit Accounts and Office Loans, if applicable, hereinafter called the "Accounts"). As soon as practicable following the date of this Agreement, FNB shall provide to BUYER file formats relating to the Accounts and up to three (3) sets of test tapes or other media reasonably acceptable to BUYER related to the Accounts in generic form which are machine readable in form specified by BUYER. By not later than 3:00 P.M. local Akron, Ohio time on the business day immediately following the Closing Date, FNB shall make the foregoing documents and materials available for pick-up by BUYER. BUYER shall review and analyze such materials including, but not limited to, the file formats and tapes or other such media, and shall advise FNB in writing of any defects or concerns relating thereto not later than 10 business days following receipt thereof.

(c)          Prior to the Closing Date, FNB shall cooperate with BUYER in making Transferred Employees available at reasonable times for whatever program of training BUYER deems advisable; provided, however, that BUYER shall conduct such training program in a manner that does not materially interfere with or prevent the performance of the normal duties and activities of such Transferred Employees, and BUYER shall reimburse FNB for any employee expenses incurred by FNB in connection with such training. BUYER shall make request of FNB for training opportunities prior to the Closing Date and consent by FNB shall not be unreasonably withheld or delayed. Such requests, shall specify the time, duration and place of such training.

(d)          FNB shall cooperate with BUYER to make provision for the installation of teller and platform equipment in the Office subject to approval by FNB; provided, however, that BUYER shall arrange for the installation and placement of such equipment at such times and in a manner that does not significantly interfere with the normal business activities and operation of FNB or the Office.

(e)          FNB shall resign as custodian of each IRA account maintained at the Office and assign the custodianship of such accounts to BUYER upon Closing subject to receipt of applicable customer consents and other provisions of this Agreement including the provisions of Section 8.10 hereof.

(f)          FNB shall terminate its ATM/debit card service effective as of close of business on the business day preceding the Closing Date or such other date and time as FNB and BUYER may agree. FNB shall have no obligation with respect to conversion or change over with respect to direct deposit or payroll and retirement payments service relating to the Deposit Accounts following the Closing and, further, BUYER shall assume all responsibility and liability with respect thereto following the Closing. FNB will continue to redirect and/or pass through relevant Automated Clearing House ("ACH") transactions on Deposit Accounts for a period of ninety (90) days following the Closing Date.

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(g)          As of the opening of business on the first business day after the Closing Date, FNB and BUYER shall provide the appropriate Federal Reserve Bank (the "FRB") with all information necessary in order to expedite the clearing and sorting of all checks, drafts, instruments and other commercial paper relative to the Deposit Liabilities and/or the Office Loans (hereinafter collectively referred to as "Paper Items"). BUYER shall bear all charges and costs imposed by the FRB in connection with the reassignment of account number ranges for sorting the Paper Items.

(h)          In the event the FRB and/or any other regional or local clearinghouse for negotiable instruments fails, refuses or is unable to direct sort such Paper Items for delivery to BUYER with the result that such Paper Items are presented to FNB, by not later than 3:00 p.m. local time on each business day following the Closing and continuing for ninety (90) days after the Closing, FNB will make available to BUYER for pick up from FNB’s offices or the offices of FNB’s agent and/or processor all of the Paper Items which are received by FNB from the FRB and/or any regional or local clearinghouse during the morning of each such business day on an "as-received basis." At the same time FNB shall also make available to BUYER information and records, including but not limited to systems printouts, concerning such Paper Items and concerning incoming ACH items as well as outstanding ATM transactions. Such information and records, including but not limited to systems printouts, will utilize the most recent account number designated by FNB for each of the Deposit Accounts and/or the Office Loans. BUYER shall initiate appropriate Notification of Change requests relating to appropriate routing matters at the sole expense of BUYER within 30 days following the Closing Date. Except as otherwise expressly provided herein, FNB shall provide the foregoing at no charge to BUYER for a period not to exceed thirty (30) days from the Closing Date, except that BUYER shall pay any charges assessed to FNB by the FRB, any national or local clearinghouse and/or FNB’s agent and/or processor to the extent such assessments relate to the Deposit Accounts or Office Loans. BUYER shall be responsible for pick-up of the data to be provided by FNB. Except as otherwise expressly provided herein, BUYER shall be responsible for processing any and all ACH returns received subsequent to the Closing directly through the appropriate Federal Reserve Bank. FNB and BUYER shall arrange for appropriate daily settlement between the parties in order that the transmission of all monies associated with the matters set forth in this Section 7.2(h) might be affected promptly.

(i)          FNB shall not be liable to BUYER for any failure to provide the data required by Section 7.2(h) to the extent any such failure results from causes beyond FNB’s control including war, strike or other labor disputes, acts of God, errors or failures of the FRB, and/or a participating regional or local clearinghouse, or equipment failure or other emergency wherein FNB and/or its agent processor has been unable to process inclearings from the FRB or such clearinghouse.

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(j)          FNB shall, not earlier than the time of procurement of all regulatory approvals, authorizations and consents required for consummation of the transaction contemplated by this Agreement nor later than thirty (30) days prior to the Closing Date, notify all depositors of the Office and all borrowers of any Office Loan by letter reasonably acceptable to BUYER, produced in, if appropriate, several similar, but different forms calculated to provide necessary and specific information to the owners of particular types of accounts and/or loans, of BUYER's pending assumption of the Deposit Liabilities and acquisition of the Office Loans hereunder, and, in appropriate instances, notify depositors that on and after the Closing Date certain FNB deposit-related services and/or FNB’s debit card and ATM services, will be terminated. The expenses of the printing, processing and mailing of such letter notices shall be shared equally by BUYER and FNB.

(k)          For a period of sixty (60) days after the Closing Date, FNB will forward to BUYER, within two (2) business days of receipt, payments received by FNB with respect to the Office Loans. BUYER will forward, within two (2) business days of receipt, payments received by BUYER with respect to any loans not assigned to BUYER under this Agreement. BUYER and FNB further agree to refer customers to the offices of the other when such customers present payments over the counter to the party not holding their respective loan. BUYER shall reimburse FNB within two (2) business days of notice by FNB to BUYER for any payments tendered by borrowers which were credited to the outstanding balance of any Office Loan prior to the Closing Date and which are subsequently returned or otherwise withdrawn for any reason and FNB shall assign to BUYER any rights of FNB to recovery of such payments as against the relevant borrower.

(l)          FNB shall forward notice to appropriate carriers for single premium prepaid life and A&H/Disability insurance related to the Office Loans (the "Insured Office Loans") of BUYER's acquisition of the Insured Office Loans within thirty (30) days following the Closing Date. Such notice shall identify BUYER as the new obligee of the Insured Office Loans and shall direct the insurance carriers to forward any premium refunds otherwise payable to FNB with respect to the Insured Office Loans following the Closing (the "Premium Refunds") to BUYER. In the event that, following the Closing, any such Insured Office Loans are paid in full prior to maturity and BUYER receives a Premium Refund, BUYER shall credit the account of such Insured Office Loan customer with the appropriate portion of any such Premium Refund. The Premium Settlement Payment by FNB shall constitute the only obligation of FNB to BUYER with respect to matters pertaining to Premium Refunds, and BUYER shall be responsible for any and all payments or credits due or owing the Insured Office Loan customers with respect to payment in full of the Insured Office Loans prior to maturity. The Premium Settlement Payment defined in Section 1.4(e) herein shall be calculated as of the Closing Date and based upon FNB’s actual commission rate on loans with such insurance coverage.

(m)          The duties and obligations of the parties in this Section 7.2 shall survive the Closing in accordance with the terms of this Section 7.2.

7.3           Overdrafts and Transitional Action. Overdrafts on the Deposit Accounts will be the responsibility and risk of BUYER except to the extent that such overdrafts are 30 days or more past due.

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7.4           ATMs and Debit Cards.

(a)          FNB shall provide to BUYER, no later than sixty (60) days prior to the Closing Date, a test tape, along with a file format or file layout and a production tape thirty (30) days before the Closing Date, containing customer name, card number, withdrawal limits, the Deposit Accounts activated by, accessible to or committed to such cards issue dates and/or open dates, last transaction dates, and expiration dates as to all ATM and debit cards issued to customers of the Office and shall notify the appropriate processor to deactivate the operation of the such ATM and debit cards completely or to deactivate or disconnect the Deposit Accounts from such ATM and debit cards no later than the business day cutoff on the date prior to the Closing Date so that all activity generated by the such ATM and debit cards shall have settled prior to the Closing Date. All transactions and activity related to the FNB ATM and debit cards for Deposit Accounts transferred to BUYER following the Closing Date which are received or forwarded to FNB will be accepted and forwarded by FNB to BUYER along with all corresponding funds. FNB thereafter agrees to immediately notify its processor to deactivate such ATM and debit cards and to forward all transactions related thereto directly to BUYER.

(b)          FNB agrees to deactivate the ATMs located at the Office on or before the business day cutoff on the day prior to the Closing Date. Thereafter, BUYER shall reconfigure the ATMs to its standards for activation after the business day cutoff on the Closing Date.

(c)          BUYER and FNB agree to cooperate with each other to assure that all transactions originated through the ATM or originated with ATM cards prior to or on the Closing Date shall be for the account of FNB and all transactions originated after the Closing Date shall be for the account of BUYER. A post-Closing adjustment shall be made in the manner set forth in Section 6.4 hereof to reflect all such transactions which cannot be reasonably calculated as of the Closing.

(d)          For a period of two (2) years from the Closing, (i) BUYER shall permit any customer or employee of FNB to use BUYER's ATMs located at the Office or at any other branch or location of BUYER without the imposition of any transaction fee, surcharge or "foreign use" charges by BUYER, and (i) FNB shall permit any customer or employee of BUYER to use FNB's ATMs located at any branch or other location of FNB without the imposition of any transaction fee, surcharge or "foreign use" charges by FNB.

(e)          The obligations of the parties under this Section 7.4 shall survive the Closing in accordance with the terms of this Section 7.4.

7.5           Environmental Matters.

(a)          Within thirty (30) days of the date of this Agreement, SELLERS shall provide to BUYER, at SELLERS’ expense, copies of any environmental site assessments in SELLERS’ possession (the "Environmental Assessments" herein) for the Real Estate.

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(b)          Within ten (10) business days of BUYER’s receipt of any such Environmental Assessment, or any Phase I environmental site assessment performed or obtained by BUYER, as the case may be, that identifies any Recognized Environmental Condition (as such term is defined in ASTM E1527-00, Standard Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process) that would reasonably be expected to create a serious risk of material liability to BUYER related to the presence of Hazardous Substances at the Real Estate should it acquire the Real Estate, BUYER shall notify SELLERS in writing of BUYER's desire to have a qualified environmental consultant selected by BUYER and reasonably satisfactory to SELLERS (the "Environmental Consultant"), to the extent reasonable and appropriate, conduct a Phase II environmental site assessment ( the "Phase II Assessment" herein). In the event that BUYER desires to have an Environmental Consultant perform a Phase II Assessment, BUYER shall provide SELLERS with a written scope of work for the Phase II testing prepared by the Environmental Consultant which shall include, without limitation, the number and location of samples to be taken and proposed analyses, protocols, procedures and methodologies to be used in analyzing such samples (the “Scope of Work” herein), along with a statement of the Environmental Consultant’s qualifications. BUYER shall not perform any soil, ground water or other Phase II sampling or testing at the Real Estate without SELLERS’ prior written approval of the Environmental Consultant and the Scope of Work.

(c)          In the event that BUYER fails to provide written notice of its election to perform a Phase II Assessment to SELLERS as provided in Section 7.5(b) hereof, BUYER shall take the Real Estate “as is” at the Closing and shall assume all risks associated with the environmental condition of the Real Estate, regardless of the cause or date of origin of such condition.

(d)          SELLERS shall have a period of ten (10) business days from receipt of such notice to elect, at their sole option, to consent to the conduct of the Phase II Assessment. In the event that SELLERS consent to the conduct of the Phase II Assessment, the following shall apply:

(i)          Any such further investigation or testing shall be conducted in such a manner so as not to interfere with operations on the Real Estate. BUYER understands and acknowledges that access by the Environmental Consultant, its employees, agents, representatives, contractors and subcontractors, will be limited to those areas of the Real Estate reasonably required in connection with performance of the Phase II Assessment;

(ii)         BUYER shall provide notice to SELLERS at least forty-eight (48) hours prior to performing any work in connection with the Phase II Assessment. All work performed in connection with the Phase II Assessment shall occur during business hours;

(iii)        No investigation or testing will be performed beyond what is set forth in the Scope of Work agreed to by BUYER and SELLERS without SELLERS’ prior written consent;

(iv)         BUYER shall be solely responsible for any characterization, transportation, manifesting and disposal of any waste generated in the course of the Phase II Assessment in accordance with applicable Environmental Law;

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(v)          In connection with the performance of the Phase II Assessment, BUYER shall require the Environmental Consultant, its contractors and subcontractors, to maintain in full force and effect comprehensive general liability insurance in such amounts as are customary in the industry and shall deliver to SELLERS, upon request, certificates of such insurance policies executed by the respective insurers; and

(vi)         Any Phase II Assessment shall be (A) conducted at BUYER's expense, (B) treated as information subject to Section 8.1 of this Agreement, and (C) completed not more than sixty (60) days after the signing of this Agreement.

(e)          BUYER agrees that it and the Environmental Consultant shall conduct the Phase II Assessment pursuant to this Section with reasonable care and subject to customary practices among environmental consultants and engineers, including, without limitation, following completion thereof, the restoration of any site to its condition prior to such site assessment or investigation and the removal or closure of all monitoring wells in accordance with applicable Environmental Law. BUYER agrees to indemnify, defend and hold SELLERS harmless from and against any liability or obligation arising out of any act or omission of BUYER, Environmental Consultant or their respective employees, contractors, subcontractors, agents or representatives in connection with the performance of the Phase II Assessment.

(f)          For purposes of this Agreement, the term "Environmental Law" shall mean any Federal or state law, statute, rule, regulation, code, order, judgment, decree, injunction, or agreement with any Federal or state governmental authority, (x) relating to the protection, preservation, or restoration of the environment (including, without limitation, air, water, vapor, asbestos, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource) or to human health or (y) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of hazardous substances, in each case as amended and now in effect. Environmental Laws include, without limitation, the Clean Air Act (42 U.S.C. section 7401 et seq.); the Comprehensive Environmental Response Compensation and Liability Act (42 U.S.C. section 9601 et seq.); and the Federal Water Pollution Control Act (33 U.S.C. section 1251 et seq.).

(g)          For purposes of this Agreement, the term "Hazardous Substance" shall mean any substance, whether liquid, solid, or gas, (a) listed, identified or designated as hazardous or toxic to a level which requires remediation under any Environmental Law including, without limitation, asbestos; (b) which, applying criteria specified in any Environmental Law, is hazardous or toxic; or (c) the use or disposal of which is regulated under Environmental Law.

7.6           Effect of Transitional Action. Except as and to the extent expressly set forth in this Article 7, nothing contained in this Article 7 shall be construed to be an abridgment or nullification of the rights, customs and established practices under applicable banking laws and regulations as they affect any of the matters addressed in this Article 7.

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8.           GENERAL COVENANTS AND INDEMNIFICATION.

8.1           Confidentiality Obligations of BUYER. From and after the date hereof, until the earlier of (i) four (4) years following the Closing Date, or (ii) four (4) years following the earlier termination of this Agreement, BUYER shall, and shall cause its affiliates and parent company to, treat all information received from SELLERS concerning the business, assets, operations, and financial condition of SELLERS and their affiliates, and SELLERS’ and their affiliates’ respective customers (including, without limitation, the Office), as confidential, unless and to the extent that BUYER can demonstrate that such information was already known to BUYER, its parent company or its affiliates, if any, or in the public domain or received from a third person not known by BUYER, its parent company or its affiliates, if any, to be under any obligation to SELLERS; and BUYER shall not, and shall cause its parent company and affiliates not to, use any such information for any purpose except in furtherance of the transactions contemplated hereby (including in the filing of required regulatory applications, provided that, if available, a confidential treatment request will be made regarding such confidential information). Upon any termination of this Agreement, BUYER shall, and shall cause its parent company and affiliates, if any, to, promptly return all documents and workpapers containing, and all copies of, any such information received from or on behalf of SELLERS in connection with the transactions contemplated hereby. The covenants of BUYER contained in this Section 8.1 are of the essence and shall survive any termination of this Agreement in accordance with the terms of this Section 8.1, but shall terminate at the Closing, if it occurs, with respect to any information that is limited solely to the activities and transactions of the Office; provided, however, that neither BUYER nor its parent company or any of its affiliates shall be deemed to have violated the covenants set forth in this Section 8.1 if any of such confidential information is required to be disclosed in compliance with any legal process, order or decree issued by any court or agency of government of competent jurisdiction. It is expressly acknowledged by SELLERS that all information provided to BUYER related to the Acquisition may be provided to BUYER's parent company and affiliates, if any, as necessary for the purpose of consummating the Acquisition.

8.2           Confidentiality Obligations of SELLERS. From and after the date hereof, until the earlier of (i) four (4) years following the Closing Date, or (ii) four (4) years following the earlier termination of this Agreement, SELLERS shall, and shall cause their respective affiliates and their respective parent corporations to, treat all information received from BUYER concerning BUYER's business, assets, operations, and financial condition as confidential, unless and to the extent that SELLERS can demonstrate that such information was already known to SELLERS, their respective affiliates or their respective parent corporations, or in the public domain, or received from a third person not known by SELLERS, their respective affiliates or their respective parent corporations to be under any obligation to BUYER; and SELLERS shall not, and shall cause their respective affiliates and their respective parent corporations not to, use any such information for any purpose except in furtherance of the transactions contemplated hereby (including in the filing of required regulatory applications, provided that, if available, a confidential treatment request will be made regarding such confidential information). Upon any termination of this Agreement, SELLERS shall, and shall cause their respective affiliates and their respective parent corporations to, promptly return all documents and workpapers containing, and all copies of, any such information received from or on behalf of BUYER in connection with the transactions contemplated hereby. The covenants of SELLERS contained in this Section 8.2 are of the essence and shall survive any termination of this Agreement in accordance with the terms of this Section 8.2; provided, however, that neither SELLERS nor any of their respective affiliates or their respective parent corporations shall be deemed to have violated the covenants set forth in this Section 8.2 if any of such confidential information is required to be disclosed in compliance with any legal process, order or decree issued by any court or agency of government of competent jurisdiction. It is expressly acknowledged by BUYER that all information provided to SELLERS related to the Acquisition may be provided to SELLERS’ respective affiliates and SELLERS’ respective parent corporations for the purpose of consummating the Acquisition.

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8.3           Indemnification by SELLERS. Subject to the limitations set forth in Section 10.2 hereof, from and after the Closing Date, SELLERS, jointly and severally, shall indemnify, hold harmless, and defend BUYER from and against all claims, losses, liabilities and obligations, including reasonable attorneys' fees and expenses (collectively, "Losses"), which BUYER may receive, suffer or incur arising out of, relating to or in connection with any actions, suits or proceedings (other than any proceedings to prevent or limit the consummation of the Acquisition) related to (i) any inaccuracy in any of the representations and warranties, or breach or nonperformance of any of the covenants, made by SELLERS herein, (ii) operations and transactions occurring on or prior to the Closing Date and which involve the Assets transferred, the Deposit Liabilities or the Office Loans being transferred to BUYER, (iii) the operations at the Office on or prior to the Closing Date, and (iv) the ownership of the Real Estate on or prior to the Closing Date. The obligations of SELLERS under this Section 8.3 shall be contingent upon BUYER giving SELLERS written notice (i) of receipt by BUYER of any process and/or pleadings in or relating to any actions, suits, or proceedings of the kinds described in this Section 8.3, including copies thereof, and (ii) of the assertion of any claim or demand relating to the foregoing, including, to the extent known to BUYER, the identity of the person(s) asserting such claim or making such demand and the nature thereof, and including copies of any correspondence or other writings relating thereto. All notices required by the preceding sentence shall be given within fifteen (15) days of the receipt by BUYER of any such process or pleadings or any oral or written notice of the assertion of any such claims or demands. SELLERS shall have the right to assume BUYER's defense in any such actions, suits, or proceedings through counsel selected by SELLERS (reasonably acceptable to BUYER), to compromise and/or settle the same and to prosecute any available appeals or review any adverse judgment or ruling that may be entered therein; provided, however, that BUYER shall have the right, at its own expense, to participate jointly with SELLERS in the defense of any such actions, suits or proceedings. Notwithstanding the right of BUYER to participate, SELLERS shall have the sole right to compromise and/or settle any such actions, suits or proceedings on such terms as SELLERS, in their sole discretion, shall deem appropriate with respect to any issue involved in any such actions, suits or proceedings as to which: (a) SELLERS have acknowledged the obligation to indemnify BUYER hereunder and the settlement is solely for cash (and BUYER receives a complete release in connection therewith); or (b) BUYER shall have declined to participate. The availability of indemnification pursuant to this Section 8.3 shall not prevent BUYER from seeking any other remedy otherwise available to BUYER, including remedies at law or in equity.

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8.4           Indemnification by BUYER. Subject to the limitations set forth in Section 10.2 hereof, from and after the Closing Date, BUYER shall indemnify, hold harmless and defend SELLERS from and against any and all Losses which SELLERS may receive, suffer, or incur arising out of, relating to or in connection with any actions, suits or proceedings (other than any proceedings to prevent or limit the consummation of the Acquisition) related to (i) any inaccuracy in any of the representations and warranties, or breach or nonperformance of any of the covenants, made by BUYER herein, (ii) SELLERS' compliance with instructions from BUYER made pursuant to Section 7.4 of this Agreement and not related to any gross negligence or malfeasance on the part of SELLERS, (iii) operations and transactions occurring after the Closing Date and which involve the Assets transferred, the Deposit Liabilities or the Office Loans being transferred to BUYER or the Assumed Liabilities (except to the extent that the Losses arise from or relate to the operations at the Office on or prior to the Closing Date), (iv) the operations at the Office after the Closing Date, (v) the ownership of the Real Estate after the Closing Date, and (vi) the imposition (including by operation of law or otherwise) by a third party of any of the Assumed Liabilities on SELLERS. The obligations of BUYER under this Section 8.4 shall be contingent upon SELLERS giving BUYER written notice (i) of the receipt by SELLERS of any process and/or pleadings in or relating to any actions, suits or proceedings of the kinds described in this Section 8.4, including copies thereof, and (ii) of the assertion of any claim or demand relating to the foregoing, including, to the extent known to SELLERS, the identity of the person(s) asserting such claim or making such demand and the nature thereof, and including copies of any correspondence or other writings relating thereto. All notices required by the preceding sentence shall be given within fifteen (15) days of the receipt by SELLERS of any such process or pleadings or any oral or written notice of the assertion of any such claims or demands. BUYER shall have the right to assume SELLERS’ defense in any such actions, suits, or proceedings through counsel selected by BUYER (reasonably acceptable to SELLERS), to compromise and/or settle the same and to prosecute any available appeals or review any adverse judgment or ruling that may be entered therein; provided, however, that SELLERS shall have the right, at their own expense, to participate jointly with BUYER in the defense of any such actions, suits or proceedings. Notwithstanding the right of SELLERS to participate, BUYER shall have the sole right to compromise and/or settle any such actions, suits or proceedings on such terms as BUYER, in its sole discretion, shall deem appropriate with respect to any issue involved in any such actions, suits or proceedings as to which: (a) BUYER has acknowledged the obligation to indemnify SELLERS hereunder and the settlement is solely for cash (and SELLERS receive a complete release in connection therewith); or (b) SELLERS shall have declined to participate. The availability of indemnification pursuant to this Section 8.4 shall not prevent SELLERS from seeking any other remedy otherwise available to SELLERS, including remedies at law or in equity.

8.5           Solicitation of Customers by BUYER Prior to Closing. At any time during the Pre-Closing Period, BUYER will not, and will cause its affiliates not to, conduct any marketing, media or customer solicitation campaign which is specifically or directly targeted to induce customers whose Deposit Account liabilities are to be assumed or Office Loans are to be acquired by BUYER pursuant to this Agreement to discontinue their account or business relationships with FNB.

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8.6           Solicitation of Customers by FNB After the Closing. For a period of four (4) years following the Closing Date, neither FNB nor any affiliate thereof will solicit (a) deposit accounts from customers whose Deposit Liabilities and/or Office Loans are assumed or acquired by BUYER pursuant to this Agreement, (b) refinancing of Office Loans from borrowers whose Office Loans are being acquired by BUYER hereunder, or (c) any persons located within a ten (10) mile radius of the Office, provided that, such radius does not extend beyond the boundaries of Summit County, Ohio (the “Territory”), to provide to such persons any retail, commercial, fiduciary, or wealth management services similar to or competitive with those services provided by BUYER; provided, however, that the foregoing (a), (b) and (c) shall not apply to (i) existing customers of FNB’s offices other than the Office or persons who are employees or current directors of FNB or any affiliate of FNB, (ii) any general advertisement by FNB or an affiliate regarding its banking products or other services, or (iii) any person who becomes a customer of FNB or an affiliate of FNB or seeks the services provided by FNB or an affiliate of FNB on such person's own initiative.

8.7           Further Assurances. From and after the date hereof, each party hereto agrees to execute and deliver such instruments and to take such other actions as the other party(ies) hereto may reasonably request in order to carry out and implement this Agreement. Without limiting the foregoing, SELLERS agree to execute and deliver such deeds, bills of sale, acknowledgments, and other instruments of conveyance and transfer as shall be necessary and appropriate to vest in BUYER the legal and equitable title to the Assets being conveyed to BUYER hereunder. Further, BUYER, at its sole cost and expense, shall prepare and shall file, or shall cause to be prepared and filed, with any appropriate third parties, any and all documents and notices which are necessary and proper to transfer to BUYER any security interests and other rights of FNB in and to collateral securing the Office Loans. SELLERS shall cooperate with BUYER in executing any necessary and proper documents and notices as may be appropriate in furtherance of the foregoing covenant and consistent with the terms of this Agreement; provided, however, that nothing contained herein shall relieve BUYER of its obligations as set forth herein.

8.8           Operation of the Office. Except as otherwise expressly provided in this Agreement, after the Closing Date, neither FNB, nor its subsidiaries or affiliates shall be obligated to provide for any managerial, financial, business, or other services to the Office, including, without limitation, any personnel, employee benefit, data processing, accounting, risk management, or other services or assistance that may have been provided to the Office prior to the Closing Date, and BUYER shall take such action as may in its judgment be necessary or advisable to provide for the ongoing operation and management of, and the provision of services and assistance to, the Office after the Closing Date. Within five (5) days after the Closing Date, BUYER shall change the legal name of the Office and, except for any documents or materials in possession of the customers of the Office (including, but not limited to, deposit tickets and checks), shall not use and shall cause the Office to cease using any signs, stationery, advertising, documents, or printed or written materials that refer to the Office by any name that includes the words "First National Bank," the name of any affiliate of FNB, or any derivations thereof. FNB will retain its signs located at the Office. During the Pre-Closing Period, SELLERS shall cooperate with any reasonable requests of BUYER directed to obtaining specifications for the procurement of new signs of BUYER's choosing for installation by BUYER of new signs immediately following the close of business on the Closing Date; provided, however, that BUYER's receipt of all sign specifications shall be obtained by BUYER in a manner that does not interfere with the normal business activities and operations of the Office and shall be at the sole and exclusive expense of BUYER. BUYER shall remove the “skins” of FNB’s signs with FNB’s name and logo and shall hold them pending pickup by FNB. It is understood by the parties hereto that, with the exception of the “skins,” all mounting facilities, electronics and components for the signs shall be considered as Fixed Assets for purposes of this Agreement.

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8.9           Information After Closing. For a period of five (5) years following the Closing Date, upon written request of SELLERS to BUYER or BUYER to SELLERS, as the case may be, such requested party(ies) shall provide the requesting party(ies) with reasonable access to, or copies of, information and records relating to the Office which are then in the possession or control of the requested party(ies) reasonably necessary to permit the requesting party(ies) or any of its subsidiaries or affiliates to comply with or contest any applicable legal, tax, banking, accounting, or regulatory policies or requirements, or any legal or regulatory proceeding thereunder or requests related to customer relationships at the Office prior to the Closing. In the event of any such requests, the requesting party(ies) shall reimburse the requested party(ies) for the reasonable costs of the requested party(ies) related to such request.

8.10         Individual Retirement Accounts. All IRAs related to the Office that shall not have been transferred to BUYER by the close of business on the thirtieth (30^th) day following the Closing Date may be retained by FNB at its option, and for any such IRAs retained, FNB shall advise the account holders that it has withdrawn its resignation as custodian or transfer the amount in such IRAs to the account holders.

8.11         Covenant Not to Compete. For a period of four (4) years following the Closing Date, FNB and its affiliates shall not, and shall not enter into any agreement to, (i) provide to any persons located within the Territory retail, commercial, fiduciary, or wealth management services similar to or competitive with the services provided by BUYER, or (ii) own, operate or use any building, office or other facility or premises located within the Territory for the purpose of operating a branch or loan production office similar to or competitive with the business of the Office as of the Closing Date; provided, however, that the foregoing (i) shall not apply to (A) existing customers of FNB’s offices other than the Office or persons who are employees or current directors of FNB or any affiliate of FNB, (B) any general advertisement by FNB or any affiliate of FNB regarding its banking products or other services, or (C) any person who becomes a customer of FNB or an affiliate of FNB or seeks the services provided by FNB or any affiliate of FNB on such person's own initiative.

8.12         Non-solicitation of Employees. BUYER and SELLERS agree that for a period of twenty-four (24) months after the Closing Date, neither BUYER nor SELLERS nor any of their respective subsidiaries or affiliates will directly or indirectly solicit for employment or employ any persons who are employees of the other party(ies) or its/their respective subsidiaries or affiliates as of the Closing Date (except in the case of BUYER, the employment of any Transferred Employees after the Closing). As used solely in this Section 8.12, the term "solicit" shall not be deemed to include general advertisements or general solicitations that are not targeted or directed specifically to individuals who are employees of the other party(ies) or its/their respective subsidiaries or affiliates. Nothing in this Section 8.12 shall prohibit the parties or their respective affiliates or subsidiaries from hiring a person covered by this Section 8.12 who contacts the hiring party on his/her own initiative (and not in response to solicitation by the hiring party in violation of this section) or a person covered by this Section 8.12 who is no longer in the employ of the other party or its respective subsidiaries or affiliates at the time of such solicitation.

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8.13         Office-Originated Loans after Closing. BUYER and SELLERS agree that for a period of two (2) years after the Closing Date, BUYER shall make available to FNB the opportunity to participate on any new loans originated at the Office in the market served by it for which loans BUYER seeks or requires participation. BUYER shall provide written notice to FNB prior to the closing of any such loans, and FNB shall have five (5) days from receipt of such notice to elect to so participate in the loans. The terms for participation shall be mutually agreed upon by the parties upon exercise of such option by FNB.

The covenants and obligations of the parties in this Article 8 shall survive the Closing or the earlier termination of this Agreement, if applicable, in accordance with their respective terms.

9.           TERMINATION.

9.1          Termination by Mutual Agreement. This Agreement may be terminated and the transactions contemplated hereby may be abandoned by mutual written consent of the parties.

9.2          Termination by SELLERS. This Agreement may be terminated and the transactions contemplated hereby abandoned by SELLERS:

(a)          in the event of a material breach by BUYER of this Agreement, if such breach is not waived or cured within thirty (30) days after being notified of the same or is incapable of being cured;

(b)          in the event any of the conditions precedent specified in Section 5.1 of this Agreement (i) has not been met as of the date specified for such condition in this Agreement or if no date is specified, the Closing Date, or (ii) is not capable of being met, and in the case of either (i) or (ii), has not been waived by SELLERS;

(c)          in the event any required regulatory approval, authorization or consent for the consummation of the Acquisition is denied by any applicable regulatory authority;

(d)          on or after the date which is 150 calendar days following the date of this Agreement (the "Termination Date") if the Closing has not then occurred unless the failure to consummate by such date is due to a breach of this Agreement by SELLERS;

(e)          in the event that a governmental authority of competent jurisdiction has issued an order permanently enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement, and such order has become final and non-appealable; or

(f)          in the event that BUYER fails to obtain within one hundred twenty (120) days after the effective date hereof, any required regulatory approval, authorization or consent of which it is BUYER’s responsibility to obtain, in which event BUYER shall pay to SELLERS the actual costs, fees and expenses incurred by SELLERS in connection with this Agreement and the Acquisition, including, without limitation, attorneys’ fees, filing costs and out of pocket expenses subject to a maximum payment of $250,000.

The payment obligations of BUYER under Section 9.2(f) shall survive any termination of this Agreement pursuant to such section.

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9.3           Termination by BUYER. This Agreement may be terminated and the transactions contemplated hereby abandoned by BUYER:

(a)          in the event of a material breach by SELLERS of this Agreement, if such breach is not waived or cured within thirty (30) days after being notified of the same or is incapable of being cured;

(b)          in the event any of the conditions precedent specified in Section 5.2 of this Agreement (i) has not been met as of the date specified for such condition in this Agreement or if no date is specified, the Closing Date, or (ii) is not capable of being met, and in the case of either (i) or (ii), has not been waived by BUYER;

(c)          in the event any required regulatory approval, authorization or consent required for consummation of the Acquisition is denied by any applicable regulatory authority;

(d)          in the event that a governmental authority of competent jurisdiction has issued an order permanently enjoining or otherwise prohibiting the consummation of the transactions contemplated by this Agreement, and such order has become final and non-appealable;

(e)          on or after the Termination Date if the Closing has not then occurred unless the failure to consummate by such time is due to a breach of this Agreement by BUYER; or

(f)          in the event that SELLERS fails to obtain within one hundred twenty (120) days after the effective date hereof, any required regulatory approval, authorization or consent of which it is SELLERS’ responsibility to obtain, in which event SELLERS shall pay to BUYER the actual costs, fees and expenses incurred by BUYER in connection with this Agreement and the Acquisition, including, without limitation, attorneys’ fees, filing costs and out of pocket expenses subject to a maximum payment of $250,000.

The payment obligation of SELLERS under Section 9.3(f) shall survive any termination of this Agreement pursuant to such section.

9.4           Effect of Termination. The termination of this Agreement pursuant to Sections 9.2 or 9.3 of this Article 9 shall not release any party hereto from any liability or obligation to the other party(ies) hereto arising from (i) a breach of any provision of this Agreement occurring prior to the termination hereof or (ii) the failure of timely satisfaction of conditions precedent to the obligations of a party(ies) to the extent that such failure of timely satisfaction is attributable to the actions or inactions of such party(ies). If this Agreement is terminated pursuant to Sections 9.2 or 9.3 of this Article 9, then all provisions of this Agreement shall thereupon become void without any liability on the part of any party hereto to any other party(ies) hereto except that this Section 9.4 and Article 10 shall survive any such termination.

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10.         MISCELLANEOUS PROVISIONS.

10.1         Expenses.

Except as and to the extent specifically allocated otherwise herein, each of the parties hereto shall bear its own expenses in connection with the transactions contemplated by this Agreement, whether or not the transactions contemplated hereby are consummated.

10.2         Limitations on Indemnification.

(a)          Termination of Representations and Warranties. The respective representations and warranties of SELLERS and BUYER contained in this Agreement shall terminate on the one (1)-year anniversary of the Closing Date, except for the representations and warranties of (i) SELLERS contained in Sections 3.1(a), (b), (c), (d), (g), (m) and (r), and (ii) BUYER contained in Sections 3.2(a), (b) and (c), which shall survive for a period of twenty-four (24) months following the Closing. The respective representations and warranties of SELLERS contained in Section 3.1(a), (b), (c) and (d), and of BUYER contained in Section 3.2 (a), (b) and (c), are collectively, the “Fundamental Representations”.

(b)          Basket; Cap.

(i)          Except for claims for indemnification with respect to any inaccuracy in or breach of any of the Fundamental Representations, neither BUYER nor SELLERS shall be entitled to indemnification for any Losses arising under Section 8.3 or 8.4, as the case may be, until the aggregate amount of all of the claims for indemnification exceeds Fifty Thousand Dollars ($50,000) and thereafter, BUYER or SELLERS, as applicable, shall be entitled to indemnification for all of the Losses.

(ii)         Except for claims for indemnification with respect to any inaccuracy in or breach of any of the Fundamental Representations, the maximum aggregate indemnification amount to which BUYER or SELLERS, as applicable, may be entitled under this Agreement shall be an amount equal to One Million Dollars ($1,000,000).

10.3        Waivers.

Each party hereto, by written instrument signed by a duly authorized officer of such party, may extend the time for the performance of any of the obligations or other acts of the other party(ies) hereto and may waive, but only as affects the party(ies) signing such instrument:

(a)          any inaccuracies in the representations or warranties of the other party(ies) contained or referred to in this Agreement;

(b)          compliance with any of the covenants or agreements of the other party(ies) contained in this Agreement;

(c)          the performance (including performance to the satisfaction of a party or its counsel) by the other party(ies) of such of its obligations set out herein; and

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(d)          satisfaction of any condition to the obligations of the waiving party(ies) pursuant to this Agreement.

10.4         Notices.

All notices and other communications hereunder may be made by mail, hand-delivery, courier service, facsimile or electronic transmission, and notice shall be deemed to have been given when received; provided, however, if notices and other communications are made by nationally recognized overnight courier service for overnight delivery, such notice shall be deemed to have been given one business day after being forwarded to such a nationally recognized overnight courier service for overnight delivery.

If to BUYER:

Premier Bank & Trust, N.A.

6141 Whipple Avenue, N.W.

North Canton, Ohio 44720

Attn: Rick L. Hull, President & CEO

E-mail: rick.hull@mypbandtbank.com

Facsimile: (330) 244-2992

With a copy to:

Krugliak, Wilkins, Griffiths & Dougherty Co., L.P.A.

4775 Munson Street NW

Canton, Ohio 44718

Attn: Jason F. Haupt

E-mail: jhaupt@kwgd.com

Facsimile: (330) 497-4020

If to SELLERS:

First National Bank, N.A.

112 West Market Street

Orrville, Ohio 44667

Attn: Mark R. Witmer, President & CEO

E-mail: MarkWitmer@discoverfirstnational.com

Facsimile: (330) 682-4644

With a copy to:

Calfee, Halter & Griswold LLP

1405 East Sixth Street

Cleveland, Ohio 4414

Attn: Joseph K. Juster

E-mail: jjuster@calfee.com

Facsimile: (216) 241-0816

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or such other person or address as any such party may designate by notice to the other parties, and shall be deemed to have been given as of the date received.

10.5         Parties in Interest; Assignment; Amendment. The rights and obligations of each party hereto shall be binding upon, by the operation of law or otherwise, and shall inure to the benefit of, the parties hereto and their respective successors, legal representatives, and permitted assigns. Except as expressly provided herein, no person who is not a party hereto (or a permitted successor or assignee of such party) shall have any rights or benefits under this Agreement, either as a third party beneficiary or otherwise. This Agreement cannot be amended or modified, except by a written agreement executed by the parties hereto or their respective successors and permitted assigns. This Agreement may not be assigned by any party hereto without the prior written consent of the other party(ies); provided, however, that BUYER shall have the right to assign all of BUYER’s rights and obligations hereunder with respect to the assignment of any leases or other Assumed Contracts related to the Real Estate to be assigned by NBOH to BUYER hereunder.

10.6         Headings. The headings and table of contents used in this Agreement are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

10.7         Terminology. The specific terms that are defined in various provisions of this Agreement shall apply throughout this Agreement (including, without limitation, each Schedule hereto), unless expressly indicated otherwise. In addition, the following terms and phrases shall have the meanings set forth for purposes of this Agreement (including such Schedule):

(a)          The term "business day" shall mean any day other than a Saturday, Sunday, or a day on which SELLERS or BUYER is/are closed in accordance with applicable law or regulation. Any action, notice, or right which is to be taken or given or which is to be exercised or lapse on or by a given date which is not a business day may be taken, given, or exercised, and shall not lapse, until the next business day following.

(b)          The term "affiliate" shall mean, with respect to any person, any other person directly or indirectly controlling, controlled by or under common control with such person.

(c)          The term "Permitted Exceptions" shall mean, with respect to the Real Estate, (i) those standard exceptions appearing as Schedule B items in a standard ALTA owners or leasehold title insurance policy, and any other exceptions, restrictions, easements, rights of way, and encumbrances referenced in the Title Commitment delivered by SELLERS to BUYER as indicated in Section 2.1(b) of this Agreement reasonably satisfactory to BUYER; (ii) statutory liens for current taxes or assessments not yet due, or if due not yet delinquent, or the validity of which is being contested in good faith by appropriate proceedings; (iii) such other liens, imperfections in title, charges, easements, covenants, restrictions, and encumbrances (but in all cases relating to the Real Estate excluding those which secure borrowed money), rights-of-way and other similar restrictions (including zoning or building restrictions) which, individually and in the aggregate do not materially detract from the value of, or materially interfere with the present use of, any property subject thereto or affected thereby as determined by BUYER in its reasonable discretion; and (iv) such other exceptions as are approved by BUYER in writing.

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(d)          The term "person" shall mean any individual, corporation partnership, limited liability company, association, trust, or other entity, whether business, personal, or otherwise.

(e)          Unless expressly indicated otherwise in a particular context, the terms "herein," "hereunder," "hereto," "hereof," and similar references refer to this Agreement in its entirety and not to specific articles, sections, Schedules, or subsections of this Agreement. Unless expressly indicated otherwise in a particular context, references in this Agreement to enumerated articles, sections, and subsections refer to designated portions of this Agreement (but do not refer to portions of any Schedule unless such Schedule is specifically referenced) and do not refer to any other document.

(f)          The term "subsidiary" shall mean a corporation, partnership, limited liability company, joint venture, or other business organization more than 50% of the voting securities or interests in which are beneficially owned or controlled by, directly or indirectly, the indicated parent of such entity.

(g)          The term "overdraft protection" shall include all such programs and product offerings that provide depositor protection for overdrafts including, but not limited to, features sometimes referred to as "overdraft privileges" and the loan relationships created thereby.

(h)          Capitalized terms used in this Agreement that are defined elsewhere in this Agreement shall have the meanings ascribed to herein, unless the context otherwise requires.

10.8         Press Releases. SELLERS or BUYER, as the case may be, shall approve, in writing prior to issuance, the form and substance of any press release or other public disclosure relating to any matters relating to this Agreement issued by the other(s), which approval shall not be unreasonably withheld. Nothing contained herein shall restrict or prohibit BUYER or SELLERS from issuance of press releases or public disclosures which, based on the advice of counsel, are required by applicable law or regulation or stock market requirement and limited to information necessary for compliance with same.

10.9         Entire Agreement. This Agreement and the Transaction Documents supersede any and all oral or written agreements and understandings heretofore made relating to the subject matter hereof and thereof and contain the entire agreement of the parties relating to the subject matter hereof and thereof. All Schedules, Exhibits, appendices to, and documents delivered in connection with, this Agreement are incorporated into this Agreement by reference and made a part hereof.

10.10        Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of Ohio and the laws of the United States, as well as regulations issued by relevant agencies thereof.

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10.11         Flexible Structure. References in this Agreement to federal or state laws or regulations, jurisdictions, or chartering or regulatory authorities shall be interpreted broadly to allow maximum flexibility in consummating the transactions contemplated hereby in light of changing business, economic, and regulatory conditions. Without limiting the foregoing, in the event SELLERS and BUYER agree in writing to alter the legal structure of the Acquisition contemplated by this Agreement references in this Agreement to such laws, regulations, jurisdictions, and authorities shall be deemed to be altered to reflect the laws, regulations, jurisdictions, and authorities that are applicable in light of such change.

10.12         Counterparts. This Agreement may be executed in several counterparts and by facsimile and electronic transmission (including by .pdf), each of which shall be deemed an original, but all of which together shall constitute one and the same Agreement.

10.13         Tax Matters. BUYER and SELLERS agree that they will file applicable tax returns and other related schedules and documents related to their respective interests based on the allocations in this Agreement (including, without limitation, in Section 1.4(b) hereof).

10.14         Updating of Disclosure Schedules and Exhibits. From time to time prior to the Closing, SELLERS shall have the right to supplement or amend the Disclosure Schedules and the Exhibits with respect to any matter hereafter arising or discovered after the delivery of the Disclosure Schedules and the Exhibits pursuant to this Agreement, subject to BUYER’s written approval of any supplement or amendment to any Disclosure Schedule or Exhibit other than Exhibit 1.2(e) and Exhibit 1.3(b), which approval shall not be unreasonably withheld or delayed. No such supplement or amendment shall have any effect on the satisfaction of the condition to closing set forth in Sections 5.2(c) and 5.2(d); provided, however, if the Closing shall occur, then BUYER shall be deemed to have waived any right or claim pursuant to the terms of this Agreement or otherwise, with respect to any and all matters disclosed or updated pursuant to any such supplement or amendment made by SELLERS (and, where applicable, approved by BUYER) at or prior to the Closing and, in any such event, any and all matters so disclosed or updated shall be deemed to be a part of this Agreement for all purposes.

[Remainder of page intentionally blank; signatures follow]

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IN WITNESS WHEREOF, the parties hereto have caused this Branch Office Purchase and Assumption Agreement to be duly executed by their respective officers thereunto duly authorized, all as of the date first above written.

ATTEST:	Premier Bank & Trust, National Association
	By:
	Rick L. Hull, its President & CEO
ATTEST:	First National Bank, National Association
	By:
	Mark R. Witmer, its President & CEO
ATTEST:	NBOH Properties, LLC
	By:
	James R. VanSickle, Secretary

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EX-21

EXHIBIT 21

SUBSIDIARY OF OHIO LEGACY CORP

Premier Bank & Trust, National Association, North Canton, Ohio, a federally-chartered national banking association.

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 333-167359 of Ohio Legacy Corp on Form S-8 of our report dated April 1, 2013, relating to Ohio Legacy Corp’s consolidated financial statements, appearing in this Annual Report on Form 10-K.

/s/Crowe Horwath LLP

Crowe Horwath LLP

Cleveland, Ohio

April 1, 2013

EX-24

Exhibit 24

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS, that the undersigned, constitutes and appoints RICK L. HULL, his true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to execute the Ohio Legacy Corp Annual Report on Form 10-K including any and all amendments thereto, and to file the same with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting such attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully and to all intents and purposes as he might or could do in person, hereby ratifying and confirming that such attorney-in-fact and agent, may lawfully do or cause to be done by virtue hereof.

This power of attorney has been signed by the following persons in the capacities and on the dates indicated below.

		Date
/s/ Wilbur R. Roat	Chairman of the Board and Director	April 1, 2013
Wilbur R. Roat
/s/ Louis M. Altman	Director	March 21, 2013
Louis M. Altman
/s/ Bruce A. Cassidy, Sr.	Director	April 1, 2013
Bruce A. Cassidy, Sr.
/s/ Brian C. Layman	Director	April 1, 2013
Brian C. Layman
/s/ James P. Tressel	Director	March 25, 2013
James P. Tressel
/s/ Francis P. Wenthur	Director	April 1, 2013
Francis P. Wenthur
/s/ David B. Wurster	Director	April 1, 2013
David B. Wurster

EX-31.1

EXHIBIT 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, Rick L. Hull, certify that:

1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2012 of Ohio Legacy Corp (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 1, 2013

/s/ Rick L. Hull

Rick L. Hull

President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Jane Marsh, certify that:

1. I have reviewed this Annual Report on Form 10-K for the fiscal year ended December 31, 2012 of Ohio Legacy Corp (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: April 1, 2013

/s/ Jane Marsh

Jane Marsh

Senior Vice President, Chief Financial Officer and Treasurer

EX-32.1

EXHIBIT 32.1

CERTIFICATIONS PURSUANT TO 18 U.S.C SECTION 1350

AS ADOPTED

 PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

April 1, 2013

In connection with the Annual Report of Ohio Legacy Corp (the "Company") on Form 10-K for the year ended December 31, 2012, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned Chief Executive Officer and Chief Financial Officer certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the periods covered in the Report.

/s/ Rick L. Hull Rick L. Hull President and Chief Executive Officer   /s/ Jane Marsh Jane Marsh Senior Vice President, Chief Financial Officer and Treasurer  

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
BASIC:
Net income	$ 114,180	$ 1,820,122
Weighted average common shares outstanding	1,971,449	1,971,456
Basic income per share (in dollars per share)	$ 0.06	$ 0.92
DILUTED:
Net income	$ 114,180	$ 1,820,122
Weighted average common shares outstanding	1,971,449	1,971,456
Dilutive effect of stock options	0	0
Total common shares and dilutive potential common shares	1,971,449	1,971,456
Diluted income per common share (in dollars per share)	$ 0.06	$ 0.92

XML

LOANS (Details 9) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Loans Receivable, Gross	$ 149,938,312	$ 110,730,240
One To Four Family Residential Mortgage [Member]
Loans Receivable, Gross	28,833,397	23,753,886
One To Four Family Rental Property [Member]
Loans Receivable, Gross	4,390,713	4,231,631
Multi-Family Real Estate [Member]
Loans Receivable, Gross	9,998,614	9,140,672
Home Equity Line Of Credit [Member]
Loans Receivable, Gross	12,795,480	8,901,243
Consumer [Member]
Loans Receivable, Gross	2,687,368	1,030,404
Commercial [Member]
Loans Receivable, Gross	15,253,309	10,031,094
Secured By Trust Assets [Member]
Loans Receivable, Gross	5,820,705	6,798,929
Commercial Real Estate Nonowner Occupied [Member]
Loans Receivable, Gross	26,672,937	22,802,758
Commercial Real Estate Owner Occupied [Member]
Loans Receivable, Gross	28,538,686	19,820,203
Loans To Nondepository Financial Institutions [Member]
Loans Receivable, Gross	7,345,540	0
Construction and Development [Member]
Loans Receivable, Gross	7,601,563	4,219,420
Not Rated [Member]
Loans Receivable, Gross	47,348,255	36,456,920
Not Rated [Member] | One To Four Family Residential Mortgage [Member]
Loans Receivable, Gross	28,181,932	23,441,682
Not Rated [Member] | One To Four Family Rental Property [Member]
Loans Receivable, Gross	949,631	494,363
Not Rated [Member] | Multi-Family Real Estate [Member]
Loans Receivable, Gross	279,367	303,587
Not Rated [Member] | Home Equity Line Of Credit [Member]
Loans Receivable, Gross	12,473,534	8,637,268
Not Rated [Member] | Consumer [Member]
Loans Receivable, Gross	2,687,368	1,030,404
Not Rated [Member] | Commercial [Member]
Loans Receivable, Gross	0	0
Not Rated [Member] | Secured By Trust Assets [Member]
Loans Receivable, Gross	0	675,626
Not Rated [Member] | Commercial Real Estate Nonowner Occupied [Member]
Loans Receivable, Gross	0	5,000
Not Rated [Member] | Commercial Real Estate Owner Occupied [Member]
Loans Receivable, Gross	0	1,795
Not Rated [Member] | Loans To Nondepository Financial Institutions [Member]
Loans Receivable, Gross	0
Not Rated [Member] | Construction and Development [Member]
Loans Receivable, Gross	2,776,423	1,867,195
Pass [Member]
Loans Receivable, Gross	93,572,057	64,669,640
Pass [Member] | One To Four Family Residential Mortgage [Member]
Loans Receivable, Gross	187,140	0
Pass [Member] | One To Four Family Rental Property [Member]
Loans Receivable, Gross	3,307,577	2,872,069
Pass [Member] | Multi-Family Real Estate [Member]
Loans Receivable, Gross	8,387,924	7,240,618
Pass [Member] | Home Equity Line Of Credit [Member]
Loans Receivable, Gross	58,170	72,895
Pass [Member] | Consumer [Member]
Loans Receivable, Gross	0	0
Pass [Member] | Commercial [Member]
Loans Receivable, Gross	15,252,260	9,823,849
Pass [Member] | Secured By Trust Assets [Member]
Loans Receivable, Gross	5,820,705	6,123,303
Pass [Member] | Commercial Real Estate Nonowner Occupied [Member]
Loans Receivable, Gross	22,949,712	19,005,683
Pass [Member] | Commercial Real Estate Owner Occupied [Member]
Loans Receivable, Gross	25,437,889	17,493,719
Pass [Member] | Loans To Nondepository Financial Institutions [Member]
Loans Receivable, Gross	7,345,540
Pass [Member] | Construction and Development [Member]
Loans Receivable, Gross	4,825,140	2,037,504
Special Mention [Member]
Loans Receivable, Gross	2,568,222	3,280,372
Special Mention [Member] | One To Four Family Residential Mortgage [Member]
Loans Receivable, Gross	116,743	203,327
Special Mention [Member] | One To Four Family Rental Property [Member]
Loans Receivable, Gross	62,659	513,544
Special Mention [Member] | Multi-Family Real Estate [Member]
Loans Receivable, Gross	907,951	254,823
Special Mention [Member] | Home Equity Line Of Credit [Member]
Loans Receivable, Gross	0	1,477
Special Mention [Member] | Consumer [Member]
Loans Receivable, Gross	0	0
Special Mention [Member] | Commercial [Member]
Loans Receivable, Gross	0	14,326
Special Mention [Member] | Secured By Trust Assets [Member]
Loans Receivable, Gross	0	0
Special Mention [Member] | Commercial Real Estate Nonowner Occupied [Member]
Loans Receivable, Gross	1,307,730	759,562
Special Mention [Member] | Commercial Real Estate Owner Occupied [Member]
Loans Receivable, Gross	173,139	1,506,489
Special Mention [Member] | Loans To Nondepository Financial Institutions [Member]
Loans Receivable, Gross	0
Special Mention [Member] | Construction and Development [Member]
Loans Receivable, Gross	0	26,824
Substandard [Member]
Loans Receivable, Gross	6,417,441	6,004,752
Substandard [Member] | One To Four Family Residential Mortgage [Member]
Loans Receivable, Gross	347,582	1,680
Substandard [Member] | One To Four Family Rental Property [Member]
Loans Receivable, Gross	70,846	351,655
Substandard [Member] | Multi-Family Real Estate [Member]
Loans Receivable, Gross	423,372	1,341,644
Substandard [Member] | Home Equity Line Of Credit [Member]
Loans Receivable, Gross	231,439	150,991
Substandard [Member] | Consumer [Member]
Loans Receivable, Gross	0	0
Substandard [Member] | Commercial [Member]
Loans Receivable, Gross	1,049	130,799
Substandard [Member] | Secured By Trust Assets [Member]
Loans Receivable, Gross	0	0
Substandard [Member] | Commercial Real Estate Nonowner Occupied [Member]
Loans Receivable, Gross	2,415,495	3,032,513
Substandard [Member] | Commercial Real Estate Owner Occupied [Member]
Loans Receivable, Gross	2,927,658	707,573
Substandard [Member] | Loans To Nondepository Financial Institutions [Member]
Loans Receivable, Gross	0
Substandard [Member] | Construction and Development [Member]
Loans Receivable, Gross	0	287,897
Doubtful [Member]
Loans Receivable, Gross	32,337	318,556
Doubtful [Member] | One To Four Family Residential Mortgage [Member]
Loans Receivable, Gross	0	107,197
Doubtful [Member] | One To Four Family Rental Property [Member]
Loans Receivable, Gross	0	0
Doubtful [Member] | Multi-Family Real Estate [Member]
Loans Receivable, Gross	0	0
Doubtful [Member] | Home Equity Line Of Credit [Member]
Loans Receivable, Gross	32,337	38,612
Doubtful [Member] | Consumer [Member]
Loans Receivable, Gross	0	0
Doubtful [Member] | Commercial [Member]
Loans Receivable, Gross	0	62,120
Doubtful [Member] | Secured By Trust Assets [Member]
Loans Receivable, Gross	0	0
Doubtful [Member] | Commercial Real Estate Nonowner Occupied [Member]
Loans Receivable, Gross	0	0
Doubtful [Member] | Commercial Real Estate Owner Occupied [Member]
Loans Receivable, Gross	0	110,627
Doubtful [Member] | Loans To Nondepository Financial Institutions [Member]
Loans Receivable, Gross	0
Doubtful [Member] | Construction and Development [Member]
Loans Receivable, Gross	$ 0	$ 0

XML

LOANS (Details 3) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Unpaid Principal Balance With No Related Allowance	$ 6,345,738	$ 4,093,506
Recorded Investment With No Related Allowance	6,129,647	3,079,906
Unpaid Principal Balance With Related Allowance	328,209	1,015,660
Recorded Investment With Related Allowance	266,066	1,004,226
Unpaid Principal Balance	6,673,947	5,109,166
Recorded Investment	6,395,713	4,084,132
Allowance for Loan Losses Allocated	60,532	119,080
Average Recorded Investment With No Related Allowance	4,136,571	2,696,560
Average Recorded Investment With Related Allowance	540,813	326,633
Impaired Financing Receivable, Average Recorded Investment	4,677,384	3,023,193
Interest Income Recognized, With No Related Allowance	182,308	40,193
Interest Income Recognized, With Related Allowance	7,699	0
Impaired Financing Receivable, Interest Income, Accrual Method	190,007	40,193
Cash Basis Interest Recognized, With No Related Allowance	174,432	40,193
Cash Basis Interest Recognized, With Related Allowance	7,174	0
Impaired Financing Receivable, Interest Income, Cash Basis Method	181,606	40,193
One To Four Family Residential [Member]
Unpaid Principal Balance With No Related Allowance	757,684	197,637
Recorded Investment With No Related Allowance	667,082	108,877
Unpaid Principal Balance With Related Allowance	0	0
Recorded Investment With Related Allowance	0	0
Allowance for Loan Losses Allocated	0	0
Average Recorded Investment With No Related Allowance	452,767	210,111
Average Recorded Investment With Related Allowance	0	36,158
Interest Income Recognized, With No Related Allowance	0	590
Interest Income Recognized, With Related Allowance	0	0
Cash Basis Interest Recognized, With No Related Allowance	0	590
Cash Basis Interest Recognized, With Related Allowance	0	0
One To Four Family Rental [Member]
Unpaid Principal Balance With No Related Allowance	62,552	288,674
Recorded Investment With No Related Allowance	13,323	162,633
Unpaid Principal Balance With Related Allowance	60,949	0
Recorded Investment With Related Allowance	36,963	0
Allowance for Loan Losses Allocated	6,689	0
Average Recorded Investment With No Related Allowance	63,897	118,228
Average Recorded Investment With Related Allowance	35,012	76,017
Interest Income Recognized, With No Related Allowance	1,344	10,861
Interest Income Recognized, With Related Allowance	0	0
Cash Basis Interest Recognized, With No Related Allowance	1,344	10,861
Cash Basis Interest Recognized, With Related Allowance	0	0
Multi-Family Real Estate [Member]
Unpaid Principal Balance With No Related Allowance	322,098	36,952
Recorded Investment With No Related Allowance	291,286	7,897
Unpaid Principal Balance With Related Allowance	0	0
Recorded Investment With Related Allowance	0	0
Allowance for Loan Losses Allocated	0	0
Average Recorded Investment With No Related Allowance	100,417	28,081
Average Recorded Investment With Related Allowance	811	0
Interest Income Recognized, With No Related Allowance	17,337	0
Interest Income Recognized, With Related Allowance	0	0
Cash Basis Interest Recognized, With No Related Allowance	14,889	0
Cash Basis Interest Recognized, With Related Allowance	0	0
Home Equity Line Of Credit [Member]
Unpaid Principal Balance With No Related Allowance	66,273	32,337
Recorded Investment With No Related Allowance	66,273	32,337
Unpaid Principal Balance With Related Allowance	197,560	157,266
Recorded Investment With Related Allowance	197,503	157,266
Allowance for Loan Losses Allocated	35,863	40,475
Average Recorded Investment With No Related Allowance	60,920	8,375
Average Recorded Investment With Related Allowance	121,703	12,011
Interest Income Recognized, With No Related Allowance	2,426	0
Interest Income Recognized, With Related Allowance	7,699	0
Cash Basis Interest Recognized, With No Related Allowance	2,240	0
Cash Basis Interest Recognized, With Related Allowance	7,174	0
Consumer [Member]
Average Recorded Investment With Related Allowance	0	0
Interest Income Recognized, With Related Allowance	0	0
Cash Basis Interest Recognized, With Related Allowance	0	0
Commercial [Member]
Unpaid Principal Balance With No Related Allowance	0	371,177
Recorded Investment With No Related Allowance	0	192,305
Unpaid Principal Balance With Related Allowance	1,140	2,849
Recorded Investment With Related Allowance	1,049	614
Allowance for Loan Losses Allocated	1,049	614
Average Recorded Investment With No Related Allowance	118,406	164,449
Average Recorded Investment With Related Allowance	0	22,158
Interest Income Recognized, With No Related Allowance	8,004	20,874
Interest Income Recognized, With Related Allowance	0	0
Cash Basis Interest Recognized, With No Related Allowance	7,486	20,874
Cash Basis Interest Recognized, With Related Allowance	0	0
Commercial Real Estate Nonowner Occupied [Member]
Unpaid Principal Balance With No Related Allowance	2,386,167	1,836,578
Recorded Investment With No Related Allowance	2,386,167	1,754,214
Unpaid Principal Balance With Related Allowance	61,518	773,028
Recorded Investment With Related Allowance	29,328	768,577
Allowance for Loan Losses Allocated	15,708	66,546
Average Recorded Investment With No Related Allowance	2,445,154	524,417
Average Recorded Investment With Related Allowance	9,170	133,958
Interest Income Recognized, With No Related Allowance	142,465	4,490
Interest Income Recognized, With Related Allowance	0	0
Cash Basis Interest Recognized, With No Related Allowance	137,741	4,490
Cash Basis Interest Recognized, With Related Allowance	0	0
Commercial Real Estate Owner Occupied [Member]
Unpaid Principal Balance With No Related Allowance	2,750,965	613,495
Recorded Investment With No Related Allowance	2,705,516	533,746
Unpaid Principal Balance With Related Allowance	7,042	82,517
Recorded Investment With Related Allowance	1,223	77,769
Allowance for Loan Losses Allocated	1,223	11,445
Average Recorded Investment With No Related Allowance	775,053	863,249
Average Recorded Investment With Related Allowance	374,117	46,331
Interest Income Recognized, With No Related Allowance	10,732	1,712
Interest Income Recognized, With Related Allowance	0	0
Cash Basis Interest Recognized, With No Related Allowance	10,732	1,712
Cash Basis Interest Recognized, With Related Allowance	0	0
Construction and Development [Member]
Unpaid Principal Balance With No Related Allowance	0	716,657
Recorded Investment With No Related Allowance	0	287,897
Average Recorded Investment With No Related Allowance	119,957	779,650
Interest Income Recognized, With No Related Allowance		1,666
Cash Basis Interest Recognized, With No Related Allowance		$ 1,666

XML

FAIR VALUE (Details 1) (Municipal Bonds [Member], USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Municipal Bonds [Member]
Balance of recurring Level 3 assets, beginning of period	$ 581,514	$ 537,577
Total gains or losses (realized/unrealized):
Included in earnings - realized	0	0
Included in earnings - unrealized	0	0
Included in other comprehensive income	(17,794)	43,937
Purchases	0	0
Sales	0	0
Issuances	0	0
Settlements	0	0
Transfers in and/or out of Level 3	(563,720)	0
Balance of recurring Level 3 assets, end of period	$ 0	$ 581,514

XML

LOANS (Details 10) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Loans Receivable, Gross	$ 149,938,312	$ 110,730,240
Performing Financing Receivable [Member]
Loans Receivable, Gross	43,901,411	33,380,744
Nonperforming Financing Receivable [Member]
Loans Receivable, Gross	414,834	304,789
One To Four Family Residential Mortgage [Member]
Loans Receivable, Gross	28,833,397	23,753,886
One To Four Family Residential Mortgage [Member] | Performing Financing Receivable [Member]
Loans Receivable, Gross	28,485,815	23,645,009
One To Four Family Residential Mortgage [Member] | Nonperforming Financing Receivable [Member]
Loans Receivable, Gross	347,582	108,877
Home Equity Line Of Credit [Member]
Loans Receivable, Gross	12,795,480	8,901,243
Home Equity Line Of Credit [Member] | Performing Financing Receivable [Member]
Loans Receivable, Gross	12,745,548	8,862,631
Home Equity Line Of Credit [Member] | Nonperforming Financing Receivable [Member]
Loans Receivable, Gross	49,932	38,612
Consumer [Member]
Loans Receivable, Gross	2,687,368	1,030,404
Consumer [Member] | Performing Financing Receivable [Member]
Loans Receivable, Gross	2,670,048	1,024,095
Consumer [Member] | Nonperforming Financing Receivable [Member]
Loans Receivable, Gross	$ 17,320	$ 6,309

XML

INCOME TAXES (Details 2) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Deferred Tax Assets
Allowance for loan losses	$ 202,594	$ 425,824
Deferred and accrued compensation	6,154	30,306
Intangible asset amortization	113,275	130,266
REO valuation allowance	246,623	197,640
Net operating loss carryforward	2,857,894	2,729,009
Other than temporary impairment of securities	982,608	982,608
Depreciation	40,412	21,010
Tax credit carryforward	58,754	61,092
Nonaccrual interest adjustment	93,986	82,968
Other	22,950	16,563
Total deferred tax assets	4,625,250	4,677,286
Deferred tax liabilities
Unrealized gain on securities available for sale	(158,296)	(153,957)
Net deferred loan costs	(35,706)	(9,976)
Prepaid expense	(14,802)	(23,511)
Federal Home Loan Bank stock dividend	(58,480)	(58,480)
Partnership adjustments	(68,056)	(40,245)
Other	(292)	(240)
Total deferred tax liabilities	(335,632)	(286,409)
Net deferred tax assets	4,289,618	4,390,877
Less: valuation allowance	(4,289,618)	(4,390,877)
Net deferred tax assets (liabilities)	$ 0	$ 0

XML

LOANS (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Balance, January 1	$ 2,484,478	$ 3,055,766
Provision for Loan Losses	13,466	152,905
Charge-offs	(315,815)	(539,498)
Recoveries	165,535	415,305
Reclassification for loans sold	0	(600,000)
Balance, December 31	2,347,664	2,484,478
One To Four Family Residential [Member]
Balance, January 1	202,699	183,507
Provision for Loan Losses	244,123	73,014
Charge-offs	(145,657)	(48,077)
Recoveries	5,260	0
Reclassification for loans sold		(5,745)
Balance, December 31	306,425	202,699
One To Four Family Rental [Member]
Balance, January 1	235,523	331,184
Provision for Loan Losses	30,806	(57,006)
Charge-offs	(30,137)	(26,737)
Recoveries	873	0
Reclassification for loans sold		(11,918)
Balance, December 31	237,065	235,523
Multi-Family Real Estate [Member]
Balance, January 1	423,031	454,670
Provision for Loan Losses	(168,030)	207,025
Charge-offs	0	(105,698)
Recoveries	0	0
Reclassification for loans sold		(132,966)
Balance, December 31	255,001	423,031
Home Equity Line Of Credit [Member]
Balance, January 1	139,419	93,187
Provision for Loan Losses	247,178	48,068
Charge-offs	(52,842)	0
Recoveries	5,968	0
Reclassification for loans sold		(1,836)
Balance, December 31	339,723	139,419
Consumer [Member]
Balance, January 1	9,687	10,818
Provision for Loan Losses	54,201	21,588
Charge-offs	(2,262)	(23,614)
Recoveries	1,627	1,809
Reclassification for loans sold		(914)
Balance, December 31	63,253	9,687
Commercial [Member]
Balance, January 1	284,961	275,473
Provision for Loan Losses	(385,827)	142,735
Charge-offs	(1,100)	(81,263)
Recoveries	118,267	38,276
Reclassification for loans sold		(90,260)
Balance, December 31	16,301	284,961
Secured By Trust Assets [Member]
Balance, January 1	13,600	12,095
Provision for Loan Losses	(1,959)	1,505
Charge-offs	0	0
Recoveries	0	0
Reclassification for loans sold		0
Balance, December 31	11,641	13,600
Commercial Real Estate Nonowner Occupied [Member]
Balance, January 1	278,699	509,739
Provision for Loan Losses	(552)	(138,828)
Charge-offs	(31,412)	(86,246)
Recoveries	10,332	0
Reclassification for loans sold		(5,966)
Balance, December 31	257,067	278,699
Commercial Real Estate Owner Occupied [Member]
Balance, January 1	662,269	1,043,458
Provision for Loan Losses	82,712	40,477
Charge-offs	(2,405)	(166,658)
Recoveries	2,405	95,387
Reclassification for loans sold		(350,395)
Balance, December 31	744,981	662,269
Construction and Development [Member]
Balance, January 1	234,590	141,635
Provision for Loan Losses	(89,186)	(185,673)
Charge-offs	(50,000)	(1,205)
Recoveries	20,803	279,833
Reclassification for loans sold		0
Balance, December 31	116,207	234,590
Loans To Nondepository Financial Institutions [Member]
Balance, January 1	0
Provision for Loan Losses	0
Charge-offs	0
Recoveries	0
Reclassification for loans sold	0
Balance, December 31	$ 0

XML

INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit) [Table Text Block]

Income tax expense was as follows for the years ended December 31, 2012 and 2011:

	2012			2011
Current federal	$	24,524		$	-
Deferred federal		96,290			1,030,624
Change in valuation allowance		(96,290	)		(1,030,624	)
Total income tax expense	$	24,524		$	-

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

Effective tax rates differ from federal statutory rates applied to financial statement earnings due to the following:

	2012			2011
Federal statutory rate (34%) times financial statement income	$	47,159		$	618,841
Effect of:
Tax exempt income net of disallowed interest expense		(35,298	)		(35,292	)
Stock based compensation		67,215			68,972
Write-off of deferred tax benefits		0			376,753
Change in valuation allowance		(96,920	)		(1,030,624	)
Other, net		42,368			1,350
Total income tax expense	$	24,524		$	0

Schedule of Deferred Tax Assets and Liabilities [Table Text Block]

Deferred tax assets and liabilities were due to the following at December 31, 2012 and 2011:

	2012			2011
Deferred Tax Assets
Allowance for loan losses	$	202,594		$	425,824
Deferred and accrued compensation		6,154			30,306
Intangible asset amortization		113,275			130,266
REO valuation allowance		246,623			197,640
Net operating loss carryforward		2,857,894			2,729,009
Other than temporary impairment of securities		982,608			982,608
Depreciation		40,412			21,010
Tax credit carryforward		58,754			61,092
Nonaccrual interest adjustment		93,986			82,968
Other		22,950			16,563
Total deferred tax assets		4,625,250			4,677,286
Deferred tax liabilities
Unrealized gain on securities available for sale		(158,296	)		(153,957	)
Net deferred loan costs		(35,706	)		(9,976	)
Prepaid expense		(14,802	)		(23,511	)
Federal Home Loan Bank stock dividend		(58,480	)		(58,480	)
Partnership adjustments		(68,056	)		(40,245	)
Other		(292	)		(240	)
Total deferred tax liabilities		(335,632	)		(286,409	)
Net deferred tax assets		4,289,618			4,390,877
Less: valuation allowance		(4,289,618	)		(4,390,877	)
Net deferred tax assets (liabilities)	$	0		$	0

XML

INCOME TAXES (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010	Dec. 31, 2032	Dec. 31, 2030	Dec. 31, 2029	Dec. 31, 2028	Dec. 31, 2027
Valuation Allowance, Amount	$ 4,289,618
Valuation Allowance, Deferred Tax Asset, Change in Amount		377,000	1,039,000
Operating Loss Carryforwards	8,405,000
Deferred Tax Assets, Operating Loss Carryforwards, Subject to Expiration				379,000	5,105,000	1,532,000	132,000	1,257,000
Deferred Tax Assets, Tax Credit Carryforwards, Alternative Minimum Tax	$ 59,000
Effective Income Tax Rate Reconciliation, at Federal Statutory Income Tax Rate	(34.00%)

XML

FAIR VALUE (Details 4) (USD $)	12 Months Ended
	Dec. 31, 2012
Residential One To Four Family Mortgage Property [Member] | Sales Comparison Approach [Member]
Balance of recurring Level 3 assets at January 1	$ 471,501
Fair Value Measurements, Valuation Techniques	Sales comparison approach
Residential One To Four Family Mortgage Property [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(9.03%)
Residential One To Four Family Mortgage Property [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(8.56%)
Residential One To Four Family Mortgage Property [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	8.71%
Residential One To Four Family Rental Property [Member] | Sales Comparison Approach [Member]
Balance of recurring Level 3 assets at January 1	43,597
Fair Value Measurements, Valuation Techniques	Sales comparison approach
Residential One To Four Family Rental Property [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	1.00%
Residential One To Four Family Rental Property [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(32.00%)
Residential One To Four Family Rental Property [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(9.43%)
Multi-Family Real Estate [Member] | Sales Comparison Approach [Member]
Balance of recurring Level 3 assets at January 1	3,441
Fair Value Measurements, Valuation Techniques	Sales comparison approach
Multi-Family Real Estate [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	2.10%
Multi-Family Real Estate [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	2.10%
Multi-Family Real Estate [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	2.10%
Home Equity Line Of Credit [Member] | Sales Comparison Approach [Member]
Balance of recurring Level 3 assets at January 1	161,640
Fair Value Measurements, Valuation Techniques	Sales comparison approach
Home Equity Line Of Credit [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(1.70%)
Home Equity Line Of Credit [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(7.17%)
Home Equity Line Of Credit [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(4.20%)
Commercial Real Estate Nonowner Occupied [Member] | Income Approach [Member]
Balance of recurring Level 3 assets at January 1	13,620
Fair Value Measurements, Valuation Techniques	Income approach
Commercial Real Estate Nonowner Occupied [Member] | Maximum [Member] | Income Approach [Member]
Fair Value Inputs, Capitalization rate	12.00%
Commercial Real Estate Nonowner Occupied [Member] | Minimum [Member] | Income Approach [Member]
Fair Value Inputs, Capitalization rate	12.00%
Commercial Real Estate Nonowner Occupied [Member] | Weighted Average [Member] | Income Approach [Member]
Fair Value Inputs, Capitalization rate	12.00%
Residential Mortgage [Member] | Sales Comparison Approach [Member]
Balance of recurring Level 3 assets at January 1	25,989
Fair Value Measurements, Valuation Techniques	Sales comparison approach
Residential Mortgage [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(26.00%)
Residential Mortgage [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(26.00%)
Residential Mortgage [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(26.00%)
Commercial Real Estate [Member] | Sales Comparison Approach [Member]
Balance of recurring Level 3 assets at January 1	150,000
Fair Value Measurements, Valuation Techniques	Sales comparison approach
Commercial Real Estate [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(7.00%)
Commercial Real Estate [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(7.00%)
Commercial Real Estate [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	(7.00%)
Construction and Development [Member] | Sales Comparison Approach [Member]
Balance of recurring Level 3 assets at January 1	145,684
Fair Value Measurements, Valuation Techniques	Sales comparison approach
Construction and Development [Member] | Maximum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	0.00%
Construction and Development [Member] | Minimum [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	0.00%
Construction and Development [Member] | Weighted Average [Member] | Sales Comparison Approach [Member]
Adjustment to Changes in Comparable Sales Rate	0.00%
Interest In Limited Liability Company [Member] | Income Approach [Member]
Balance of recurring Level 3 assets at January 1	$ 1,171,620
Fair Value Measurements, Valuation Techniques	Income approach
Interest In Limited Liability Company [Member] | Maximum [Member] | Income Approach [Member]
Fair Value Inputs, Capitalization rate	10.25%
Interest In Limited Liability Company [Member] | Minimum [Member] | Income Approach [Member]
Fair Value Inputs, Capitalization rate	10.25%
Interest In Limited Liability Company [Member] | Weighted Average [Member] | Income Approach [Member]
Fair Value Inputs, Capitalization rate	10.25%

XML

PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net income	$ 114,180	$ 1,820,122
Adjustments to reconcile net income to net cash from operating activities:
Net cash used for operating activities	(1,219,126)	(541,486)
Cash flows from financing activities:
Net change in cash and cash equivalents	(14,339,105)	(12,636,062)
Cash and cash equivalents at beginning of period	20,046,156	32,682,218
Cash and cash equivalents at end of period	5,707,051	20,046,156
Parent [Member]
Cash flows from operating activities:
Net income	114,180	1,820,122
Adjustments to reconcile net income to net cash from operating activities:
Equity in undistributed income of subsidiary	(101,100)	(1,695,008)
Net change in other assets and other liabilities	(19,963)	(79,532)
Net cash used for operating activities	(6,883)	45,582
Cash flows from financing activities:
Reverse stock split - cash paid for fractional shares	(251)	0
Net change in cash and cash equivalents	(7,134)	45,582
Cash and cash equivalents at beginning of period	60,058	14,476
Cash and cash equivalents at end of period	$ 52,924	$ 60,058

XML

LOANS (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Financing Receivable Recorded Investment 90 Days Past Due	$ 3,403,978	$ 1,343,279
Residential Real Estate [Member] | Federal Home Loan Bank [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	30,231,000	24,475,000
Commercial and Multifamily Real Estate [Member] | Federal Home Loan Bank [Member]
Federal Home Loan Bank, Advances, General Debt Obligations, Disclosures, Collateral Pledged	39,117,000	23,827,000
Commercial and Home Equity Loans [Member] | Federal Reserve Bank Of Cleveland [Member]
Federal Reserve Bank Advances General Debt Obligations Disclosures Collateral Pledged	20,289,000	16,553,000
Commercial Real Estate Nonowner Occupied [Member]
Financing Receivable Recorded Investment 90 Days Past Due	29,328	39,948
Commercial, Recorded Investment	287,845
Commercial Real Estate Owner Occupied [Member]
Financing Receivable Recorded Investment 90 Days Past Due	$ 2,706,739	$ 611,515
Bank Participation Interest Percentage 90 Days Past Due	2.45%
Participation Interest In Credit Percentage 90 Days Past Due	Sixty-six

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INCOME TAXES (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Current federal	$ 24,524	$ 0
Deferred federal	96,290	1,030,624
Change in valuation allowance	(96,290)	(1,030,624)
Total income tax expense	$ 24,524	$ 0

XML

LOAN COMMITMENTS AND RELATED ACTIVITIES (Details Textual)	12 Months Ended
	Dec. 31, 2012
Long-term Purchase Commitment, Time Period	Commitments to make loans are generally made for periods of 30 days or less

XML

STOCK-BASED COMPENSATION (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012
Options, Outstanding, January 1	128,185
Options, Granted	0
Options, Forfeited or expired	(160)
Options, Exercised	0
Options, Outstanding, December 31	128,025
Options, Exercisable at December 31	51,910
Weighted Average Exercise Price, Outstanding, January 1(in dollars per share)	$ 22.98
Weighted Average Exercise Price, Granted (in dollars per share)	$ 0
Weighted Average Exercise Price, Forfeited or expired (in dollars per share)	$ 23.00
Weighted Average Exercise Price, Exercised (in dollars per share)	$ 0
Weighted Average Exercise Price, Outstanding, December 31 (in dollars per share)	$ 22.98
Weighted Average Exercise Price, Exercisable at December 31 (in dollars per share)	$ 22.98

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PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 5,707,051	$ 20,046,156	$ 32,682,218
Total assets	174,741,177	146,601,367
LIABILITIES AND SHAREHOLDERS' EQUITY
Shareholders' equity	18,912,468	18,588,088	16,470,516
Total liabilities and shareholders' equity	174,741,177	146,601,367
Parent [Member]
ASSETS
Cash and cash equivalents	52,924	60,058	14,476
Investment in subsidiary, Premier Bank & Trust, N.A.	18,869,489	18,557,939
Other assets	4,795	5,414
Total assets	18,927,208	18,623,411
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities	14,740	35,323
Shareholders' equity	18,912,468	18,588,088
Total liabilities and shareholders' equity	$ 18,927,208	$ 18,623,411

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INCOME TAXES (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Federal statutory rate (34%) times financial statement income	$ 47,159	$ 618,841
Effect of:
Tax exempt income net of disallowed interest expense	(35,298)	(35,292)
Stock based compensation	67,215	68,972
Write-off of deferred tax benefits	0	376,753
Change in valuation allowance	(96,290)	(1,030,624)
Other, net	42,368	1,350
Total income tax expense	$ 24,524	$ 0

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FAIR VALUE (Details 2) (Municipal Bonds [Member], USD $)	12 Months Ended
	Dec. 31, 2011
Municipal Bonds [Member]
Interest income on securities	$ 152
Other changes in fair value	43,785
Total	$ 43,937

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SECURITIES (Tables)

12 Months Ended

Dec. 31, 2012

Investments, Debt and Equity Securities [Abstract]

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

The fair values of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale, carried at fair value:
December 31, 2012
U.S. Government-sponsored enterprises	$	1,006,648	$	7	$	0		$	1,006,655
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		7,309,579		151,274		0			7,460,853
Other mortgage-backed securities-residential		188,430		0		(9,548	)		178,882
Municipal securities		2,702,912		170,892		0			2,873,804
Equity securities		39,900		152,950		0			192,850
Total	$	11,247,469	$	475,123	$	(9,548	)	$	11,713,044
December 31, 2011
U.S. Government-sponsored enterprises	$	2,514,982	$	952	$	(28	)	$	2,515,906
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		4,663,733		201,434		0			4,865,167
Other mortgage-backed securities-residential		250,748		0		(60,877	)		189,871
Municipal decurities		2,755,465		205,885		0			2,961,350
Equity securities		39,900		105,450		0			145,350
Total	$	10,224,828	$	513,721	$	(60,905	)	$	10,677,644

Investments Classified by Contractual Maturity Date [Table Text Block]

Securities with unrealized losses for less than one year and one year or more were as follows:

	Less than 12 months				12 Months or More					Total
	Fair		Unrealized		Fair		Unrealized			Fair		Unrealized
December 31, 2012:	Value		Loss		Value		Loss			Value		Loss
Available for sale:
Other mortgage-backed securities-residential	$	0	$	0	$	178,882	$	(9,548	)	$	178,882	$	(9,548	)

	Less than 12 months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2011:	Value		Loss			Value		Loss			Value		Loss
Available for sale:
U.S. Government-sponsored enterprises	$	1,003,318	$	(28	)	$	-	$	-		$	1,003,318	$	(28	)
Other mortgage-backed securities		-		-			189,871		(60,877	)		189,871		(60,877	)
Total	$	1,003,318	$	(28	)	$	189,871	$	(60,877	)	$	1,193,189	$	(60,905	)

Available For Sale Securities Continuous Unrealized Loss Position [Table Text Block]

The fair value of debt securities available for sale at year-end 2012 by contractual maturity were as follows. Securities not due at a single maturity date (mortgage-backed securities) are shown separately.

	Available for Sale
	Fair Value
Due in one year or less	$	0
Due from one to five years		861,103
Due from five to ten years		2,270,108
Due after ten years		749,248
Mortgage-backed securities-residential		7,639,735
Total	$	11,520,194

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LOANS (Details 5) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Nonaccrual Loans	$ 3,205,677	$ 1,341,607
90 Days or Greater & Still Accruing	198,301	1,672
Total	3,403,978	1,343,279
One To Four Family Residential [Member]
Nonaccrual Loans	347,582	108,877
90 Days or Greater & Still Accruing	197,353	0
Total	544,935	108,877
One To Four Family Rental [Member]
Nonaccrual Loans	50,286	162,633
90 Days or Greater & Still Accruing	0	0
Total	50,286	162,633
Multi-Family Real Estate [Member]
Nonaccrual Loans	3,441	7,897
90 Days or Greater & Still Accruing	0	0
Total	3,441	7,897
Home Equity Line Of Credit [Member]
Nonaccrual Loans	49,932	38,612
90 Days or Greater & Still Accruing	0	0
Total	49,932	38,612
Consumer [Member]
Nonaccrual Loans	17,320	6,309
90 Days or Greater & Still Accruing	948	1,672
Total	18,268	7,981
Commercial [Member]
Nonaccrual Loans	1,049	77,919
90 Days or Greater & Still Accruing	0	0
Total	1,049	77,919
Secured By Trust Assets [Member]
Nonaccrual Loans	0
90 Days or Greater & Still Accruing	0
Total	0
Commercial Real Estate Nonowner Occupied [Member]
Nonaccrual Loans	29,328	39,948
90 Days or Greater & Still Accruing	0	0
Total	29,328	39,948
Commercial Real Estate Owner Occupied [Member]
Nonaccrual Loans	2,706,739	611,515
90 Days or Greater & Still Accruing	0	0
Total	2,706,739	611,515
Construction and Development [Member]
Nonaccrual Loans	0	287,897
90 Days or Greater & Still Accruing	0	0
Total	$ 0	$ 287,897

XML

SECURITIES (Details 1) (USD $)	Dec. 31, 2011	Dec. 31, 2011 Mortgage-Backed Securities, Issued By Us Government Sponsored Enterprises [Member]	Dec. 31, 2012 Mortgage Backed Securities Other Residential [Member]	Dec. 31, 2012 Mortgage Backed Securities, Other [Member]
Available for sale, Less than 12 months, Fair Value	$ 1,003,318	$ 1,003,318	$ 0	$ 0
Available for sale, Less than 12 months, Unrealized Loss	(28)	(28)	0	0
Available for sale, 12 Months or More, Fair Value	189,871	0	178,882	189,871
Available for sale, 12 Months or More, Unrealized Loss	(60,877)	0	(9,548)	(60,877)
Available for sale, Fair Value	1,193,189	1,003,318	178,882	189,871
Available for sale, Unrealized Loss	$ (60,905)	$ (28)	$ (9,548)	$ (60,877)

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FAIR VALUE (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Impaired Loans, Collateral Dependent Loans, Unpaid Principal Balance	$ 754,331	$ 1,639,944
Impaired Financing Receivable, Related Allowance	60,532	119,080
Assets Acquired In Settlement Of Loans Fair Value	1,493,293
Provision For Other Losses	127,075	628,530
Tangible Asset Impairment Charges	209,453	192,882
Commercial Impaired Loans And Other Real Estate Owned Property Carrying Value Limit	$ 250,000
Fair Value Inputs, Discount Rate	10.00%

XML

PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Tables)

12 Months Ended

Dec. 31, 2012

Loan Commitments and Related Activities [Abstract]

Schedule of Condensed Balance Sheet [Table Text Block]

CONDENSED BALANCE SHEETS
As of December 31
	2012		2011
ASSETS
Cash and cash equivalents	$	52,924	$	60,058
Investment in subsidiary, Premier Bank & Trust, N.A.		18,869,489		18,557,939
Other assets		4,795		5,414
Total assets	$	18,927,208	$	18,623,411
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities	$	14,740	$	35,323
Shareholders' equity		18,912,468		18,588,088
Total liabilities and shareholders' equity	$	18,927,208	$	18,623,411

Schedule of Condensed Income Statement [Table Text Block]

CONDENSED STATEMENTS OF OPERATIONS
For the year ended December 31
	2012			2011
Dividends received from subsidiary	$	100,000		$	200,000
Professional fees		(11,575	)		(9,360	)
Other expense		(75,345	)		(65,526	)
Income before undistributed earnings of subsidiary		13,080			125,114
Equity in undistributed income of subsidiary		101,100			1,695,008
Income before income taxes		114,180			1,820,122
Income tax expense		0			0
Net income	$	114,180		$	1,820,122
Other comprehensive income		12,759			94,591
Comprehensive income	$	126,939		$	1,914,713

Schedule of Condensed Cash Flow Statement [Table Text Block]

CONDENSED STATEMENT OF CASH FLOWS
For the year ended December 31,	2012			2011
Cash flows from operating activities:
Net income	$	114,180		$	1,820,122
Adjustments to reconcile net income to net cash from operating activities:
Equity in undistributed income of subsidiary		(101,100	)		(1,695,008	)
Net change in other assets and other liabilities		(19,963	)		(79,532	)
Net cash used for operating activities		(6,883	)		45,582
Cash flows from financing activities:
Reverse stock split - cash paid for fractional shares		(251	)		0
Net change in cash and cash equivalents		(7,134	)		45,582
Beginning cash and cash equivalents		60,058			14,476
Ending cash and cash equivalents	$	52,924		$	60,058

XML

LOANS (Details 7) (USD $)	Dec. 31, 2012	Dec. 31, 2011
TDR allocated specific reserves	$ 30,780	$ 100,746
TDR loan commitments outstanding	0	6,000
Home Equity Line Of Credit [Member]
Number of Loans	2	1
Recorded Investment	213,844	150,991
Commercial Loan [Member]
Number of Loans	1	3
Recorded Investment	78,990	177,120
Commercial Real Estate Nonowner Occupied [Member]
Number of Loans	5	4
Recorded Investment	2,674,012	2,482,844
Commercial Real Estate Owner Occupied [Member]
Number of Loans	1	2
Recorded Investment	$ 215,377	$ 110,627

XML

FEDERAL HOME LOAN BANK ADVANCES (Details 1) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Long-term Federal Home Loan Bank advances	$ 6,000,000	$ 6,000,000
0.59% Fixed Rate, Maturing November 27, 2013 [Member]
Long-term Federal Home Loan Bank advances	3,000,000	3,000,000
0.55% Fixed Rate, Maturing April 12, 2013 [Member]
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Amount of Advances	$ 3,000,000	$ 3,000,000

XML

PREMISES AND EQUIPMENT (Details 1) (USD $)	Dec. 31, 2012
2013	$ 193,222
2014	177,188
2015	149,490
2016	158,004
2017	154,812
Thereafter	1,712,508
Total minimum lease payments	$ 2,545,224

XML

LOANS (Details 2) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	$ 2,287,132	$ 2,365,398
Loans Collectively Evaluated for Impairment, Recorded Investment	143,542,599	106,646,108
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	60,532	119,080
Loans Individually Evaluated for Impairment, Recorded Investment	6,395,713	4,084,132
Total Allowance for Loan Loss	2,347,664	2,484,478	3,055,766
Total Recorded Investment	149,938,312	110,730,240
One To Four Family Residential [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	306,425	202,699
Loans Collectively Evaluated for Impairment, Recorded Investment	28,166,315	23,645,009
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	0	0
Loans Individually Evaluated for Impairment, Recorded Investment	667,082	108,877
Total Allowance for Loan Loss	306,425	202,699	183,507
Total Recorded Investment	28,833,397	23,753,886
One To Four Family Rental [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	230,376	235,523
Loans Collectively Evaluated for Impairment, Recorded Investment	4,340,427	4,068,998
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	6,689	0
Loans Individually Evaluated for Impairment, Recorded Investment	50,286	162,633
Total Allowance for Loan Loss	237,065	235,523	331,184
Total Recorded Investment	4,390,713	4,231,631
Multi-Family Real Estate [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	255,001	423,031
Loans Collectively Evaluated for Impairment, Recorded Investment	9,707,328	9,132,775
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	0	0
Loans Individually Evaluated for Impairment, Recorded Investment	291,286	7,897
Total Allowance for Loan Loss	255,001	423,031	454,670
Total Recorded Investment	9,998,614	9,140,672
Home Equity Line Of Credit [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	303,860	98,944
Loans Collectively Evaluated for Impairment, Recorded Investment	12,531,704	8,711,640
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	35,863	40,475
Loans Individually Evaluated for Impairment, Recorded Investment	263,776	189,603
Total Allowance for Loan Loss	339,723	139,419	93,187
Total Recorded Investment	12,795,480	8,901,243
Consumer [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	63,253	9,687
Loans Collectively Evaluated for Impairment, Recorded Investment	2,687,368	1,030,404
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	0	0
Loans Individually Evaluated for Impairment, Recorded Investment	0	0
Total Allowance for Loan Loss	63,253	9,687	10,818
Total Recorded Investment	2,687,368	1,030,404
Commercial [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	15,252	284,347
Loans Collectively Evaluated for Impairment, Recorded Investment	15,252,260	9,838,175
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	1,049	614
Loans Individually Evaluated for Impairment, Recorded Investment	1,049	192,919
Total Allowance for Loan Loss	16,301	284,961	275,473
Total Recorded Investment	15,253,309	10,031,094
Secured By Trust Assets [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	11,641	13,600
Loans Collectively Evaluated for Impairment, Recorded Investment	5,820,705	6,798,929
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	0	0
Loans Individually Evaluated for Impairment, Recorded Investment	0	0
Total Allowance for Loan Loss	11,641	13,600	12,095
Total Recorded Investment	5,820,705	6,798,929
Commercial Real Estate Nonowner Occupied [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	241,359	212,153
Loans Collectively Evaluated for Impairment, Recorded Investment	24,257,442	20,279,967
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	15,708	66,546
Loans Individually Evaluated for Impairment, Recorded Investment	2,415,495	2,522,791
Total Allowance for Loan Loss	257,067	278,699	509,739
Total Recorded Investment	26,672,937	22,802,758
Commercial Real Estate Owner Occupied [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	743,758	650,824
Loans Collectively Evaluated for Impairment, Recorded Investment	25,831,947	19,208,688
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	1,223	11,445
Loans Individually Evaluated for Impairment, Recorded Investment	2,706,739	611,515
Total Allowance for Loan Loss	744,981	662,269	1,043,458
Total Recorded Investment	28,538,686	19,820,203
Loans To Nondepository Financial Institutions [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	0
Loans Collectively Evaluated for Impairment, Recorded Investment	7,345,540
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	0
Loans Individually Evaluated for Impairment, Recorded Investment	0
Total Allowance for Loan Loss	0	0
Total Recorded Investment	7,345,540	0
Construction and Development [Member]
Loans Collectively Evaluated for Impairment, Allowance for Loan Loss	116,207	234,590
Loans Collectively Evaluated for Impairment, Recorded Investment	7,601,563	3,931,523
Loans Individually Evaluated for Impairment, Allowance for Loan Loss	0	0
Loans Individually Evaluated for Impairment, Recorded Investment	0	287,897
Total Allowance for Loan Loss	116,207	234,590	141,635
Total Recorded Investment	$ 7,601,563	$ 4,219,420

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SECURITIES

12 Months Ended

Dec. 31, 2012

Investments, Debt and Equity Securities [Abstract]

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

NOTE 2 – SECURITIES

The fair values of available for sale securities and the related gross unrealized gains and losses recognized in accumulated other comprehensive income were as follows:

			Gross		Gross
	Amortized		Unrealized		Unrealized			Fair
	Cost		Gains		Losses			Value
Available for sale, carried at fair value:
December 31, 2012
U.S. Government-sponsored enterprises	$	1,006,648	$	7	$	0		$	1,006,655
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		7,309,579		151,274		0			7,460,853
Other mortgage-backed securities-residential		188,430		0		(9,548	)		178,882
Municipal securities		2,702,912		170,892		0			2,873,804
Equity securities		39,900		152,950		0			192,850
Total	$	11,247,469	$	475,123	$	(9,548	)	$	11,713,044
December 31, 2011
U.S. Government-sponsored enterprises	$	2,514,982	$	952	$	(28	)	$	2,515,906
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		4,663,733		201,434		0			4,865,167
Other mortgage-backed securities-residential		250,748		0		(60,877	)		189,871
Municipal decurities		2,755,465		205,885		0			2,961,350
Equity securities		39,900		105,450		0			145,350
Total	$	10,224,828	$	513,721	$	(60,905	)	$	10,677,644

At June 30, 2011, the Company reclassified its municipal securities to the available-for-sale category from held-to-maturity since management no longer intends to hold these securities to maturity. At the time of the transfer, the municipal securities were carried at amortized cost totaling $2,816,058 and the estimated fair value was $2,950,608. The unrealized gain included as a component of accumulated other comprehensive income related to the reclassification was $134,550. The securities were reclassified because management considered selling the municipal securities to assist in funding the sale of two branch offices in October 2011. No purchases will be classified as held-to-maturity before June 30, 2013.

Proceeds from sales of securities available for sale were $806,170 for 2012 and $10.8 million for 2011. Gross gains of $55,016 and $358,030 and no gross losses were realized on the sales during 2012 and 2011, respectively.

Securities with unrealized losses for less than one year and one year or more were as follows:

	Less than 12 months				12 Months or More					Total
	Fair		Unrealized		Fair		Unrealized			Fair		Unrealized
December 31, 2012:	Value		Loss		Value		Loss			Value		Loss
Available for sale:
Other mortgage-backed securities-residential	$	0	$	0	$	178,882	$	(9,548	)	$	178,882	$	(9,548	)

	Less than 12 months					12 Months or More					Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
December 31, 2011:	Value		Loss			Value		Loss			Value		Loss
Available for sale:
U.S. Government-sponsored enterprises	$	1,003,318	$	(28	)	$	-	$	-		$	1,003,318	$	(28	)
Other mortgage-backed securities		-		-			189,871		(60,877	)		189,871		(60,877	)
Total	$	1,003,318	$	(28	)	$	189,871	$	(60,877	)	$	1,193,189	$	(60,905	)

Other-Than-Temporary Impairment

Management evaluates securities for other-than-temporary impairment (“OTTI”) in the fair value of its securities portfolio at least on a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation. As of December 31, 2012, the Company’s security portfolio consisted of twenty-seven securities. One security was in an unrealized loss position, discussed below under “Mortgage-backed securities”, for twelve months or longer.

Mortgage-backed securities

At December 31, 2012, 19% of the mortgage-backed securities held by the Company were issued by the Government National Mortgage Association (“GNMA”), which are backed by the full faith and credit of the U.S. government, and 79% were issued by the Federal National Mortgage Association (“FNMA”) and the Federal Home Loan Mortgage Corporation (“FHLMC”), institutions which the government has affirmed its commitment to support.

The Company’s mortgage-backed securities portfolio includes one non-agency security with a fair value of $178,882 which represents an unrealized loss of $9,548 at December 31, 2012 and $60,877 at December 31, 2011. The estimated fair value has been less than its amortized cost for twelve months or more. This non-agency mortgage-backed security is rated Caa2 by Moody’s rating service on December 4, 2012 and BB- by Standard & Poor’s rating service on October 16, 2012. It is senior to two subordinate classes of securities that together are collateralized by a pool of residential mortgages. No losses incurred on the mortgages in the pool have been assigned to the senior classes. Although the borrowers are not required to make principal payments during the initial 10 year period, 81% of the original principal has been repaid as of December 31, 2012. There are no negative amortization loans in the pool and none of the loans are subprime, Alt A or similar type of high-default product. Based on these factors, as of December 31, 2012, the Company believes there is no OTTI and does not have the intent to sell this security and it is not likely that it will be required to sell the security before its anticipated recovery.

The fair value of debt securities available for sale at year-end 2012 by contractual maturity were as follows. Securities not due at a single maturity date (mortgage-backed securities) are shown separately.

	Available for Sale
	Fair Value
Due in one year or less	$	0
Due from one to five years		861,103
Due from five to ten years		2,270,108
Due after ten years		749,248
Mortgage-backed securities-residential		7,639,735
Total	$	11,520,194

Available for sale securities with a fair value of $7,177,000 and $7,002,000 were pledged as collateral for repurchase agreements (see Note 7) as of December 31, 2012 and 2011, respectively. No securities were pledged as collateral to the Federal Home Loan Bank or for public fund deposits at December 31, 2012 and 2011.

At December 31, 2012 and at December 31, 2011, there were no holdings of securities of specific issuers, other than mortgage backed securities and debentures issued by U.S. Government-sponsored enterprises, in an amount greater than 10% of shareholders’ equity.

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PREMISES AND EQUIPMENT (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2011 Banking Office At2375 Benden Drive Suite Cwooster Ohio [Member]	Dec. 31, 2010 Banking Office At6141 Whipple Ave N W North Canton Ohio [Member]	Dec. 31, 2012 Banking Office At107 Plaza Drive Suite Ast Clairsville Ohio [Member]	Dec. 31, 2011 Banking Office At305 West Liberty Street [Member]
Depreciation and amortization	$ 277,738	$ 334,529
Gain on lease assignment	0	217,532				217,532
Operating Leases, Rent Expense	232,615	215,264	43,125		21,521
Lease Initiation Date	Mar. 01, 2010		Aug. 01, 2011	Oct. 01, 2010	Jan. 13, 2012
Lease Term			3 years	20 years	10 years
Operating Leases Future Minimum Payments Due In First Six Months				22,752
Operating Leases Future Minimum Payments Due In Next Six Months				45,396
Operating Leases Future Minimum Payments Due In Two To Five Years				90,792
Operating Leases Future Minimum Payments Due In Six To Ten Years				102,144	52,668
Operating Leases Future Minimum Payments Due In Eleven To Fifteenen Years				114,912
Operating Leases Future Minimum Payments Due In Sixteen To Twenty Years				129,276
Operating Leases, Future Minimum Payments, Due In Two Years	177,188				38,040
Operating Leases Future Minimum Payments Due In Three To Five Years					55,860
Operating Leases, Rent Expense, Minimum Rentals					$ 20,496
Lease Renewal Date					Mar. 31, 2013

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SECURITIES (Details 2) (USD $)	Dec. 31, 2012
Due in one year or less	$ 0
Due from one to five years	861,103
Due from five to ten years	2,270,108
Due after ten years	749,248
Mortgage-backed securities-residential/Total	11,520,194
Residential Mortgage Backed Securities [Member]
Mortgage-backed securities-residential/Total	$ 7,639,735

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DEPOSITS (Tables)

12 Months Ended

Dec. 31, 2012

Banking and Thrift [Abstract]

Schedule of Maturities of Long-term Debt [Table Text Block]

Scheduled maturities of certificates of deposit were as follows at December 31, 2012:

2013	$	41,190,195
2014		7,988,060
2015		5,625,702
2016		212,922
2017		11,500
	$	55,028,379

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PREMISES AND EQUIPMENT (Tables)

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

Premises and equipment were as follows at December 31 2012 and 2011:

	2012			2011
Land	$	524,559		$	524,559
Office building		996,183			996,183
Leasehold improvements		824,130			520,223
Furniture, fixtures and equipment		1,780,201			1,942,534
Premises and equipment, cost		4,125,073			3,983,499
Less:  Accumulated depreciation		(1,695,997	)		(1,530,872	)
Premises and equipment, net	$	2,429,076		$	2,452,627

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

Rent expense was $232,615 and $215,264 for the years ended December 31, 2012 and 2011, respectively. Estimated rental commitments under all leases for their non-cancelable periods were as follows as of December 31, 2012:

	Operating Leases
2013	$	193,222
2014		177,188
2015		149,490
2016		158,004
2017		154,812
Thereafter		1,712,508
Total minimum lease payments	$	2,545,224

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LOANS (Details 11) (USD $)	12 Months Ended
	Dec. 31, 2012
Balance, January 1	$ 5,387,226
New loans or advances	197,813
Repayments	(700,571)
Balance, December 31	$ 4,884,468

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SECURITIES (Details Textual) (USD $)	12 Months Ended		1 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Jun. 30, 2011 Municipal Notes [Member]	Dec. 31, 2012 Municipal Notes [Member]	Dec. 31, 2011 Municipal Notes [Member]
Available-for-sale Securities, Amortized Cost	$ 11,247,469	$ 10,224,828	$ 2,816,058
Available-for-sale Securities, Gross Realized Gains	55,016	358,030
Available-for-sale Securities, Gross Realized Losses	0	0
Available for sale securities	11,713,044	10,677,644	2,950,608	2,873,804	2,961,350
Other Comprehensive Income (Loss), Reclassification Adjustment for Sale of Securities Included in Net Income, Tax			134,550
Sales of securities available for sale	806,170	10,770,482
Available-for-sale Securities Pledged as Collateral	$ 7,177,000	$ 7,002,000
Percentage Of Mortgage Backed Securities Issued By Government National Mortgage Association	19.00%
Percentage Of Mortgage Backed Securities Issued By Federal National Mortgage Association	79.00%
Percentage Of Original Principal Amount Paid	81.00%

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REPURCHASE AGREEMENTS (Tables)

12 Months Ended

Dec. 31, 2012

Disclosure Of Repurchase Agreements [Abstract]

Summary Of Repurchase Agreements [Table Text Block]

The securities are held in a segregated safekeeping account at the Federal Home Loan Bank. Information concerning the repurchase agreements for 2012 and 2011 is summarized as follows:

	2012			2011
Average daily balance during the year	$	4,591,173		$	4,056,358
Average interest rate during the year		0.25	%		0.26	%
Maximum month-end balance during the year		5,845,256			6,978,179
Interest rate at year-end		0.25	%		0.25	%

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FEDERAL HOME LOAN BANK ADVANCES (Tables)

12 Months Ended

Dec. 31, 2012

Banking and Thrift [Abstract]

Schedule Of Federal Home Loan Bank, Short Term Advances [Table Text Block]

The following table details FHLB short term borrowings as of December 31, 2012 and 2011.

	2012		2011
Cash management interest only advance
.14% variable rate, maturing January 14, 2013	$	5,000,000	$	0
Cash management interest only advance
.18% fixed rate, maturing January 4, 2013		8,000,000		0
Cash management interest only advance
.14% variable rate, maturing January 11, 2012		0		5,000,000
Cash management interest only advance
.04% fixed rate, maturing January 6, 2012		0		8,000,000
Total	$	13,000,000	$	13,000,000

Schedule Of Federal Home Loan Bank, Long Term Advances [Table Text Block]

The following table details FHLB long term advances as of December 31, 2012 and 2011:

	2012		2011
Two-year interest-only advance
.59% fixed rate, maturing November 27,2013	$	3,000,000	$	3,000,000
18-month interest-only advance
.55% fixed rate, maturing April 12, 2013		3,000,000		3,000,000
Total advances	$	6,000,000	$	6,000,000

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations and Principles of Consolidation: The consolidated financial statements include Ohio Legacy Corp (“Ohio Legacy”) and its wholly-owned subsidiary, Premier Bank & Trust, National Association (the “Bank”, formerly Ohio Legacy Bank, N.A.). Intercompany transactions and balances are eliminated in consolidation. References to the “Company” include Ohio Legacy, consolidated with its subsidiary, the Bank. The Company is 76.09% owned by Excel Bancorp, LLC.

Ohio Legacy is a bank holding company, incorporated in July 1999 under the laws of the State of Ohio. The Bank provides financial services through three full-service banking offices in North Canton and St. Clairsville, Ohio. The Bank provides trust, private banking, investment and other banking services to its clients. Its primary deposit products are checking, savings and certificate of deposit accounts, and its primary lending products are residential mortgage, commercial real estate, commercial and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by residential and commercial real estate. Concentrations of credit are evaluated based on the North American Industry Classification System (“NAICS”) code assignments. At December 31, 2012, concentrations of credit risk exceeding 25% of Tier 1 capital plus the Allowance for Loan Losses included the following:

	Recorded Investment ($000s)		% of Tier 1 Capital plus the Allowance for Loan Loss
Commercial Real Estate/ Rental & Leasing	$	26,803		129.16	%
Residential Real Estate/ Rental & Leasing		17,180		82.79	%
Retail Trade		7,222		34.80	%
Contractors/Developers		6,085		29.32	%

The Bank’s credit policy includes various concentration limits expressed as a percentage of Tier 1 capital plus the Allowance for Loan Loss and as a percentage of total loans. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions and federal funds sold.

Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The allowance for loan losses, judgments about the other than temporary impairment of securities, fair value of financial instruments, valuation of deferred tax assets and the fair value of other real estate owned are particularly subject to change.

Cash Flows: Cash and cash equivalents includes cash, deposits with other financial institutions with original maturities of less than 90 days and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, repurchase agreements, and short term FHLB advances.

Interest–Bearing Deposits in Other Financial Institutions: Interest-bearing deposits in other financial institutions mature within one year and are carried at cost.

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank of $550,000 and $1,514,000 was required to meet regulatory reserve and clearing requirements at December 31, 2012 and 2011, respectively.

Securities: Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax when appropriate.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

In order to determine OTTI for purchased beneficial interests that, on the purchase date, were not highly rated, the Company compares the present value of the remaining cash flows as estimated at the preceding evaluation date to the current expected remaining cash flows. OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows.

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Mortgage loans held for sale are sold with servicing rights released. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses.

Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on loans is generally discontinued at the time the loan becomes 90 days delinquent unless the credit is well-secured and in process of collection. For 1-4 family owner occupied mortgages or home equity lines of credit where the loan balance is 60% or less of the appraised value, the Bank may maintain accrual status. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Delinquency status is based on contractual payment due date.

All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status upon approval of the Credit Committee or the Asset Quality Committee when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Allowance for Loan and Lease Losses: The allowance for loan and lease losses (“ALLL”) is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired and assigned a probable loss amount. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impairment is measured on a loan by loan basis for all loans other than consumer loans and residential mortgage loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures unless the loan is on nonaccrual status.

Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The Company divides loans not individually evaluated for impairment by risk into four grades: pass, special mention, substandard, and doubtful. Loans with a pass grade and loans not rated are divided into ten separate segments. Total charge-offs for a specified time period, currently three years, are divided into the same segments and used as a starting point to estimate credit losses in each segment. Other subjective factors, such as industry conditions, local economic trends and similar items are assigned a numeric value by segment and are also applied to the balances in the pass grade. Historic loss percentages are applied separately to the special mention and substandard pools of loans based on actual charge-offs for each pool in total regardless of the segment.

A description of each segment of the loan portfolio, along with the risk characteristics of each segment, is included below

One to Four Family Residential Mortgages: The Company defines residential real estate loans as first mortgages on individuals’ primary residence. Credit approval for residential real estate loans requires demonstration of sufficient income to repay the principal and interest and the real estate taxes and insurance, stability of employment, an established credit record and an appropriately appraised value of the real estate securing the loan that generally requires that the residential real estate loan amount be no more than 85% of the purchase price or the appraised value of the real estate securing the loan, whichever is less, unless private mortgage insurance is obtained by the borrower. Loans made for the Bank’s portfolio are generally adjustable rate, fully amortized mortgages. The rates used are generally fully-indexed rates and are not priced using low introductory “teaser” rates.

Home Equity Loans: These loans are either lines of credit or closed-end loans secured by second mortgages. The maximum amount of a home equity line of credit is generally limited to 95% (with acceptable credit scores) of the appraised value of the property less the balance of the first mortgage.

One to Four Family Rental Property: These loans are secured by residential real estate rental properties. The principal source of repayment generally is dependent upon satisfactory occupancy of the building by tenants.

Multi-family Real Estate: These loans consist of residential rental properties and generally consist of buildings with rental units for five or more families. The principal source of repayment generally is dependent upon satisfactory occupancy of the building by tenants.

Consumer Loans: The Company originates direct consumer loans, primarily automobile loans, personal lines of credit, and unsecured consumer loans in its primary market areas. Credit approval for consumer loans requires income sufficient to repay principal and interest due, stability of employment, an established credit record and sufficient collateral for secured loans. Consumer loans typically have shorter terms and lower balances with higher yields as compared to real estate mortgage loans, but generally carry higher risks of default. Consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances.

Commercial Loans: Commercial loans are made for a wide variety of general corporate purposes, including financing for industrial and commercial properties, financing for equipment, inventories and accounts receivable. The term of each commercial loan varies by its purpose. Repayment terms are structured such that commercial loans will be repaid within the economic useful life of the underlying asset. The commercial loan portfolio includes loans to a wide variety of corporations and businesses across many industrial classifications in the areas where the Bank operates.

Loans Secured by Trust Assets: These loans, principally used for commercial activities, are secured by cash or marketable securities and have substantially less credit risk than other types of commercial loans.

Commercial Real Estate:  Commercial real estate loans (“CRE loans”) are divided into two classes—owner occupied and non-owner occupied—and include mortgage loans to developers and owners of commercial real estate. The collateral for these CRE loans is the underlying commercial real estate. The Bank generally requires that the CRE loan amount be no more than 90% of the purchase price or 80% of the appraised value of the commercial real estate securing the CRE loan, whichever is less. Non-owner occupied CRE loans typically exhibit higher risk.

Construction and Development: Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost (including interest) of construction. If the estimate of construction cost proves to be inaccurate, the Bank may be required to advance funds beyond the amount originally committed to permit completion of the project. If the estimate of value proves inaccurate, the Bank may be confronted, at or prior to the maturity of the loan, with a project having a value insufficient to assure full repayment, should the borrower default. In the event a default on a construction loan occurs and foreclosure follows, the Bank must take control of the project and attempt either to arrange for completion of construction or to dispose of the unfinished project. Additional risk exists with respect to loans made to developers who do not have a buyer for the property, as the developer may lack funds to pay the loan if the property is not sold upon completion. Generally the Bank attempts to reduce such risks on loans to developers by requiring personal guarantees and reviewing current personal financial statements and tax returns.

Loans to Nondepository Financial Institutions: Loans to nondepository financial institutions consist of indirect financing provided to a nationwide network of qualified mortgage brokers that originate mortgage loans for sale to third-party investors. The Bank has a loan participation agreement with another financial institution (the “Direct Lender”) which purchases mortgage loans from the mortgage brokers. The Bank purchases a 75% interest in each mortgage loan offered to the Bank by the Direct Lender for purchase subject to appropriate underwriting requirements up to a an aggregate limit of $10 million. Since the loans are returned to the mortgage broker for sale to the third party investor, the transactions do not meet the definition of a participating interest under generally accepted accounting principles and the financing arrangement is classified as loans to nondepository financial institutions (the originating mortgage brokers). The financing arrangement is collateralized by first mortgages on single family homes. If the loan has not been sold to the third-party investor within 120 days, the mortgage broker must repurchase the mortgage loan from the Direct Lender. The mortgage broker must pay the Direct Lender an amount equal to 10% of the mortgage loan purchase price sixty days after the purchase date and an equal amount ninety days after the purchase date. The mortgage broker, at the Direct Lender’s sole discretion, must repurchase each mortgage loan from the Direct Lender within 120 days after the date of purchase. There is no agreement between the investor and the Direct Lender or the Bank. The Bank receives interest on the mortgage loans equivalent to the fixed coupon rates of the underlying mortgage loans. The Direct Lender and the Bank review each underlying mortgage loan to reasonably ensure conformity with U.S. Agency-sponsored underwriting qualifications prior to the advancement of funds. The underwriting package includes an approved investor commitment to purchase the loan.

Management utilizes past due information as a credit quality indicator across the loan portfolio. The past due information is the primary credit quality indicator within both the 1-4 family residential real estate loan portfolio (including first liens, home equity loans, and construction loans in the 1-4 family real estate segment) and consumer loans.

The primary credit quality indicator for loans to nondepository financial institutions, loans secured by trust assets, commercial and commercial real estate loans (including non-owner occupied, owner occupied, multi-family real estate, 1-4 family rental property, and construction and development loans not included in the residential real estate segment) is based on an internal grading system. Credit grades are monitored regularly by the respective loan officer and independently by credit administration, and adjustments are made when appropriate. The frequency of loan review with respect to credit grades is dependent upon the size and grade of the loan. A description of credit quality indicators is included in Note 3.

Commercial and commercial real estate loans that are graded “doubtful” are shown as nonperforming and management generally charges these loans down to their fair value by taking a partial charge-off or recording a specific allocation of the allowance. Loans classified as “doubtful” have all the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Any commercial loan graded “loss” is immediately charged-off.

When collection of principal and interest is in doubt or a loan is 90-days past due, the loan is placed on non-accrual status and is specifically reviewed for impairment. Impairment is measured based on one of three methods: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) at the observable market price of the loan; or (3) the fair value of the collateral less estimated disposal costs. Individually impaired loans include all nonaccrual and restructured loans. U.S. generally accepted accounting principles (“GAAP”) require a specific allocation to be established as a component of the allowance for loan losses for certain loans when it is probable that all amounts due pursuant to the contractual terms of the loans will not be collected, and the recorded investment exceeds fair value.

For all loan segments, the Bank will initiate a charge-off or a partial charge-off based on the status of the loan. If the loan is not fully collateralized and is in the process of collection, the Bank will charge off the amount of the uncollectable account balance as a loss. The designated workout officer is generally responsible for calculating and recommending the charge-off amount. All charge-offs must be approved by the Credit Committee whose members consist of the Chief Credit Officer, the Chief Executive Officer, the Chief Operating Officer, the Workout Officer, and the Senior Lending Officer.

Charge offs are recorded when consumer loans are 120 days past due and real estate loans are 180 days past due. This may be extended if management believes that the risk of loss is minimal, and the Bank is in the process of collection with a reasonable prospect of full collection. Management conducts reviews of impaired loans regularly and assesses the requirement for specific allocations or charge-offs. When a loss has not been confirmed and payments are current, a specific allocation is generally recorded. Charge-offs (either full or partial) are recognized when loss is confirmed (for example, upon receipt of a current appraisal) and is generally based on the amount that the loan balance exceeds the estimated net realizable value of the collateral. For unsecured loans, the full balance is charged-off at the time the loan is deemed impaired. The Company did not revise its charge-off policy during the periods presented.

The amount and timing of full or partial charge-offs is important since charge-offs are factored into the calculation of the three-year historical loan loss experience rates used to estimate the adequacy of the allowance for loan losses. Failure to record charge-offs in a timely manner could result in lower historical loss rates and potentially understate the estimate of the amount of probable incurred losses within the portfolio and distort coverage ratios such as the allowance for loan losses to nonaccrual loans used by management to evaluate the adequacy of the allowance for loan losses.

Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Federal Bank Stock: The Bank is a member of the Federal Home Loan Bank (the “FHLB”) system. Members are required to own a certain amount of stock based on the level of borrowing and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as federal bank stock on the balance sheet, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Federal Reserve Bank stock is also carried at cost. Cash dividends are reported as income. At December 31, 2012, federal bank stock consisted of Federal Home Loan Bank stock of $1,021,000 and Federal Reserve Bank stock of $556,750. As of December 31, 2011, federal bank stock consisted of Federal Home Loan Bank stock of $1,021,000 and Federal Reserve Bank stock of $576,850.

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed over an asset’s useful life, primarily using the straight line method. Leasehold improvements and office buildings under a capital lease are amortized over the original term of the lease or the life of the asset, whichever is shorter. Furniture, fixture and equipment have useful lives ranging from 3 to 7 years. Buildings have useful lives ranging from 15 to 20 years. Premises and equipment and other long-lived assets are reviewed for impairment when events indicate their carrying amount may not be recoverable through future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Assets Acquired in Settlement of Loans: These assets include other real estate owned and a limited liability interest in an indoor waterpark and resort obtained through a U.S. Bankruptcy Code 363 sale. The limited liability company was formed by the lead bank for the banks participating in the project financing to acquire title to the real estate, conduct the operation of the facility, and market the real estate and the operations of the business for sale. The carrying value of its interest is based upon the estimated fair value of the real estate less costs to sell.

Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, direct write-downs are recorded through expense to the carrying amount of the asset. Costs incurred after acquisition are expensed. Improvements that improve the fair value of the property are capitalized.

Long-Term Assets: Premises and equipment, intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

The issuance of common stock to Excel Bancorp during 2010 resulted in an “ownership change” of the Company, as broadly defined in Section 382 of the Internal Revenue Code. As a result of the ownership change, utilization of the Company’s net operating loss carryforwards and certain built-in losses under federal income tax laws will be subject to annual limitation. The annual limitation placed on the Company’s ability to utilize these potential tax deductions will equal the product of an applicable interest rate mandated under federal income tax laws and the Company’s value immediately before the ownership change. The annual limitation imposed under Section 382 would limit the deduction for both the carryforward tax attributes and the built-in losses realized within five years of the date of the ownership change to approximately $91,683 per year. Given the limited carryforward period assigned to these tax deductions in excess of this annual limit, some portion of these potential deductions will be lost and, consequently, the related tax benefits will not be recorded in the financial statements. See Note 10 for additional information regarding net operating loss carryforwards.

Earnings Per Share: Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares that may be issued upon the exercise of stock options. On September 17, 2012, the Company completed a one for ten reverse stock split approved by its shareholders at the annual shareholders’ meeting in May 2012. Outstanding shares and per share amounts for 2011 were retroactively restated for the reverse stock split. The following table details the calculation of basic and diluted earnings per share for the years ended December 31:

	2012		2011
BASIC:
Net income	$	114,180	$	1,820,122
Weighted average common shares outstanding		1,971,449		1,971,456
Basic income per share	$	0.06	$	0.92
DILUTED:
Net income	$	114,180	$	1,820,122
Weighted average common shares outstanding		1,971,449		1,971,456
Dilutive effect of stock options		-		-
Total common shares and dilutive potential common shares		1,971,449		1,971,456
Diluted income per common share	$	0.06	$	0.92

The computation of diluted income per share excludes potential dilutive common shares if the effect of their exercise would be anti-dilutive. Potential dilutive common shares which were excluded totaled 128,025 for 2012 and 131,120 for 2011.

Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The face amount for these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale, which are also recognized as a separate component of equity, net of tax.

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the financial statements.

Dividend Restriction: Banking regulations require the Bank to maintain certain capital levels and may limit the dividends paid by the Bank to Ohio Legacy and by Ohio Legacy to shareholders. See Note 12 for a further description of regulatory restrictions.

Fair Values of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 9. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or market conditions could significantly affect the estimates.

Operating Segments: 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 services operations are considered by management to be aggregated into one reportable operating segment.

Reclassifications: Some items in the prior-year financial statements were reclassified to conform to the current year’s presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

Adoption of New Accounting Pronouncements:

In June 2011, the FASB amended existing guidance and eliminated the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity. The amendment requires that comprehensive income be presented in either a single continuous statement or in two separate consecutive statements. The amendments in this guidance are effective as of the beginning of a fiscal reporting year, and interim periods within that year, that began after December 15, 2011. The adoption of this amendment changed the presentation of the components of comprehensive income for the Company as part of the consolidated statement of changes in shareholders’ equity.

In May 2011, the FASB issued an amendment to achieve common fair value measurement and disclosure requirements between U.S. and International accounting principles. Overall, the guidance is consistent with existing U.S. accounting principles; however, there are some amendments that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this guidance were effective for interim and annual reporting periods beginning after December 15, 2011. The effect of adopting this standard did not have a material effect on the Company’s operating results or financial condition.

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FAIR VALUE (Tables)

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value, Assets Measured on Recurring Basis [Table Text Block]

Assets measured at fair value on a recurring basis are summarized in the following table:

	Fair Value Measurements Using
			Significant
	Quoted Prices in		Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2012:
Equity securities	$	192,850	$	0	$	0	$	192,850
U.S. government sponsored enterprises		0		1,006,655		0		1,006,655
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		0		7,460,853		0		7,460,853
Other mortgage backed securities-residential		0		178,882		0		178,882
Municipal securities		0		2,873,804		0		2,873,804
Total securities available for sale	$	192,850	$	11,520,194	$	0	$	11,713,044
December 31, 2011:
Equity securities	$	145,350	$	0	$	0	$	145,350
U.S. government sponsored enterprises		0		2,515,906		0		2,515,906
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		0		4,865,167		0		4,865,167
Other mortgage backed securities-residential		0		189,871		0		189,871
Municipal securities		0		2,379,836		581,514		2,961,350
Total securities available for sale	$	145,350	$	9,950,780	$	581,514	$	10,677,644

Fair Value Assets Measured On Recurring Basis Unobservable Input Reconciliation Changes In Unrealized Gains Losses [Table Text Block]

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31.

	Municipal Securities
	2012			2011
Balance of recurring Level 3 assets at January 1	$	581,514		$	537,577
Total gains or losses (realized/unrealized):
Included in earnings – realized		0			0
Included in earnings – unrealized		0			0
Included in other comprehensive income		(17,794	)		43,937
Purchases		0			0
Sales		0			0
Issuances		0			0
Settlements		0			0
Transfers in and/or out of Level 3		(563,720	)		0
Balance of recurring Level 3 assets at December 31	$	0		$	581,514

Fair Value Assets Measured On Nonrecurring Basis [Table Text Block]

The following table summarizes changes in unrealized gains and losses recorded in earnings for the year ended December 31, 2011 for Level 3 assets and liabilities that are still held at December 31.

	2011
Interest income on securities	$	152
Other changes in fair value		43,785
Total	$	43,937

Fair Value Inputs Assets Quantitative Information Recurring Basis [Table Text Block]

The following table depicts assets measured at fair value on a non-recurring basis.

	Fair Value Measurements Using
			Significant
	Quoted Prices in		Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2012:
Impaired loans:
1-4 family residential mortgage	$	0	$	0	$	471,501	$	471,501
1-4 family rental property		0		0		43,597		43,597
Home equity		0		0		161,640		161,640
Multi-family real estate		0		0		3,441		3,441
Commercial real estate:
Non-owner occupied		0		0		13,620		13,620
Assets acquired in settlement of loans:
Residential		0		0		25,989		25,989
Commercial real estate		0		0		150,000		150,000
Construction and development		0		0		145,684		145,684
Interest in limited liability company		0		0		1,171,620		1,171,620
December 31, 2011:
Impaired loans:
1-4 family residential mortgage	$	0	$	0	$	107,197	$	107,197
1-4 family rental property		0		0		130,659		130,659
Home equity		0		0		116,791		116,791
Multi-family real estate		0		0		7,897		7,897
Commercial		0		0		62,120		62,120
Commercial real estate:
Non-owner occupied		0		0		741,979		741,979
Owner occupied		0		0		66,324		66,324
Construction and development		0		0		287,897		287,897
Assets acquired in settlement of loans:
Residential		0		0		55,989		55,989
Commercial real estate		0		0		292,251		292,251
Construction and development		0		0		263,910		263,910
Interest in limited liability company		0		0		1,255,437		1,255,437

Fair Value By Balance Sheet Grouping [Table Text Block]

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2012:

	Fair value		Valuation Technique	Unobservable Inputs	Range		Weighted Average
Impaired loans
1-4 family residential	$	471,501	Sales comparison approach	Adjustment for differences between the comparable sales		8.56% to 9.03%		8.71	%
1-4 family rental property		43,597	Sales comparison approach	Adjustment for differences between the comparable sales		-32.00% to 1.00%		-9.43	%
Home equity		161,640	Sales comparison approach	Adjustment for differences between the comparable sales		-7.17% to -1.70%		-4.20	%
Multi-family real estate		3,441	Sales comparison approach	Adjustment for differences between the comparable sales		2.10% to 2.10%		2.10	%
Commercial real estate:
Non-owner occupied		13,620	Income approach	Capitalization rate		12.00% to 12.00%		12.00	%
Assets Acquired in Settlement of Loans
Residential	$	25,989	Sales comparison approach	Adjustment for differences between the comparable sales		-26.00% to -26.00%		-26.00	%
Commercial real estate		150,000	Sales comparison approach	Adjustment for differences between the comparable sales		-7.00% to -7.00%		-7.00	%
Construction and development		145,684	Sales comparison approach	Adjustment for differences between the comparable sales		0.00% to 0.00%		0.00	%
Interest in limited liability company		1,171,620	Income approach	Capitalization rate		10.25% to 10.25%		10.25	%

Fair Value Inputs Assets Quantitative Information Nonrecurring Basis [Table Text Block]

The carrying amounts and estimated fair values of financial assets and liabilities at December 31 are as follows:

				Fair Value Measurements Using:
December 31, 2012	Carrying Value			Level 1			Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	5,707,000		$	5,707,000		$	0		$	0	$	5,707,000
Certificate of deposit in financial institution		100,000			0			100,000			0		100,000
Securities available for sale		11,713,000			193,000			10,956,000			564,000		11,713,000
Loans held for sale		2,040,000			0			2,066,000			0		2,066,000
Loans, net		147,684,000			0			0			149,843,000		149,843,000
Federal bank stock		1,578,000			NA			NA			NA		NA
Accrued interest receivable		422,000			0			51,000			371,000		422,000
Financial liabilities
Deposits		(131,542,000	)		(76,514,000	)		(55,213,000	)		0		(131,727,000	)
Repurchase agreements		(4,360,000	)		0			(4,360,000	)		0		(4,360,000	)
Federal Home Loan Bank advances		(19,000,000	)		0			(19,003,000	)		0		(19,003,000	)
Accrued interest payable		(29,000	)		(1,000	)		(28,000	)		0		(29,000	)

December 31, 2011	Carrying Value			Estimated Fair Value
Financial assets
Cash and cash equivalents	$	20,046,000		$	20,046,000
Certificate of deposit in financial institution		100,000			100,000
Securities available for sale		10,678,000			10,678,000
Loans held for sale		896,000			928,000
Loans, net		108,277,000			110,428,000
Federal bank stock		1,598,000			NA
Accrued interest receivable		340,000			340,000
Financial liabilities
Deposits		(103,962,000	)		(104,100,000	)
Repurchase agreements		(4,214,000	)		(4,214,000	)
Federal Home Loan Bank advances		(19,000,000	)		(19,055,000	)
Accrued interest payable		(24,000	)		(24,000	)

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STOCK-BASED COMPENSATION (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized	200,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term	7 years 6 months 11 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value	$ 0
Stockholders' Equity, Reverse Stock Split	1 for 10
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized	492,499
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition	2 years 6 months
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested in Period, Fair Value	$ 158,656	$ 275,860

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Cash On Hand Or On Deposit For Regulatory Reserve and Clearing Requirements	$ 550,000	$ 1,514,000
Time Period For Discontinunation Of Interest Income On Delinquent Loans	90 days
Loans Assumed Percentage	75.00%
Loans Assumed	10,000,000
Federal Home Loan Bank Stock	1,021,000	1,021,000
Federal Reserve Bank Stock	556,750	576,850
Limitation On Net Operating Loss Carry Forwards And Certain Builtin Losses Following Ownership Change			$ 91,683
Antidilutive Securities Excluded From Computation Of Earnings Per Share, Amount (in shares)	128,025	131,120
Concentrations Of Credit Risk Percentage Of Tier One Capital	25.00%
Loan and Lease Losses	3 years
Mortgage Loan Repurchase Agreement By Broker Description	If the loan has not been sold to the third-party investor within 120 days, the mortgage broker must repurchase the mortgage loan from the Direct Lender. The mortgage broker must pay the Direct Lender an amount equal to 10% of the mortgage loan purchase price sixty days after the purchase date and an equal amount ninety days after the purchase date. The mortgage broker, at the Direct Lender's sole discretion, must repurchase each mortgage loan from the Direct Lender within 120 days after the date of purchase.
Noncontrolling Interest, Ownership Percentage by Parent	76.09%
Commercial Real Estate [Member]
Loan Amount Percentage Of Appraised Value	80.00%
Loan Amount Percenatge Of Purchase Price	90.00%
One To Four Family Residential Mortgage [Member]
Loan Amount Percentage Of Appraised Value	60.00%
Loan Amount Percenatge Of Purchase Price	85.00%
Home Equity Line Of Credit [Member]
Loan Amount Percentage Of Appraised Value	95.00%
Minimum [Member] | Building [Member]
Property, Plant and Equipment, Useful Life	15 years
Minimum [Member] | Furniture Fixtures and Equipment [Member]
Property, Plant and Equipment, Useful Life	3 years
Maximum [Member] | Building [Member]
Property, Plant and Equipment, Useful Life	20 years
Maximum [Member] | Furniture Fixtures and Equipment [Member]
Property, Plant and Equipment, Useful Life	7 years

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LOANS (Details 8) (Commercial [Member], USD $)	Dec. 31, 2011
Commercial [Member]
Commercial, Number of Loans	1
Commercial, Recorded Investment	$ 6,692

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FAIR VALUE (Details 3) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	$ 1,493,293
Residential One To Four Family Mortgage Property [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	471,501	107,197
Residential One To Four Family Mortgage Property [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Residential One To Four Family Mortgage Property [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Residential One To Four Family Mortgage Property [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	471,501	107,197
Residential One To Four Family Rental Property [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	43,597	130,659
Residential One To Four Family Rental Property [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Residential One To Four Family Rental Property [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Residential One To Four Family Rental Property [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	43,597	130,659
Home Equity Line Of Credit [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	161,640	116,791
Home Equity Line Of Credit [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Home Equity Line Of Credit [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Home Equity Line Of Credit [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	161,640	116,791
Multi-Family Real Estate [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	3,441	7,897
Multi-Family Real Estate [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Multi-Family Real Estate [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Multi-Family Real Estate [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	3,441	7,897
Commercial Loan [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		62,120
Commercial Loan [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		0
Commercial Loan [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		0
Commercial Loan [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		62,120
Commercial Real Estate Nonowner Occupied [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	13,620	741,979
Commercial Real Estate Nonowner Occupied [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Commercial Real Estate Nonowner Occupied [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	0	0
Commercial Real Estate Nonowner Occupied [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value	13,620	741,979
Commercial Real Estate Owner Occupied [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		66,324
Commercial Real Estate Owner Occupied [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		0
Commercial Real Estate Owner Occupied [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		0
Commercial Real Estate Owner Occupied [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		66,324
Residential Mortgage [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	25,989	55,989
Residential Mortgage [Member] | Fair Value, Inputs, Level 1 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	0	0
Residential Mortgage [Member] | Fair Value, Inputs, Level 2 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	0	0
Residential Mortgage [Member] | Fair Value, Inputs, Level 3 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	25,989	55,989
Commercial Real Estate [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	150,000	292,251
Commercial Real Estate [Member] | Fair Value, Inputs, Level 1 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	0	0
Commercial Real Estate [Member] | Fair Value, Inputs, Level 2 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	0	0
Commercial Real Estate [Member] | Fair Value, Inputs, Level 3 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	150,000	292,251
Construction and Development [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		287,897
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	145,684	263,910
Construction and Development [Member] | Fair Value, Inputs, Level 1 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		0
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	0	0
Construction and Development [Member] | Fair Value, Inputs, Level 2 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		0
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	0	0
Construction and Development [Member] | Fair Value, Inputs, Level 3 [Member]
Impaired loans:
Impaired Financing Receivable, Recorded Investment, Fair Value		287,897
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	145,684	263,910
Interest In Limited Liability Company [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	1,171,620	1,255,437
Interest In Limited Liability Company [Member] | Fair Value, Inputs, Level 1 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	0	0
Interest In Limited Liability Company [Member] | Fair Value, Inputs, Level 2 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	0	0
Interest In Limited Liability Company [Member] | Fair Value, Inputs, Level 3 [Member]
Assets acquired in settlement of loans:
Fair Value of Assets Acquired	$ 1,171,620	$ 1,255,437

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CONSOLIDATED BALANCE SHEETS (USD $)	Dec. 31, 2012	Dec. 31, 2011
ASSETS
Cash and due from banks	$ 1,103,974	$ 778,689
Federal funds sold and interest-bearing deposits in financial institutions	4,603,077	19,267,467
Cash and cash equivalents	5,707,051	20,046,156
Certificate of deposit in financial institution	100,000	100,000
Securities available for sale	11,713,044	10,677,644
Loans held for sale	2,040,395	895,610
Loans, net of allowance of $2,347,664 and $2,484,478 at December 31, 2012 and December 31, 2011	147,684,318	108,277,319
Federal bank stock	1,577,750	1,597,850
Premises and equipment, net	2,429,076	2,452,627
Assets acquired in settlement of loans	1,980,755	2,012,752
Accrued interest receivable and other assets	1,508,788	541,409
Total assets	174,741,177	146,601,367
LIABILITIES
Noninterest-bearing demand	24,765,857	21,017,215
Interest-bearing demand	9,290,531	6,190,520
Savings	42,457,581	38,537,916
Certificates of deposit, net	55,028,379	38,216,813
Total deposits	131,542,348	103,962,464
Repurchase agreements	4,359,837	4,213,612
Short-term Federal Home Loan Bank advances	13,000,000	13,000,000
Long-term Federal Home Loan Bank advances	6,000,000	6,000,000
Accrued interest payable and other liabilities	926,524	837,203
Total liabilities	155,828,709	128,013,279
Commitments and contingent liabilities
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 500,000 shares authorized, none outstanding	0	0
Common stock, no par value; December 31, 2012 and December 31, 2011: 22,500,000 shares authorized, 1,971,431 shares issued and outstanding at December 31, 2012 and 1,971,456 issued and outstanding at December 31, 2011	36,004,103	35,806,662
Accumulated deficit	(17,354,709)	(17,468,889)
Accumulated other comprehensive income	263,074	250,315
Total shareholders' equity	18,912,468	18,588,088
Total liabilities and shareholders' equity	$ 174,741,177	$ 146,601,367

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LOANS (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Total Loans	$ 149,938,312	$ 110,730,240
Less: Allowance for loan losses	(2,347,664)	(2,484,478)	(3,055,766)
Net deferred loan costs	93,670	31,557
Loans, net	147,684,318	108,277,319
Loans and Leases Receivable Ratio Of Loans To All Loans	100.00%	100.00%
Residential Real Estate [Member]
Total Loans	33,224,110	27,985,517
Loans and Leases Receivable Ratio Of Loans To All Loans	22.10%	25.30%
Multi-Family Real Estate [Member]
Total Loans	9,998,614	9,140,672
Less: Allowance for loan losses	(255,001)	(423,031)	(454,670)
Loans and Leases Receivable Ratio Of Loans To All Loans	6.70%	8.20%
Commercial Real Estate [Member]
Total Loans	55,211,623	42,622,961
Loans and Leases Receivable Ratio Of Loans To All Loans	36.80%	38.50%
Commercial Construction Real Estate [Member]
Total Loans	7,601,563	4,219,420
Loans and Leases Receivable Ratio Of Loans To All Loans	5.10%	3.80%
Commerical [Member]
Total Loans	15,253,309	10,031,094
Loans and Leases Receivable Ratio Of Loans To All Loans	10.20%	9.10%
Secured By Trust Assets [Member]
Total Loans	5,820,705	6,798,929
Less: Allowance for loan losses	(11,641)	(13,600)	(12,095)
Loans and Leases Receivable Ratio Of Loans To All Loans	3.90%	6.10%
Loans To Nondepository Financial Institutions [Member]
Total Loans	7,345,540	0
Less: Allowance for loan losses	0	0
Loans and Leases Receivable Ratio Of Loans To All Loans	4.90%	0.00%
Consumer and Home Equity Loan [Member]
Total Loans	$ 15,482,848	$ 9,931,647
Loans and Leases Receivable Ratio Of Loans To All Loans	10.30%	9.00%

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $)	Common Stock [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Balances at Dec. 31, 2010	$ 35,603,803	$ (19,289,011)	$ 155,724	$ 16,470,516
Balances (in shares) at Dec. 31, 2010	19,714,564
Stock based compensation expense	202,859			202,859
and cash paid for fractions shares				0
Net income		1,820,122		1,820,122
Other comprehensive income			94,591	94,591
Balances at Dec. 31, 2011	35,806,662	(17,468,889)	250,315	18,588,088
Balances (in shares) at Dec. 31, 2011	19,714,564
Stock based compensation expense	197,692		197,692
One for ten reverse stock split (in shares)	(17,743,107.60)
and cash paid for fractions shares	(251)			(251)
and cash paid for fractions shares (in shares)	(25.4)
Net income		114,180		114,180
Other comprehensive income			12,759	12,759
Balances at Dec. 31, 2012	$ 36,004,103	$ (17,354,709)	$ 263,074	$ 18,912,468
Balances (in shares) at Dec. 31, 2012	1,971,431

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ASSETS ACQUIRED IN SETTLEMENT OF LOANS (Details Textual) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Tangible Asset Impairment Charges	$ 209,453	$ 192,882

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REGULATORY MATTERS (Tables)

12 Months Ended

Dec. 31, 2012

Banking and Thrift [Abstract]

Schedule of Compliance with Regulatory Capital Requirements under Banking Regulations [Table Text Block]

Actual and required capital amounts and ratios are presented below at December 31, 2012 and 2011:

											To Be Well-
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2012
Total capital to risk-weighted assets
Premier Bank & Trust	$	20,307		13.4	%	$	12,146		8.0	%	$	15,182		10.0	%
Tier 1 capital to risk-weighted assets
Premier Bank & Trust		18,404		12.1	%		6,073		4.0	%		9,109		6.0	%
Tier 1 capital to average assets
Premier Bank & Trust		18,404		10.6	%		6,930		4.0	%		8,662		5.0	%
December 31, 2011:
Total capital to risk-weighted assets
Premier Bank & Trust	$	19,501		17.6	%	$	8,841		8.0	%	$	11,051		10.0	%
Tier 1 capital to risk-weighted assets
Premier Bank & Trust		18,106		16.4	%		4,420		4.0	%		6,631		6.0	%
Tier 1 capital to average assets
Premier Bank & Trust		18,106		12.1	%		5,965		4.0	%		7,457		5.0	%

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REPURCHASE AGREEMENTS (Details) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Average daily balance during the year	$ 4,591,173	$ 4,056,358
Average interest rate during the year	0.25%	0.26%
Maximum month-end balance during the year	$ 5,845,256	$ 6,978,179
Interest rate at year-end	0.25%	0.25%

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SUBSEQUENT EVENTS - BRANCH PURCHASE

12 Months Ended

Dec. 31, 2012

Subsequent Events [Abstract]

Subsequent Events [Text Block]

NOTE 15 – SUBSEQUENT EVENTS - BRANCH PURCHASE (UNAUDITED)

On February 1, 2013, the Bank entered into a Branch Office Purchase and Assumption Agreement (the “Agreement”), with First National Bank, N.A. located in Orrville, Ohio (“FNB”), and a wholly owned subsidiary of National Bancshares Corporation and with NBOH Properties, LLC, an Ohio limited liability company, for the purchase of certain assets and the assumption of certain liabilities of FNB’s Fairlawn branch located at 3085 West Market Street, Akron, Ohio. Under the terms of the Agreement, the Bank will purchase $10 million to $12 million in loans and will assume $13 million to $16 million in deposits. The Bank will pay a deposit premium of approximately 5.25% based on the average amount of assumed deposits during a specified period prior to the closing, with a minimum premium of $682,500. The Bank will also purchase real estate owned by NBOH Properties, LLC for $1.1 million and other assets including fixtures and equipment associated with the branch location. The transaction, which is subject to regulatory approvals and certain closing conditions, is expected to be completed during the second quarter of 2013.

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LOAN COMMITMENTS AND RELATED ACTIVITIES (Tables)

12 Months Ended

Dec. 31, 2012

Loan Commitments and Related Activities [Abstract]

Purchase Commitment, Excluding Long-term Commitment [Table Text Block]

Commitments to make loans are generally made for periods of 30 days or less. The contractual amount of loan commitments with off-balance sheet risk was as follows at December 31 2012 and 2011:

	2012		2011
Commitments to make loans:
Variable rate	$	4,994,469	$	2,061,725
Fixed rate		2,387,864		696,800
Unused lines of credit, variable-rate		42,043,782		34,106,820
Standby letters of credit		615,232		194,856

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Allowance for Credit Losses on Financing Receivables [Table Text Block]

At December 31, 2012, concentrations of credit risk exceeding 25% of Tier 1 capital plus the Allowance for Loan Losses included the following:

	Recorded Investment ($000s)		% of Tier 1 Capital plus the Allowance for Loan Loss
Commercial Real Estate/ Rental & Leasing	$	26,803		129.16	%
Residential Real Estate/ Rental & Leasing		17,180		82.79	%
Retail Trade		7,222		34.80	%
Contractors/Developers		6,085		29.32	%

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

The following table details the calculation of basic and diluted earnings per share for the years ended December 31:

	2012		2011
BASIC:
Net income	$	114,180	$	1,820,122
Weighted average common shares outstanding		1,971,449		1,971,456
Basic income per share	$	0.06	$	0.92
DILUTED:
Net income	$	114,180	$	1,820,122
Weighted average common shares outstanding		1,971,449		1,971,456
Dilutive effect of stock options		-		-
Total common shares and dilutive potential common shares		1,971,449		1,971,456
Diluted income per common share	$	0.06	$	0.92

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FEDERAL HOME LOAN BANK ADVANCES (Details Textual) (USD $)	Nov. 27, 2013	Apr. 12, 2013	Jan. 14, 2013	Jan. 04, 2013	Dec. 31, 2012	Jan. 11, 2012	Jan. 06, 2012
Federal Home Loan Bank Advances Variable Interest Rate			0.14%			0.14%
Federal Home Loan Bank Advances Fixed Interest Rate	0.59%	0.55%		0.18%			0.04%
Federal Home Loan Bank, Advances, General Debt Obligations, Amount Of Available, Unused Funds					$ 21,055,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Cash flows from operating activities:
Net Income	$ 114,180	$ 1,820,122
Adjustments to reconcile net income to net cash from operating activities:
Provision for loan losses	13,466	152,905
Depreciation and amortization	277,738	334,529
Loss on disposition of fixed assets	441	3,818
Gain on sale of branch deposits	0	(3,526,070)
Securities amortization and accretion, net	125,582	210,426
Gain on lease assignment	0	(217,532)
Origination of loans held for sale	(19,132,413)	(9,196,955)
Proceeds from sales of loans held for sale	18,133,831	9,947,343
Loss on disposition or direct write-down of assets acquired in settlement of loans	205,417	268,117
Gain on sale of securities available for sale	(55,016)	(358,030)
Gain on sale of loans held for sale	(159,873)	(109,629)
Stock based compensation expense	197,692	202,859
Net change in:
Accrued interest receivable and other assets	(967,379)	117,370
Accrued interest payable and other liabilities	89,321	(294,760)
Deferred loan fees	(62,113)	104,001
Net cash from operating activities	(1,219,126)	(541,486)
Cash flows from investing activities:
Purchases of securities available for sale	(6,209,677)	(6,539,002)
(Purchases) or redemptions of federal bank stock	20,100	(40,150)
Maturities, calls and paydowns of securities available for sale	4,310,301	13,355,600
Sales of securities available for sale	806,170	10,770,482
Proceeds from sale of assets acquired in settlement of loans	326,041	820,055
Participation loans sold	9,278,619	5,099,496
Participation loans purchased	(6,829,351)	(1,674,216)
Net change in loans	(42,293,412)	(12,462,508)
Proceeds from sale of premises and equipment	6,722	1,250,464
Acquisition of premises and equipment	(261,350)	(362,451)
Net cash from investing activities	(40,845,837)	10,217,770
Cash flows from financing activities
Net change in deposits	27,579,884	38,583,982
Sale of branch deposits	0	(74,311,095)
Net change in repurchase agreements	146,225	(177,640)
Repayment of capital lease obligations	0	(38,126)
Assignment of capital lease obligation	0	(369,467)
Proceeds from short term FHLB advances, net of repayments	0	13,000,000
Proceeds from long term FHLB advances	0	6,000,000
Repayments of long term FHLB advances	0	(5,000,000)
Cash paid in lieu of fractional shares for reverse stock split	(251)	0
Net cash from financing activities	27,725,858	(22,312,346)
Net change in cash and cash equivalents	(14,339,105)	(12,636,062)
Cash and cash equivalents at beginning of period	20,046,156	32,682,218
Cash and cash equivalents at end of period	5,707,051	20,046,156
Supplemental disclosures of cash flow information:
Interest	679,166	1,185,674
Federal income taxes	40,000	0
Non-cash transactions:
Transfer of loans to assets acquired in settlement of loans	499,461	749,624
Transfer of securities to available-for-sale from held-to-maturity	$ 0	$ 2,816,058

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CONSOLIDATED BALANCE SHEETS [Parenthetical] (USD $)	Dec. 31, 2012	Dec. 31, 2011
Loans receivable, allowance (in dollars)	$ 2,347,664	$ 2,484,478
Preferred stock, shares authorized	500,000	500,000
Preferred stock, shares outstanding	0	0
Common stock, shares authorized	22,500,000	22,500,000
Common stock, shares issued	1,971,431	1,971,456
Common stock, shares outstanding	1,971,431	1,971,456

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INCOME TAXES

12 Months Ended

Dec. 31, 2012

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

NOTE 10 - INCOME TAXES

Income tax expense was as follows for the years ended December 31, 2012 and 2011:

	2012			2011
Current federal	$	24,524		$	-
Deferred federal		96,290			1,030,624
Change in valuation allowance		(96,290	)		(1,030,624	)
Total income tax expense	$	24,524		$	-

Effective tax rates differ from federal statutory rates applied to financial statement earnings due to the following:

	2012			2011
Federal statutory rate (34%) times financial statement income	$	47,159		$	618,841
Effect of:
Tax exempt income net of disallowed interest expense		(35,298	)		(35,292	)
Stock based compensation		67,215			68,972
Write-off of deferred tax benefits		0			376,753
Change in valuation allowance		(96,920	)		(1,030,624	)
Other, net		42,368			1,350
Total income tax expense	$	24,524		$	0

Deferred tax assets and liabilities were due to the following at December 31, 2012 and 2011:

	2012			2011
Deferred Tax Assets
Allowance for loan losses	$	202,594		$	425,824
Deferred and accrued compensation		6,154			30,306
Intangible asset amortization		113,275			130,266
REO valuation allowance		246,623			197,640
Net operating loss carryforward		2,857,894			2,729,009
Other than temporary impairment of securities		982,608			982,608
Depreciation		40,412			21,010
Tax credit carryforward		58,754			61,092
Nonaccrual interest adjustment		93,986			82,968
Other		22,950			16,563
Total deferred tax assets		4,625,250			4,677,286
Deferred tax liabilities
Unrealized gain on securities available for sale		(158,296	)		(153,957	)
Net deferred loan costs		(35,706	)		(9,976	)
Prepaid expense		(14,802	)		(23,511	)
Federal Home Loan Bank stock dividend		(58,480	)		(58,480	)
Partnership adjustments		(68,056	)		(40,245	)
Other		(292	)		(240	)
Total deferred tax liabilities		(335,632	)		(286,409	)
Net deferred tax assets		4,289,618			4,390,877
Less: valuation allowance		(4,289,618	)		(4,390,877	)
Net deferred tax assets (liabilities)	$	0		$	0

A valuation allowance of $4,289,618 was recorded to reduce the carrying amount of the Company’s net deferred tax assets to zero due primarily to losses sustained in prior years.

Internal Revenue Code section 382 places a limitation on the amount of taxable income that can be offset by net operating loss carryforwards after a change in control (generally greater than 50% change in ownership) of a loss corporation. Accordingly, utilization of net operating loss carryforwards may be subject to an annual limitation regarding their utilization against future taxable income upon change in control.

At February 19, 2010, a Stock Purchase Agreement between Ohio Legacy Corp and Excel Bancorp resulted in a section 382 limitation against pre-transaction Ohio Legacy Corp net operating loss carryforwards. The Company reduced the deferred tax asset related to net operating loss carryforwards and the valuation allowance by $1,039,000 at December 31, 2010. At December 31, 2011, the Company further reduced the deferred tax asset related to net operating loss carryforwards and the valuation allowance by an additional $377,000 as a result of changes in the realizable amount of such net operating loss.

At December 31, 2012, after consideration of the reduction to pre-transaction net operating losses due to the section 382 limitation, the Company had net operating loss carryforwards of approximately $8,405,000 that will expire as follows: $1,257,000 on December 31, 2027, $132,000 on December 31, 2028, $1,532,000 on December 31, 2029, $5,105,000 on December 31, 2030 and $379,000 on December 31, 2032.

In addition, the Company has approximately $59,000 of alternative minimum tax credits that may be carried forward indefinitely.

At December 31, 2012 and 2011, the Company had no unrecognized tax benefits recorded. The Company does not expect the amount of unrecognized tax benefits to change significantly within the next twelve months.

The Company and the Bank are subject to U.S. federal income tax. The Company is no longer subject to examination by federal taxing authorities for tax years prior to 2009. The tax years 2009, 2010 and 2011 remain open to examination by the U.S. taxing authorities.

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DOCUMENT AND ENTITY INFORMATION (USD $)	12 Months Ended
	Dec. 31, 2012	Mar. 29, 2013	Jun. 30, 2012
Entity Registrant Name	OHIO LEGACY CORP
Entity Central Index Key	0001096654
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	olcb
Entity Common Stock, Shares Outstanding		1,971,431
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 31, 2012
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2012
Entity Well-Known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 5,158,241

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STOCK-BASED COMPENSATION

12 Months Ended

Dec. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

NOTE 11 - STOCK-BASED COMPENSATION

Shareholders adopted the Ohio Legacy Corp 2010 Cash and Equity Incentive Plan in May 2010. The Plan permits the grant of share-based awards for a maximum of 200,000 shares of common stock. The Plan provides for awards of options, restricted stock, stock appreciation rights, and other stock-based awards to employees, directors and consultants. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock at the date of grant. Option awards have vesting periods as determined by the Compensation Committee of the Board of Directors. All options currently outstanding have an original vesting period of five years and a ten year contractual term.

The fair value of each option award is estimated on the date of grant using a closed form option valuation (Black-Scholes) model that uses the assumptions noted in the table below. Expected volatilities are based on historical volatilities of the Company’s common stock. The Company uses historical data to estimate option exercise and post-vesting termination behavior. The expected term of options granted represents the period of time that options granted are expected to be outstanding, which takes into account that the options are not transferable. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of the grant.

The fair value of options granted in 2010 was determined using the following weighted-average assumptions as of the grant date:

Risk-free interest rate	1.11% - 1.83%
Expected term (years)	6.5
Expected stock price volatility	0.298
Dividend yield	0	%

No options were granted during 2012 or 2011. Options and the related exercise price were adjusted for the 1 for 10 reverse stock split completed during September 2012. Options outstanding, exercise price and option activity occurring prior to the reverse stock split have been restated accordingly. The Company has a policy of using authorized but unissued common shares to satisfy option exercises.

The following table depicts the activity under the Plan:

	2012
	Options			Weighted Average Exercise Price
Outstanding, January 1		128,185		$	22.98
Granted		0			0
Forfeited or expired		(160	)		23.00
Exercised		0			0
Outstanding, December 31		128,025		$	22.98
Exercisable at December 31		51,910		$	22.98

The weighted average remaining contractual life of the options outstanding at December 31, 2012 was 7.53 years. The intrinsic value of options outstanding was $0. All nonvested options outstanding are expect to vest.

The follow table depicts vesting activity under the Plan.

	2012
	Options			Weighted Average Exercise Price
Nonvested at January 1, 2012		101,660		$	22.98
Granted		0			0
Vested		(25,385	)		23.00
Forfeited or expired		(160	)		23.00
Nonvested at December 31, 2012		76,115		$	22.98

As of December 31, 2012, there was $492,499 of total unrecognized compensation cost related to nonvested shares granted under the Plan. The cost is expected to be recognized over a weighted average period of 2.5 years. The total fair value of shares vested during the years ended December 31, 2012 and 2011 was $158,656 and $275,860.

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STOCK-BASED COMPENSATION (Details)	12 Months Ended
	Dec. 31, 2012
Expected term (years)	6 years 6 months
Expected stock price volatility	0.298%
Dividend yield	0.00%
Minimum [Member]
Risk-free interest rate	1.11%
Maximum [Member]
Risk-free interest rate	1.83%

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SUBSEQUENT EVENTS - BRANCH PURCHASE (Details Textual) (Branch Office Purchase and Assumption Agreement With First National Bank [Member], USD $)	Feb. 01, 2013
Deposit Premium On Deposits Assumed	5.25%
Minimum Deposit Premium On Deposits Assumed	$ 682,500
Payments For Acquire Real Estate	1,100,000
Minimum [Member]
Business Combination, Acquired Receivables, Fair Value	10,000,000
Business Combination Deposits Acquired	13,000,000
Maximum [Member]
Business Combination, Acquired Receivables, Fair Value	12,000,000
Business Combination Deposits Acquired	$ 16,000,000

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Interest and dividend income:
Loans, including fees	$ 5,951,183	$ 5,529,061
Securities, taxable	164,911	363,817
Securities, tax-exempt	107,308	107,608
Interest-bearing deposits, federal funds sold and other	25,049	79,554
Dividends on federal bank stock	79,089	74,566
Total interest and dividend income	6,327,540	6,154,606
Interest expense:
Deposits	613,168	1,037,267
Short-term Federal Home Loan Bank advances	25,293	4,381
Long-term Federal Home Loan Bank advances	34,199	21,156
Repurchase agreements and federal funds purchased	11,620	11,036
Capital leases	0	49,966
Total interest expense	684,280	1,123,806
Net interest income	5,643,260	5,030,800
Provision for loan losses	13,466	152,905
Net interest income after provision for loan losses	5,629,794	4,877,895
Noninterest income:
Service charges and other fees	285,426	551,361
Trust and brokerage fee income	903,374	743,850
Gain on sales of securities available for sale, net	55,016	358,030
Gain on sale of loans	159,873	109,629
Gain on sale of branch deposits	0	3,526,070
Gain on assignment of branch lease	0	217,532
Loss on disposition or direct write-down of assets acquired in settlement of loans	(205,417)	(268,117)
Loss on disposition of fixed assets	(441)	(3,818)
Other income	43,950	62,549
Total noninterest income	1,241,781	5,297,086
Noninterest expense:
Salaries and benefits	3,675,562	4,228,249
Occupancy and equipment	781,225	954,872
Professional fees	503,232	579,491
Franchise tax	234,625	209,824
Data processing	494,642	728,243
Marketing and advertising	92,920	74,669
Stationery and supplies	63,326	71,362
Deposit expense and insurance	291,959	389,509
Branch disposal expenses	0	212,383
Other expenses	595,380	906,257
Total noninterest expense	6,732,871	8,354,859
Net income before income taxes	138,704	1,820,122
Income tax expense	24,524	0
Net income	$ 114,180	$ 1,820,122
Basic income per share (in dollars per share)	$ 0.06	$ 0.92
Diluted income per share (in dollars per share)	$ 0.06	$ 0.92

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PREMISES AND EQUIPMENT

12 Months Ended

Dec. 31, 2012

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

NOTE 5 - PREMISES AND EQUIPMENT

Premises and equipment were as follows at December 31 2012 and 2011:

	2012			2011
Land	$	524,559		$	524,559
Office building		996,183			996,183
Leasehold improvements		824,130			520,223
Furniture, fixtures and equipment		1,780,201			1,942,534
Premises and equipment, cost		4,125,073			3,983,499
Less:  Accumulated depreciation		(1,695,997	)		(1,530,872	)
Premises and equipment, net	$	2,429,076		$	2,452,627

The North Canton banking office is located at 600 South Main Street in North Canton, Ohio. The Bank owns the land and building, which was constructed during 2005. During 2010, the Company changed its main office to this location.

During the years ended December 31, 2012 and 2011, depreciation expense was $277,738 and $334,529, respectively. Depreciation expense includes amortization of assets leased under capital leases.

In October 2011, the lease for the Company’s former banking office located at 305 West Liberty Street was assigned to the purchaser of the deposits associated with the Bank’s former branch offices located in Wooster, Ohio. Prior to the lease assignment, the building portion of the lease was accounted for as a capital lease while the land portion of the lease was accounted for as an operating lease, due to the land exceeding 25% of the total fair value of the property. The Company recognized a gain of $217,532 on the assignment of this lease based on the difference between the obligation for the lease payments for the remainder of the lease term and the net book value of the leasehold improvements for the office.

In October 2011, the Company also sold its Milltown banking office located at 3562 Commerce Parkway in Wooster, Ohio, in connection with the sale of branch deposits associated with its former Wooster, Ohio banking offices. The sales price for the building and real estate was equivalent to the Company’s net book value at the time of the sale.

The Bank’s operations center is located at 2375 Benden Drive, Suite C, Wooster, Ohio. The initial term of the current lease was three years beginning August 1, 2011 with an option to renew the lease for an additional three year term. The annual rent is $43,125.

The Belden banking office is located at 6141 Whipple Ave NW, North Canton, Ohio. The landlord for the Belden office is a related party. The original term of the current lease is twenty years commencing October 1, 2010. The rent for the first six months was $22,752 and increased to $45,396 for the second six months. Annual rent in year two through five is $90,792 increasing to $102,144 in year six through year ten, $114,912 in year eleven through year fifteen, and $129,276 in year sixteen through year twenty. The Company has the option to renew the lease for six successive periods of five years each.

In September 2011, the Bank entered into a lease agreement for office space located at 107 Plaza Drive, Suite A, St. Clairsville, Ohio, to expand the space previously leased under a separate agreement for purposes of opening a full service branch to complement the wealth services including trust and brokerage services offered at this location since 2010. The lease commenced following completion of construction on January 13, 2012. The initial lease term is ten years with annual rent of $38,040 for the first two years, $55,860 for years three through five, and $52,668 for years six through ten with additional rent in the amount of the tenant’s proportionate share of building operating expenses which includes real estate taxes, insurance, utilities, maintenance, and other costs associated with the maintenance and operation of the building.

A lease for office space for wealth services is located at 107 Plaza Drive, Suite J, St. Clairsville, Ohio. The initial term of the lease was three years beginning March 1, 2010. The minimum annual rent is $20,496 with additional rent in the amount of the tenant’s proportionate share of building operating expenses which includes real estate taxes, insurance, utilities, maintenance, and other costs associated with the maintenance and operation of the building. The lease provides for options to renew the lease for two additional one year terms. The lease was renewed in March 2013 for an annual rent of $21,521.

Rent expense was $232,615 and $215,264 for the years ended December 31, 2012 and 2011, respectively. Estimated rental commitments under all leases for their non-cancelable periods were as follows as of December 31, 2012:

	Operating Leases
2013	$	193,222
2014		177,188
2015		149,490
2016		158,004
2017		154,812
Thereafter		1,712,508
Total minimum lease payments	$	2,545,224

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ASSETS ACQUIRED IN SETTLEMENT OF LOANS

12 Months Ended

Dec. 31, 2012

Assets Acquired In Settlement Of Loans Disclosure Abstract

Assets Acquired In Settlement Of Loans Disclosure [Text Block]

NOTE 4 – ASSETS ACQUIRED IN SETTLEMENT OF LOANS

Assets acquired in settlement of loans were as follows for the years ended December 31, 2012 and 2011:

	2012		2011
Interest in limited liability company	$	1,171,620	$	1,255,437
Residential real estate		51,690		201,154
Commercial real estate		251,000		292,251
Construction and development		506,445		263,910
Total	$	1,980,755	$	2,012,752

Direct write-downs of assets acquired in settlement of loans totaled $209,453 and $192,882 for the year ended December 31, 2012 and 2011, respectively.

The interest in the limited liability company was obtained through a U.S. Bankruptcy Code 363 sale. The limited liability company was formed by the lead bank for the banks participating in the project financing to acquire title to the real estate, conduct the operation of the facility, and market the real estate and the operations of the business for sale. The carrying value of its interest is based upon the estimated fair value of the real estate less costs to sell.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

12 Months Ended

Dec. 31, 2012

Organization, Consolidation and Presentation Of Financial Statements [Abstract]

Consolidation, Policy [Policy Text Block]

Nature of Operations and Principles of Consolidation: The consolidated financial statements include Ohio Legacy Corp (“Ohio Legacy”) and its wholly-owned subsidiary, Premier Bank & Trust, National Association (the “Bank”, formerly Ohio Legacy Bank, N.A.). Intercompany transactions and balances are eliminated in consolidation. References to the “Company” include Ohio Legacy, consolidated with its subsidiary, the Bank. The Company is 76.09% owned by Excel Bancorp, LLC.

Ohio Legacy is a bank holding company, incorporated in July 1999 under the laws of the State of Ohio. The Bank provides financial services through three full-service banking offices in North Canton and St. Clairsville, Ohio. The Bank provides trust, private banking, investment and other banking services to its clients. Its primary deposit products are checking, savings and certificate of deposit accounts, and its primary lending products are residential mortgage, commercial real estate, commercial and installment loans. Substantially all loans are secured by specific items of collateral including business assets, consumer assets and real estate. Commercial loans are expected to be repaid from cash flow from operations of businesses. Real estate loans are secured by residential and commercial real estate. Concentrations of credit are evaluated based on the North American Industry Classification System (“NAICS”) code assignments. At December 31, 2012, concentrations of credit risk exceeding 25% of Tier 1 capital plus the Allowance for Loan Losses included the following:

	Recorded Investment ($000s)		% of Tier 1 Capital plus the Allowance for Loan Loss
Commercial Real Estate/ Rental & Leasing	$	26,803		129.16	%
Residential Real Estate/ Rental & Leasing		17,180		82.79	%
Retail Trade		7,222		34.80	%
Contractors/Developers		6,085		29.32	%

The Bank’s credit policy includes various concentration limits expressed as a percentage of Tier 1 capital plus the Allowance for Loan Loss and as a percentage of total loans. Other financial instruments that potentially represent concentrations of credit risk include deposit accounts in other financial institutions and federal funds sold.

Use of Estimates, Policy [Policy Text Block]

Use of Estimates: To prepare financial statements in conformity with U.S. generally accepted accounting principles, management makes estimates and assumptions based on available information. These estimates and assumptions affect the amounts reported in the financial statements and the disclosures provided, and actual results could differ. The allowance for loan losses, judgments about the other than temporary impairment of securities, fair value of financial instruments, valuation of deferred tax assets and the fair value of other real estate owned are particularly subject to change.

Cash and Cash Equivalents, Policy [Policy Text Block]

Cash Flows: Cash and cash equivalents includes cash, deposits with other financial institutions with original maturities of less than 90 days and federal funds sold. Net cash flows are reported for customer loan and deposit transactions, interest bearing deposits in other financial institutions, repurchase agreements, and short term FHLB advances.

Interest Capitalization, Policy [Policy Text Block]

Interest–Bearing Deposits in Other Financial Institutions: Interest-bearing deposits in other financial institutions mature within one year and are carried at cost.

Cash and Cash Equivalents Restricted Cash and Cash Equivalents [Policy Text Block]

Restrictions on Cash: Cash on hand or on deposit with the Federal Reserve Bank of $550,000 and $1,514,000 was required to meet regulatory reserve and clearing requirements at December 31, 2012 and 2011, respectively.

Marketable Securities, Policy [Policy Text Block]

Securities: Debt securities are classified as held to maturity and carried at amortized cost when management has the positive intent and ability to hold them to maturity. Debt securities are classified as available for sale when they might be sold before maturity. Equity securities with readily determinable fair values are classified as available for sale. Securities available for sale are carried at fair value, with unrealized holding gains and losses reported in other comprehensive income, net of tax when appropriate.

Interest income includes amortization of purchase premium or discount. Premiums and discounts on securities are amortized on the level-yield method without anticipating prepayments, except for mortgage backed securities where prepayments are anticipated. Gains and losses on sales are recorded on the trade date and determined using the specific identification method.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer. Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the income statement and 2) OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

In order to determine OTTI for purchased beneficial interests that, on the purchase date, were not highly rated, the Company compares the present value of the remaining cash flows as estimated at the preceding evaluation date to the current expected remaining cash flows. OTTI is deemed to have occurred if there has been an adverse change in the remaining expected future cash flows.

Finance, Loan and Lease Receivables, Held-for-sale, Policy [Policy Text Block]

Loans Held for Sale: Mortgage loans originated and intended for sale in the secondary market are carried at the lower of aggregate cost or fair value, as determined by outstanding commitments from investors. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Mortgage loans held for sale are sold with servicing rights released. Gains and losses on sales of mortgage loans are based on the difference between the selling price and the carrying value of the related loan sold.

Policy Loans Receivable, Policy [Policy Text Block]

Loans: Loans that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are reported at the principal balance outstanding, net of deferred loan fees and costs and an allowance for loan losses.

Interest income is accrued on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the level-yield method without anticipating prepayments.

Interest income on loans is generally discontinued at the time the loan becomes 90 days delinquent unless the credit is well-secured and in process of collection. For 1-4 family owner occupied mortgages or home equity lines of credit where the loan balance is 60% or less of the appraised value, the Bank may maintain accrual status. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Delinquency status is based on contractual payment due date.

All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. Interest received on such loans is accounted for on the cash-basis or cost-recovery method until qualifying for return to accrual. Loans are returned to accrual status upon approval of the Credit Committee or the Asset Quality Committee when all principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Loans and Leases Receivable, Allowance for Loan Losses Policy [Policy Text Block]

Allowance for Loan and Lease Losses: The allowance for loan and lease losses (“ALLL”) is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.

Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components. The specific component relates to loans that are individually classified as impaired and assigned a probable loss amount. A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impairment is measured on a loan by loan basis for all loans other than consumer loans and residential mortgage loans by either the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price, or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are collectively evaluated for impairment. Accordingly, the Company does not separately identify individual consumer and residential loans for impairment disclosures unless the loan is on nonaccrual status.

Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings and classified as impaired. Troubled debt restructurings are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a troubled debt restructuring is considered to be a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For troubled debt restructurings that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The Company divides loans not individually evaluated for impairment by risk into four grades: pass, special mention, substandard, and doubtful. Loans with a pass grade and loans not rated are divided into ten separate segments. Total charge-offs for a specified time period, currently three years, are divided into the same segments and used as a starting point to estimate credit losses in each segment. Other subjective factors, such as industry conditions, local economic trends and similar items are assigned a numeric value by segment and are also applied to the balances in the pass grade. Historic loss percentages are applied separately to the special mention and substandard pools of loans based on actual charge-offs for each pool in total regardless of the segment.

A description of each segment of the loan portfolio, along with the risk characteristics of each segment, is included below

One to Four Family Residential Mortgages: The Company defines residential real estate loans as first mortgages on individuals’ primary residence. Credit approval for residential real estate loans requires demonstration of sufficient income to repay the principal and interest and the real estate taxes and insurance, stability of employment, an established credit record and an appropriately appraised value of the real estate securing the loan that generally requires that the residential real estate loan amount be no more than 85% of the purchase price or the appraised value of the real estate securing the loan, whichever is less, unless private mortgage insurance is obtained by the borrower. Loans made for the Bank’s portfolio are generally adjustable rate, fully amortized mortgages. The rates used are generally fully-indexed rates and are not priced using low introductory “teaser” rates.

Home Equity Loans: These loans are either lines of credit or closed-end loans secured by second mortgages. The maximum amount of a home equity line of credit is generally limited to 95% (with acceptable credit scores) of the appraised value of the property less the balance of the first mortgage.

One to Four Family Rental Property: These loans are secured by residential real estate rental properties. The principal source of repayment generally is dependent upon satisfactory occupancy of the building by tenants.

Multi-family Real Estate: These loans consist of residential rental properties and generally consist of buildings with rental units for five or more families. The principal source of repayment generally is dependent upon satisfactory occupancy of the building by tenants.

Consumer Loans: The Company originates direct consumer loans, primarily automobile loans, personal lines of credit, and unsecured consumer loans in its primary market areas. Credit approval for consumer loans requires income sufficient to repay principal and interest due, stability of employment, an established credit record and sufficient collateral for secured loans. Consumer loans typically have shorter terms and lower balances with higher yields as compared to real estate mortgage loans, but generally carry higher risks of default. Consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances.

Commercial Loans: Commercial loans are made for a wide variety of general corporate purposes, including financing for industrial and commercial properties, financing for equipment, inventories and accounts receivable. The term of each commercial loan varies by its purpose. Repayment terms are structured such that commercial loans will be repaid within the economic useful life of the underlying asset. The commercial loan portfolio includes loans to a wide variety of corporations and businesses across many industrial classifications in the areas where the Bank operates.

Loans Secured by Trust Assets: These loans, principally used for commercial activities, are secured by cash or marketable securities and have substantially less credit risk than other types of commercial loans.

Commercial Real Estate:  Commercial real estate loans (“CRE loans”) are divided into two classes—owner occupied and non-owner occupied—and include mortgage loans to developers and owners of commercial real estate. The collateral for these CRE loans is the underlying commercial real estate. The Bank generally requires that the CRE loan amount be no more than 90% of the purchase price or 80% of the appraised value of the commercial real estate securing the CRE loan, whichever is less. Non-owner occupied CRE loans typically exhibit higher risk.

Construction and Development: Construction financing is generally considered to involve a higher degree of risk of loss than long-term financing on improved, occupied real estate. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the property’s value at completion of construction and the estimated cost (including interest) of construction. If the estimate of construction cost proves to be inaccurate, the Bank may be required to advance funds beyond the amount originally committed to permit completion of the project. If the estimate of value proves inaccurate, the Bank may be confronted, at or prior to the maturity of the loan, with a project having a value insufficient to assure full repayment, should the borrower default. In the event a default on a construction loan occurs and foreclosure follows, the Bank must take control of the project and attempt either to arrange for completion of construction or to dispose of the unfinished project. Additional risk exists with respect to loans made to developers who do not have a buyer for the property, as the developer may lack funds to pay the loan if the property is not sold upon completion. Generally the Bank attempts to reduce such risks on loans to developers by requiring personal guarantees and reviewing current personal financial statements and tax returns.

Loans to Nondepository Financial Institutions: Loans to nondepository financial institutions consist of indirect financing provided to a nationwide network of qualified mortgage brokers that originate mortgage loans for sale to third-party investors. The Bank has a loan participation agreement with another financial institution (the “Direct Lender”) which purchases mortgage loans from the mortgage brokers. The Bank purchases a 75% interest in each mortgage loan offered to the Bank by the Direct Lender for purchase subject to appropriate underwriting requirements up to a an aggregate limit of $10 million. Since the loans are returned to the mortgage broker for sale to the third party investor, the transactions do not meet the definition of a participating interest under generally accepted accounting principles and the financing arrangement is classified as loans to nondepository financial institutions (the originating mortgage brokers). The financing arrangement is collateralized by first mortgages on single family homes. If the loan has not been sold to the third-party investor within 120 days, the mortgage broker must repurchase the mortgage loan from the Direct Lender. The mortgage broker must pay the Direct Lender an amount equal to 10% of the mortgage loan purchase price sixty days after the purchase date and an equal amount ninety days after the purchase date. The mortgage broker, at the Direct Lender’s sole discretion, must repurchase each mortgage loan from the Direct Lender within 120 days after the date of purchase. There is no agreement between the investor and the Direct Lender or the Bank. The Bank receives interest on the mortgage loans equivalent to the fixed coupon rates of the underlying mortgage loans. The Direct Lender and the Bank review each underlying mortgage loan to reasonably ensure conformity with U.S. Agency-sponsored underwriting qualifications prior to the advancement of funds. The underwriting package includes an approved investor commitment to purchase the loan.

Management utilizes past due information as a credit quality indicator across the loan portfolio. The past due information is the primary credit quality indicator within both the 1-4 family residential real estate loan portfolio (including first liens, home equity loans, and construction loans in the 1-4 family real estate segment) and consumer loans.

The primary credit quality indicator for loans to nondepository financial institutions, loans secured by trust assets, commercial and commercial real estate loans (including non-owner occupied, owner occupied, multi-family real estate, 1-4 family rental property, and construction and development loans not included in the residential real estate segment) is based on an internal grading system. Credit grades are monitored regularly by the respective loan officer and independently by credit administration, and adjustments are made when appropriate. The frequency of loan review with respect to credit grades is dependent upon the size and grade of the loan. A description of credit quality indicators is included in Note 3.

Commercial and commercial real estate loans that are graded “doubtful” are shown as nonperforming and management generally charges these loans down to their fair value by taking a partial charge-off or recording a specific allocation of the allowance. Loans classified as “doubtful” have all the weaknesses inherent in those classified as “substandard” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Any commercial loan graded “loss” is immediately charged-off.

When collection of principal and interest is in doubt or a loan is 90-days past due, the loan is placed on non-accrual status and is specifically reviewed for impairment. Impairment is measured based on one of three methods: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) at the observable market price of the loan; or (3) the fair value of the collateral less estimated disposal costs. Individually impaired loans include all nonaccrual and restructured loans. U.S. generally accepted accounting principles (“GAAP”) require a specific allocation to be established as a component of the allowance for loan losses for certain loans when it is probable that all amounts due pursuant to the contractual terms of the loans will not be collected, and the recorded investment exceeds fair value.

For all loan segments, the Bank will initiate a charge-off or a partial charge-off based on the status of the loan. If the loan is not fully collateralized and is in the process of collection, the Bank will charge off the amount of the uncollectable account balance as a loss. The designated workout officer is generally responsible for calculating and recommending the charge-off amount. All charge-offs must be approved by the Credit Committee whose members consist of the Chief Credit Officer, the Chief Executive Officer, the Chief Operating Officer, the Workout Officer, and the Senior Lending Officer.

Charge offs are recorded when consumer loans are 120 days past due and real estate loans are 180 days past due. This may be extended if management believes that the risk of loss is minimal, and the Bank is in the process of collection with a reasonable prospect of full collection. Management conducts reviews of impaired loans regularly and assesses the requirement for specific allocations or charge-offs. When a loss has not been confirmed and payments are current, a specific allocation is generally recorded. Charge-offs (either full or partial) are recognized when loss is confirmed (for example, upon receipt of a current appraisal) and is generally based on the amount that the loan balance exceeds the estimated net realizable value of the collateral. For unsecured loans, the full balance is charged-off at the time the loan is deemed impaired. The Company did not revise its charge-off policy during the periods presented.

The amount and timing of full or partial charge-offs is important since charge-offs are factored into the calculation of the three-year historical loan loss experience rates used to estimate the adequacy of the allowance for loan losses. Failure to record charge-offs in a timely manner could result in lower historical loss rates and potentially understate the estimate of the amount of probable incurred losses within the portfolio and distort coverage ratios such as the allowance for loan losses to nonaccrual loans used by management to evaluate the adequacy of the allowance for loan losses.

Transfers and Servicing of Financial Assets, Policy [Policy Text Block]

Transfers of Financial Assets: Transfers of financial assets are accounted for as sales, when control over the assets has been relinquished. Control over transferred assets is deemed to be surrendered when the assets have been isolated from the Company, the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Federal Bank Stock [Policy Text Block]

Federal Bank Stock: The Bank is a member of the Federal Home Loan Bank (the “FHLB”) system. Members are required to own a certain amount of stock based on the level of borrowing and other factors, and may invest in additional amounts. FHLB stock is carried at cost, classified as federal bank stock on the balance sheet, and periodically evaluated for impairment based on ultimate recovery of par value. Both cash and stock dividends are reported as income. Federal Reserve Bank stock is also carried at cost. Cash dividends are reported as income. At December 31, 2012, federal bank stock consisted of Federal Home Loan Bank stock of $1,021,000 and Federal Reserve Bank stock of $556,750. As of December 31, 2011, federal bank stock consisted of Federal Home Loan Bank stock of $1,021,000 and Federal Reserve Bank stock of $576,850.

Property, Plant and Equipment, Policy [Policy Text Block]

Premises and Equipment: Land is carried at cost. Premises and equipment are stated at cost less accumulated depreciation. Depreciation is computed over an asset’s useful life, primarily using the straight line method. Leasehold improvements and office buildings under a capital lease are amortized over the original term of the lease or the life of the asset, whichever is shorter. Furniture, fixture and equipment have useful lives ranging from 3 to 7 years. Buildings have useful lives ranging from 15 to 20 years. Premises and equipment and other long-lived assets are reviewed for impairment when events indicate their carrying amount may not be recoverable through future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Assets Acquired In Settlement Of Loans [Policy Text Block]

Assets Acquired in Settlement of Loans: These assets include other real estate owned and a limited liability interest in an indoor waterpark and resort obtained through a U.S. Bankruptcy Code 363 sale. The limited liability company was formed by the lead bank for the banks participating in the project financing to acquire title to the real estate, conduct the operation of the facility, and market the real estate and the operations of the business for sale. The carrying value of its interest is based upon the estimated fair value of the real estate less costs to sell.

Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. If fair value declines subsequent to foreclosure, direct write-downs are recorded through expense to the carrying amount of the asset. Costs incurred after acquisition are expensed. Improvements that improve the fair value of the property are capitalized.

Impairment or Disposal of Long-Lived Assets, Including Intangible Assets, Policy [Policy Text Block]

Long-Term Assets: Premises and equipment, intangible assets, and other long-term assets are reviewed for impairment when events indicate their carrying amount may not be recoverable from future undiscounted cash flows. If impaired, the assets are recorded at fair value.

Income Tax, Policy [Policy Text Block]

Income Taxes: Income tax expense is the total of the current year income tax due or refundable and the change in deferred tax assets and liabilities. Deferred tax assets and liabilities are the expected future tax amounts for the temporary differences between carrying amounts and tax bases of assets and liabilities, computed using enacted tax rates. A valuation allowance, if needed, reduces deferred tax assets to the amount expected to be realized.

A tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded.

The Company recognizes interest and/or penalties related to income tax matters in income tax expense.

The issuance of common stock to Excel Bancorp during 2010 resulted in an “ownership change” of the Company, as broadly defined in Section 382 of the Internal Revenue Code. As a result of the ownership change, utilization of the Company’s net operating loss carryforwards and certain built-in losses under federal income tax laws will be subject to annual limitation. The annual limitation placed on the Company’s ability to utilize these potential tax deductions will equal the product of an applicable interest rate mandated under federal income tax laws and the Company’s value immediately before the ownership change. The annual limitation imposed under Section 382 would limit the deduction for both the carryforward tax attributes and the built-in losses realized within five years of the date of the ownership change to approximately $91,683 per year. Given the limited carryforward period assigned to these tax deductions in excess of this annual limit, some portion of these potential deductions will be lost and, consequently, the related tax benefits will not be recorded in the financial statements. See Note 10 for additional information regarding net operating loss carryforwards.

Earnings Per Share, Policy [Policy Text Block]

Earnings Per Share: Basic earnings per share is net income divided by the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the dilutive effect of additional potential common shares that may be issued upon the exercise of stock options. On September 17, 2012, the Company completed a one for ten reverse stock split approved by its shareholders at the annual shareholders’ meeting in May 2012. Outstanding shares and per share amounts for 2011 were retroactively restated for the reverse stock split. The following table details the calculation of basic and diluted earnings per share for the years ended December 31:

	2012		2011
BASIC:
Net income	$	114,180	$	1,820,122
Weighted average common shares outstanding		1,971,449		1,971,456
Basic income per share	$	0.06	$	0.92
DILUTED:
Net income	$	114,180	$	1,820,122
Weighted average common shares outstanding		1,971,449		1,971,456
Dilutive effect of stock options		-		-
Total common shares and dilutive potential common shares		1,971,449		1,971,456
Diluted income per common share	$	0.06	$	0.92

The computation of diluted income per share excludes potential dilutive common shares if the effect of their exercise would be anti-dilutive. Potential dilutive common shares which were excluded totaled 128,025 for 2012 and 131,120 for 2011.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation: Compensation cost is recognized for stock options and restricted stock awards issued to employees, based on the fair value of these awards at the date of grant. A Black-Scholes model is utilized to estimate the fair value of stock options, while the market price of the Company’s common stock at the date of grant is used for restricted stock awards. Compensation cost is recognized over the required service period, generally defined as the vesting period. For awards with graded vesting, compensation cost is recognized on a straight-line basis over the requisite service period for the entire award.

Loan Commitments, Policy [Policy Text Block]

Loan Commitments and Related Financial Instruments: Financial instruments include off-balance sheet credit instruments such as commitments to make loans and commercial letters of credit issued to meet customer financing needs. The face amount for these items represents the exposure to loss before considering customer collateral or ability to repay. Such financial instruments are recorded when they are funded.

Comprehensive Income, Policy [Policy Text Block]

Comprehensive Income: Comprehensive income consists of net income and other comprehensive income (loss). Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale, which are also recognized as a separate component of equity, net of tax.

Commitments and Contingencies, Policy [Policy Text Block]

Loss Contingencies: Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated. Management does not believe there are any such matters that will have a material effect on the financial statements.

Dividend Restriction, Policy [Policy Text Block]

Dividend Restriction: Banking regulations require the Bank to maintain certain capital levels and may limit the dividends paid by the Bank to Ohio Legacy and by Ohio Legacy to shareholders. See Note 12 for a further description of regulatory restrictions.

Fair Value of Financial Instruments, Policy [Policy Text Block]

Fair Values of Financial Instruments: Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 9. Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments and other factors, especially in the absence of broad markets for particular items. Changes in assumptions or market conditions could significantly affect the estimates.

Segment Reporting, Policy [Policy Text Block]

Operating Segments: 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 services operations are considered by management to be aggregated into one reportable operating segment.

Reclassification, Policy [Policy Text Block]

Reclassifications: Some items in the prior-year financial statements were reclassified to conform to the current year’s presentation. Reclassifications had no effect on prior year net income or shareholders’ equity.

New Accounting Pronouncements, Policy [Policy Text Block]

Adoption of New Accounting Pronouncements:

In June 2011, the FASB amended existing guidance and eliminated the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity. The amendment requires that comprehensive income be presented in either a single continuous statement or in two separate consecutive statements. The amendments in this guidance are effective as of the beginning of a fiscal reporting year, and interim periods within that year, that began after December 15, 2011. The adoption of this amendment changed the presentation of the components of comprehensive income for the Company as part of the consolidated statement of changes in shareholders’ equity.

In May 2011, the FASB issued an amendment to achieve common fair value measurement and disclosure requirements between U.S. and International accounting principles. Overall, the guidance is consistent with existing U.S. accounting principles; however, there are some amendments that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments in this guidance were effective for interim and annual reporting periods beginning after December 15, 2011. The effect of adopting this standard did not have a material effect on the Company’s operating results or financial condition.

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REGULATORY MATTERS

12 Months Ended

Dec. 31, 2012

Banking and Thrift [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE 12 – REGULATORY MATTERS

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes as of December 31, 2012, the Company and Bank meet all capital adequacy requirements to which they are subject. The consolidated capital amounts and ratios for the Company are materially similar to the Bank.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

At year-end 2012, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

Actual and required capital amounts and ratios are presented below at December 31, 2012 and 2011:

											To Be Well-
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2012
Total capital to risk-weighted assets
Premier Bank & Trust	$	20,307		13.4	%	$	12,146		8.0	%	$	15,182		10.0	%
Tier 1 capital to risk-weighted assets
Premier Bank & Trust		18,404		12.1	%		6,073		4.0	%		9,109		6.0	%
Tier 1 capital to average assets
Premier Bank & Trust		18,404		10.6	%		6,930		4.0	%		8,662		5.0	%
December 31, 2011:
Total capital to risk-weighted assets
Premier Bank & Trust	$	19,501		17.6	%	$	8,841		8.0	%	$	11,051		10.0	%
Tier 1 capital to risk-weighted assets
Premier Bank & Trust		18,106		16.4	%		4,420		4.0	%		6,631		6.0	%
Tier 1 capital to average assets
Premier Bank & Trust		18,106		12.1	%		5,965		4.0	%		7,457		5.0	%

The payment of dividends by the Bank to Ohio Legacy is subject to restrictions by regulatory agencies. These restrictions generally limit dividends to the sum of the current year and prior two years retained earnings. In addition, dividends may not reduce capital levels below the minimum regulatory requirements as described above. The Company is not able to declare dividends without prior approval from its regulators.

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REGULATORY MATTERS (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Actual Capital	$ 20,307	$ 19,501
Capital to Risk Weighted Assets ratio	13.40%	17.60%
Tier One Risk Based Capital to Risk Weighted Assets Ratio	12.10%	16.40%
Tier One Risk Based Capital To Risk Average Assets Ratio	10.60%	12.10%
Capital Required for Capital Adequacy	12,146	8,841
Capital Required for Capital Adequacy to Risk Weighted Assets Ratio	8.00%	8.00%
Tier One Risk Based Capital Required for Capital Adequacy to Risk Weighted Assets Ratio	4.00%	4.00%
Tier One Risk Based Capital Required For Capital Adequacy To Risk Average Assets Ratio	4.00%	4.00%
Capital Required to be Well Capitalized	15,182	11,051
Capital Required to be Well Capitalized to Risk Weighted Assets Ratio	10.00%	10.00%
Tier One Risk Based Capital Required to be Well Capitalized to Risk Weighted Assets Ratio	6.00%	6.00%
Tier One Risk Based Capital Required To Be Well Capitalized To Risk Average Assets Ratio	5.00%	5.00%
Weighted Assets [Member]
Actual Tier one risk based Capital	18,404	18,106
Tier One Risk Based Capital Required for Capital Adequacy	6,073	4,420
Tier One Risk Based Capital Required to be Well Capitalized	9,109	6,631
Average Assets [Member]
Actual Tier one risk based Capital	18,404	18,106
Tier One Risk Based Capital Required for Capital Adequacy	6,930	5,965
Tier One Risk Based Capital Required to be Well Capitalized	$ 8,662	$ 7,457

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FEDERAL HOME LOAN BANK ADVANCES

12 Months Ended

Dec. 31, 2012

Banking and Thrift [Abstract]

Federal Home Loan Bank Advances, Disclosure [Text Block]

NOTE 8 - FEDERAL HOME LOAN BANK ADVANCES

The following table details FHLB short term borrowings as of December 31, 2012 and 2011.

	2012		2011
Cash management interest only advance
.14% variable rate, maturing January 14, 2013	$	5,000,000	$	0
Cash management interest only advance
.18% fixed rate, maturing January 4, 2013		8,000,000		0
Cash management interest only advance
.14% variable rate, maturing January 11, 2012		0		5,000,000
Cash management interest only advance
.04% fixed rate, maturing January 6, 2012		0		8,000,000
Total	$	13,000,000	$	13,000,000

The cash management advances are prepayable without penalty.

The following table details FHLB long term advances as of December 31, 2012 and 2011:

	2012		2011
Two-year interest-only advance
.59% fixed rate, maturing November 27,2013	$	3,000,000	$	3,000,000
18-month interest-only advance
.55% fixed rate, maturing April 12, 2013		3,000,000		3,000,000
Total advances	$	6,000,000	$	6,000,000

Each interest-only advance is payable at its maturity date and has a prepayment penalty if repaid prior to maturity. The advances are collateralized by a blanket pledge of eligible residential real estate loan and a specific pledge of commercial and commercial real estate loans. At December 31, 2012, the Bank had approximately $21,055,000 in additional borrowing capacity available for future advances based upon current collateral and the Company’s holdings of FHLB stock. As of December 31, 2012, required principal payments on all FHLB advances are due during 2013.

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PREMISES AND EQUIPMENT (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Premises and equipment, cost	$ 4,125,073	$ 3,983,499
Less: Accumulated depreciation	(1,695,997)	(1,530,872)
Premises and equipment, net	2,429,076	2,452,627
Office Building [Member]
Premises and equipment, cost	996,183	996,183
Land [Member]
Premises and equipment, cost	524,559	524,559
Leasehold Improvements [Member]
Premises and equipment, cost	824,130	520,223
Furniture and Fixtures [Member]
Premises and equipment, cost	$ 1,780,201	$ 1,942,534

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DEPOSITS

12 Months Ended

Dec. 31, 2012

Banking and Thrift [Abstract]

Deposit Liabilities Disclosures [Text Block]

NOTE 6 - DEPOSITS

Certificates of deposit in denominations of $100,000 or more were $38,075,582 and $25,383,342 at December 31, 2012 and 2011, respectively.

Scheduled maturities of certificates of deposit were as follows at December 31, 2012:

2013	$	41,190,195
2014		7,988,060
2015		5,625,702
2016		212,922
2017		11,500
	$	55,028,379

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REPURCHASE AGREEMENTS

12 Months Ended

Dec. 31, 2012

Disclosure Of Repurchase Agreements [Abstract]

Repurchase Agreements, Resale Agreements, Securities Borrowed, and Securities Loaned Disclosure [Text Block]

NOTE 7 – REPURCHASE AGREEMENTS

Repurchase agreements are financing arrangements that mature daily. Under the agreements, customers agree to maintain funds on deposit with the Bank and in return acquire an interest in a pool of securities pledged as collateral against the funds. The securities are held in a segregated safekeeping account at the Federal Home Loan Bank. Information concerning the repurchase agreements for 2012 and 2011 is summarized as follows:

	2012			2011
Average daily balance during the year	$	4,591,173		$	4,056,358
Average interest rate during the year		0.25	%		0.26	%
Maximum month-end balance during the year		5,845,256			6,978,179
Interest rate at year-end		0.25	%		0.25	%

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FAIR VALUE

12 Months Ended

Dec. 31, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

NOTE 9 – FAIR VALUE

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate the fair value of each type of financial asset:

Securities: The fair values for securities are determined by quoted market prices, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

Impaired Loans: The fair value of collateral dependent impaired loans with specific allocations of the allowance for loan losses and other real estate is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Assets Acquired in Settlement of Loans: The fair value of assets acquired in settlement of loans is generally based on real estate appraisals. Appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are typically significant and result in a Level 3 classification of the inputs for determining fair value.

Annual appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers (for commercial properties) or certified residential appraisers (for residential properties) whose qualifications and licenses have been reviewed and verified by the Company. For commercial impaired loans and other real estate owned, if the carrying value is less than $250,000, the Company may obtain a property evaluation by an independent company instead of an appraisal. The Company uses an independent third party appraisal management company for the management of appraisal ordering and review. The appraisal management company reviews the assumptions and approaches, utilized in the appraisal as well as the overall resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics and provides a written review report to the Company. On an annual basis, the Company compares the actual selling price of collateral that has been sold to the most recent appraised value to determine what additional adjustment should be made to the appraised value to arrive at fair value. The most recent analysis performed indicated that a discount of 10% should be applied. In some cases, and when justified through appropriate documentation, additional discounting is reflected to allow for changing market conditions, property condition or increasing vacancy.

Assets measured at fair value on a recurring basis are summarized in the following table:

	Fair Value Measurements Using
			Significant
	Quoted Prices in		Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2012:
Equity securities	$	192,850	$	0	$	0	$	192,850
U.S. government sponsored enterprises		0		1,006,655		0		1,006,655
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		0		7,460,853		0		7,460,853
Other mortgage backed securities-residential		0		178,882		0		178,882
Municipal securities		0		2,873,804		0		2,873,804
Total securities available for sale	$	192,850	$	11,520,194	$	0	$	11,713,044
December 31, 2011:
Equity securities	$	145,350	$	0	$	0	$	145,350
U.S. government sponsored enterprises		0		2,515,906		0		2,515,906
Mortgage-backed securities issued by U.S. Government-sponsored enterprises		0		4,865,167		0		4,865,167
Other mortgage backed securities-residential		0		189,871		0		189,871
Municipal securities		0		2,379,836		581,514		2,961,350
Total securities available for sale	$	145,350	$	9,950,780	$	581,514	$	10,677,644

Level 3 securities are priced by a third party vendor and consist of non-rated municipal bonds of a single issuer. The vendor uses internal quality ratings that are a proprietary, internal data management tool to group municipal securities into sectors by perceived credit quality and correlation to the overall municipal market. Data gathered can be categorized as indicative data (terms and conditions data) and market data which are inputs used in price generation. Market data is comprised of various inputs needed to generate or adjust the variables required by the vendors pricing system. Examples of these market inputs are trades, bid price or spread, two-sided markets, quotes, benchmark curves including but not limited to Treasury benchmarks and LIBOR and swap curves, market data feeds such as MSRB, new issues, financial statements, discount rate, capital rates, and trustee reports. They rely on the expertise and judgment of its pricing analysts to gather and identify relevant information to use in formulating pricing opinions.

The Company’s policy is to recognize transfers into or out of a level as of the end of the reporting period. There were no transfers between Level 1 and Level 2 securities during 2012 or 2011.

The table below presents a reconciliation of all assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the year ended December 31.

	Municipal Securities
	2012			2011
Balance of recurring Level 3 assets at January 1	$	581,514		$	537,577
Total gains or losses (realized/unrealized):
Included in earnings – realized		0			0
Included in earnings – unrealized		0			0
Included in other comprehensive income		(17,794	)		43,937
Purchases		0			0
Sales		0			0
Issuances		0			0
Settlements		0			0
Transfers in and/or out of Level 3		(563,720	)		0
Balance of recurring Level 3 assets at December 31	$	0		$	581,514

The fair value for two municipal bonds with a fair value of $563,720 as of December 31, 2012 was transferred from Level 3 to Level 2 because observable market data was available for the securities.

The following table summarizes changes in unrealized gains and losses recorded in earnings for the year ended December 31, 2011 for Level 3 assets and liabilities that are still held at December 31.

	2011
Interest income on securities	$	152
Other changes in fair value		43,785
Total	$	43,937

The following table depicts assets measured at fair value on a non-recurring basis.

	Fair Value Measurements Using
			Significant
	Quoted Prices in		Other		Significant
	Active Markets for		Observable		Unobservable
	Identical Assets		Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
December 31, 2012:
Impaired loans:
1-4 family residential mortgage	$	0	$	0	$	471,501	$	471,501
1-4 family rental property		0		0		43,597		43,597
Home equity		0		0		161,640		161,640
Multi-family real estate		0		0		3,441		3,441
Commercial real estate:
Non-owner occupied		0		0		13,620		13,620
Assets acquired in settlement of loans:
Residential		0		0		25,989		25,989
Commercial real estate		0		0		150,000		150,000
Construction and development		0		0		145,684		145,684
Interest in limited liability company		0		0		1,171,620		1,171,620
December 31, 2011:
Impaired loans:
1-4 family residential mortgage	$	0	$	0	$	107,197	$	107,197
1-4 family rental property		0		0		130,659		130,659
Home equity		0		0		116,791		116,791
Multi-family real estate		0		0		7,897		7,897
Commercial		0		0		62,120		62,120
Commercial real estate:
Non-owner occupied		0		0		741,979		741,979
Owner occupied		0		0		66,324		66,324
Construction and development		0		0		287,897		287,897
Assets acquired in settlement of loans:
Residential		0		0		55,989		55,989
Commercial real estate		0		0		292,251		292,251
Construction and development		0		0		263,910		263,910
Interest in limited liability company		0		0		1,255,437		1,255,437

The above impaired loans, which are measured for impairment using the fair value of the collateral, had a carrying amount of $754,331 with a specific allocation of the allowance for loan losses of $60,532 at December 31, 2012. Provisions for loan losses as a result of charge-offs or write-downs to the fair value of collateral were $127,075 in 2012.

The above impaired loans, which are measured for impairment using the fair value of the collateral, had a carrying amount of $1,639,944 with a specific allocation of the allowance for loan losses of $119,080 at December 31, 2011. Provisions for loan losses as a result of charge-offs or write-downs to the fair value of collateral were $628,530 in 2011.

The above assets acquired in settlement of loans, measured at fair value less costs to sell, had a carrying value of $1,493,293 at December 31, 2012. Gross write-downs totaling $209,453 were recorded on these assets during the year ended December 31, 2012. Gross write-downs totaling $192,882 were recorded on these assets during the year ended December 31, 2011.

The following table presents quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at December 31, 2012:

	Fair value		Valuation Technique	Unobservable Inputs	Range		Weighted Average
Impaired loans
1-4 family residential	$	471,501	Sales comparison approach	Adjustment for differences between the comparable sales		8.56% to 9.03%		8.71	%
1-4 family rental property		43,597	Sales comparison approach	Adjustment for differences between the comparable sales		-32.00% to 1.00%		-9.43	%
Home equity		161,640	Sales comparison approach	Adjustment for differences between the comparable sales		-7.17% to -1.70%		-4.20	%
Multi-family real estate		3,441	Sales comparison approach	Adjustment for differences between the comparable sales		2.10% to 2.10%		2.10	%
Commercial real estate:
Non-owner occupied		13,620	Income approach	Capitalization rate		12.00% to 12.00%		12.00	%
Assets Acquired in Settlement of Loans
Residential	$	25,989	Sales comparison approach	Adjustment for differences between the comparable sales		-26.00% to -26.00%		-26.00	%
Commercial real estate		150,000	Sales comparison approach	Adjustment for differences between the comparable sales		-7.00% to -7.00%		-7.00	%
Construction and development		145,684	Sales comparison approach	Adjustment for differences between the comparable sales		0.00% to 0.00%		0.00	%
Interest in limited liability company		1,171,620	Income approach	Capitalization rate		10.25% to 10.25%		10.25	%

The carrying amounts and estimated fair values of financial assets and liabilities at December 31 are as follows:

				Fair Value Measurements Using:
December 31, 2012	Carrying Value			Level 1			Level 2			Level 3		Total
Financial assets
Cash and cash equivalents	$	5,707,000		$	5,707,000		$	0		$	0	$	5,707,000
Certificate of deposit in financial institution		100,000			0			100,000			0		100,000
Securities available for sale		11,713,000			193,000			10,956,000			564,000		11,713,000
Loans held for sale		2,040,000			0			2,066,000			0		2,066,000
Loans, net		147,684,000			0			0			149,843,000		149,843,000
Federal bank stock		1,578,000			NA			NA			NA		NA
Accrued interest receivable		422,000			0			51,000			371,000		422,000
Financial liabilities
Deposits		(131,542,000	)		(76,514,000	)		(55,213,000	)		0		(131,727,000	)
Repurchase agreements		(4,360,000	)		0			(4,360,000	)		0		(4,360,000	)
Federal Home Loan Bank advances		(19,000,000	)		0			(19,003,000	)		0		(19,003,000	)
Accrued interest payable		(29,000	)		(1,000	)		(28,000	)		0		(29,000	)

December 31, 2011	Carrying Value			Estimated Fair Value
Financial assets
Cash and cash equivalents	$	20,046,000		$	20,046,000
Certificate of deposit in financial institution		100,000			100,000
Securities available for sale		10,678,000			10,678,000
Loans held for sale		896,000			928,000
Loans, net		108,277,000			110,428,000
Federal bank stock		1,598,000			NA
Accrued interest receivable		340,000			340,000
Financial liabilities
Deposits		(103,962,000	)		(104,100,000	)
Repurchase agreements		(4,214,000	)		(4,214,000	)
Federal Home Loan Bank advances		(19,000,000	)		(19,055,000	)
Accrued interest payable		(24,000	)		(24,000	)

The methods and assumptions used to estimate fair value, not previously presented, are described as follows:

Cash and Cash Equivalents: The carrying amounts of cash and short-term instruments approximate fair values and are classified as Level 1.

Certificate of Deposit in Financial Institution: The fair value of certificates of deposit maintained with financial institutions is based upon discounted cash analyses, using interest rates currently offered for similar time deposits resulting in a Level 2 classification.

Loans: Fair values of loans, excluding loans held for sale, are estimated as follows: Fair values for loans are estimated using discounted cash flow analyses, using interest rates currently offered for loans with similar terms to borrowers of similar credit quality resulting in a Level 3 classification. Impaired loans are valued at the lower of cost or fair value as previously described. The methods utilized to estimate the fair value of loans do not necessarily represent an exit price.

Loans Held For Sale: The fair value of loans held for sale is determined using quoted prices for similar assets, adjusted for specific attributes of that loan resulting in Level 2 classification.

Federal Bank Stock: It is not practical to determine the fair value of federal bank stock due to restrictions placed on their transferability.

Deposits: The fair values disclosed for demand deposits (e.g., interest and non-interest checking, passbook savings, and certain types of money market accounts) are, by definition, equal to the amount payable on demand at the reporting date (i.e. their carrying amount) resulting in a Level 1 classification. The carrying amounts of variable rate, fixed-term money market accounts and certificates of deposit approximate their fair values at the reporting date resulting in a Level 1 classification. Fair values for fixed rate certificates of deposit are estimated using a discounted cash flows calculation that applies interest rates currently being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits resulting in a Level 2 classification.

Short-term Borrowings: The carrying amounts of federal funds purchased, borrowings under repurchase agreements, and other short-term borrowings, generally maturing within ninety days, approximate their fair values resulting in a Level 2 classification.

Other Borrowings: The fair values of the Company’s long-term borrowings are estimated using discounted cash flow analyses based on the current borrowing rates for similar types of borrowing arrangements resulting in a Level 2 classification.

Accrued Interest Receivable/Payable: The carrying amounts of accrued interest approximate fair value and its classification is correlated to the underlying financial instrument.

Off-balance Sheet Instruments: Fair values for off-balance sheet commitments are nominal and are not material.

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DEPOSITS (Details Textual) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Time Deposits, 100,000 Or More	$ 38,075,582	$ 25,383,342
Certificate Of Deposit In Financial Institution	$ 100,000	$ 100,000

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LOAN COMMITMENTS AND RELATED ACTIVITIES (Details) (Commitments To Extend Credit [Member], USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Commitments To Extend Credit [Member]
Variable rate	$ 4,994,469	$ 2,061,725
Fixed rate	2,387,864	696,800
Unused lines of credit, variable-rate	42,043,782	34,106,820
Standby letters of credit	$ 615,232	$ 194,856

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FEDERAL HOME LOAN BANK ADVANCES (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Short-term Federal Home Loan Bank advances	$ 13,000,000	$ 13,000,000
0.14% variable rate, maturing January 14,2013 [Member]
Short-term Federal Home Loan Bank advances	5,000,000	0
0.18% fixed rate, maturing January 4, 2013 [Member]
Short-term Federal Home Loan Bank advances	8,000,000	0
0.14% variable rate, maturing January 11, 2012 [Member]
Short-term Federal Home Loan Bank advances	0	5,000,000
0.04% fixed rate, maturing January 6, 2012 [Member]
Short-term Federal Home Loan Bank advances	$ 0	$ 8,000,000

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DEPOSITS (Details) (USD $)	Dec. 31, 2012
2013	$ 41,190,195
2014	7,988,060
2015	5,625,702
2016	212,922
2017	11,500
Time Deposit Maturities, after Year Five	$ 55,028,379

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STOCK-BASED COMPENSATION (Tables)

12 Months Ended

Dec. 31, 2012

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Schedule of Assumptions Used [Table Text Block]

The fair value of options granted in 2010 was determined using the following weighted-average assumptions as of the grant date:

Risk-free interest rate	1.11% - 1.83%
Expected term (years)	6.5
Expected stock price volatility	0.298
Dividend yield	0	%

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

The following table depicts the activity under the Plan:

	2012
	Options			Weighted Average Exercise Price
Outstanding, January 1		128,185		$	22.98
Granted		0			0
Forfeited or expired		(160	)		23.00
Exercised		0			0
Outstanding, December 31		128,025		$	22.98
Exercisable at December 31		51,910		$	22.98

Schedule of Nonvested Share Activity [Table Text Block]

The follow table depicts vesting activity under the Plan.

	2012
	Options			Weighted Average Exercise Price
Nonvested at January 1, 2012		101,660		$	22.98
Granted		0			0
Vested		(25,385	)		23.00
Forfeited or expired		(160	)		23.00
Nonvested at December 31, 2012		76,115		$	22.98

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LOANS (Details 6) (USD $)	Dec. 31, 2012	Dec. 31, 2011
TDRs outstanding , Number of Loans	3	10
TDRs Outstanding Recorded Investment , Pre-Modification	$ 558,007	$ 2,639,672
TDRs Outstanding Recorded Investment , Post-Modification	586,291	2,957,802
Home Equity Line Of Credit [Member]
TDRs outstanding , Number of Loans	1	1
TDRs Outstanding Recorded Investment , Pre-Modification	66,272	150,991
TDRs Outstanding Recorded Investment , Post-Modification	66,272	150,991
Commercial Loan [Member]
TDRs outstanding , Number of Loans	0	3
TDRs Outstanding Recorded Investment , Pre-Modification	0	145,294
TDRs Outstanding Recorded Investment , Post-Modification	0	195,761
Commercial Real Estate Nonowner Occupied [Member]
TDRs outstanding , Number of Loans	1	4
TDRs Outstanding Recorded Investment , Pre-Modification	253,218	2,222,984
TDRs Outstanding Recorded Investment , Post-Modification	290,500	2,490,647
Commercial Real Estate Owner Occupied [Member]
TDRs outstanding , Number of Loans	1	2
TDRs Outstanding Recorded Investment , Pre-Modification	238,517	120,403
TDRs Outstanding Recorded Investment , Post-Modification	$ 229,519	$ 120,403

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PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

12 Months Ended

Dec. 31, 2012

Condensed Financial Information Of Parent Company Only Disclosure [Abstract]

Condensed Financial Information of Parent Company Only Disclosure [Text Block]

NOTE 14 - PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION

CONDENSED BALANCE SHEETS
As of December 31
	2012		2011
ASSETS
Cash and cash equivalents	$	52,924	$	60,058
Investment in subsidiary, Premier Bank & Trust, N.A.		18,869,489		18,557,939
Other assets		4,795		5,414
Total assets	$	18,927,208	$	18,623,411
LIABILITIES AND SHAREHOLDERS' EQUITY
Other liabilities	$	14,740	$	35,323
Shareholders' equity		18,912,468		18,588,088
Total liabilities and shareholders' equity	$	18,927,208	$	18,623,411

CONDENSED STATEMENTS OF OPERATIONS
For the year ended December 31
	2012			2011
Dividends received from subsidiary	$	100,000		$	200,000
Professional fees		(11,575	)		(9,360	)
Other expense		(75,345	)		(65,526	)
Income before undistributed earnings of subsidiary		13,080			125,114
Equity in undistributed income of subsidiary		101,100			1,695,008
Income before income taxes		114,180			1,820,122
Income tax expense		0			0
Net income	$	114,180		$	1,820,122
Other comprehensive income		12,759			94,591
Comprehensive income	$	126,939		$	1,914,713

CONDENSED STATEMENT OF CASH FLOWS
For the year ended December 31,	2012			2011
Cash flows from operating activities:
Net income	$	114,180		$	1,820,122
Adjustments to reconcile net income to net cash from operating activities:
Equity in undistributed income of subsidiary		(101,100	)		(1,695,008	)
Net change in other assets and other liabilities		(19,963	)		(79,532	)
Net cash used for operating activities		(6,883	)		45,582
Cash flows from financing activities:
Reverse stock split - cash paid for fractional shares		(251	)		0
Net change in cash and cash equivalents		(7,134	)		45,582
Beginning cash and cash equivalents		60,058			14,476
Ending cash and cash equivalents	$	52,924		$	60,058

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LOANS (Tables)

12 Months Ended

Dec. 31, 2012

Receivables [Abstract]

Schedule Of Classification Of Loans Receivable [Table Text Block]

Loans, by collateral type, were as follows:

	December 31, 2012						December 31, 2011
	Balance			Percent			Balance			Percent
Residential real estate	$	33,224,110			22.1	%	$	27,985,517			25.3	%
Multifamily real estate		9,998,614			6.7	%		9,140,672			8.2	%
Commercial real estate		55,211,623			36.8	%		42,622,961			38.5	%
Construction and development		7,601,563			5.1	%		4,219,420			3.8	%
Commercial		15,253,309			10.2	%		10,031,094			9.1	%
Secured by trust assets		5,820,705			3.9	%		6,798,929			6.1	%
Loans to nondepository financial institutions		7,345,540			4.9	%		0			0.0	%
Consumer and home equity		15,482,848			10.3	%		9,931,647			9.0	%
Total Loans		149,938,312			100.0	%		110,730,240			100.0	%
Less: Allowance for loan losses		(2,347,664	)					(2,484,478	)
Net deferred loan costs		93,670						31,557
Loans, net	$	147,684,318					$	108,277,319

Schedule of Credit Losses Related to Financing Receivables, Current and Noncurrent [Table Text Block]

Activity in the allowance for loan loss by portfolio class for 2012 is depicted in the following two tables:

	1-4 Family Residential			1-4 Family Rental			Multi-Family Real Estate			Home Equity			Consumer			Commercial
Balance, January 1	$	202,699		$	235,523		$	423,031		$	139,419		$	9,687		$	284,961
Provision for loan losses		244,123			30,806			(168,030	)		247,178			54,201			(385,827	)
Charge-offs		(145,657	)		(30,137	)		0			(52,842	)		(2,262	)		(1,100	)
Recoveries		5,260			873			0			5,968			1,627			118,267
Balance, December 31, 2012	$	306,425		$	237,065		$	255,001		$	339,723		$	63,253		$	16,301

				Commercial real estate									Loans to Nondepository
	Secured by Trust Assets			Non-owner Occupied			Owner Occupied			Construction			Financial Institutions		Total
Balance, January 1	$	13,600		$	278,699		$	662,269		$	234,590		$	0	$	2,484,478
Provision for loan losses		(1,959	)		(552	)		82,712			(89,186	)		0		13,466
Charge-offs		0			(31,412	)		(2,405	)		(50,000	)		0		(315,815	)
Recoveries		0			10,332			2,405			20,803			0		165,535
Balance, December 31, 2012	$	11,641		$	257,067		$	744,981		$	116,207		$	0	$	2,347,664

Activity in the allowance for loan loss by portfolio class for 2011 is depicted in the following two tables:

	1-4 family residential			1-4 family rental			Multi-family real state			Home Equity			Consumer			Commercial
Balance, December 31, 2010	$	183,507		$	331,184		$	454,670		$	93,187		$	10,818		$	275,473
Provision for loan losses		73,014			(57,006	)		207,025			48,068			21,588			142,735
Charge-offs		(48,077	)		(26,737	)		(105,698	)		-			(23,614	)		(81,263	)
Recoveries		-			-			-			-			1,809			38,276
Reclassification of allowance for loans disposed of through branch sale		(5,745	)		(11,918	)		(132,966	)		(1,836	)		(914	)		(90,260	)
Balance, December 31, 2011	$	202,699		$	235,523		$	423,031		$	139,419		$	9,687		$	284,961

	Secured by Trust Assets		Non-owner occupied			Owner Occupied			Construction			Total
Balance, December 31, 2010	$	12,095	$	509,739		$	1,043,458		$	141,635		$	3,055,766
Provision for loan losses		1,505		(138,828	)		40,477			(185,673	)		152,905
Charge-offs		-		(86,246	)		(166,658	)		(1,205	)		(539,498	)
Recoveries		-		-			95,387			279,833			415,305
Reclassification of allowance for loans disposed of through branch sale		-		(5,966	)		(350,395	)		-			(600,000	)
Balance, December 31, 2011	$	13,600	$	278,699		$	662,269		$	234,590		$	2,484,478

Allowance for Credit Losses on Financing Receivables [Table Text Block]

The following tables present the balance in the allowance for loan losses and the recorded investment of loans by portfolio class and based on impairment method.

	Loans Collectively Evaluated for Impairment				Loans Individually Evaluated for Impairment				Total
December 31, 2012	Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment
1-4 family residential mortgage	$	306,425	$	28,166,315	$	0	$	667,082	$	306,425	$	28,833,397
1-4 family rental property		230,376		4,340,427		6,689		50,286		237,065		4,390,713
Multi-family real estate		255,001		9,707,328		0		291,286		255,001		9,998,614
Home equity		303,860		12,531,704		35,863		263,776		339,723		12,795,480
Consumer		63,253		2,687,368		0		0		63,253		2,687,368
Commercial		15,252		15,252,260		1,049		1,049		16,301		15,253,309
Secured by trust assets		11,641		5,820,705		0		0		11,641		5,820,705
Commercial real estate:
Non-owner occupied		241,359		24,257,442		15,708		2,415,495		257,067		26,672,937
Owner occupied		743,758		25,831,947		1,223		2,706,739		744,981		28,538,686
Loans to nondepository financial institutions		0		7,345,540		0		0		0		7,345,540
Construction and development		116,207		7,601,563		0		0		116,207		7,601,563
Total	$	2,287,132	$	143,542,599	$	60,532	$	6,395,713	$	2,347,664	$	149,938,312

	Loans Collectively Evaluated for Impairment				Loans Individually Evaluated for Impairment				Total
December 31, 2011	Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment
1-4 family residential mortgage	$	202,699	$	23,645,009	$	0	$	108,877	$	202,699	$	23,753,886
1-4 family rental property		235,523		4,068,998		0		162,633		235,523		4,231,631
Multi-family real estate		423,031		9,132,775		0		7,897		423,031		9,140,672
Home equity		98,944		8,711,640		40,475		189,603		139,419		8,901,243
Consumer		9,687		1,030,404		0		0		9,687		1,030,404
Commercial		284,347		9,838,175		614		192,919		284,961		10,031,094
Commercial secured by trust assets		13,600		6,798,929		0		0		13,600		6,798,929
Commercial real estate:
Non-owner occupied		212,153		20,279,967		66,546		2,522,791		278,699		22,802,758
Owner occupied		650,824		19,208,688		11,445		611,515		662,269		19,820,203
Construction and development		234,590		3,931,523		0		287,897		234,590		4,219,420
Total	$	2,365,398	$	106,646,108	$	119,080	$	4,084,132	$	2,484,478	$	110,730,240

Impaired Financing Receivables [Table Text Block]

The following tables present loans individually evaluated for impairment by loan class:

	As of December 31, 2012						As of December 31, 2011
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
1-4 family residential mortgage	$	757,684	$	667,082	$	0	$	197,637	$	108,877	$	0
1-4 family rental property		62,552		13,323		0		288,674		162,633		0
Multi-family real estate		322,098		291,286		0		36,952		7,897		0
Home equity		66,273		66,273		0		32,337		32,337		0
Commercial		0		0		0		371,177		192,305		0
Commercial real estate:
Non-owner occupied		2,386,167		2,386,167		0		1,836,578		1,754,214		0
Owner occupied		2,750,965		2,705,516		0		613,495		533,746		0
Construction and development		0		0		0		716,657		287,897		0
Subtotal		6,345,738		6,129,647		0		4,093,506		3,079,906		0
With an allowance recorded:
1-4 family residential mortgage		0		0		0		0		0		0
1-4 family rental property		60,949		36,963		6,689		0		0		0
Multi-family real estate		0		0		0		0		0		0
Home equity		197,560		197,503		35,863		157,266		157,266		40,475
Commercial		1,140		1,049		1,049		2,849		614		614
Commercial real estate:
Non-owner occupied		61,518		29,328		15,708		773,028		768,577		66,546
Owner occupied		7,042		1,223		1,223		82,517		77,769		11,445
Subtotal		328,209		266,066		60,532		1,015,660		1,004,226		119,080
Total	$	6,673,947	$	6,395,713	$	60,532	$	5,109,166	$	4,084,132	$	119,080

	For the Year Ended December 31, 2012						For the Year Ended December 31, 2011
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
With no related allowance recorded:
1-4 family residential mortgage	$	452,767	$	0	$	0	$	210,111	$	590	$	590
1-4 family rental property		63,897		1,344		1,344		118,228		10,861		10,861
Multi-family real estate		100,417		17,337		14,889		28,081		0		0
Home equity		60,920		2,426		2,240		8,375		0		0
Commercial		118,406		8,004		7,486		164,449		20,874		20,874
Commercial real estate:
Non-owner occupied		2,445,154		142,465		137,741		524,417		4,490		4,490
Owner occupied		775,053		10,732		10,732		863,249		1,712		1,712
Construction and development		119,957						779,650		1,666		1,666
Subtotal		4,136,571		182,308		174,432		2,696,560		40,193		40,193
With an allowance recorded:
1-4 family residential mortgage		0		0		0		36,158		0		0
1-4 family rental property		35,012		0		0		76,017		0		0
Multi-family real estate		811		0		0		0		0		0
Home equity		121,703		7,699		7,174		12,011		0		0
Consumer		0		0		0		0		0		0
Commercial		0		0		0		22,158		0		0
Commercial real estate:
Non-owner occupied		9,170		0		0		133,958		0		0
Owner occupied		374,117		0		0		46,331		0		0
Subtotal		540,813		7,699		7,174		326,633		0		0
Total	$	4,677,384	$	190,007	$	181,606	$	3,023,193	$	40,193	$	40,193

Past Due Financing Receivables [Table Text Block]

The following tables present the aging of the recorded investment in loans by loan class:

			Days Past Due
December 31, 2012	Loans Not Past Due		30-59 Days		60-89 Days		90 Days or Greater		Total Past Due		Total
1-4 family residential mortgage	$	27,180,242	$	960,868	$	180,021	$	512,266	$	1,653,155	$	28,833,397
1-4 family rental property		4,340,427		6,143		7,180		36,963		50,286		4,390,713
Multi-family real estate		9,995,173		0		3,441		0		3,441		9,998,614
Home equity loans		12,676,103		39,802		29,643		49,932		119,377		12,795,480
Consumer		2,685,058		719		642		949		2,310		2,687,368
Commercial		15,252,260		1,049		0		0		1,049		15,253,309
Secured by trust assets		5,820,705		0		0		0		0		5,820,705
Commercial real estate:		0		0		0		0
Non-owner occupied		26,643,609		0		0		29,328		29,328		26,672,937
Owner occupied		26,048,546		0		191,894		2,298,246		2,490,140		28,538,686
Loans to nondepository financial institutions		7,345,540		0		0		0		0		7,345,540
Construction and development		7,601,563		0		0		0		0		7,601,563
Total	$	145,589,226	$	1,008,581	$	412,821	$	2,927,684	$	4,349,086	$	149,938,312

			Days Past Due
December 31, 2011	Loans Not Past Due		30-59 Days		60-89 Days		90 Days or Greater		Total Past Due		Total
1-4 family residential mortgage	$	23,161,060	$	454,167	$	138,659	$	0	$	592,826	$	23,753,886
1-4 family rental property		3,924,394		144,603		31,975		130,659		307,237		4,231,631
Multi-family real estate		9,132,775		0		0		7,897		7,897		9,140,672
Home equity loans		8,809,248		25,161		34,497		32,337		91,995		8,901,243
Consumer		1,017,062		0		11,670		1,672		13,342		1,030,404
Commercial		10,005,369		3,848		6,692		15,185		25,725		10,031,094
Secured by trust assets		6,798,929		0		0		0		0		6,798,929
Commercial real estate:
Non-owner occupied		22,762,810		0		0		39,948		39,948		22,802,758
Owner occupied		19,581,686		0		0		238,517		238,517		19,820,203
Construction and development		3,881,837		49,686		0		287,897		337,583		4,219,420
Total	$	109,075,170	$	677,465	$	223,493	$	754,112	$	1,655,070	$	110,730,240

Past Due Financing Receivables Past 90 Days And Non Accrual [Table Text Block]

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by loan class:

December  31, 2012	Nonaccrual Loans		90 Days or Greater & Still Accruing		Total
1-4 family residential mortgage	$	347,582	$	197,353	$	544,935
1-4 family rental property		50,286		0		50,286
Multi-family real estate		3,441		0		3,441
Home equity loans		49,932		0		49,932
Consumer		17,320		948		18,268
Commercial		1,049		0		1,049
Secured by trust assets		0		0		0
Commercial real estate:
Non-owner occupied		29,328		0		29,328
Owner occupied		2,706,739		0		2,706,739
Construction and development		0		0		0
Total	$	3,205,677	$	198,301	$	3,403,978

December 31, 2011	Nonaccrual loans		90 Days or Greater & Still Accruing		Total
1-4 family residential mortgage	$	108,877	$	-	$	108,877
1-4 family rental property		162,633		-		162,633
Multi-family real estate		7,897		-		7,897
Home equity loans		38,612		-		38,612
Consumer		6,309		1,672		7,981
Commercial		77,919		-		77,919
Commercial real estate:
Non-owner occupied		39,948		-		39,948
Owner occupied		611,515		-		611,515
Construction and development		287,897		-		287,897
Total	$	1,341,607	$	1,672	$	1,343,279

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

The following tables depict TDR activity for 2012 and 2011:

			For the Year Ended December 31, 2012
	Number of Loans		Pre-Modification		Post-Modification
Home equity		1	$	66,272	$	66,272
Commercial		0		0		0
Commercial real estate:
Non-owner occupied		1		253,218		290,500
Owner occupied		1		238,517		229,519
Total		3	$	558,007	$	586,291

			For the Year Ended December 31, 2011
	Number of Loans		Pre-Modification		Post-Modification
Home equity		1	$	150,991	$	150,991
Commercial		3		145,294		195,761
Commercial real estate:
Non-owner occupied		4		2,222,984		2,490,647
Owner occupied		2		120,403		120,403
Total		10	$	2,639,672	$	2,957,802

Schedule I Of Troubled Debt Restructuring [Table Text Block]

The following table reports the balance of TDRs outstanding and related information as of year-end:

	December 31, 2012				December 31, 2011
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Home equity		2	$	213,844		1	$	150,991
Commercial real estate:
Non-owner occupied		5		2,674,012		4		2,482,844
Owner occupied		1		215,377		2		110,627
Commercial		1		78,990		3		177,120
TDR allocated specific reserves			$	30,780			$	100,746
TDR loan commitments outstanding				0				6,000

Troubled Debt Restructurings On Financing Receivables Subsequently Defaulted [Table Text Block]

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within the twelve months following the modification during the year ending December 31, 2011:

Troubled Debt Restructurings That Subsequently Defaulted	Number of Loans		Recorded Investment
Commercial		1	$	6,692

Financing Receivable Credit Quality Indicators [Table Text Block]

A loan may also be separated from the homogeneous pool and individually risk rated due to recurrent delinquency problems, typically 60 to 89 days past due. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows:

December 31, 2012	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
1-4 family residential mortgage	$	28,181,932	$	187,140	$	116,743	$	347,582	$	0	$	28,833,397
1-4 family rental property		949,631		3,307,577		62,659		70,846		0		4,390,713
Multi-family real estate		279,367		8,387,924		907,951		423,372		0		9,998,614
Home equity loans		12,473,534		58,170		0		231,439		32,337		12,795,480
Consumer		2,687,368		0		0		0		0		2,687,368
Commercial		0		15,252,260		0		1,049		0		15,253,309
Secured by trust assets		0		5,820,705		0		0		0		5,820,705
Commercial real estate:
Non-owner occupied		0		22,949,712		1,307,730		2,415,495		0		26,672,937
Owner occupied		0		25,437,889		173,139		2,927,658		0		28,538,686
Loans to nondepository financial institutions		0		7,345,540		0		0		0		7,345,540
Construction and development		2,776,423		4,825,140		0		0		0		7,601,563
Total	$	47,348,255	$	93,572,057	$	2,568,222	$	6,417,441	$	32,337	$	149,938,312

December 31, 2011	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
1-4 family residential mortgage	$	23,441,682	$	-	$	203,327	$	1,680	$	107,197	$	23,753,886
1-4 family rental property		494,363		2,872,069		513,544		351,655		-		4,231,631
Multi-family real estate		303,587		7,240,618		254,823		1,341,644		-		9,140,672
Home equity loans		8,637,268		72,895		1,477		150,991		38,612		8,901,243
Consumer		1,030,404		-		-		-		-		1,030,404
Commercial		-		9,823,849		14,326		130,799		62,120		10,031,094
Secured by trust assets		675,626		6,123,303		-		-		-		6,798,929
Commercial real estate:
Non-owner occupied		5,000		19,005,683		759,562		3,032,513		-		22,802,758
Owner occupied		1,795		17,493,719		1,506,489		707,573		110,627		19,820,203
Construction and development		1,867,195		2,037,504		26,824		287,897		-		4,219,420
Total	$	36,456,920	$	64,669,640	$	3,280,372	$	6,004,752	$	318,556	$	110,730,240

Financing Receivable Credit Quality Indicators By Performing [Table Text Block]

The following table presents the current principal balance of residential and consumer loans based on payment activity:

	Residential
December 31, 2012	1-4 family		Home Equity		Consumer		Total
Performing	$	28,485,815	$	12,745,548	$	2,670,048	$	43,901,411
Nonperforming		347,582		49,932		17,320		414,834
Total	$	28,833,397	$	12,795,480	$	2,687,368	$	44,316,245

	Residential
December 31, 2011	1-4 Family		Home Equity		Consumer		Total
Performing	$	23,645,009	$	8,862,631	$	1,024,095	$	33,380,744
Nonperforming		108,877		38,612		6,309		304,789
Total	$	23,753,886	$	8,901,243	$	1,030,404	$	33,685,533

Loans and Leases Receivable Related Parties [Table Text Block]

Loans to principal officers, directors and their affiliates in 2012 were as follows:

Balance, January 1	$	5,387,226
New loans or advances		197,813
Repayments		(700,571	)
Balance, December 31	$	4,884,468

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LOANS (Details 4) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Loans Not Past Due	$ 145,589,226	$ 109,075,170
Loans, Past Due - 30-59 Days	1,008,581	677,465
Loans, Past Due 60-89 Days	412,821	223,493
Loans, Past Due 90 Days or Greater	2,927,684	754,112
Total Loans, Past Due	4,349,086	1,655,070
Total	149,938,312	110,730,240
One To Four Family Residential [Member]
Loans Not Past Due	27,180,242	23,161,060
Loans, Past Due - 30-59 Days	960,868	454,167
Loans, Past Due 60-89 Days	180,021	138,659
Loans, Past Due 90 Days or Greater	512,266	0
Total Loans, Past Due	1,653,155	592,826
Total	28,833,397	23,753,886
One To Four Family Rental [Member]
Loans Not Past Due	4,340,427	3,924,394
Loans, Past Due - 30-59 Days	6,143	144,603
Loans, Past Due 60-89 Days	7,180	31,975
Loans, Past Due 90 Days or Greater	36,963	130,659
Total Loans, Past Due	50,286	307,237
Total	4,390,713	4,231,631
Multi-Family Real Estate [Member]
Loans Not Past Due	9,995,173	9,132,775
Loans, Past Due - 30-59 Days	0	0
Loans, Past Due 60-89 Days	3,441	0
Loans, Past Due 90 Days or Greater	0	7,897
Total Loans, Past Due	3,441	7,897
Total	9,998,614	9,140,672
Home Equity Line Of Credit [Member]
Loans Not Past Due	12,676,103	8,809,248
Loans, Past Due - 30-59 Days	39,802	25,161
Loans, Past Due 60-89 Days	29,643	34,497
Loans, Past Due 90 Days or Greater	49,932	32,337
Total Loans, Past Due	119,377	91,995
Total	12,795,480	8,901,243
Consumer [Member]
Loans Not Past Due	2,685,058	1,017,062
Loans, Past Due - 30-59 Days	719	0
Loans, Past Due 60-89 Days	642	11,670
Loans, Past Due 90 Days or Greater	949	1,672
Total Loans, Past Due	2,310	13,342
Total	2,687,368	1,030,404
Commercial [Member]
Loans Not Past Due	15,252,260	10,005,369
Loans, Past Due - 30-59 Days	1,049	3,848
Loans, Past Due 60-89 Days	0	6,692
Loans, Past Due 90 Days or Greater	0	15,185
Total Loans, Past Due	1,049	25,725
Total	15,253,309	10,031,094
Secured By Trust Assets [Member]
Loans Not Past Due	5,820,705	6,798,929
Loans, Past Due - 30-59 Days	0	0
Loans, Past Due 60-89 Days	0	0
Loans, Past Due 90 Days or Greater	0	0
Total Loans, Past Due	0	0
Total	5,820,705	6,798,929
Commercial Real Estate Nonowner Occupied [Member]
Loans Not Past Due	26,643,609	22,762,810
Loans, Past Due - 30-59 Days	0	0
Loans, Past Due 60-89 Days	0	0
Loans, Past Due 90 Days or Greater	29,328	39,948
Total Loans, Past Due	29,328	39,948
Total	26,672,937	22,802,758
Commercial Real Estate Owner Occupied [Member]
Loans Not Past Due	26,048,546	19,581,686
Loans, Past Due - 30-59 Days	0	0
Loans, Past Due 60-89 Days	191,894	0
Loans, Past Due 90 Days or Greater	2,298,246	238,517
Total Loans, Past Due	2,490,140	238,517
Total	28,538,686	19,820,203
Loans To Nondepository Financial Institutions [Member]
Loans Not Past Due	7,345,540
Loans, Past Due - 30-59 Days	0
Loans, Past Due 60-89 Days	0
Loans, Past Due 90 Days or Greater	0
Total Loans, Past Due	0
Total	7,345,540	0
Construction and Development [Member]
Loans Not Past Due	7,601,563	3,881,837
Loans, Past Due - 30-59 Days	0	49,686
Loans, Past Due 60-89 Days	0	0
Loans, Past Due 90 Days or Greater	0	287,897
Total Loans, Past Due	0	337,583
Total	$ 7,601,563	$ 4,219,420

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SECURITIES (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Available-for-sale Securities, Amortized Cost	$ 11,247,469	$ 10,224,828
Available-for-sale Securities, Gross Unrealized Gains	475,123	513,721
Available-for-sale Securities, Gross Unrealized Losses	(9,548)	(60,905)
Available for sale, Fair Value	11,713,044	10,677,644
U S Government-Sponsored Enterprises Debt Securities [Member]
Available-for-sale Securities, Amortized Cost	1,006,648	2,514,982
Available-for-sale Securities, Gross Unrealized Gains	7	952
Available-for-sale Securities, Gross Unrealized Losses	0	(28)
Available for sale, Fair Value	1,006,655	2,515,906
Mortgage-Backed Securities, Issued By Us Government Sponsored Enterprises [Member]
Available-for-sale Securities, Amortized Cost	7,309,579	4,663,733
Available-for-sale Securities, Gross Unrealized Gains	151,274	201,434
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available for sale, Fair Value	7,460,853	4,865,167
Mortgage Backed Securities Other Residential [Member]
Available-for-sale Securities, Amortized Cost	188,430	250,748
Available-for-sale Securities, Gross Unrealized Gains	0	0
Available-for-sale Securities, Gross Unrealized Losses	(9,548)	(60,877)
Available for sale, Fair Value	178,882	189,871
Municipal Bonds [Member]
Available-for-sale Securities, Amortized Cost	2,702,912	2,755,465
Available-for-sale Securities, Gross Unrealized Gains	170,892	205,885
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available for sale, Fair Value	2,873,804	2,961,350
Equity Securities [Member]
Available-for-sale Securities, Amortized Cost	39,900	39,900
Available-for-sale Securities, Gross Unrealized Gains	152,950	105,450
Available-for-sale Securities, Gross Unrealized Losses	0	0
Available for sale, Fair Value	$ 192,850	$ 145,350

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Net income	$ 114,180	$ 1,820,122
Other comprehensive income:
Unrealized holding gains arising during the period	67,775	452,621
Reclassification adjustment for gains included in net income	(55,016)	(358,030)
Tax effect	0	0
Total other comprehensive income	12,759	94,591
Comprehensive income	$ 126,939	$ 1,914,713

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PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (Details 1) (USD $)	12 Months Ended
	Dec. 31, 2012	Dec. 31, 2011
Professional fees	$ (503,232)	$ (579,491)
Other expense	(595,380)	(906,257)
Income tax expense	24,524	0
Net income	114,180	1,820,122
Other comprehensive income	12,759	94,591
Comprehensive income	126,939	1,914,713
Parent [Member]
Dividends received from subsidiary	100,000	200,000
Professional fees	(11,575)	(9,360)
Other expense	(75,345)	(65,526)
Income before undistributed earnings of subsidiary	13,080	125,114
Equity in undistributed income of subsidiary	101,100	1,695,008
Income before income taxes	114,180	1,820,122
Income tax expense	0	0
Net income	114,180	1,820,122
Other comprehensive income	12,759	94,591
Comprehensive income	$ 126,939	$ 1,914,713

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LOANS

12 Months Ended

Dec. 31, 2012

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 3 – LOANS

Loans, by collateral type, were as follows:

	December 31, 2012						December 31, 2011
	Balance			Percent			Balance			Percent
Residential real estate	$	33,224,110			22.1	%	$	27,985,517			25.3	%
Multifamily real estate		9,998,614			6.7	%		9,140,672			8.2	%
Commercial real estate		55,211,623			36.8	%		42,622,961			38.5	%
Construction and development		7,601,563			5.1	%		4,219,420			3.8	%
Commercial		15,253,309			10.2	%		10,031,094			9.1	%
Secured by trust assets		5,820,705			3.9	%		6,798,929			6.1	%
Loans to nondepository financial institutions		7,345,540			4.9	%		0			0.0	%
Consumer and home equity		15,482,848			10.3	%		9,931,647			9.0	%
Total Loans		149,938,312			100.0	%		110,730,240			100.0	%
Less: Allowance for loan losses		(2,347,664	)					(2,484,478	)
Net deferred loan costs		93,670						31,557
Loans, net	$	147,684,318					$	108,277,319

Approximately $30,231,000 and $24,475,000 of residential real estate loans were pledged as collateral for FHLB advances at December 31, 2012 and 2011, respectively. Commercial and multi-family real estate loans pledged to the FHLB as of December 31, 2012 and 2011 totaled $39,117,000 and $23,827,000, respectively. Approximately $20,289,000 and $16,553,000 of commercial and home equity loans were pledged as collateral at the Federal Reserve Bank of Cleveland for available discount window borrowing at December 31, 2012 and 2011.

Activity in the allowance for loan loss by portfolio class for 2012 is depicted in the following two tables:

	1-4 Family Residential			1-4 Family Rental			Multi-Family Real Estate			Home Equity			Consumer			Commercial
Balance, January 1	$	202,699		$	235,523		$	423,031		$	139,419		$	9,687		$	284,961
Provision for loan losses		244,123			30,806			(168,030	)		247,178			54,201			(385,827	)
Charge-offs		(145,657	)		(30,137	)		0			(52,842	)		(2,262	)		(1,100	)
Recoveries		5,260			873			0			5,968			1,627			118,267
Balance, December 31, 2012	$	306,425		$	237,065		$	255,001		$	339,723		$	63,253		$	16,301

				Commercial real estate									Loans to Nondepository
	Secured by Trust Assets			Non-owner Occupied			Owner Occupied			Construction			Financial Institutions		Total
Balance, January 1	$	13,600		$	278,699		$	662,269		$	234,590		$	0	$	2,484,478
Provision for loan losses		(1,959	)		(552	)		82,712			(89,186	)		0		13,466
Charge-offs		0			(31,412	)		(2,405	)		(50,000	)		0		(315,815	)
Recoveries		0			10,332			2,405			20,803			0		165,535
Balance, December 31, 2012	$	11,641		$	257,067		$	744,981		$	116,207		$	0	$	2,347,664

Activity in the allowance for loan loss by portfolio class for 2011 is depicted in the following two tables:

	1-4 family residential			1-4 family rental			Multi-family real state			Home Equity			Consumer			Commercial
Balance, December 31, 2010	$	183,507		$	331,184		$	454,670		$	93,187		$	10,818		$	275,473
Provision for loan losses		73,014			(57,006	)		207,025			48,068			21,588			142,735
Charge-offs		(48,077	)		(26,737	)		(105,698	)		-			(23,614	)		(81,263	)
Recoveries		-			-			-			-			1,809			38,276
Reclassification of allowance for loans disposed of through branch sale		(5,745	)		(11,918	)		(132,966	)		(1,836	)		(914	)		(90,260	)
Balance, December 31, 2011	$	202,699		$	235,523		$	423,031		$	139,419		$	9,687		$	284,961

	Secured by Trust Assets		Non-owner occupied			Owner Occupied			Construction			Total
Balance, December 31, 2010	$	12,095	$	509,739		$	1,043,458		$	141,635		$	3,055,766
Provision for loan losses		1,505		(138,828	)		40,477			(185,673	)		152,905
Charge-offs		-		(86,246	)		(166,658	)		(1,205	)		(539,498	)
Recoveries		-		-			95,387			279,833			415,305
Reclassification of allowance for loans disposed of through branch sale		-		(5,966	)		(350,395	)		-			(600,000	)
Balance, December 31, 2011	$	13,600	$	278,699		$	662,269		$	234,590		$	2,484,478

The unpaid principal balance of loans reflects the borrowers’ principal balance and is not reduced by partial charge-offs previously recorded by the Company. For nonaccrual loans, the recorded investment in loans is reduced by the full amount of payments received from the borrower, whereas the unpaid principal balance will continue to reflect an allocation of the borrower’s payment between principal and interest. Generally accepted accounting principles define the recorded investment in loans as the sum of unpaid principal balance, accrued interest receivable, and deferred fees and costs minus partial charge-offs. Because accrued interest receivable, deferred fees and deferred costs are not material, the recorded investment in loans presented in the accompanying tables does not include these balances.

The following tables present the balance in the allowance for loan losses and the recorded investment of loans by portfolio class and based on impairment method.

	Loans Collectively Evaluated for Impairment				Loans Individually Evaluated for Impairment				Total
December 31, 2012	Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment
1-4 family residential mortgage	$	306,425	$	28,166,315	$	0	$	667,082	$	306,425	$	28,833,397
1-4 family rental property		230,376		4,340,427		6,689		50,286		237,065		4,390,713
Multi-family real estate		255,001		9,707,328		0		291,286		255,001		9,998,614
Home equity		303,860		12,531,704		35,863		263,776		339,723		12,795,480
Consumer		63,253		2,687,368		0		0		63,253		2,687,368
Commercial		15,252		15,252,260		1,049		1,049		16,301		15,253,309
Secured by trust assets		11,641		5,820,705		0		0		11,641		5,820,705
Commercial real estate:
Non-owner occupied		241,359		24,257,442		15,708		2,415,495		257,067		26,672,937
Owner occupied		743,758		25,831,947		1,223		2,706,739		744,981		28,538,686
Loans to nondepository financial institutions		0		7,345,540		0		0		0		7,345,540
Construction and development		116,207		7,601,563		0		0		116,207		7,601,563
Total	$	2,287,132	$	143,542,599	$	60,532	$	6,395,713	$	2,347,664	$	149,938,312

	Loans Collectively Evaluated for Impairment				Loans Individually Evaluated for Impairment				Total
December 31, 2011	Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment		Allowance for Loan Loss		Recorded Investment
1-4 family residential mortgage	$	202,699	$	23,645,009	$	0	$	108,877	$	202,699	$	23,753,886
1-4 family rental property		235,523		4,068,998		0		162,633		235,523		4,231,631
Multi-family real estate		423,031		9,132,775		0		7,897		423,031		9,140,672
Home equity		98,944		8,711,640		40,475		189,603		139,419		8,901,243
Consumer		9,687		1,030,404		0		0		9,687		1,030,404
Commercial		284,347		9,838,175		614		192,919		284,961		10,031,094
Commercial secured by trust assets		13,600		6,798,929		0		0		13,600		6,798,929
Commercial real estate:
Non-owner occupied		212,153		20,279,967		66,546		2,522,791		278,699		22,802,758
Owner occupied		650,824		19,208,688		11,445		611,515		662,269		19,820,203
Construction and development		234,590		3,931,523		0		287,897		234,590		4,219,420
Total	$	2,365,398	$	106,646,108	$	119,080	$	4,084,132	$	2,484,478	$	110,730,240

The following tables present loans individually evaluated for impairment by loan class:

	As of December 31, 2012						As of December 31, 2011
	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
1-4 family residential mortgage	$	757,684	$	667,082	$	0	$	197,637	$	108,877	$	0
1-4 family rental property		62,552		13,323		0		288,674		162,633		0
Multi-family real estate		322,098		291,286		0		36,952		7,897		0
Home equity		66,273		66,273		0		32,337		32,337		0
Commercial		0		0		0		371,177		192,305		0
Commercial real estate:
Non-owner occupied		2,386,167		2,386,167		0		1,836,578		1,754,214		0
Owner occupied		2,750,965		2,705,516		0		613,495		533,746		0
Construction and development		0		0		0		716,657		287,897		0
Subtotal		6,345,738		6,129,647		0		4,093,506		3,079,906		0
With an allowance recorded:
1-4 family residential mortgage		0		0		0		0		0		0
1-4 family rental property		60,949		36,963		6,689		0		0		0
Multi-family real estate		0		0		0		0		0		0
Home equity		197,560		197,503		35,863		157,266		157,266		40,475
Commercial		1,140		1,049		1,049		2,849		614		614
Commercial real estate:
Non-owner occupied		61,518		29,328		15,708		773,028		768,577		66,546
Owner occupied		7,042		1,223		1,223		82,517		77,769		11,445
Subtotal		328,209		266,066		60,532		1,015,660		1,004,226		119,080
Total	$	6,673,947	$	6,395,713	$	60,532	$	5,109,166	$	4,084,132	$	119,080

	For the Year Ended December 31, 2012						For the Year Ended December 31, 2011
	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
With no related allowance recorded:
1-4 family residential mortgage	$	452,767	$	0	$	0	$	210,111	$	590	$	590
1-4 family rental property		63,897		1,344		1,344		118,228		10,861		10,861
Multi-family real estate		100,417		17,337		14,889		28,081		0		0
Home equity		60,920		2,426		2,240		8,375		0		0
Commercial		118,406		8,004		7,486		164,449		20,874		20,874
Commercial real estate:
Non-owner occupied		2,445,154		142,465		137,741		524,417		4,490		4,490
Owner occupied		775,053		10,732		10,732		863,249		1,712		1,712
Construction and development		119,957						779,650		1,666		1,666
Subtotal		4,136,571		182,308		174,432		2,696,560		40,193		40,193
With an allowance recorded:
1-4 family residential mortgage		0		0		0		36,158		0		0
1-4 family rental property		35,012		0		0		76,017		0		0
Multi-family real estate		811		0		0		0		0		0
Home equity		121,703		7,699		7,174		12,011		0		0
Consumer		0		0		0		0		0		0
Commercial		0		0		0		22,158		0		0
Commercial real estate:
Non-owner occupied		9,170		0		0		133,958		0		0
Owner occupied		374,117		0		0		46,331		0		0
Subtotal		540,813		7,699		7,174		326,633		0		0
Total	$	4,677,384	$	190,007	$	181,606	$	3,023,193	$	40,193	$	40,193

The following tables present the aging of the recorded investment in loans by loan class:

			Days Past Due
December 31, 2012	Loans Not Past Due		30-59 Days		60-89 Days		90 Days or Greater		Total Past Due		Total
1-4 family residential mortgage	$	27,180,242	$	960,868	$	180,021	$	512,266	$	1,653,155	$	28,833,397
1-4 family rental property		4,340,427		6,143		7,180		36,963		50,286		4,390,713
Multi-family real estate		9,995,173		0		3,441		0		3,441		9,998,614
Home equity loans		12,676,103		39,802		29,643		49,932		119,377		12,795,480
Consumer		2,685,058		719		642		949		2,310		2,687,368
Commercial		15,252,260		1,049		0		0		1,049		15,253,309
Secured by trust assets		5,820,705		0		0		0		0		5,820,705
Commercial real estate:		0		0		0		0
Non-owner occupied		26,643,609		0		0		29,328		29,328		26,672,937
Owner occupied		26,048,546		0		191,894		2,298,246		2,490,140		28,538,686
Loans to nondepository financial institutions		7,345,540		0		0		0		0		7,345,540
Construction and development		7,601,563		0		0		0		0		7,601,563
Total	$	145,589,226	$	1,008,581	$	412,821	$	2,927,684	$	4,349,086	$	149,938,312

Loans past due 90 days or greater included one commercial real estate, owner occupied loan with a recorded investment of $2.3 million representing the Bank’s 2.45% participation interest. Sixty-six participants share in the credit. The loan has matured and the participating banks have agreed to extend the maturity date of the loan with new terms for the borrower. The closing for the loan extension was completed during March 2013, and the Bank has reinstated the loan to accrual status with a loan grade of a pass credit.

			Days Past Due
December 31, 2011	Loans Not Past Due		30-59 Days		60-89 Days		90 Days or Greater		Total Past Due		Total
1-4 family residential mortgage	$	23,161,060	$	454,167	$	138,659	$	0	$	592,826	$	23,753,886
1-4 family rental property		3,924,394		144,603		31,975		130,659		307,237		4,231,631
Multi-family real estate		9,132,775		0		0		7,897		7,897		9,140,672
Home equity loans		8,809,248		25,161		34,497		32,337		91,995		8,901,243
Consumer		1,017,062		0		11,670		1,672		13,342		1,030,404
Commercial		10,005,369		3,848		6,692		15,185		25,725		10,031,094
Secured by trust assets		6,798,929		0		0		0		0		6,798,929
Commercial real estate:
Non-owner occupied		22,762,810		0		0		39,948		39,948		22,802,758
Owner occupied		19,581,686		0		0		238,517		238,517		19,820,203
Construction and development		3,881,837		49,686		0		287,897		337,583		4,219,420
Total	$	109,075,170	$	677,465	$	223,493	$	754,112	$	1,655,070	$	110,730,240

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by loan class:

December  31, 2012	Nonaccrual Loans		90 Days or Greater & Still Accruing		Total
1-4 family residential mortgage	$	347,582	$	197,353	$	544,935
1-4 family rental property		50,286		0		50,286
Multi-family real estate		3,441		0		3,441
Home equity loans		49,932		0		49,932
Consumer		17,320		948		18,268
Commercial		1,049		0		1,049
Secured by trust assets		0		0		0
Commercial real estate:
Non-owner occupied		29,328		0		29,328
Owner occupied		2,706,739		0		2,706,739
Construction and development		0		0		0
Total	$	3,205,677	$	198,301	$	3,403,978

December 31, 2011	Nonaccrual loans		90 Days or Greater & Still Accruing		Total
1-4 family residential mortgage	$	108,877	$	-	$	108,877
1-4 family rental property		162,633		-		162,633
Multi-family real estate		7,897		-		7,897
Home equity loans		38,612		-		38,612
Consumer		6,309		1,672		7,981
Commercial		77,919		-		77,919
Commercial real estate:
Non-owner occupied		39,948		-		39,948
Owner occupied		611,515		-		611,515
Construction and development		287,897		-		287,897
Total	$	1,341,607	$	1,672	$	1,343,279

Troubled Debt Restructurings:

Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDRs”) and classified as impaired. TDRs are separately identified for impairment disclosures and are measured at the present value of estimated future cash flows using the loan’s effective rate at inception. If a TDR is considered a collateral dependent loan, the loan is reported, net, at the fair value of the collateral. For TDRs that subsequently default, the Company determines the amount of reserve in accordance with the accounting policy for the allowance for loan losses.

The following tables depict TDR activity for 2012 and 2011:

			For the Year Ended December 31, 2012
	Number of Loans		Pre-Modification		Post-Modification
Home equity		1	$	66,272	$	66,272
Commercial		0		0		0
Commercial real estate:
Non-owner occupied		1		253,218		290,500
Owner occupied		1		238,517		229,519
Total		3	$	558,007	$	586,291

			For the Year Ended December 31, 2011
	Number of Loans		Pre-Modification		Post-Modification
Home equity		1	$	150,991	$	150,991
Commercial		3		145,294		195,761
Commercial real estate:
Non-owner occupied		4		2,222,984		2,490,647
Owner occupied		2		120,403		120,403
Total		10	$	2,639,672	$	2,957,802

The home equity modifications related to a change in payment through the re-amortization of the remaining balance and an increase in the interest rate.  

The modifications of the commercial class generally relate to maturity date extensions as well as rate and payment modifications.  The payment modifications adjusted the remaining amortization of the outstanding loan balance.  Generally, interest rates are either maintained at the same rate or increased for modifications in the Commercial class.  The advance of funds “post-modification” related to equipment purchases.

The modifications of the non-owner occupied commercial real estate class related to a restructuring of payment, interest rate, term and amortization.  For each loan, the interest rate was either increased or was unchanged.  The loan term was left unchanged or shortened.  The amortization period was lengthened up to 7 years with the loan-to-value of each loan remaining within Bank credit policy limits. The increase in balances “post-modification” related to the advance of new funds to pay delinquent real estate taxes.

The Owner-Occupied Commercial Real Estate modifications were the result of shortening the maturity of loans so that the expiration date of the real estate holding company debt and the operating entity debt were the same.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

The following table reports the balance of TDRs outstanding and related information as of year-end:

	December 31, 2012				December 31, 2011
	Number of Loans		Recorded Investment		Number of Loans		Recorded Investment
Home equity		2	$	213,844		1	$	150,991
Commercial real estate:
Non-owner occupied		5		2,674,012		4		2,482,844
Owner occupied		1		215,377		2		110,627
Commercial		1		78,990		3		177,120
TDR allocated specific reserves			$	30,780			$	100,746
TDR loan commitments outstanding				0				6,000

No loans were modified during the year ending December 31, 2012 or 2011 that had a significant payment delay and did not meet the definition of a troubled debt restructuring.

A loan is typically considered to be in payment default once it is eleven days contractually past due under the modified terms. During 2012, there was one non-owner occupied commercial real estate loan identified as a TDR with a balance of $287,845 as of December 31, 2012 for which a payment default occurred during the prior twelve months following the modification. The payment default did not result in a charge off or a change in the allowance for loan and lease losses.

The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within the twelve months following the modification during the year ending December 31, 2011:

Troubled Debt Restructurings That Subsequently Defaulted	Number of Loans		Recorded Investment
Commercial		1	$	6,692

The troubled debt restructuring that subsequently defaulted described above did not increase the allowance for loan losses or result in any loan charge offs during the period ending December 31, 2011.

Credit Quality Indicators:

The Company classifies all non-homogeneous loans such as commercial and commercial real estate loans into risk classes based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk into four non-classified categories (i.e. passing grade loans) and three categories of classified loans. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings for classified loans:

Special Mention. Loans classified as special mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution's credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans. Loans not analyzed as part of homogeneous groups include commercial, commercial real estate, multi-family real estate, most one to four family rental properties, construction and development loans (except for consumer construction loans for single family owner-occupied homes included as part of a homogeneous group), loans secured by trust assets, and loans to nondepository financial institutions. Loans secured by one to four family rental properties are not risk rated when the borrower owns less than four rental properties or units. Homogeneous groups of loans are not typically risk rated unless the loan is placed on nonaccrual status. A loan may also be separated from the homogeneous pool and individually risk rated due to recurrent delinquency problems, typically 60 to 89 days past due. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows:

December 31, 2012	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
1-4 family residential mortgage	$	28,181,932	$	187,140	$	116,743	$	347,582	$	0	$	28,833,397
1-4 family rental property		949,631		3,307,577		62,659		70,846		0		4,390,713
Multi-family real estate		279,367		8,387,924		907,951		423,372		0		9,998,614
Home equity loans		12,473,534		58,170		0		231,439		32,337		12,795,480
Consumer		2,687,368		0		0		0		0		2,687,368
Commercial		0		15,252,260		0		1,049		0		15,253,309
Secured by trust assets		0		5,820,705		0		0		0		5,820,705
Commercial real estate:
Non-owner occupied		0		22,949,712		1,307,730		2,415,495		0		26,672,937
Owner occupied		0		25,437,889		173,139		2,927,658		0		28,538,686
Loans to nondepository financial institutions		0		7,345,540		0		0		0		7,345,540
Construction and development		2,776,423		4,825,140		0		0		0		7,601,563
Total	$	47,348,255	$	93,572,057	$	2,568,222	$	6,417,441	$	32,337	$	149,938,312

December 31, 2011	Not Rated		Pass		Special Mention		Substandard		Doubtful		Total
1-4 family residential mortgage	$	23,441,682	$	-	$	203,327	$	1,680	$	107,197	$	23,753,886
1-4 family rental property		494,363		2,872,069		513,544		351,655		-		4,231,631
Multi-family real estate		303,587		7,240,618		254,823		1,341,644		-		9,140,672
Home equity loans		8,637,268		72,895		1,477		150,991		38,612		8,901,243
Consumer		1,030,404		-		-		-		-		1,030,404
Commercial		-		9,823,849		14,326		130,799		62,120		10,031,094
Secured by trust assets		675,626		6,123,303		-		-		-		6,798,929
Commercial real estate:
Non-owner occupied		5,000		19,005,683		759,562		3,032,513		-		22,802,758
Owner occupied		1,795		17,493,719		1,506,489		707,573		110,627		19,820,203
Construction and development		1,867,195		2,037,504		26,824		287,897		-		4,219,420
Total	$	36,456,920	$	64,669,640	$	3,280,372	$	6,004,752	$	318,556	$	110,730,240

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the current principal balance of residential and consumer loans based on payment activity:

	Residential
December 31, 2012	1-4 family		Home Equity		Consumer		Total
Performing	$	28,485,815	$	12,745,548	$	2,670,048	$	43,901,411
Nonperforming		347,582		49,932		17,320		414,834
Total	$	28,833,397	$	12,795,480	$	2,687,368	$	44,316,245

	Residential
December 31, 2011	1-4 Family		Home Equity		Consumer		Total
Performing	$	23,645,009	$	8,862,631	$	1,024,095	$	33,380,744
Nonperforming		108,877		38,612		6,309		304,789
Total	$	23,753,886	$	8,901,243	$	1,030,404	$	33,685,533

Loans to principal officers, directors and their affiliates in 2012 were as follows:

Balance, January 1	$	5,387,226
New loans or advances		197,813
Repayments		(700,571	)
Balance, December 31	$	4,884,468

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ASSETS ACQUIRED IN SETTLEMENT OF LOANS (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Repossessed Assets	$ 1,980,755	$ 2,012,752
Interest In Limited Liability Company [Member]
Repossessed Assets	1,171,620	1,255,437
Residential Real Estate [Member]
Repossessed Assets	51,690	201,154
Commercial Real Estate [Member]
Repossessed Assets	251,000	292,251
Construction and Development [Member]
Repossessed Assets	$ 506,445	$ 263,910

XML

STOCK-BASED COMPENSATION (Details 2) (USD $)	12 Months Ended
	Dec. 31, 2012
Options, Nonvested at January 1, 2012	101,660
Options, Granted	0
Options, Vested	(25,385)
Options, Forfeited or expired	(160)
Options, Nonvested at December 31, 2012	76,115
Weighted Average Exercise Price, Nonvested at January 1, 2012 (in dollars per share)	$ 22.98
Weighted Average Exercise Price, Granted (in dollars per share)	$ 0
Weighted Average Exercise Price, Vested (in dollars per share)	$ 23.00
Weighted Average Exercise Price, Forfeited or expired (in dollars per share)	$ 23.00
Weighted Average Exercise Price, Nonvested at December 31, 2012 (in dollars per share)	$ 22.98

XML

FAIR VALUE (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Jun. 30, 2011
Available for sale securities	$ 11,713,044	$ 10,677,644
Equity Securities [Member]
Available for sale securities	192,850	145,350
U S Government-Sponsored Enterprises Debt Securities [Member]
Available for sale securities	1,006,655	2,515,906
Mortgage-Backed Securities, Issued By Us Government Sponsored Enterprises [Member]
Available for sale securities	7,460,853	4,865,167
Mortgage Backed Securities Other Residential [Member]
Available for sale securities	178,882	189,871
Municipal Notes [Member]
Available for sale securities	2,873,804	2,961,350	2,950,608
Fair Value, Inputs, Level 1 [Member]
Available for sale securities	192,850	145,350
Fair Value, Inputs, Level 1 [Member] | Equity Securities [Member]
Available for sale securities	192,850	145,350
Fair Value, Inputs, Level 1 [Member] | U S Government-Sponsored Enterprises Debt Securities [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 1 [Member] | Mortgage-Backed Securities, Issued By Us Government Sponsored Enterprises [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 1 [Member] | Mortgage Backed Securities Other Residential [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 1 [Member] | Municipal Notes [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 2 [Member]
Available for sale securities	11,520,194	9,950,780
Fair Value, Inputs, Level 2 [Member] | Equity Securities [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 2 [Member] | U S Government-Sponsored Enterprises Debt Securities [Member]
Available for sale securities	1,006,655	2,515,906
Fair Value, Inputs, Level 2 [Member] | Mortgage-Backed Securities, Issued By Us Government Sponsored Enterprises [Member]
Available for sale securities	7,460,853	4,865,167
Fair Value, Inputs, Level 2 [Member] | Mortgage Backed Securities Other Residential [Member]
Available for sale securities	178,882	189,871
Fair Value, Inputs, Level 2 [Member] | Municipal Notes [Member]
Available for sale securities	2,873,804	2,379,836
Fair Value, Inputs, Level 3 [Member]
Available for sale securities	0	581,514
Fair Value, Inputs, Level 3 [Member] | Equity Securities [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 3 [Member] | U S Government-Sponsored Enterprises Debt Securities [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 3 [Member] | Mortgage-Backed Securities, Issued By Us Government Sponsored Enterprises [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 3 [Member] | Mortgage Backed Securities Other Residential [Member]
Available for sale securities	0	0
Fair Value, Inputs, Level 3 [Member] | Municipal Notes [Member]
Available for sale securities	$ 0	$ 581,514

XML

ASSETS ACQUIRED IN SETTLEMENT OF LOANS (Tables)

12 Months Ended

Dec. 31, 2012

Acquisition Of Assets In Settlement Of Loans [Abstract]

Schedule Of Assets Acquired In Settlement Of Loans [Table Text Block]

Assets acquired in settlement of loans were as follows for the years ended December 31, 2012 and 2011:

	2012		2011
Interest in limited liability company	$	1,171,620	$	1,255,437
Residential real estate		51,690		201,154
Commercial real estate		251,000		292,251
Construction and development		506,445		263,910
Total	$	1,980,755	$	2,012,752

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FAIR VALUE (Details 5) (USD $)	Dec. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Financial assets
Cash and cash equivalents, Carrying Value	$ 5,707,051	$ 20,046,156	$ 32,682,218
Certificate of deposit in financial institution, Carrying Value	100,000	100,000
Securities available for sale, Carrying Value	11,713,044	10,677,644
Loans held for sale, Carrying Value	2,040,395	895,610
Loans, net, Carrying Value	147,684,318	108,277,319
Federal bank stock, Carrying Value	1,577,750	1,597,850
Accrued interest receivable, Carrying Value	422,000	340,000
Cash and cash equivalents, Estimated Fair Value	5,707,000	20,046,000
Certificate of deposit in financial institution, Estimated Fair Value	100,000	100,000
Securities available for sale, Estimated Fair Value	11,713,044	10,677,644
Loans held for sale, Estimated Fair Value	2,066,000	928,000
Loans, net, Estimated Fair Value	149,843,000	110,428,000
Accrued interest receivable, Estimated Fair Value	422,000	340,000
Financial liabilities
Deposits, Carrying Value	(131,542,348)	(103,962,464)
Repurchase agreements, Carrying Value	(4,359,837)	(4,213,612)
Federal Home Loan Bank advances, Carrying Value	(19,000,000)	(19,000,000)
Accrued interest payable, Carrying Value	(29,000)	(24,000)
Deposits, Estimated Fair Value	(131,727,000)	(104,100,000)
Repurchase agreements, Estimated Fair Value	(4,360,000)	(4,214,000)
Federal Home Loan Bank advances, Estimated Fair Value	(19,003,000)	(19,055,000)
Accrued interest payable, Estimated Fair Value	(29,000)	(24,000)
Fair Value, Inputs, Level 1 [Member]
Financial assets
Cash and cash equivalents, Estimated Fair Value	5,707,000
Certificate of deposit in financial institution, Estimated Fair Value	0
Securities available for sale, Estimated Fair Value	192,850	145,350
Loans held for sale, Estimated Fair Value	0
Loans, net, Estimated Fair Value	0
Accrued interest receivable, Estimated Fair Value	0
Financial liabilities
Deposits, Estimated Fair Value	(76,514,000)
Repurchase agreements, Estimated Fair Value	0
Federal Home Loan Bank advances, Estimated Fair Value	0
Accrued interest payable, Estimated Fair Value	(1,000)
Fair Value, Inputs, Level 2 [Member]
Financial assets
Cash and cash equivalents, Estimated Fair Value	0
Certificate of deposit in financial institution, Estimated Fair Value	100,000
Securities available for sale, Estimated Fair Value	11,520,194	9,950,780
Loans held for sale, Estimated Fair Value	2,066,000
Loans, net, Estimated Fair Value	0
Accrued interest receivable, Estimated Fair Value	51,000
Financial liabilities
Deposits, Estimated Fair Value	(55,213,000)
Repurchase agreements, Estimated Fair Value	(4,360,000)
Federal Home Loan Bank advances, Estimated Fair Value	(19,003,000)
Accrued interest payable, Estimated Fair Value	(28,000)
Fair Value, Inputs, Level 3 [Member]
Financial assets
Cash and cash equivalents, Estimated Fair Value	0
Certificate of deposit in financial institution, Estimated Fair Value	0
Securities available for sale, Estimated Fair Value	0	581,514
Loans held for sale, Estimated Fair Value	0
Loans, net, Estimated Fair Value	149,843,000
Accrued interest receivable, Estimated Fair Value	371,000
Financial liabilities
Deposits, Estimated Fair Value	0
Repurchase agreements, Estimated Fair Value	0
Federal Home Loan Bank advances, Estimated Fair Value	0
Accrued interest payable, Estimated Fair Value	$ 0

XML

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $)	Dec. 31, 2012	Dec. 31, 2011
Recorded Investment ($000s)	$ 145,589,226	$ 109,075,170
% of Tier 1 Capital plus the Allowance for Loan Loss	10.60%	12.10%
Commercial Real Estate [Member]
Recorded Investment ($000s)	26,803,000
% of Tier 1 Capital plus the Allowance for Loan Loss	129.16%
Residential Real Estate [Member]
Recorded Investment ($000s)	17,180,000
% of Tier 1 Capital plus the Allowance for Loan Loss	82.79%
Retail Trade [Member]
Recorded Investment ($000s)	7,222,000
% of Tier 1 Capital plus the Allowance for Loan Loss	34.80%
Contractors [Member]
Recorded Investment ($000s)	$ 6,085,000
% of Tier 1 Capital plus the Allowance for Loan Loss	29.32%

XML

LOAN COMMITMENTS AND RELATED ACTIVITIES

12 Months Ended

Dec. 31, 2012

Loan Commitments and Related Activities [Abstract]

Loan Commitments and Related Activities [Text Block]

NOTE 13 - LOAN COMMITMENTS AND RELATED ACTIVITIES

Some financial instruments, such as loan commitments, credit lines, letters of credit and overdraft protection, are issued to meet customer financing needs. These are agreements to provide credit or support the credit of others, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used. Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies used to make loans are also used to make such commitments, including obtaining collateral upon exercise of the commitment.

Commitments to make loans are generally made for periods of 30 days or less. The contractual amount of loan commitments with off-balance sheet risk was as follows at December 31 2012 and 2011:

	2012		2011
Commitments to make loans:
Variable rate	$	4,994,469	$	2,061,725
Fixed rate		2,387,864		696,800
Unused lines of credit, variable-rate		42,043,782		34,106,820
Standby letters of credit		615,232		194,856