-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UP/G98rHMzBWyhTtvbcdPlCqdt93/kSrSDygkp5yLhctB9A482DrOfiMyBJ2MZBZ s9lwavJviZ4xOi0ADiXzBg== 0001157523-03-003859.txt : 20030808 0001157523-03-003859.hdr.sgml : 20030808 20030808144732 ACCESSION NUMBER: 0001157523-03-003859 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20030807 ITEM INFORMATION: ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20030808 FILER: COMPANY DATA: COMPANY CONFORMED NAME: OHIO LEGACY CORP CENTRAL INDEX KEY: 0001096654 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 341903890 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-31673 FILM NUMBER: 03831486 BUSINESS ADDRESS: STREET 1: 305 WEST LIBERTY STREET CITY: WOOSTER STATE: OH ZIP: 44691 BUSINESS PHONE: 3302620437 MAIL ADDRESS: STREET 1: P O BOX 959 CITY: WOOSTER STATE: OH ZIP: 44691 8-K 1 a4450875.txt OHIO LEGACY 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) August 7, 2003 -------------- OHIO LEGACY CORP ---------------- (Exact name of registrant as specified in its charter) OHIO 000-31673 34-1903890 ---- --------- ---------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 305 West Liberty Street, Wooster, Ohio 44691 -------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (330) 263-1955 -------------- N/A (Former name or former address, if changed since last report) Item 7. Financial Statements and Exhibits. (a) Financial Statements. Not applicable. (b) Pro Forma Financial Information. Not applicable. (c) Exhibits. Exhibit Number Description 99.1 Press Release dated August 7, 2003, entitled "Ohio Legacy Corp Announces Second Quarter Earnings of $.08 Per Share Versus Loss of ($.07) Per Share," Item 12. Results of Operations and Financial Condition On August 7, 2003, Ohio Legacy Corp (the "Company") issued a press release regarding its second quarter earnings. The Company hereby incorporates by reference the information set forth in its Press Release dated August 7, 2003, entitled "Ohio Legacy Corp Announces Second Quarter Earnings of $.08 Per Share Versus Loss of ($.07) Per Share," a copy of which is attached hereto as Exhibit 99.1. Any statement in the attached press release that is not a statement of historical fact may be deemed to be a forward-looking statement, which involves known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially and significantly different from any future results, performance or achievements expressed or implied by such forward-looking statements. The information in this Current Report is being furnished and shall not be deemed "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, as amended. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. OHIO LEGACY CORP - ---------------- (Registrant) By: /s/ ERIC S. NADEAU --------------------------- Eric S. Nadeau Chief Financial Officer Date: AUGUST 7, 2003 --------------------------- EX-99 3 a4450875_ex991.txt OHIO LEGACY EXHIBIT 99.1 Exhibit 99.1 Ohio Legacy Corp Announces Second Quarter Earnings of $0.08 Per Share Versus Loss of -$0.07 Per Share WOOSTER, Ohio--(BUSINESS WIRE)--Aug. 7, 2003--Ohio Legacy Corp (NASDAQ:OLCB), the parent of Ohio Legacy Bank, N.A. ("Bank"), today reported net income for the three months ending June 30, 2003, of $160,000 or $0.08 per share, an 18% increase in net income from the first quarter of 2003. The Company incurred a loss of ($64,000) or ($0.07) per share during the second quarter of 2002. During the second quarter of 2003, net loans increased $5.7 million to $87.4 million and deposits increased $2.5 million to $118.6 million. Net interest income - During the three months ended June 30, 2003, net interest income was $1.0 million compared to $641,000 during the second quarter of 2002, primarily as a result of a higher balance of interest-earning assets. Net interest margin improved to 3.09% in 2003 from 2.38% in the second quarter of 2002 and 2.90% during the first quarter of 2003. Interest rate spread improved to 2.75% during the second quarter of 2003 compared to 2.19% during the second quarter of 2002 and 2.53% during the first quarter of 2003. The yield on interest-earning assets fell to 5.85% during the second quarter of 2003 compared to 6.24% in the second quarter of 2002. A shift from securities to loans during the second quarter of 2003 kept the yield steady compared to the 5.82% earned during the first quarter of 2003. The Company's cost of funds declined to 3.10% in the second quarter of 2003, compared to 4.05% in the second quarter of 2002 and 3.29% in the first quarter of 2003, as approximately 17% of the certificate of deposit portfolio repriced downward during the second quarter of 2003. Noninterest income - Total noninterest income was $105,000 for the three months ended June 30, 2003, compared to $62,000 for the same period in 2002. The 2003 amount includes $17,000 of gains from the sale of securities. Annualized noninterest income, excluding gains on securities sales, improved as a percent of average assets to 0.25% during the second quarter of 2003 compared to 0.22% during the second quarter of 2002 and 0.20% during the first quarter of 2003. Noninterest Expense - Total noninterest expense increased to $873,000 for the three months ended June 30, 2003, as compared to $642,000 for the same period in 2002 and $856,000 in the first quarter in 2003. The Company's efficiency ratio improved to 79.8% during the second quarter of 2003 compared to 91.3% during the second quarter of 2002 and 84.4% during the first quarter of 2003 while annualized noninterest expense as a percent of average assets increased to 2.51% in the second quarter of 2003 compared to 2.26% in 2002 and 2.49% during the first quarter of 2003. This dichotomy is caused by the significant improvement in the Company's net interest margin as a result of falling deposit rates outweighing the increase in overhead expenses and slower asset growth. Salaries and benefits are higher in 2003 reflecting a higher level of employment at the Bank, including the hiring of two new members of management and additional support staff hired during the second half of 2002 to support the lending function and the Millersburg branch launched in early 2002. Salaries and benefits will continue to increase as the Bank hired a Chief Operations Officer ("COO") in July 2003 and plans to hire additional lenders during the second half of this year. However, these investments should provide for higher profitability in the future through the increase in loan volume with the addition of lenders and improvement in overhead efficiency to be gained through the dedicated oversight and standardization of operations in each of the Bank's offices by the COO. Commenting on future growth plans, L. Dwight Douce, President and CEO of the Company said, "Our strategic plan calls for sound but strong growth in assets and profitability. We are laying the foundation for an efficient and flexible Bank through the hiring of key management members. Additionally, we plan to focus our lending team on further penetration of our existing market areas by hiring experienced and competent commercial lending officers." Professional fees have increased as the Bank utilized outside consultants to assist management with the OCC Agreement, described below, and enhance the corporate governance and oversight responsibilities of management and the board of directors under the requirements of the Sarbanes-Oxley Act and new rules promulgated by the National Association of Securities Dealers. Management expects professional fees to increase over prior year comparable quarters as the Company continues to address the compliance and information technology reviews required by the OCC Agreement. Loans - At June 30, 2003, the loan portfolio (before the allowance for loan losses) was $88.4 million, an increase of $9.2 million from December 31, 2002, and $5.7 million during the quarter. "We are pleased with the performance of our loan portfolio during the second quarter of 2003," added Mr. Douce. "Even as we experience competitive pressures as a result of continued low interest rates, we were able to grow all loan types during the second quarter, with our commercial credits leading the increase. Additionally, our loan portfolio continued to yield over 7% during the second quarter. However, the reduction in short-term rates, especially the Prime rate, in late June will have some impact on our loan yield. While only 20% of our loan portfolio is based on Prime, the overall rate environment will probably lower the yields on new loans added during the third quarter." Asset Quality - The Company's provision for loan losses was $78,000 during the three months ended June 30, 2003, compared to $125,000 during the quarter ended June 30, 2002, and $80,000 during the quarter ended March 31, 2003. However, the allowance for loan losses as a percentage of total loans increased to 1.09% at June 30, 2003, compared to 1.06% at December 31, 2002, and 1.07% at March 31, 2003. Net charge-offs during the three months ended June 30, 2003, totaled $3,000. At June 30, 2003, the Company had three nonperforming assets with total balances of $35,000, including $33,000 in nonaccrual status. Mr. Douce responded, "While we did see loans move into the ninety day past due and nonaccrual categories during the second quarter, we're comfortable with the quality of assets in our loan portfolio and its resilience to the challenging economic times and increasing unemployment." Regulatory Matters - On June 18, 2002, Ohio Legacy Bank and the Office of the Comptroller of the Currency ("OCC") entered into an agreement ("OCC Agreement") to address certain issues identified during the OCC's examination of the Bank in January 2002. The Bank is enhancing its comprehensive staffing plan, as required by the OCC Agreement, and is working to improve internal controls related to operations and information security. Among other requirements, the OCC Agreement restricts the Bank's average asset growth to no more than 5% each calendar quarter. About Ohio Legacy Corp Ohio Legacy Corp is a bank holding company headquartered in Wooster, Ohio. Its operating subsidiary, Ohio Legacy Bank, N.A., provides financial services to small businesses and consumers though three full-service banking locations in Canton, Millersburg and Wooster, Ohio. Forward-Looking Statements Disclosure This release contains certain forward-looking statements related to the future performance and financial condition of Ohio Legacy Corp. These statements, which are subject to numerous risks and uncertainties, are presented in good faith based on the Company's current condition and management's understanding, expectations, and assumptions regarding its future prospects as of the date of this release. Actual results could differ materially from those projected or implied by the statements contained herein. The factors that could affect the Company's future results are set forth in the periodic reports and registration statements filed by the Company with the Securities and Exchange Commission. OHIO LEGACY CORP CONSOLIDATED BALANCE SHEETS June 30, 2003, and December 31, 2002 June 30, December 31, 2003 2002 ------------- ------------- (unaudited) ASSETS Cash and due from banks $6,120,308 $5,301,451 Federal funds sold 9,745,000 10,418,000 ------------- ------------- Cash and cash equivalents 15,865,308 15,719,451 Securities available for sale 35,543,333 38,722,169 Loans, net 87,405,580 78,291,832 Federal Reserve Bank stock 537,900 318,900 Premises and equipment, net 2,116,961 2,185,108 Accrued interest receivable and other assets 1,012,021 810,017 ------------- ------------- Total assets $142,481,103 $136,047,477 ============= ============= LIABILITIES Deposits: Noninterest-bearing demand $6,078,109 $4,992,413 Interest-bearing demand 7,862,407 7,206,953 Savings 42,141,977 39,886,817 Certificates of deposit 62,526,410 62,805,167 ------------- ------------- Total deposits 118,608,903 114,891,350 Other borrowed funds - 105,000 Trust preferred securities 3,325,000 3,325,000 Capital lease obligations 980,174 983,439 Accrued interest payable and other liabilities 3,236,170 1,739,633 ------------- ------------- Total liabilities 126,150,247 121,044,422 SHAREHOLDERS' EQUITY Preferred stock, no par value, 500,000 shares authorized, none outstanding - - Common stock, no par value, 5,000,000 shares authorized, 2,115,700 and 1,965,700 shares issued and outstanding at June 30, 2003, and December 31, 2002, respectively 17,678,955 16,546,465 Accumulated deficit (1,868,585) (2,164,585) Accumulated other comprehensive income 520,486 621,175 ------------- ------------- Total shareholders' equity 16,330,856 15,003,055 ------------- ------------- Total liabilities and shareholders' equity $142,481,103 $136,047,477 ============= ============= Book value per share, end of period $7.71 $7.63 ============= ============= OHIO LEGACY CORP CONSOLIDATED STATEMENTS OF OPERATIONS For the three and six months ending June 30, 2003 and 2002 Three Months Ending Six Months Ending June 30, June 30, ----------------------- ----------------------- 2003 2002 2003 2002 ----------- ----------- ----------- ----------- Interest income: Loans $1,517,081 $1,259,810 $2,944,736 $2,312,449 Securities 353,978 381,649 794,215 646,456 Federal funds sold and other 33,669 40,118 63,516 73,158 ----------- ----------- ----------- ----------- Total interest income 1,904,728 1,681,577 3,802,467 3,032,063 Interest expense: Deposits 787,398 934,415 1,627,272 1,746,423 Other borrowings 111,111 106,029 223,754 131,255 ----------- ----------- ----------- ----------- Total interest expense 898,509 1,040,444 1,851,026 1,877,678 ----------- ----------- ----------- ----------- Net interest income 1,006,219 641,133 1,951,441 1,154,385 Provision for loan losses 77,500 125,000 157,500 250,956 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 928,719 516,133 1,793,941 903,429 Noninterest income: Service charges and other fees 85,696 59,653 152,256 116,211 Gain on sales of securities 16,640 - 74,489 - Other income 2,322 2,042 4,976 3,823 ----------- ----------- ----------- ----------- Total other income 104,658 61,695 231,721 120,034 Noninterest expense: Salaries and benefits 355,882 277,839 736,042 514,167 Occupancy and equipment 137,797 122,042 276,971 219,720 Professional fees 129,541 50,580 209,805 97,418 Franchise tax 46,197 22,106 94,997 48,369 Data processing 76,515 58,572 152,576 110,688 Marketing and advertising 25,650 21,980 53,897 37,848 Stationery and supplies 21,339 24,525 40,095 49,078 Other expenses 80,456 64,067 165,279 111,835 ----------- ----------- ----------- ----------- Total noninterest expense 873,377 641,711 1,729,662 1,189,123 ----------- ----------- ----------- ----------- Income before income taxes 160,000 (63,883) 296,000 (165,660) Income tax benefit (expense) - - - - ----------- ----------- ----------- ----------- Net income (loss) $160,000 $(63,883) $296,000 $(165,660) =========== =========== =========== =========== Basic earnings (loss) per share $0.08 $(0.07) $0.14 $(0.17) Diluted earnings (loss) per share $0.08 $(0.07) $0.14 $(0.17) Basic weighted average shares outstanding 2,115,700 965,500 2,101,612 965,500 Diluted weighted average shares outstanding 2,118,674 965,500 2,103,450 965,500 OHIO LEGACY CORP QUARTERLY BALANCE SHEETS (Dollars in thousands) 2003 2002 ------------------- ----------------------------------- June 30 March 31 Dec. 31 Sept. 30 June 30 ---------- ---------- ---------- ---------- ---------- Cash and cash equivalents $15,865 $8,349 $15,719 $9,816 $9,616 Securities 35,543 40,562 38,722 30,750 35,847 Loans 88,372 82,636 79,129 75,509 70,604 Allowance for loan losses (966) (891) (837) (739) (635) Premises and equipment, net 2,117 2,146 2,185 2,231 2,287 Other assets 1,550 5,174 1,129 1,183 1,146 ---------- ---------- ---------- ---------- ---------- Total assets $142,481 $137,976 $136,047 $118,750 $118,865 ========== ========== ========== ========== ========== Noninterest- bearing demand $6,078 $5,264 $4,992 $3,882 $5,620 Interest-bearing demand 7,862 6,537 7,207 5,823 5,678 Savings 42,142 40,559 39,886 38,208 41,773 Certificates of deposit 62,527 63,751 62,806 58,188 53,861 ---------- ---------- ---------- ---------- ---------- Total deposits 118,609 116,111 114,891 106,101 106,932 Other borrowings 4,305 4,307 4,413 4,415 4,416 Other liabilities 3,236 1,448 1,740 847 576 ---------- ---------- ---------- ---------- ---------- Total liabilities 126,150 121,866 121,044 111,363 111,924 Shareholders' equity 16,331 16,110 15,003 7,387 6,941 ---------- ---------- ---------- ---------- ---------- Total liabilities and shareholders' equity $ 142,481 $ 137,976 $136,047 $ 118,750 $ 118,865 ========== ========== ========== ========== ========== LOAN PORTFOLIO: - ---------------- Commercial $12,924 $12,196 $10,206 $10,323 $8,924 1-4 family residential 32,483 31,455 31,346 29,965 29,376 Multifamily residential 6,464 6,383 6,732 5,702 4,268 Commercial real estate 21,006 20,051 18,385 18,262 17,469 Construction 5,949 4,675 4,636 3,985 3,751 Consumer and home equity 9,677 8,022 7,926 7,371 6,908 Net deferred loan fees (131) (146) (102) (99) (92) ---------- ---------- ---------- ---------- ---------- Loans $88,372 $82,636 $79,129 $75,509 $70,604 ========== ========== ========== ========== ========== QUARTERLY AVERAGES: - ---------- Fed funds and securities (1) $46,243 $50,804 $40,816 $38,039 $39,063 Loans 84,898 79,346 75,692 73,068 68,945 Total interest- earning assets 131,141 130,150 116,508 111,107 108,008 Total assets 139,038 137,793 124,255 118,736 113,814 Total assets, year to date 138,109 112,138 102,780 Interest-bearing deposits 111,936 111,305 107,062 101,680 98,515 Other borrowings and leases 4,306 4,405 4,414 4,416 4,420 Total interest- bearing liabilities 116,242 115,710 111,476 106,096 102,935 Shareholders' equity 16,220 15,557 7,325 7,164 6,757 Shareholders' equity, year to date 15,667 6,998 6,750 (1) Includes Federal Reserve Bank stock not classified in securities on the consolidated balance sheets OHIO LEGACY CORP QUARTERLY STATEMENTS OF OPERATIONS (Dollars in thousands, except per share data) 2003 2002 ---------------- ------------------------ For the three months ending June 30 March 31 Dec. 31 Sept. 30 June 30 ------- -------- ------- -------- ------- Interest income $1,905 $1,898 $1,800 $1,740 $1,681 Interest expense (899) (953) (973) (981) (1,040) ------- -------- ------- -------- ------- Net interest income 1,006 945 827 759 641 Provision for loan losses (78) (80) (98) (104) (125) Noninterest income 105 127 73 67 62 Noninterest expense (873) (856) (731) (678) (642) ------- -------- ------- -------- ------- Net income (loss) $160 $136 $71 $44 $(64) ======= ======== ======= ======== ======= Income (Loss) per share, diluted $0.08 $0.07 $0.07 $0.05 $(0.07) Common and dilutive shares 2,119 2,088 1,042 966 966 SELECTED RATIOS: - ---------------- Net interest margin (1) 3.09% 2.90% 2.84% 2.73% 2.38% Yield on interest-earning assets 5.85% 5.82% 6.18% 6.27% 6.24% Cost of funds 3.10% 3.29% 3.49% 3.70% 4.05% Interest rate spread (2) 2.75% 2.53% 2.69% 2.57% 2.19% Efficiency ratio (3) 79.8% 84.4% 81.2% 82.0% 91.3% Allowance as a percent of loans 1.09% 1.07% 1.06% 0.98% 0.90% Net loans as a percent of deposits 73.7% 70.4% 68.1% 70.5% 65.4% Annualized net charge-offs to loans 0.01% 0.13% 0.00% 0.00% 0.00% Annualized noninterest income to average assets (4) 0.25% 0.20% 0.24% 0.23% 0.22% Annualized noninterest expense to average assets 2.51% 2.49% 2.35% 2.28% 2.26% Annualized return on average assets 0.46% 0.39% 0.23% 0.15% NM Annualized return on average equity 3.95% 3.50% 3.86% 2.46% NM (1) Net interest income, annualized, divided by average interest-earning assets for the period (2) Difference between the yield on interest-earning assets and the cost of funds (3) Noninterest expense divided by net interest income and noninterest income, excluding gains on securities sales (4) Excludes gains on securities sales NM Not meaningful CONTACT: Ohio Legacy Corp L. Dwight Douce or Eric S. Nadeau, 330-263-1955 http://www.ohiolegacycorp.com -----END PRIVACY-ENHANCED MESSAGE-----