-----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, HbnHcqS4HTBOSLI0JFGOt9Kx5PsDQW0mgtQyDPw6k+GmgfVrycQ9JblwldlTXoD/ eLBJBHoIWzJljzO/+HiAOQ== 0001157523-05-009548.txt : 20051102 0001157523-05-009548.hdr.sgml : 20051102 20051102161245 ACCESSION NUMBER: 0001157523-05-009548 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20051102 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051102 DATE AS OF CHANGE: 20051102 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: 051173416 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 a5010043.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 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) November 2, 2005 ---------------- 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) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 2.02 Results of Operations and Financial Condition. On November 2, 2005, the registrant issued a press release regarding its quarterly financial results, a copy of which is attached hereto as Exhibit 99.1 and is incorporated herein by reference. 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. Item 9.01 Financial Statements and Exhibits. (c) Exhibits. Exhibit Number Description ------ ----------- 99.1 Press release dated November 2, 2005 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) Date: November 2, 2005 /s/ ERIC S. NADEAU --------------------------- Eric S. Nadeau Chief Financial Officer and Treasurer EX-99.1 2 a5010043ex991.txt OHIO LEGACY CORP EXHIBIT 99.1 Exhibit 99.1 Ohio Legacy Corp Announces Third Quarter Results WOOSTER, Ohio--(BUSINESS WIRE)--Nov. 2, 2005--Ohio Legacy Corp (NASDAQ:OLCB), parent company of Ohio Legacy Bank, N.A., today reported net earnings for the three months ended September 30, 2005, of $140,000, or $0.06 per share, compared to $400,000, or $0.19 per share, during the third quarter of 2004. Earnings before federal income tax expense were $211,000 during the third quarter of 2005 compared to $400,000 in 2004. The Company did not recognize federal income tax expense in 2004 due to a valuation allowance on its deferred tax assets. Net earnings for the first nine months of 2005 totaled $406,000, or $0.19 per share. Assets totaled $206.6 million at September 30, 2005. The following key items summarize the Company's financial results during the third quarter of 2005: -- The loan portfolio increased $8.1 million, resulting in a 16% increase for the nine month period -- The deposit portfolio decreased $4.3 million due to runoff in money market accounts -- Spread fell slightly and margin was flat due to an increase in cost of funds -- Net interest income increased $171,000 from the third quarter of 2004 and $40,000 from the linked quarter -- Noninterest expense fell 2% from the second quarter of 2005 -- A provision for loan losses of $103,000 was recorded in the third quarter, compared to $15,000 in the second quarter of 2005 Net Interest Income - During the three months ended September 30, 2005, net interest income grew 11% to $1.7 million from $1.5 million in the third quarter of 2004. Net interest margin was 3.50% in the third quarter of 2005, flat compared to 3.52% in the third quarter of 2004 and 3.49% in the second quarter of 2005. Interest rate spread was 3.16% in 2005 compared to 3.21% in the year-ago period, which is reflective of the cost of funds increasing faster than in the yield on assets. The yield on performing assets was 6.02% during the third quarter of 2005, an increase of 14 basis points from the linked-quarter and 44 basis points from the third quarter of 2004. The cost of funds increased 17 basis points during the third quarter of 2005 due to a shift in the mix of funds, which became more dependent on certificates of deposits and borrowings, and increasing rates on those funds. Noninterest Income - Service charges on deposit accounts increased to $138,000 from $110,000 in 2004 due to a higher volume of overdraft fees and returned check charges. A loss on disposal of fixed assets totaled $3,000 during the third quarter of 2005. A loss on the sale of securities was recorded in 2004 for $5,000. Noninterest Expense - Total noninterest expense was $1.5 million in the third quarter of 2005 compared to $1.2 million in the third quarter of 2004. Noninterest expense in the third quarter of 2005 was slightly lower than the second quarter of 2005. Compared to 2004, salaries were higher in 2005 due to the addition of a branch in Wooster in the third quarter of 2004, of which only one month of personnel costs were recorded in 2004. Additionally, personnel expenses in 2005 increased due the hiring of operations employees in the first half of 2005 and the employment of branch personnel in the third quarter of 2005 for the Company's fifth banking office in North Canton. This banking office opened on October 24, 2005. Personnel expense is expected to increase in the fourth quarter of 2005 as the Company hired a Chief Deposit Executive in October 2005 and to reflect a full quarter of employment costs related to the North Canton personnel. Occupancy and equipment expenses increased with the addition of the Wooster Milltown banking office in August 2004. Rent and depreciation expense increased $13,000 each in the third quarter of 2005. The Company expects occupancy and equipment expense to increase during the fourth quarter of 2005 as a result of the launch of the North Canton banking office. Professional fees were higher in the first half of 2005 due to management succession costs, consulting fees incurred to assist management with performing due diligence on information technology service contracts and audit fees as a result of the Sarbanes-Oxley Act. Professional fees decreased during the third quarter of 2005 as these costs abated. Data processing expense increased during 2005 as a result of higher transaction volumes, more deposit and loan accounts and additional services offered to customers, including set-up costs for internet banking and online bill payment. Data processing expense in the third quarter of 2005 decreased from the second quarter of 2005 as the Company realized a full quarter of the benefit from pricing discounts related to the renewal of information technology service agreements, which became effective late in the second quarter of 2005. Intangible asset amortization relates to core deposit and other intangibles recognized with the acquisition of the Milltown banking office in Wooster in August 2004. Amortization in the third quarter of 2005 was $52,000 compared to $9,000 in 2004. The third quarter of 2004 reflects only one month of amortization. Loans and Asset Quality - At September 30, 2005, the loan portfolio, net of the allowance for loan losses and deferred fees, totaled $153.7 million, an increase of $8.1 million from June 2005. The loan portfolio has increased $21.6 million, or 16%, during the nine months of 2005. During the third quarter of 2005, the largest increase in loans came in the commercial real estate portfolio, which grew $5.2 million. Loans secured by residential real estate and commercial loans increased $1.4 million and $1.2 million, respectively, during the third quarter. The weighted average rate of loans originated during the third quarter of 2005 was 7.02%. This compares favorably to the 6.53% rate earned on the rest of the portfolio. At September 30, 2005, approximately 21% of the loan portfolio reprices with changes in the Prime rate and 41% of the portfolio is indexed to the three-year constant maturity Treasury note rate. Approximately 25% of the loan portfolio is comprised of fixed-rate loans. Credit quality remained strong as nonperforming loans totaled $465,000 at September 30, 2005, compared to $419,000 at June 30, 2005, and $1.1 million at December 31, 2004. Loans are considered nonperforming if they are impaired or if they are in nonaccrual status. Net charge-offs and the provision for loan losses totaled $30,000 and $103,000, respectively, during the third quarter of 2005. Deposits - The deposit portfolio decreased $4.2 million during the third quarter of 2005. Core deposit balances decreased $5.3 million as the Company has continues to experience strong competitive pricing of money market deposits in its market areas. For the full nine months, core deposits have decreased $4.1 million while certificates of deposit have grown $5.2 million. Borrowings and repurchase agreements - The decrease in the deposit portfolio and the growth in the loan portfolio resulted in the need to draw additional net borrowings from the Federal Home Loan Bank of $5.6 million during the third quarter of 2005. At September 30, 2005, the Company held $8.5 million in overnight borrowings. The Company launched a new repurchase sweep product during the third quarter to attract commercial relationships. Repurchase agreements totaled $2.4 million at September 30, 2005, with a rate of 3.50%. Common stock warrant redemption - On June 9, 2005, the Company announced that it called for redemption of the stock purchase warrants that were issued in connection with the Company's initial public offering in October 2000 ("IPO Warrants"). Warrant holders had until August 5, 2005, to exercise their right to purchase the Company's common stock underlying the warrants at a price of $10.00 per share. All outstanding IPO Warrants terminated at 5:00 P.M., New York Time, on August 5, 2005. The Company received $791,240 after the redemption announcement. The Company redeemed 92,394 IPO warrants at a redemption price of $0.10 (ten cents) per warrant after the redemption date. ABOUT OHIO LEGACY CORP Ohio Legacy Corp is a bank holding company headquartered in Wooster, Ohio. Its subsidiary, Ohio Legacy Bank, N.A., provides financial services to small businesses and consumers through five full-service banking offices in Wooster, Canton, Millersburg and North Canton, 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 As of September 30, 2005, and December 31, 2004 September 30, December 31, 2005 2004 ------------- ------------- (unaudited) ASSETS Cash and due from banks $4,252,511 $4,571,131 Federal funds sold and interest-bearing deposits in financial institutions 5,220,691 12,418,192 ------------- ------------- Cash and cash equivalents 9,473,202 16,989,323 Certificate of deposit in financial institution 100,000 - Securities available for sale 35,296,036 39,357,929 Securities held to maturity (fair value of $832,000 and $640,000 at September 30, 2005, and December 31, 2004) 840,571 647,981 Loans, net of allowance of $1,289,160 and $1,263,655 at September 30, 2005 and December 31, 2004 153,731,653 132,084,072 Federal bank stock 1,466,400 1,375,650 Premises and equipment, net 3,315,672 2,269,068 Intangible asset 504,876 669,174 Accrued interest receivable and other assets 1,868,524 1,658,860 ------------- ------------- Total assets $206,596,934 $195,052,057 ============= ============= LIABILITIES Deposits: Noninterest-bearing demand $12,535,072 $11,914,867 Interest-bearing demand 10,018,559 13,262,252 Savings 42,389,388 43,847,951 Certificates of deposit 93,829,922 88,617,541 ------------- ------------- Total deposits 158,772,941 157,642,611 Federal Home Loan Bank advances 22,174,117 15,295,144 Repurchase agreements 2,400,137 - Subordinated debentures 3,325,000 3,325,000 Capital lease obligations 961,901 968,712 Accrued interest payable and other liabilities 608,396 580,216 ------------- ------------- Total liabilities 188,242,492 177,811,683 SHAREHOLDERS' EQUITY Preferred stock, no par value, 500,000 shares authorized, none outstanding - - Common stock, no par value, 5,000,000 shares authorized, 2,214,564 and 2,121,220 shares issued and outstanding at September 30, 2005, and December 31, 2004, respectively 18,658,386 17,734,155 Accumulated earnings (deficit) 123,415 (282,585) Accumulated other comprehensive loss (427,359) (211,196) ------------- ------------- Total shareholders' equity 18,354,442 17,240,374 ------------- ------------- Total liabilities and shareholders' equity $206,596,934 $195,052,057 ============= ============= OHIO LEGACY CORP CONSOLIDATED STATEMENTS OF OPERATIONS For the Three and Nine Months Ended September 30, 2005 and 2004 (Unaudited) For the Three For the Nine Months Ended Months Ended September 30, September 30, ----------------------- ----------------------- 2005 2004 2005 2004 ----------- ----------- ----------- ----------- Interest income: Loans, including fees $2,515,946 $2,075,429 $6,992,354 $5,862,717 Securities 347,840 311,123 1,115,008 981,559 Interest-bearing deposits and federal funds sold 30,040 23,893 121,951 47,300 Dividends on federal bank stock 19,405 16,347 55,757 43,748 ----------- ----------- ----------- ----------- Total interest income 2,913,231 2,426,792 8,285,070 6,935,324 Interest expense: Deposits 982,651 672,052 2,757,245 2,142,855 Federal Home Loan Bank advances 128,524 128,493 312,831 332,638 Subordinated debentures 70,722 70,722 212,166 212,166 Repurchase agreements 4,896 - 4,896 - Capital leases 37,676 38,014 113,294 114,272 ----------- ----------- ----------- ----------- Total interest expense 1,224,469 909,281 3,400,432 2,801,931 ----------- ----------- ----------- ----------- Net interest income 1,688,762 1,517,511 4,884,638 4,133,393 Provision for loan losses 103,000 71,000 210,046 306,000 ----------- ----------- ----------- ----------- Net interest income after provision for loan losses 1,585,762 1,446,511 4,674,592 3,827,393 Noninterest income: Service charges and other fees 138,058 110,335 392,345 310,700 Gain (loss) on sales of securities available for sale, net - (5,237) - 7,910 Gain on sale of loans - - 9,782 - Other gains (losses) (2,505) - 71 - Other income 7,957 2,610 18,750 7,167 ----------- ----------- ----------- ----------- Total noninterest income 143,510 107,708 420,948 325,777 Noninterest expense: Salaries and benefits 792,251 531,797 2,117,255 1,482,402 Occupancy and equipment 192,253 166,591 589,350 468,051 Professional fees 95,780 109,288 371,497 305,911 Franchise tax 58,269 56,034 191,782 177,440 Data processing 132,201 111,819 442,426 323,311 Marketing and advertising 36,141 38,416 117,811 122,069 Stationery and supplies 29,622 28,756 89,448 67,717 Intangible asset amortization 52,199 9,042 164,298 9,042 Other expenses 129,011 102,476 398,657 349,227 ----------- ----------- ----------- ----------- Total noninterest expense 1,517,727 1,154,219 4,482,524 3,305,170 ----------- ----------- ----------- ----------- Earnings before income tax expense 211,545 400,000 613,016 848,000 Income tax expense 71,545 - 207,016 - ----------- ----------- ----------- ----------- NET EARNINGS 140,000 400,000 406,000 848,000 Other comprehensive income (loss), net of tax (121,628) 667,560 (216,163) (52,821) ----------- ----------- ----------- ----------- Comprehensive income $18,372 $1,067,560 $189,837 $795,179 =========== =========== =========== =========== Basic earnings per share $0.06 $0.19 $0.19 $0.40 Diluted earnings per share 0.06 0.19 0.18 0.39 OHIO LEGACY CORP QUARTERLY BALANCE SHEETS (Dollars in thousands) 2005 2004 ----------------------------- ------------------- Sept. 30 June 30 March 31 Dec. 31 Sept. 30 --------- --------- --------- --------- --------- Cash and cash equivalents $9,473 $11,040 $11,587 $16,989 $14,756 Securities and time deposits 36,236 38,821 41,267 40,006 33,522 Loans, net of fees 155,021 146,874 142,805 133,348 130,745 Allowance for loan losses (1,289) (1,216) (1,344) (1,264) (1,288) Premises and equipment, net 3,316 2,676 2,262 2,269 2,170 Core deposit intangible 505 557 612 669 741 Other assets 3,335 3,251 3,287 3,035 2,593 --------- --------- --------- --------- --------- Total assets $206,597 $202,003 $200,476 $195,052 $183,239 ========= ========= ========= ========= ========= Noninterest-bearing demand $12,535 $12,901 $11,885 $11,915 $11,621 Interest-bearing demand 10,019 10,089 11,265 13,262 13,161 Savings and money market 42,389 47,251 49,477 43,848 38,941 Certificates of deposit 93,830 92,779 90,774 88,618 78,988 --------- --------- --------- --------- --------- Total deposits 158,773 163,020 163,401 157,643 142,711 Other borrowings 28,861 20,839 19,215 19,589 22,960 Other liabilities 609 557 673 580 701 --------- --------- --------- --------- --------- Total liabilities 188,243 184,416 183,289 177,812 166,372 Shareholders' equity 18,354 17,587 17,187 17,240 16,867 --------- --------- --------- --------- --------- Total liabilities and shareholders' equity $206,597 $202,003 $200,476 $195,052 $183,239 ========= ========= ========= ========= ========= LOAN PORTFOLIO: - --------------------- Residential real estate $56,405 $55,031 $53,593 $50,728 $49,459 Commercial real estate 51,053 45,817 44,847 36,365 33,856 Consumer and home equity 11,716 11,915 12,586 12,250 12,127 Commercial 14,606 13,412 11,567 10,710 11,751 Construction 11,617 10,948 10,506 13,315 13,591 Multifamily residential 9,832 9,955 9,903 10,148 10,119 Net deferred loan fees (208) (204) (197) (168) (158) --------- --------- --------- --------- --------- Loans 155,021 146,874 $142,805 $133,348 $130,745 ========= ========= ========= ========= ========= QUARTERLY AVERAGES: - --------------------- Fed funds sold and securities (1) $41,471 $45,773 $55,041 $49,690 $40,794 Loans 149,183 143,907 136,073 132,607 131,248 Total interest- earning assets 192,110 189,680 191,114 182,297 172,042 Total assets 201,152 198,832 198,487 190,032 178,296 Noninterest-bearing deposits 12,449 12,192 11,860 11,784 9,078 Interest-bearing deposits 147,546 149,085 149,477 138,666 124,158 Other borrowings and leases 22,418 19397 19,349 22,204 27,982 Total interest- bearing liabilities 169,964 168,482 168,826 160,870 152,140 Shareholders' equity 18,028 17,337 17,238 16,851 16,235 (1) Includes federal agency stock not classified in securities on the consolidated balance sheets and interest-earning deposits in financial institutions OHIO LEGACY CORP QUARTERLY STATEMENTS OF OPERATIONS (In thousands, except per share data and ratios) 2005 2004 ------------------------- ---------------- For the three months ended Sept. 30 June 30 March 31 Dec. 31 Sept. 30 -------- ------- -------- ------- -------- Interest income $2,913 $2,779 $2,593 $2,537 $2,427 Interest expense (1,224) (1,130) (1,046) (897) (910) -------- ------- -------- ------- -------- Net interest income 1,689 1,649 1,547 1,640 1,517 Provision for loan losses (103) (15) (92) - (71) Loss on sales of securities - - - - (5) Gain on sale of loans - - 10 - - Other gains and losses, net (3) 3 - - - Noninterest income 146 133 131 120 113 Amortization of intangible asset (52) (55) (57) (71) (9) Noninterest expense (1,466) (1,487) (1,366) (1,350) (1,145) -------- ------- -------- ------- -------- Net earnings before taxes 211 228 173 339 400 Income tax (expense) benefit (71) (77) (58) 86 - -------- ------- -------- ------- -------- Net earnings $140 $151 $115 $425 $400 ======== ======= ======== ======= ======== Earnings per share, diluted $0.06 $0.07 $0.05 $0.19 $0.19 Common and dilutive shares, avg. 2,199 2,219 2,123 2,206 2,157 KEY RATIOS: - ---------------------------- Net interest margin (1) 3.50% 3.49% 3.28% 3.52% 3.52% Yield on interest-earning assets 6.02 5.88 5.50 5.53 5.58 Cost of funds 2.86 2.69 2.51 2.30 2.37 Interest rate spread (2) 3.16 3.19 2.99 3.23 3.21 Efficiency ratio (3) 79.87 83.32 84.76 76.68 70.80 Allowance as a percent of loans 0.83 0.83 0.94 0.95 0.98 Net loans as a percent of deposits 96.82 89.35 86.57 83.79 90.98 Annualized net charge-offs to loans 0.08 0.40 0.04 0.08 0.03 Annualized noninterest income to average assets (4) 0.29 0.27 0.27 0.25 0.25 Annualized noninterest expense to average assets (5) 2.91 2.99 2.75 2.84 2.58 Annualized return on average assets (6) 0.28 0.30 0.23 0.71 0.89 Annualized return on average equity (6) 3.11 5.26 2.67 8.05 9.86 (1) Tax-equivalent 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, excluding intangible asset amortization divided by the sum of net interest income and noninterest income, excluding gains and losses (4) Excludes gains and losses (5) Excludes intangible asset amortization (6) Excludes income tax benefit recorded in the three months ended December 31, 2004. The Company did not record income tax expense prior to December 31, 2004 CONTACT: Ohio Legacy Corp L. Dwight Douce, D. Michael Kramer or Eric S. Nadeau, 330-263-1955 http://www.ohiolegacycorp.com -----END PRIVACY-ENHANCED MESSAGE-----