Ohio Legacy (OLCB) 8-K Ohio Legacy Corp Announces First Quarter Results

Exhibit 99.1

OHIO LEGACY CORP ANNOUNCES FIRST QUARTER RESULTS

Wooster, Ohio, April 24, 2006– Ohio Legacy Corp (NASDAQ: OLCB) today reported net earnings for the three months ended March 31, 2006, of $117,000, or $0.05 per share, compared to $115,000 or $0.05 per share, a 1.7% increase over the same period a year ago. Total assets grew to $213,120,000 an increase of 6.3% over the same period a year ago and a 2.5% increase over the fourth quarter of 2005.

The following key items summarize the Company’s financial results during the first quarter or 2006:

§	While yield on earning assets has continued to show improvement it is not keeping pace with the cost of funds; resulting in continued margin compression.
§	Noninterest income improved from 0.3% of average assets to 0.5%, increasing from $141,000 for the period one year ago to $263,000 for the first quarter of 2006.
§	Noninterest expense increased 21% over the same period one year ago and 5% over the fourth quarter of 2005. The increase in expense is tied directly to new banking office expansion, staffing and separation expense and year-end data processing costs.
§	Neither asset, nor low cost liability growth occurred at acceptable levels for the first quarter.

Net Interest Income– During the three months ended March 31, 2006, net interest income grew to
$1.70 million, compared to $1.55 million in the first quarter of 2005. Total interest income improved $555,000 over the same period one year ago, an increase of 21%, however, total interest expense also grew at a fast pace; increasing $406,000 for the period or 39% resulting in a $149,000 increase in net interest income. However, the Company did experience a $35,000 decrease in net interest income as compared to the fourth quarter of 2005. Net interest margin increased to 3.46% in the first quarter of 2006 compared to 3.28% for the same period one year ago, however, this is a reduction from 3.49% in the fourth quarter of 2005. Interest rate spread was 3.06% compared to 2.99% in the year-ago period. However it fell from 3.11 in the fourth quarter of 2005. The yield on assets grew to 6.40% for the quarter compared to 5.50% in 2005 and 6.18 in the previous quarter.

The cost of funds increased 27 basis points from the previous quarter and 83 basis points since the first quarter a year ago, due in large part to increased borrowings from the Federal Home Loan Bank. The Company continues to be committed to its strategy of balance sheet transformation through the organic growth of low cost transaction deposit accounts. We saw success with this effort in the fourth quarter and strong growth in March after considerable seasonal run-off in January and February. Provision for loan loss was $50,000 compared to $92,000 for the same period a year ago. The Company’s allowance as a percentage of loans is 1.01% compared to 0.94% for the same period a year ago and 0.99% for the fourth quarter of 2005.

Noninterest Income– Noninterest income increased $122,000 during the first quarter of 2006 compared to the first quarter of 2005, primarily due to a restructuring of our deposit fee schedule, the introduction of a number of new web-based banking products and an increased number of transaction deposit accounts.

Noninterest Expense– Total noninterest expense increased to $1.7 million for the quarter, an increase of $305,000 or 21% from the same period in 2005, and up 5% compared to the fourth quarter of 2005.

Salary and benefit expense accounted for the majority of increase in noninterest expense, up $316,000 compared to first quarter 2005. The drivers behind this remain the costs of branch expansion and increased audit and compliance staff to meet regulatory compliance needs. The Company has taken action in the first quarter to selectively reduce staffing levels and anticipates this number flattening over the remainder of the year.

Occupancy and equipment expenses increased with the addition of the North Canton banking office in November 2005. The Company expects occupancy and equipment expense to flatten over the course of 2006.

Professional fees were lower in the first quarter of 2006; however, the Company anticipates increased audit fees in 2006 as a result of the Sarbanes-Oxley Act.

Data processing expense decreased $11,000 for the quarter, compared to the same period in 2005, however, due to year-end processing costs, they increased $10,000 compared to the fourth quarter in 2005.

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Loans and Asset Quality —At March 31, 2006, the loan portfolio, net of the allowance for loan losses and deferred fees, totaled $160.9 million, an increase of $2.8 million or 1.8% from December 31, 2005 and an increase of $19.5 million over the same period a year ago. The Company believes that this level of loan growth represents a seasonal “slow down” and anticipates matching historical loan growth ranges in the remaining quarters of the year. At March 31, 2006 the portfolio breakdown is:

• Residential Real Estate — 36.9%

• Commercial Real Estate — 34.7%

• Commercial — 8.3%

• Construction — 7.0%

• Consumer and Home Equity — 7.0%

• Multi-Family Residential — 6.1%

Nonperforming loans totaled $658,000 at March 31, 2006, compared to $1.2 million for the same period one year ago and $664,000 at December 31, 2005. Loans are considered nonperforming if they are impaired or if they are in nonaccrual status. Most of the nonperforming loan balances were associated with two loans to one borrower, each secured by multifamily residential real estate. The allowance for loan losses totaled $1.6 million at March 31, 2006 compared to $1.3 million at March 31, 2005 and has remained basically unchanged since year end 2005. The provision for loan losses net of charge-offs totaled $48,000 for the period, as compared to $80,000 for the same quarter in 2005.

Deposits —Total deposits decreased $1.0 million, or 0.6% during the first quarter of 2006 compared to March 31, 2005 and $539,000 and 0.3% compared to year end 2005. The majority of the reduction came as two large depositors reduced their deposits in money market and interest bearing checking accounts. These depositors accounted for deposit loss of over $3.5 million. The Company was able to add back $3.0 million in deposit growth during the first quarter, nearly offsetting these large depositor movements. Core deposit balances decreased $2.4 million from the prior quarter with demand deposit accounts accounting for the entire reduction. Savings and money market account balances grew $95,000 compared to December 31, 2005. The Company is experiencing pricing pressure on short-term certificates of deposit. The market is reacting very strongly to consumer demand and the expectations for higher short term rates, based on the anticipation of continued rate increases from the Federal Reserve. While the Company is working to maintain a disciplined approach to managing deposit rates, this will continue to put compression pressure on the Company’s margin.

ANNUAL MEETING

The 2006 Annual Meeting of Shareholders of Ohio Legacy Corp will be held on April 27, 2006 at the Wooster Country Club, Wooster Ohio.

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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, professionals and consumers through five full-service banking offices in Canton, North 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.

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OHIO LEGACY CORP
CONSOLIDATED BALANCE SHEETS
As of March 31, 2006 and December 31, 2005

	March 31,			December 31,
	2006			2005
	(unaudited)
ASSETS
Cash and due from banks	$	6,254,019		$	4,528,094
Federal funds sold and interest-bearing deposits in financial institutions		5,622,414			3,594,452
Cash and cash equivalents		11,876,433			8,122,546
Certificate of deposit in financial institution		100,000			100,000
Securities available for sale		31,395,865			33,032,297
Securities held to maturity		835,829			838,224
Loans, net of allowance of $1,637,205 and $1,589,407 at March 31, 2006 and December 31, 2005		160,952,596			158,182,319
Federal bank stock		1,492,500			1,479,500
Premises and equipment, net		3,750,847			3,797,314
Intangible assets		408,179			455,244
Accrued interest receivable and other assets		2,307,641			2,010,323
Total assets	$	213,119,890		$	208,017,767
LIABILITIES
Deposits:
Noninterest-bearing demand	$	14,400,390		$	15,727,338
Interest-bearing demand		11,079,624			12,231,345
Savings and money market		42,759,668			42,665,057
Certificates of deposit, net		94,118,634			92,273,308
Total deposits		162,358,316			162,897,048
Repurchase agreements		3,305,992			3,066,517
Overnight Federal Home Loan Bank advances		700,000			7,200,000
Federal Home Loan Bank advances		23,415,664			11,796,009
Subordinated debentures		3,325,000			3,325,000
Capital lease obligations		956,902			959,450
Accrued interest payable and other liabilities		876,898			668,868
Total liabilities		194,938,772			189,912,892
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 shares issued and outstanding at March 31, 2006, and December 31, 2005, respectively		18,665,436			18,658,386
Accumulated earnings		196,415			79,415
Accumulated other comprehensive loss		(680,733	)		(632,926	)
Total shareholders’ equity		18,181,118			18,104,875
Total liabilities and shareholders’ equity	$	213,119,890		$	208,017,767

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OHIO LEGACY CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2006 and 2005
(Unaudited)

	For the Three Months Ended
	March 31,
	2006		2005
Interest income:
Loans, including fees	$	2,754,238	$	2,118,411
Securities		328,845		393,702
Interest-bearing deposits, federal funds sold		42,553		63,078
Dividends on federal bank stock		21,619		17,389
Total interest income		3,147,255		2,592,580
Interest expense:
Deposits		1,073,771		846,178
Federal Home Loan Bank advances		241,002		90,886
Subordinated debentures		70,722		70,722
Repurchase agreements		28,871		—
Capital leases		37,487		37,852
Total interest expense		1,451,853		1,045,638
Net interest income		1,695,402		1,546,942
Provision for loan losses		50,000		92,046
Net interest income after provision for loan losses		1,645,402		1,454,896
Noninterest income:
Service charges and other fees		246,473		126,237
Gain on sale of loans		—		9,782
Other gains		4,894		—
Other income		11,938		5,477
Total noninterest income		263,305		141,496
Noninterest expense:
Salaries and benefits		919,596		603,473
Occupancy and equipment		236,105		200,923
Professional fees		90,282		137,553
Franchise tax		63,800		71,300
Data processing		151,719		162,275
Marketing and advertising		41,833		38,614
Stationery and supplies		31,476		31,698
Intangible asset amortization		47,065		57,333
Other expenses		146,004		119,730
Total noninterest expense		1,727,880		1,422,899
Earnings before income tax expense		180,827		173,493
Income tax expense		63,827		58,493
Net earnings	$	117,000	$	115,000
Basic earnings per share	$	0.05	$	0.05
Diluted earnings per share	$	0.05	$	0.05
Basic weighted average shares outstanding		2,214,564		2,122,833
Diluted weighted average shares outstanding		2,221,706		2,244,558

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OHIO LEGACY CORP
QUARTERLY BALANCE SHEETS
(Unaudited)
(Dollars in thousands)

	2006			2005
	March 31			Dec. 31			Sept. 30			June 30			March 31
Cash and cash equivalents	$	11,876		$	8,123		$	9,473		$	11,040		$	11,587
Securities and time deposits		32,332			33,971			36,236			38,821			41,267
Loans, net of fees		162,590			159,771			155,021			146,874			142,805
Allowance for loan losses		(1,637	)		(1,589	)		(1,289	)		(1,216	)		(1,344	)
Premises and equipment, net		3,751			3,797			3,316			2,676			2,262
Intangible assets		408			455			505			557			612
Other assets		3,800			3,490			3,335			3,251			3,287
Total assets	$	213,120		$	208,018		$	206,597		$	202,003		$	200,476
Noninterest-bearing demand	$	14,400		$	15,727		$	12,535		$	12,901		$	11,885
Interest-bearing demand		11,079			12,231			10,019			10,089			11,265
Savings and money market		42,760			42,665			42,389			47,251			49,477
Certificates of deposit		94,119			92,273			93,830			92,779			90,774
Total deposits		162,358			162,896			158,773			163,020			163,401
Other borrowings		31,704			26,348			28,861			20,839			19,215
Other liabilities		877			669			609			557			673
Total liabilities		194,939			189,913			188,243			184,416			183,289
Shareholders’ equity		18,181			18,105			18,354			17,587			17,187
Total liabilities and shareholders’ equity	$	213,120		$	208,018		$	206,597		$	202,003		$	200,476
LOAN PORTFOLIO:
Residential real estate	$	60,032		$	59,321		$	56,405		$	55,031		$	53,593
Commercial real estate		56,490			54,522			51,053			45,817			44,847
Consumer and home equity		11,431			11,656			11,716			11,915			12,586
Commercial		13,501			12,805			14,606			13,412			11,567
Construction		11,456			11,758			11,617			10,948			10,506
Multifamily residential		9,890			9,930			9,832			9,955			9,903
Net deferred loan fees		(210	)		(221	)		(208	)		(204	)		(197	)
Loans	$	162,590		$	159,771		$	155,021			146,874		$	142,805
QUARTERLY AVERAGES:
Fed funds sold and securities (1)	$	38,983		$	40,595		$	41,471		$	45,773		$	55,041
Loans		160,531			156,945			149,183			143,907			136,073
Total interest-earning assets		199,514			197,540			192,110			189,680			191,114
Total assets		209,839			207,392			201,152			198,832			198,487
Total assets, year to date		209,839			201,465			199,490			198,660			198,487
Noninterest-bearing deposits		14,485			15,070			12,449			12,192			11,860
Interest-bearing deposits		143,855			146,791			147,546			149,085			149,477
Other borrowings and leases		32,363			26,453			22,418			19,397			19,349
Total interest-bearing liabilities		176,218			173,244			169,964			168,482			168,826
Shareholders’ equity		18,111			18,142			18,028			17,337			17,238
Shareholders’ equity, year to date		18,111			17,685			17,534			17,288			17,238

(1) Includes federal agency stock not classified in securities on the consolidated balance sheets and interest-earning deposits in financial institutions

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OHIO LEGACY CORP
QUARTERLY STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share data and ratios)

	2006			2005
For the three months ended	March 31			Dec. 31			Sept. 30			June 30			March 31
Interest income	$	3,147		$	3,070		$	2,913		$	2,779		$	2,593
Interest expense		(1,452	)		(1,340	)		(1,224	)		(1,130	)		(1,046	)
Net interest income		1,695			1,730			1,689			1,649			1,547
Provision for loan losses		(50	)		(313	)		(103	)		(15	)		(92	)
Gain on sale of loans		—			—			—			—			10
Other gains and losses, net		5			—			(3	)		3			—
Noninterest income		258			162			146			133			131
Amortization of intangible asset		(47	)		(50	)		(52	)		(55	)		(57	)
Noninterest expense		(1,680	)		(1,594	)		(1,466	)		(1,487	)		(1,366	)
Net earnings (loss) before taxes		181			(65	)		211			228			173
Income tax (expense) benefit		(64	)		21			(71	)		(77	)		(58	)
Net income (loss)	$	117		$	(44	)	$	140		$	151		$	115
Earnings per share, diluted	$	0.05		$	(0.02	)	$	0.06		$	0.07		$	0.05
Common and dilutive shares, avg.		2,221			2,215			2,199			2,219			2,123
SELECTED RATIOS:
Net interest margin (1)		3.46	%		3.49	%		3.50	%		3.49	%		3.28	%
Yield on interest-earning assets		6.40			6.18			6.02			5.88			5.50
Cost of funds		3.34			3.07			2.86			2.69			2.51
Interest rate spread (2)		3.06			3.11			3.16			3.19			2.99
Money market rates, year to date		2.73			2.59			2.58			2.57			2.49
Certificate of deposit rates, year to date		3.67			3.11			2.98			2.90			2.81
Certificate of deposit rates		3.67			3.46			3.15			2.98			2.81
Efficiency ratio (3)		86.03			84.29			79.87			83.32			84.76
Allowance as a percent of loans		1.01			0.99			0.83			0.83			0.94
Net loans as a percent of deposits		99.13			97.11			96.82			89.35			86.57
Loan yield		6.96			6.77			6.69			6.57			6.36
Annualized net charge-offs to loans		0.01			0.03			0.08			0.40			0.04
Annualized noninterest income to average assets (4)		0.50			0.31			0.29			0.27			0.27
Annualized noninterest expense to average assets (5)		3.20			3.08			2.91			2.99			2.75
Annualized return on average assets		0.22			NA			0.28			0.30			0.23
Annualized return on average equity		2.58			NA			3.11			5.26			2.67

(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, excluding intangible asset amortization divided by net interest income and noninterest income, excluding gains and losses on sales of securities and loans
(4)	Excludes gains and losses on sales of securities and loans
(5)	Excludes intangible asset amortization

Contact:	D. Michael Kramer, President and Chief Executive Officer
	330-263-1955
	http://www.ohiolegacycorp.com

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