Exhibit 99.1
Ohio Legacy Corp Announces First Quarter Results and Management Appointment
WOOSTER, Ohio--(BUSINESS WIRE)--May 5, 2005--Ohio Legacy Corp
(NASDAQ:OLCB) today reported net earnings for the three months ended
March 31, 2005, of $115,000, or $0.05 per share, compared to $222,000,
or $0.10 per share, during the first quarter of 2004. Total assets
exceeded the $200 million level, ending the quarter at $200.5 million.
The following key items summarize the Company's financial results
during the first quarter of 2005:
-- the Company did not recognize federal income tax expense in
2004 due to a valuation allowance on its deferred tax assets.
The valuation allowance was removed at December 31, 2004,
resulting in the recognition of federal income tax expense in
2005. Earnings before federal income taxes was $173,000 during
the first quarter of 2005 compared to $222,000 in 2004;
-- increases in the cost of funds outpaced improvement in the
yield on interest-earning assets;
-- approximately $46,000 of interest income was charged-off in
2005 on nonaccrual loans;
-- the company incurred management succession costs of $41,000;
-- a gain recorded on the sale of the Company's credit card
portfolio totaled $10,000;
-- the Company added a commercial lender and operations staff,
resulting in an increase in personnel expenses;
-- total assets grew $5.4 million, or 2.8%, driven by deposit
growth of $5.8 million; and,
-- net growth in the loan portfolio was a seasonally-strong $9.5
million, or 7.1%.
Net Interest Income - During the three months ended March 31,
2005, net interest income grew to $1.5 million, compared to $1.2
million in the first quarter of 2004. Net interest income was
negatively impacted by a $46,000 charge to interest income related to
nonaccrual loans during the first quarter of 2005. Net interest margin
increased to 3.28% in the first quarter of 2005 compared to 3.23% in
2004. Interest rate spread was 2.99% compared to 2.93% in the year-ago
period. Excluding the impact of the interest charge-off, margin and
spread in 2005 were 3.38% and 3.08%, respectively. The yield on assets
fell to 5.50% during 2005 compared to 5.66% in 2004. Excluding the
impact of the interest reversal, the yield on performing assets was
5.60%, an increase of 7 basis points from the linked quarter. The cost
of funds increased 24 basis points during the quarter, primarily due
to a higher volume of and an increasing rate paid on money market
accounts.
Noninterest Income - Noninterest income increased $38,000 during
the first quarter of 2005 compared to the first quarter of 2004,
primarily due to a higher number of deposit accounts serviced in 2005.
The Company sold its credit card portfolio during the first quarter of
2005. Proceeds from the sale of the portfolio were approximately
$257,000 and the gain on the sale was approximately $10,000.
Noninterest Expense - Total noninterest expense increased to $1.4
million during 2005, a 36% increase from 2004, but flat compared to
the fourth quarter of 2004. Salaries and benefits were higher in 2005
due to the addition of a branch in Wooster and the hiring of a
commercial lender and operations personnel.
Occupancy and equipment expenses increased with the addition of
the Wooster Milltown banking office in August 2004. The Company
expects occupancy and equipment expense to increase during 2005 with
the construction of a banking location in North Canton, Ohio.
Professional fees were higher in the first quarter of 2005 due to
management succession costs, legal expenses related to the workout of
the nonaccrual loans discussed below and consulting fees incurred to
assist management with performing due diligence on information
technology service contracts. Audit fees also increased in 2005 as a
result of the Sarbanes-Oxley Act.
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.
Loans and Asset Quality - At March 31, 2005, the loan portfolio,
net of the allowance for loan losses and deferred fees, totaled $141.5
million, an increase of $9.4 million from December 31, 2004.
Approximately 88% of the loans originated during the quarter were
underwritten as commercial credits. Loans secured by commercial real
estate increased $8.5 million during the quarter, an increase of 23%.
A decrease of $2.8 million in the construction loan portfolio was
offset by a $2.8 million increase in loans secured by one-to-four
family residential real estate. The weighted average rate on loans
originated during the first quarter was 6.64%. This compares favorable
to the 6.40% yield earned on average loans during the quarter,
excluding the impact of the interest reversal.
Nonperforming loans totaled $1.2 million at March 31, 2005,
compared to $1.1 million at December 31, 2004. 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. These loans totaled $723,000 at March 31, 2005. The
properties securing these loans were sold and the notes refinanced to
unrelated borrowers in April 2005 with no loss of principal. The
allowance for loan losses totaled $1.3 million at March 31, 2005. Net
charge-offs and the provision for loan losses totaled $12,000 and
$92,000 during the quarter, respectively.
Deposits - Total deposits increased $5.8 million, or 3.6% during
the first quarter of 2005. Core deposit balances increased $3.6
million with demand deposit accounts decreasing $2.1 million and
savings and money market accounts increasing $5.6 million. The Company
has experienced a strong response to the competitive pricing of its
money market product, as described above.
Branch development - In March 2005, the Company's subsidiary, Ohio
Legacy Bank, N.A., received approval from the Office of the
Comptroller of the Currency to establish its fifth banking office,
which will be located in North Canton, Ohio. Construction will
commence in May 2005 and the office is expected to be in service
during the fourth quarter of 2005.
Management appointment - On April 28, 2005, the Company announced
the appointment D. Michael Kramer to the position of Executive Vice
President and Chief Operating Officer. Mr. Kramer was previously
Executive Vice President of Integra Bank Corp, a $3.0 billion bank
holding company based in Evansville, Indiana. Mr. Kramer will assume
responsibilities of daily operations of the Bank.
The Company's President and Chief Executive Officer, L. Dwight
Douce commented, "We are excited that Mike Kramer has joined the Ohio
Legacy Corp family. He brings with him nearly 25 years of banking
experience. Mike will provide strong leadership and possesses a wealth
of knowledge in strategic planning and organizational development. He
will be an integral member of our executive management team and we
look forward to this next step in the evolution of Ohio Legacy Corp."
Mr. Douce will continue as the Company's President and Chief Executive
Officer under a management succession plan that will transition Mr.
Kramer into those roles within the next year.
ANNUAL MEETING
The 2005 Annual Meeting of Shareholders of Ohio Legacy Corp was
held on April 28, 2005. At that meeting, shareholders voted on
nominees for director of the Company. Messrs. Gregory A. Long and
Robert F. Belden were reelected and Melvin J. Yoder was elected to
replace Mr. Benjamin J. Mast, who retired from the board.
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 though four
full-service banking offices 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
As of March 31, 2005 and December 31, 2004
March 31, December 31,
2005 2004
------------- -------------
(unaudited)
ASSETS
Cash and due from banks $ 3,601,553 $ 4,571,131
Federal funds sold and interest-bearing
deposits in financial institutions 7,985,058 12,418,192
------------- -------------
Cash and cash equivalents 11,586,611 16,989,323
Certificate of deposit in financial
institution 100,000 -
Securities available for sale 40,521,053 39,357,929
Securities held to maturity (fair value of
$629,591) 646,484 647,981
Loans, net 141,460,600 132,084,072
Federal bank stock 1,384,850 1,375,650
Premises and equipment, net 2,261,819 2,269,068
Intangible asset 611,841 669,174
Accrued interest receivable and other
assets 1,902,334 1,658,860
------------- -------------
Total assets $200,475,592 $195,052,057
============= =============
LIABILITIES
Deposits:
Noninterest-bearing demand $ 11,884,563 $ 11,914,867
Interest-bearing demand 11,264,788 13,262,252
Savings and money market 49,476,690 43,847,951
Certificates of deposit, net 90,774,756 88,617,541
------------- -------------
Total deposits 163,400,797 157,642,611
Federal Home Loan Bank advances 14,923,671 15,295,144
Subordinated debentures 3,325,000 3,325,000
Capital lease obligations 966,529 968,712
Accrued interest payable and other
liabilities 672,978 580,216
------------- -------------
Total liabilities 183,288,975 177,811,683
SHAREHOLDERS' EQUITY
Preferred stock, no par value, 500,000
shares authorized, none outstanding - -
Common stock, no par value, 5,000,000
shares authorized, 2,135,020 and 2,121,220
shares issued and outstanding at
March 31, 2005, and December 31, 2004,
respectively 17,870,655 17,734,155
Accumulated deficit (167,585) (282,585)
Accumulated other comprehensive loss (516,453) (211,196)
------------- -------------
Total shareholders' equity 17,186,617 17,240,374
------------- -------------
Total liabilities and shareholders'
equity $200,475,592 $195,052,057
============= =============
OHIO LEGACY CORP
CONSOLIDATED STATEMENTS OF OPERATIONS
For the three months ended March 31, 2005 and 2004
For the Three Months Ended
March 31,
2005 2004
------------- -------------
Interest income:
Loans, including fees $ 2,118,411 $ 1,805,449
Securities 393,702 356,366
Interest-bearing deposits, federal funds
sold and other 80,467 25,933
------------- -------------
Total interest income 2,592,580 2,187,748
Interest expense:
Deposits 846,178 739,035
Federal Home Loan Bank advances 90,886 88,934
Subordinated debentures 70,722 70,722
Capital leases 37,852 38,164
------------- -------------
Total interest expense 1,045,638 936,855
------------- -------------
Net interest income 1,546,942 1,250,893
Provision for loan losses 92,046 85,000
------------- -------------
Net interest income after provision for
loan losses 1,454,896 1,165,893
Noninterest income:
Service charges and other fees 126,237 87,932
Gain on sales of securities available for
sale, net - 13,147
Gain on sale of loans 9,782 -
Other income 5,477 2,286
------------- -------------
Total noninterest income 141,496 103,365
Noninterest expense:
Salaries and benefits 603,473 464,702
Occupancy and equipment 200,923 150,283
Professional fees 137,553 87,967
Franchise tax 71,300 63,050
Data processing 162,275 100,925
Marketing and advertising 38,614 43,897
Stationery and supplies 31,698 17,418
Intangible asset amortization 57,333 -
Other expenses 119,730 119,016
------------- -------------
Total noninterest expense 1,422,899 1,047,258
------------- -------------
Net earnings before income taxes 173,493 222,000
Income tax expense 58,493 -
------------- -------------
Net earnings $ 115,000 $ 222,000
Basic earnings per share $ 0.05 $ 0.10
Diluted earnings per share $ 0.05 $ 0.10
Basic weighted average shares outstanding 2,122,833 2,118,750
Diluted weighted average shares
outstanding 2,244,558 2,180,894
OHIO LEGACY CORP
QUARTERLY BALANCE SHEETS
(Dollars in thousands)
2005 2004
--------- ---------------------------------------
March 31 Dec. 31 Sept. 30 June 30 March 31
--------- --------- --------- --------- ---------
Cash and cash
equivalents $ 11,587 $ 16,989 $ 14,756 $ 6,760 $ 11,541
Securities 41,267 40,006 33,522 33,054 36,754
Loans, net of fees 142,805 133,348 130,745 129,405 117,463
Allowance for loan
losses (1,344) (1,264) (1,288) (1,226) (1,189)
Premises and
equipment, net 2,262 2,269 2,170 1,935 1,988
Core deposit
intangible 612 669 741 - -
Other assets 3,287 3,035 2,593 2,603 2,293
--------- --------- --------- --------- ---------
Total assets $200,476 $195,052 $183,239 $172,531 $168,850
========= ========= ========= ========= =========
Noninterest-bearing
demand $ 11,885 $ 11,915 $ 11,621 $ 7,800 $ 7,095
Interest-bearing
demand 11,265 13,262 13,161 11,702 9,214
Savings and money
market 49,477 43,848 38,941 38,987 38,443
Certificates of
deposit 90,774 88,618 78,988 70,228 73,071
--------- --------- --------- --------- ---------
Total deposits 163,401 157,643 142,711 128,717 127,823
Other borrowings 19,215 19,589 22,960 27,329 23,697
Other liabilities 673 580 701 685 777
--------- --------- --------- --------- ---------
Total liabilities 183,289 177,812 166,372 156,731 152,297
Shareholders' equity 17,187 17,240 16,867 15,800 16,553
--------- --------- --------- --------- ---------
Total liabilities
and shareholders'
equity $200,476 $195,052 $183,239 $172,531 $168,850
========= ========= ========= ========= =========
LOAN PORTFOLIO:
- ---------------
Residential real
estate $ 53,593 $ 50,728 $ 49,459 $ 48,449 $ 43,865
Commercial real
estate 44,847 36,365 33,856 32,338 28,206
Consumer and home
equity 12,586 12,250 12,127 11,677 11,286
Commercial 11,567 10,710 11,751 11,733 11,491
Construction 10,506 13,315 13,591 15,331 13,104
Multifamily
residential 9,903 10,148 10,119 10,049 9,690
Net deferred loan
fees (197) (168) (158) (172) (179)
--------- --------- --------- --------- ---------
Loans $142,805 $133,348 $130,745 $129,405 $117,463
========= ========= ========= ========= =========
QUARTERLY AVERAGES:
- -------------------
Fed funds sold and
securities (1) $ 55,041 $ 49,690 $ 40,794 $ 40,745 $ 43,815
Loans 136,073 132,607 131,248 125,102 111,273
Total interest-
earning assets 191,114 182,297 172,042 165,847 155,088
Total assets 198,487 190,032 178,296 172,672 161,396
Interest-bearing
deposits 149,477 138,666 124,158 123,176 117,658
Other borrowings and
leases 19,349 22,204 27,982 25,203 19,903
Total interest-
bearing liabilities 168,826 160,870 152,140 148,379 137,561
Shareholders' equity 17,238 16,851 16,235 16,093 16,182
(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 March 31 Dec. 31 Sept. 30 June 30 March 31
-------- -------- -------- -------- --------
Interest income $ 2,593 $ 2,537 $ 2,427 $ 2,321 $ 2,188
Interest expense (1,046) (897) (910) (956) (937)
-------- -------- -------- -------- --------
Net interest income 1,547 1,640 1,517 1,365 1,251
Provision for loan losses (92) - (71) (150) (85)
Gain (Loss) on sales of
securities - - (5) - 13
Gain on sale of loans 10 - - - -
Noninterest income 131 120 113 115 90
Amortization of
intangible asset (57) (71) (9) - -
Noninterest expense (1,366) (1,350) (1,145) (1,104) (1,047)
-------- -------- -------- -------- --------
Net earnings before
taxes 173 339 400 226 222
Income tax (expense)
benefit (58) 86 - - -
-------- -------- -------- -------- --------
Net earnings $ 115 $ 425 $ 400 $ 226 $ 222
======== ======== ======== ======== ========
Earnings per share,
diluted $ 0.05 $ 0.19 $ 0.19 $ 0.10 $ 0.10
Common and dilutive
shares, avg. 2,123 2,206 2,157 2,181 2,181
SELECTED RATIOS:
- ----------------
Net interest margin (1) 3.28% 3.52% 3.52% 3.28% 3.23%
Yield on interest-earning
assets 5.50 5.53 5.58 5.59 5.66
Cost of funds 2.51 2.30 2.37 2.58 2.73
Interest rate spread (2) 2.99 3.23 3.21 3.01 2.93
Efficiency ratio (3) 84.76 76.68 70.80 74.59 78.09
Allowance as a percent of
loans 0.94 0.95 0.98 0.95 1.01
Net loans as a percent of
deposits 86.57 83.79 90.98 99.58 90.96
Annualized net charge-
offs to loans 0.04 0.08 0.03 0.36 0.06
Annualized noninterest
income to average
assets(4) 0.27 0.25 0.25 0.27 0.22
Annualized noninterest
expense to average
assets (5) 2.75 2.84 2.58 2.56 2.60
Annualized return on
average assets (6) 0.23 0.71 0.89 0.52 0.55
Annualized return on
average equity (6) 2.67 8.05 9.86 5.62 5.49
(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
(6) Excludes income tax benefit in the quarter ended December 31,
2004. The company did not record income tax expense prior to
December 31, 2004
CONTACT: Ohio Legacy Corp
L. Dwight Douce or Eric S. Nadeau, 330-263-1955
http://www.ohiolegacycorp.com