##### Table of Contents



UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2008
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 For the transition period from _________ to _________
 Commission file number: 000-31673
 OHIO LEGACY CORP
 
   
   
   
   
  þ o
  Large accelerated filer oAccelerated filer oNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company þ o þ




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##### 



PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    3Item 2. Managements Discussion and Analysis
    
    
    12Item 3. Not Applicable for Smaller Reporting Companies
    
    
    19Item 4. Controls and Procedures
    
    
    19PART II  OTHER INFORMATION
    
    
    20Item 1. Legal Proceedings
    
    
    20Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    20Item 3. Defaults Upon Senior Securities
    
    
    20Item 4. Submission of Matters to a Vote of Security Holders
    
    
    20Item 5. Other Information
    
    
    20Item 6. Exhibits
    
    
    21SIGNATURES
    
    
    22EX-10.15EX-10.16EX-10.17EX-31.1EX-32.1
  2.




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements.
 
 
 March 31,
    
    
    December 31,2008
    
    
    2007(unaudited)ASSETSCash and due from banks
    
    $
    6,196,859
    
    
    $
    5,764,580Federal funds sold and interest-bearing deposits in financial institutions
    
    
    8,370,496
    
    
    
    1,350,625Cash and cash equivalents
    
    
    14,567,355
    
    
    
    7,115,205Certificate of deposit in financial institution
    
    
    100,000
    
    
    
    100,000Securities available for sale
    
    
    28,295,799
    
    
    
    29,010,334Securities held to maturity (fair value of $3,017,278 and $2,995,122 at
March 31, 2008 and December 31, 2007)
    
    
    3,001,974
    
    
    
    3,002,754Loans held for sale
    
    
    1,169,919
    
    
    
    911,906Loans, net of allowance of $1,628,411 and $1,622,906 at March 31, 2008
and December 31, 2007
    
    
    132,564,021
    
    
    
    131,642,471Federal bank stock
    
    
    1,553,900
    
    
    
    1,541,200Premises and equipment, net
    
    
    2,866,269
    
    
    
    2,901,906Intangible asset
    
    
    124,080
    
    
    
    150,322Other real estate owned
    
    
    3,177,232
    
    
    
    2,416,367Accrued interest receivable and other assets
    
    
    1,721,168
    
    
    
    1,488,214Total assets
    
    $
    189,141,717
    
    
    $
    180,280,679LIABILITIESDeposits:Noninterest-bearing demand
    
    $
    14,757,427
    
    
    $
    14,329,339Interest-bearing demand
    
    
    9,933,031
    
    
    
    9,995,343Savings
    
    
    52,440,636
    
    
    
    49,566,417Certificates of deposit, net
    
    
    75,130,030
    
    
    
    73,458,253Total deposits
    
    
    152,261,124
    
    
    
    147,349,352Repurchase agreements
    
    
    1,939,208
    
    
    
    2,022,869Short term Federal Home Loan Bank advances
    
    
    
    
    
    
    2,025,000Federal Home Loan Bank advances
    
    
    18,000,000
    
    
    
    12,000,000Capital lease obligations
    
    
    487,481
    
    
    
    493,168Accrued interest payable and other liabilities
    
    
    1,031,506
    
    
    
    1,076,647Total liabilities
    
    
    173,719,319
    
    
    
    164,967,036SHAREHOLDERS EQUITYPreferred 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, 2008, and December 31, 2007,
respectively
    
    
    18,793,090
    
    
    
    18,781,925Accumulated earnings (loss)
    
    
    (3,503,318
    )
    
    
    (3,472,218
    )Accumulated other comprehensive earnings
    
    
    132,626
    
    
    
    3,936Total shareholders equity
    
    
    15,422,398
    
    
    
    15,313,643Total liabilities and shareholders equity
    
    $
    189,141,717
    
    
    $
    180,280,679
  3.




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For the Three Months EndedMarch 31,2008
    
    
    2007Interest and dividend income:Loans, including fees
    
    $
    2,327,699
    
    
    $
    3,241,274Securities, taxable
    
    
    398,929
    
    
    
    275,447Securities, tax-exempt
    
    
    28,566
    
    
    
    23,322Interest-bearing deposits, federal funds sold and other
    
    
    32,116
    
    
    
    100,448Dividends on federal bank stock
    
    
    21,209
    
    
    
    23,823Total interest and dividend income
    
    
    2,808,519
    
    
    
    3,664,314Interest expense:Deposits
    
    
    1,231,588
    
    
    
    1,711,227Short term Federal Home Loan Bank advances
    
    
    24,814
    
    
    
    Long term Federal Home Loan Bank advances
    
    
    163,440
    
    
    
    195,838Subordinated debentures
    
    
    
    
    
    
    70,723Repurchases agreements
    
    
    12,460
    
    
    
    13,591Capital leases
    
    
    19,832
    
    
    
    36,667Total interest expense
    
    
    1,452,134
    
    
    
    2,028,046Net interest income
    
    
    1,356,385
    
    
    
    1,636,268Provision for loan losses
    
    
    6,500
    
    
    
    43,000Net interest income after provision for loan losses
    
    
    1,349,885
    
    
    
    1,593,268Noninterest income:Service charges and other fees
    
    
    214,248
    
    
    
    265,639Gain on sale of loans
    
    
    31,025
    
    
    
    50,951Gain on redemption of equity interest in Visa
    
    
    18,391
    
    
    
    Gain on disposition of other real estate owned
    
    
    9,170
    
    
    
    5,451Direct write-down of other real estate owned
    
    
    
    
    
    
    (23,249
    )Other income
    
    
    11,363
    
    
    
    23,196Total noninterest income
    
    
    284,197
    
    
    
    321,988Noninterest expense:Salaries and benefits
    
    
    796,468
    
    
    
    1,027,522Occupancy and equipment
    
    
    227,094
    
    
    
    236,814Professional fees
    
    
    97,927
    
    
    
    117,151Franchise tax
    
    
    50,250
    
    
    
    63,750Data processing
    
    
    170,256
    
    
    
    173,752Marketing and advertising
    
    
    59,911
    
    
    
    49,921Stationery and supplies
    
    
    27,380
    
    
    
    34,887Amortization of intangible asset
    
    
    26,242
    
    
    
    36,796Deposit expense and insurance
    
    
    61,137
    
    
    
    42,148Other expenses
    
    
    148,517
    
    
    
    145,406Total noninterest expense
    
    
    1,665,182
    
    
    
    1,928,147Net earnings (loss) before income taxes
    
    
    (31,100
    )
    
    
    (12,891
    )Income tax expense (benefit)
    
    
    
    
    
    
    (7,445
    )Net earnings (loss)
    
    $
    (31,100
    )
    
    $
    (5,446
    )Basic earnings (loss) per share
    
    $
    (0.01
    )
    
    $
    0.00Diluted earnings (loss) per share
    
    $
    (0.01
    )
    
    $
    0.00
  4.




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For the Three Months EndedMarch 31,2008
    
    
    2007Shareholders equity, beginning of period
    
    $
    15,313,643
    
    
    $
    18,418,557Net earnings (loss)
    
    
    (31,100
    )
    
    
    (5,446
    )Other comprehensive income (loss), net of tax:Net unrealized gain (loss) on available for sale securities
arising during the period
    
    
    128,690
    
    
    
    102,332Total comprehensive income (loss), net of tax
    
    
    97,590
    
    
    
    96,886Additional paid in capital from stock based compensation expense
    
    
    11,165
    
    
    
    11,490Balance, end of period
    
    $
    15,422,398
    
    
    $
    18,526,933
  5.




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For the Three Months EndedMarch 31,2008
    
    
    2007Cash flows from operating activities:Net earnings (loss)
    
    $
    (31,100
    )
    
    $
    (5,446
    )Adjustments to reconcile net earnings to net cash from
operating activities:Depreciation and amortization
    
    
    116,888
    
    
    
    139,767Securities amortization and accretion, net
    
    
    6,817
    
    
    
    22,409Origination of loans held for sale
    
    
    (6,232,053
    )
    
    
    (4,848,102
    )Proceeds from sales of loans held for sale
    
    
    6,005,065
    
    
    
    4,254,452Provision for loan losses
    
    
    6,500
    
    
    
    43,000Loss from Ohio Legacy Trust 1
    
    
    
    
    
    
    2,018Gain on sale of other real estate
    
    
    (8,952
    )
    
    
    (5,451
    )Direct write-down of other real estate
    
    
    
    
    
    
    23,249Gain on sale of loans held for sale
    
    
    (31,025
    )
    
    
    (50,951
    )Accretion of fair value purchase adjustments
    
    
    
    
    
    
    (4,471
    )FHLB stock dividend
    
    
    (12,700
    )
    
    
    Stock option expense
    
    
    11,165
    
    
    
    11,490Net change in:Accrued interest receivable and other assets
    
    
    (299,248
    )
    
    
    (87,664
    )Accrued interest payable and other liabilities
    
    
    (45,141
    )
    
    
    (58,618
    )Deferred loan fees
    
    
    (9,886
    )
    
    
    3,587Net cash from operating activities
    
    
    (523,670
    )
    
    
    (560,731
    )Cash flows from investing activities:Purchases of securities held to maturity
    
    
    (100,000
    )
    
    
    (804,847
    )Maturities, calls and paydowns of securities available for sale
    
    
    903,482
    
    
    
    1,133,120Maturities of securities held to maturity
    
    
    100,000
    
    
    
    Proceeds from sales of other real estate owned
    
    
    13,148
    
    
    
    127,927Net change in loans
    
    
    (1,683,225
    )
    
    
    1,472,232Purchases of premises and equipment
    
    
    (55,009
    )
    
    
    (11,211
    )Net cash from investing activities
    
    
    (821,604
    )
    
    
    1,917,221Cash flows from financing activities:Net change in deposits
    
    
    4,911,772
    
    
    
    50,466Net change in repurchase agreements
    
    
    (83,661
    )
    
    
    276,208Repayment of capital lease obligations
    
    
    (5,687
    )
    
    
    (7,145
    )Proceeds from short term FHLB advances, net of repayments
    
    
    (2,025,000
    )
    
    
    Proceeds from long term FHLB advances
    
    
    6,000,000
    
    
    
    Repayments of long term FHLB advances
    
    
    
    
    
    
    (5,129,158
    )Net cash provided by financing activities
    
    
    8,797,424
    
    
    
    (4,809,629
    )Net change in cash and cash equivalents
    
    
    7,452,150
    
    
    
    (3,453,139
    )Cash and cash equivalents at beginning of period
    
    
    7,115,205
    
    
    
    13,039,865Cash and cash equivalents at end of period
    
    $
    14,567,355
    
    
    $
    9,586,726Supplemental disclosures of cash flow information:Cash paid during the period for:Interest
    
    $
    1,471,394
    
    
    $
    2,051,430Federal income taxes
    
    
    
    
    
    
    Non-cash transactions:Transfer of loans to other real estate owned
    
    $
    765,061
    
    
    $
    29,321
  6.




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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 NOTE 1  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Nature of Operations and Principles of Consolidation
    Use of Estimates
 Reclassifications
 Income Taxes
 NOTE 2  STOCK BASED COMPENSATION
  7.




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NOTE 2  STOCK BASED COMPENSATION (continued)
  Three months ended March 31, 2008Total options outstandingWeightedAverageExerciseShares
    
    
    PriceOptions outstanding, beginning of
period
    
    
    214,150
    
    
    $
    10.64Forfeited
    
    
    (28,800
    )
    
    
    10.36Exercised
    
    
    
    
    
    
    Granted
    
    
    
    
    
    
    Options outstanding, end of period
    
    
    185,350
    
    
    $
    10.69Options exercisable, end of period
    
    
    158,250
    
    
    $
    10.95
   CompensationCostsRemainder of 2008
    
    $
    28,0102009
    
    
    17,6592010
    
    
    2,081Total
    
    $
    47,750
 NOTE 3  EARNINGS (LOSS) PER SHARE
  8.




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NOTE 3  EARNINGS PER SHARE (continued)
 Three Months Ended March 31,2008
    
    
    2007BASIC:Net earnings (loss)
    
    $
    (31,100
    )
    
    $
    (5,446
    )Weighted average common shares outstanding
    
    
    2,214,564
    
    
    
    2,214,564Basic earnings (loss) per share
    
    $
    (0.01
    )
    
    $
    0.00DILUTED:Net earnings (loss)
    
    $
    (31,100
    )
    
    $
    (5,446
    )Weighed average common shares outstanding
    
    
    2,214,564
    
    
    
    2,214,564Dilutive effect of stock options
    
    
    
    
    
    
    Dilutive effect of stock warrants
    
    
    
    
    
    
    Total common shares and dilutive potential
common shares
    
    
    2,214,564
    
    
    
    2,214,564Diluted earnings (loss) per share
    
    $
    (0.01
    )
    
    $
    0.00
  Three months endedMarch 312008
    
    
    2007Stock options
    
    
    185,350
    
    
    
    283,329Stock warrants
    
    
    150,000
    
    
    
    150,000Total
    
    
    335,350
    
    
    
    433,329
 NOTE 4  LOANS
  March 31, 2008
    
    
    December 31, 2007Balance
    
    
    Percent
    
    
    Balance
    
    
    PercentResidential real estate
    
    $
    35,685,786
    
    
    
    26.6
    %
    
    $
    36,548,271
    
    
    
    27.4
    %Multifamily residential real estate
    
    
    7,540,614
    
    
    
    5.6
    
    
    
    7,918,222
    
    
    
    5.9Commercial real estate
    
    
    60,985,267
    
    
    
    45.4
    
    
    
    59,574,635
    
    
    
    44.7Construction
    
    
    10,763,509
    
    
    
    8.0
    
    
    
    10,714,524
    
    
    
    8.0Commercial
    
    
    12,463,312
    
    
    
    9.3
    
    
    
    12,528,137
    
    
    
    9.4Consumer and home equity
    
    
    6,904,038
    
    
    
    5.1
    
    
    
    6,141,568
    
    
    
    4.6Total loans
    
    
    134,342,526
    
    
    
    100.0
    %
    
    
    133,425,357
    
    
    
    100.0
    %Less: Allowance for loan losses
    
    
    (1,628,411
    )
    
    
    
    
    
    
    (1,622,906
    )Net deferred loan fees
    
    
    (150,094
    )
    
    
    
    
    
    
    (159,980
    )Loans, net
    
    $
    132,564,021
    
    
    
    
    
    
    $
    131,642,471
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NOTE 4  LOANS (continued)
  For the Three Months EndedMarch 31,2008
    
    
    2007Balance, beginning of period
    
    $
    1,622,906
    
    
    $
    1,757,110Provision for loan losses
    
    
    6,500
    
    
    
    43,000Loans charged-off
    
    
    (12,245
    )
    
    
    (46,627
    )Recoveries
    
    
    11,250
    
    
    
    3,392Balance, end of period
    
    $
    1,628,411
    
    
    $
    1,756,875Allowance for loan losses, percent of total loans
    
    
    1.21
    %
    
    
    0.99
    %
  March 31,
    
    December 31,2008
    
    2007Loans past due over 90 days still on accrual
    
    $
    
    
    
    $
    Nonaccrual loans, includes smaller balance homogeneous loans
    
    
    3,978,890
    
    
    
    4,205,143Impaired loans, included in nonaccrual loans
    
    
    3,328,965
    
    
    
    3,550,936Amount of the allowance for loan losses allocated
    
    $
    19,599
    
    
    $
    11,472
 NOTE 5  OTHER REAL ESTATE OWNED
  March 31,
    
    
    December 31,2008
    
    
    2007Residential real estate
    
    $
    896,141
    
    
    $
    136,716Land development
    
    
    2,281,091
    
    
    
    2,279,651Total real estate owned
    
    
    3,177,232
    
    
    
    2,416,367Less: valuation allowance
    
    
    
    
    
    
    Real estate owned, net
    
    $
    3,177,232
    
    
    $
    2,416,367
  10.




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NOTE 6  ADOPTION OF NEW ACCOUNTING STANDARDS
    NOTE 7  FAIR VALUE MEASUREMENT
       11.




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NOTE 7  FAIR VALUE MEASUREMENT (continued)
  Quoted Prices
    
    Significanton Active
    
    Other
    
    SignificantMarkets for
    
    Observable
    
    UnobservableIdentical Assets
    
    Inputs
    
    InputsMarch 31, 2008
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Available for sale
securities
    
    $
    28,295,799
    
    
    $
    
    
    
    $
    28,295,799
    
    
    $
    
  Quoted Prices
    
    Significanton Active
    
    Other
    
    SignificantMarkets for
    
    Observable
    
    UnobservableIdentical Assets
    
    Inputs
    
    InputsMarch 31, 2008
    
    (Level 1)
    
    (Level 2)
    
    (Level 3)Impaired loans
    
    $
    2,819,134
    
    
    $
    
    
    
    $
    778,406
    
    
    $
    2,040,728
   
 Item 2. Managements Discussion and Analysis
  FORWARD-LOOKING STATEMENTS
  
    
    anticipated changes in industry conditions created by state and federal legislation and
regulations;
    
    anticipated changes in general 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;
    
    retention of our existing customer base and our ability to attract new customers;
 12.




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##### Table of Contents




    
    the development of new products and services and their success in the marketplace;
    
    the adequacy of the allowance for loan losses; and
    
    statements regarding our anticipated loan and deposit account growth, expense levels,
liquidity and capital resources and projections of earnings.
  
    
    competition in the industry and markets in which we operate;
    
    changes in general interest rates;
    
    rapid changes in technology affecting the financial services industry;
    
    changes in government regulation; and
    
    general economic and business conditions.
 OVERVIEW
  
    
    Cash and cash equivalents increased $7.5 million over year end 2007.
    
    Loans increased $932,000 since December 31, 2007.
    
    Deposits increased $4.9 million over year end 2007.
    
    FHLB borrowings increased $6.0 million since December 31, 2007.
  
    
    Net loss for the period was ($31,100) or ($0.01) per share.
    
    Net interest income fell $279,900 compared to the same period a year ago.
    
    Noninterest income fell $61,000 over first quarter 2007.
    
    Noninterest expense improved by $286,200 against the same quarter last year.
    
    The federal funds target rate is 300 basis points lower than the same period a year ago,
impacting both interest income and interest expense.
  
    
    We are pleased with our deposit results for the period and believe that the continued
low cost deposit growth will contribute to improved earnings in the coming quarters.
    
    The reduction in rates has brought about a steeper yield curve that has had a dampening
effect on our loan yields. We believe that deposit rates, which typically lag changes in
the market will eventually offset, through reduced interest expense, the drop in interest
income and assist us in returning to profitability.
    
    Although the reduction in noninterest expense was positive, given the level of legal
costs anticipated with foreclosure activity scheduled for the next quarter, we will have to
work extremely hard to improve on this performance in future periods.
 13.




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CRITICAL ACCOUNTING POLICIES
 Allowance for loan losses
    FINANCIAL CONDITION  MARCH 31, 2008, COMPARED TO DECEMBER 31, 2007
 Assets
 Securities
 Loans
 Allowance for loan losses and asset quality
  14.




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Accrued interest receivable and other assets.
 Deposits
 Federal Home Loan Bank advances
 RESULTS OF OPERATIONS  THREE MONTHS ENDED MARCH 31, 2008
  Net interest income
  15.




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Three months ended March 31,2008
    
    
    2007Average
    
    
    Interest
    
    
    
    
    
    
    Average
    
    
    InterestOutstanding
    
    
    earned/
    
    
    Yield/
    
    
    outstanding
    
    
    earned/
    
    
    Yield/(Dollars in thousands)
    
    Balance
    
    
    paid
    
    
    Rate
    
    
    balance
    
    
    paid
    
    
    RateAssetsInterest-earning assets:Interest-bearing deposits and federal funds sold
    
    
    3,992
    
    
    
    32
    
    
    
    3.24
    %
    
    
    7,767
    
    
    
    100
    
    
    
    5.22
    %Securities available for sale
    
    
    28,688
    
    
    
    399
    
    
    
    5.56
    
    
    
    26,020
    
    
    
    275
    
    
    
    4.29Securities held to maturity
    
    
    3,002
    
    
    
    29
    
    
    
    3.81
    
    
    
    2,657
    
    
    
    23
    
    
    
    3.53Federal agency stock
    
    
    1,541
    
    
    
    21
    
    
    
    5.51
    
    
    
    1,541
    
    
    
    24
    
    
    
    6.32Loans (1)
    
    
    131,011
    
    
    
    2,328
    
    
    
    7.15
    
    
    
    176,412
    
    
    
    3,241
    
    
    
    7.45Total interest-earning assets
    
    
    168,234
    
    
    
    2,809
    
    
    
    6.71
    
    
    
    214,397
    
    
    
    3,664
    
    
    
    6.93Noninterest-earning assets
    
    
    16,893
    
    
    
    
    
    
    
    
    
    
    
    17,495Total assets
    
    
    185,127
    
    
    
    
    
    
    
    
    
    
    
    231,892Liabilities and Shareholders EquityInterest-bearing liabilities:Interest-bearing demand deposits
    
    
    9,874
    
    
    
    35
    
    
    
    1.43
    %
    
    
    8,985
    
    
    
    17
    
    
    
    .77
    %Savings accounts
    
    
    5,414
    
    
    
    11
    
    
    
    0.85
    
    
    
    9,109
    
    
    
    18
    
    
    
    .80Money market accounts
    
    
    44,231
    
    
    
    363
    
    
    
    3.30
    
    
    
    41,746
    
    
    
    388
    
    
    
    3.77Certificates of deposit
    
    
    74,395
    
    
    
    822
    
    
    
    4.45
    
    
    
    109,604
    
    
    
    1,288
    
    
    
    4.77Total interest-bearing deposits
    
    
    133,914
    
    
    
    1,231
    
    
    
    3.70
    
    
    
    169,444
    
    
    
    1,711
    
    
    
    4.10Other borrowings
    
    
    18,941
    
    
    
    221
    
    
    
    4.68
    
    
    
    23,226
    
    
    
    317
    
    
    
    5.54Total interest-bearing liabilities
    
    
    152,855
    
    
    
    1,452
    
    
    
    3.82
    
    
    
    192,670
    
    
    
    2,028
    
    
    
    4.27Noninterest-bearing demand deposits
    
    
    14,590
    
    
    
    
    
    
    
    
    
    
    
    18,046Noninterest-bearing liabilities
    
    
    945
    
    
    
    
    
    
    
    
    
    
    
    1,151Total liabilities
    
    
    168,390
    
    
    
    
    
    
    
    
    
    
    
    211,867Shareholders equity
    
    
    16,737
    
    
    
    
    
    
    
    
    
    
    
    20,025Total liabilities and shareholders equity
    
    
    185,127
    
    
    
    
    
    
    
    
    
    
    
    231,892Net interest income; interest-rate spread (2)
    
    
    
    
    
    
    1,357
    
    
    
    2.89
    %
    
    
    
    
    
    
    1,636
    
    
    
    2.66
    %Net earning assets
    
    
    15,379
    
    
    
    
    
    
    
    
    
    
    
    21,727Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    3.24
    %
    
    
    
    
    
    
    
    
    
    
    3.10
    %Average interest-earning assets to
interest-bearing liabilities
    
    
    1.10x
    
    
    
    
    
    
    
    
    
    
    
    1.11x
 
 (1)
    
    Net of net deferred loan fees and costs and loans in process. Non-accrual loans are reported in non-interest earning assets in this table.(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, annualized, divided by average interest-earning assets. Interest income
 Interest expense
 Provision for loan losses
 16.




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##### Table of Contents



Noninterest income
 Noninterest expense
 Salary and benefits
 Professional fees
 Franchise tax.
 Other expenses
 STRATEGIC DEVELOPMENTS
    
    
    Transform the balance sheet through low cost deposit growth
    
    Increase top line revenue
    
    Improve credit quality
 17.




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##### Table of Contents



CONTRACTUAL OBLIGATIONS, COMMITMENTS, CONTINGENT LIABILITIES AND OFF-BALANCE SHEET ARRANGEMENTS
   LIQUIDITY
     CAPITAL RESOURCES
   18.




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##### Table of Contents



To Be Well-Capitalized UnderFor Capital
    
    Prompt CorrectiveActual
    
    Adequacy Purposes
    
    Action ProvisionsAmount
    
    Ratio
    
    Amount
    
    Ratio
    
    Amount
    
    RatioTotal capital to risk-weighted assets
    
    $
    16,142
    
    
    
    11.3
    %
    
    $
    11,476
    
    
    
    8.0
    %
    
    $
    14,345
    
    
    
    10.0
    %Tier 1 capital to risk-weighted
assets
    
    $
    14,514
    
    
    
    10.1
    %
    
    $
    5,738
    
    
    
    4.0
    %
    
    $
    8,607
    
    
    
    6.0
    %Tier 1 capital to average assets
    
    $
    14,514
    
    
    
    7.9
    %
    
    $
    7,369
    
    
    
    4.0
    %
    
    $
    9,212
    
    
    
    5.0
    %
  
 Item 3. Not applicable for Smaller Reporting Companies.
 
 Item 4. Controls and Procedures
  19.




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings.
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
  
 Item 3. Defaults Upon Senior Securities.
  
 Item 4. Submission of Matters to a Vote of Security Holders.
  
 Item 5. Other Information.
  20.




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##### Table of Contents



Item 6. Exhibits.
 ExhibitNumber
    
    Note
    
    Description of Document3.1
    
    
    (1
    )
    
    Second Amended and Restated Articles of Incorporation of Ohio Legacy Corp3.2
    
    
    (2
    )
    
    Code of Regulations of Ohio Legacy Corp, as amended by Amendment No. 14.1
    
    
    (3
    )
    
    See Pages 1 through 9 of Exhibit 3.1 for provisions defining the rights of the holders of common shares4.2
    
    
    (3
    )
    
    Form of Organizer Stock Purchase Warrant4.4
    
    
    (2
    )
    
    2004 Amendment to Omnibus Stock Option, Stock Ownership and Long Term Incentive Plan of Ohio Legacy Corp10.1
    
    
    (3
    )
    
    Omnibus Stock Option, Stock Ownership and Long Term Incentive Plan10.2
    
    
    (4
    )
    
    2002 Amendment to Omnibus Stock Option, Stock Ownership and Long Term Incentive Plan of Ohio Legacy Corp10.5
    
    
    (3
    )
    
    Lease Agreement dated August 24, 1999, by and among Jack K. and Heidi M. Gant and Ohio Legacy Corp10.6
    
    
    (3
    )
    
    Lease Agreement dated November 30, 1999, by and between Schoeppner Properties and Ohio Legacy Corp10.8
    
    
    (5
    )
    
    Lease Agreement dated October 2001 by and between Shee-Brees, L.L.C. and Ohio Legacy Corp10.10
    
    
    (6
    )
    
    Assignment and assumption of lease by and among Unizan Bank, Ohio Legacy Bank and Chesterland Productions,
P.L.L. dated August 27, 200410.11
    
    
    (7
    )
    
    Employment Agreement with Mr. Kramer10.12
    
    
    (8
    )
    
    Change in Control Agreement with
Mr. Williams10.13
    
    
    (8
    )
    
    Change in Control Agreement with Mr. Spradlin10.14
    
    
    (8
    )
    
    Change in Control Agreement with Mr. Dodds10.15
    
    
    (9
    )
    
    Loan Processing Agreement dated April 28, 2008 by and between Midwest Mortgage Porcessing, LLC and Ohio
Legacy Bank, N.A.10.16
    
    
    (9
    )
    
    Administrative Services Agreement dated April 28, 2008 by and between JMC Marketing Ltd. And Ohio Legacy
Bank, N.A.10.17
    
    
    
    
    
    Guaranty dated April 28, 2008 by and between James A. Hinkle, Cheldon
Rose, Michael Prall and Ohio Legacy Bank, N.A.11
    
    
    
    
    
    Statement Regarding Computation of Per Share Earnings (incorporated by
reference to
Note 3 on page 9 of the this Form 10-Q)31.1
    
    
    
    
    
    Rule 13a-14(a)/15d-14(a) Certification of Principal Executive Officer and
acting Chief Financial Officer32.1
    
    
    
    
    
    Certification Pursuant To 18 U.S.C. Section 1350 As Adopted Pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002
 
 (1)
    
     Incorporated by reference to Registrants Form 10-QSB for the fiscal quarter ended June 30, 2003, filed on August 14, 2003(2)
    
     Incorporated by reference to Registrants Form 10-KSB for the fiscal year ended December 31, 2003, filed on March 17, 2004(3)
    
     Incorporated by reference to Registrants Form SB-2, File No. 333-38328, effective June 1, 2000(4)
    
     Incorporated by reference to Registrants Form S-8, File No. 333-88842, effective May 22, 2002(5)
    
     Incorporated by reference to Registrants Form 10-KSB for the fiscal year ended December 31, 2001, filed on April 1, 2002(6)
    
     Incorporated by reference to Registrants Form 10-KSB for the fiscal year ended December 31, 2004, filed on March 22, 2005(7)
    
     Incorporated by reference to Registrants Form 8-K filed on May 6, 2005(8)
    
     Incorporated by reference to Registrants Form 10-K filed on April 7, 2008(9)
    
     Confidential treatment has been requested for the redacted portions of this exhibit, and
such confidential portions have been omitted and filed separately with the Securities and
Exchange Commission. 21.




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##### Table of Contents



SIGNATURES
  OHIO LEGACY CORP
(Registrant)Date: May 15, 2008
    By:
    /s/ D. Michael KramerD. Michael Kramer, President,President, Chief Executive Officer and acting
Chief Financial Officer 22.