UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q


(Mark
One)





x
            QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
  SECURITIES


EXCHANGE
      ACT OF 1934





For the quarterly period ended March
31, 2009


or


 ̈
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT OF
      1934





For the transition period from
__________ to __________





Commission
file number:  000-31673




OHIO LEGACY CORP
 (Exact
name of registrant as specified in its charter)
  Ohio
                    
                    34-1903890(State
      or other jurisdiction of incorporation or organization)
                    
                    I.R.S.
      Employer Identification
Number
  2375 Benden Drive Suite C, Wooster, OH, 44691
 (Address
of principal executive offices)
 
 (330) 263-1955
 Registrant's
telephone number


Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days. Yes x     No
 ̈




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes o   No x


Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in rule 12b-2 of the Exchange Act.





Large
      accelerated filer  ̈
              Accelerated
      filer  ̈Non-accelerated
      filer  ̈
              Smaller
      reporting company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).   Yes  ̈  No
x





APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY


PROCEEDINGS
DURING THE PRECEDING FIVE YEARS





Indicate
by check mark whether the registrant has filed all documents and reports
required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act
of 1934 subsequent to the distribution of securities under a plan confirmed by a
court    Yes  ̈   No
 ̈





As of May
14, 2009, the latest practicable date, there were 2,214,564 shares of the
issuer’s Common Stock, without par value, issued and
outstanding.





OHIO
LEGACY CORP


FORM
10-Q


AS OF AND
FOR THE THREE MONTHS ENDED MARCH 31, 2009


FIRST
QUARTER REPORT




PagePART
      I - FINANCIAL INFORMATIONItem
      1. Financial Statements
                      3Item
      2. Management’s Discussion and Analysis
                      15Item
      3. Not Applicable for Smaller Reporting Companies
                      24Item
      4T. Controls and Procedures
                      24PART
      II - OTHER INFORMATION
                      25Item
      1. Legal Proceedings
                      25Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                      25Item
      3. Defaults Upon Senior Securities
                      25Item
      4. Submission of Matters to a Vote of Security Holders
                      25Item
      5. Other Information
                      25Item
      6. Exhibits
                      26SIGNATURES
                      27


2.


PART
I – FINANCIAL INFORMATION





Item
1. Financial Statements.


OHIO
LEGACY CORP
 CONSOLIDATED
BALANCE SHEETS
 As of
March 31, 2009, and December 31, 2008


March
      31,
                  
                  
                  December
      31,2009
                  
                  
                  2008(unaudited)ASSETSCash
      and due from banks
                  
                  $
                  15,201,603
                  
                  
                  $
                  7,652,710Federal
      funds sold and interest-bearing deposits in financial
      institutions
                  
                  
                  2,030,536
                  
                  
                  
                  3,815,227Cash
      and cash equivalents
                  
                  
                  17,232,139
                  
                  
                  
                  11,467,937Certificate
      of deposit in financial institution
                  
                  
                  100,000
                  
                  
                  
                  100,000Securities
      available for sale
                  
                  
                  37,757,158
                  
                  
                  
                  32,726,863Securities
      held to maturity (fair value of $3,017,277 and $3,003,825 at March 31,
      2009 and December 31, 2008)
                  
                  
                  2,999,022
                  
                  
                  
                  2,999,813Loans
      held for sale
                  
                  
                  308,422
                  
                  
                  
                  1,012,038Loans,
      net of allowance of $3,565,895 and $3,398,284 at March 31, 2009 and
      December 31, 2008
                  
                  
                  121,218,324
                  
                  
                  
                  126,836,473Federal
      bank stock
                  
                  
                  1,321,150
                  
                  
                  
                  1,455,100Premises
      and equipment, net
                  
                  
                  3,198,424
                  
                  
                  
                  3,284,884Intangible
      asset
                  
                  
                  43,642
                  
                  
                  
                  59,901Other
      real estate owned
                  
                  
                  4,691,564
                  
                  
                  
                  5,215,696Accrued
      interest receivable and other assets
                  
                  
                  1,289,867
                  
                  
                  
                  1,375,369Total
      assets
                  
                  $
                  190,159,712
                  
                  
                  $
                  186,534,074LIABILITIESDeposits:Noninterest-bearing
      demand
                  
                  $
                  16,462,666
                  
                  
                  $
                  16,659,300Interest-bearing
      demand
                  
                  
                  8,728,473
                  
                  
                  
                  10,070,737Savings
      and money market
                  
                  
                  58,640,302
                  
                  
                  
                  53,483,533Certificates
      of deposit, net
                  
                  
                  75,617,373
                  
                  
                  
                  65,491,464Total
      deposits
                  
                  
                  159,448,814
                  
                  
                  
                  145,705,034Repurchase
      agreements
                  
                  
                  1,207,730
                  
                  
                  
                  1,405,619Short
      term Federal Home Loan Bank advances
                  
                  
                  -
                  
                  
                  
                  6,850,000Federal
      Home Loan Bank advances
                  
                  
                  18,500,000
                  
                  
                  
                  21,000,000Capital
      lease obligations
                  
                  
                  462,411
                  
                  
                  
                  469,060Accrued
      interest payable and other liabilities
                  
                  
                  744,197
                  
                  
                  
                  1,583,504Total
      liabilities
                  
                  
                  180,363,152
                  
                  
                  
                  177,013,217SHAREHOLDERS’
      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, 2009, and December 31, 2008,
      respectively
                  
                  
                  18,814,774
                  
                  
                  
                  18,808,311Accumulated
      earnings (loss)
                  
                  
                  (9,016,925
                  )
                  
                  
                  (9,519,307
                  )Accumulated
      other comprehensive earnings
                  
                  
                  (1,289
                  )
                  
                  
                  231,853Total
      shareholders’ equity
                  
                  
                  9,796,560
                  
                  
                  
                  9,520,857Total
      liabilities and shareholders’ equity
                  
                  $
                  190,159,712
                  
                  
                  $
                  186,534,074





See notes
to the consolidated financial statements.


3.


OHIO
LEGACY CORP


CONSOLIDATED
STATEMENTS OF OPERATIONS


For the
Three Months Ended March 31, 2009 and 2008
 (Unaudited)


For the Three Months EndedMarch 31,2009
                    
                    
                    2008Interest
      and dividend income:Loans,
      including fees
                    
                    $
                    1,944,312
                    
                    
                    $
                    2,327,699Securities,
      taxable
                    
                    
                    401,012
                    
                    
                    
                    398,929Securities,
      tax-exempt
                    
                    
                    28,554
                    
                    
                    
                    28,566Interest-bearing
      deposits, federal funds sold and other
                    
                    
                    6,263
                    
                    
                    
                    32,116Dividends
      on federal bank stock
                    
                    
                    16,464
                    
                    
                    
                    21,209Total
      interest and dividend income
                    
                    
                    2,396,605
                    
                    
                    
                    2,808,519Interest
      expense:Deposits
                    
                    
                    939,478
                    
                    
                    
                    1,231,588Short
      term Federal Home Loan Bank advances
                    
                    
                    2,085
                    
                    
                    
                    24,814Long
      term Federal Home Loan Bank advances
                    
                    
                    177,273
                    
                    
                    
                    163,440Repurchases
      agreements
                    
                    
                    932
                    
                    
                    
                    12,460Capital
      leases
                    
                    
                    18,846
                    
                    
                    
                    19,832Total
      interest expense
                    
                    
                    1,138,614
                    
                    
                    
                    1,452,134Net
      interest income
                    
                    
                    1,257,991
                    
                    
                    
                    1,356,385Provision
      for loan losses
                    
                    
                    181,000
                    
                    
                    
                    6,500Net
      interest income after provision for loan losses
                    
                    
                    1,076,991
                    
                    
                    
                    1,349,885Noninterest
      income:Service
      charges and other fees
                    
                    
                    212,186
                    
                    
                    
                    214,248Gain
      on sale of securities net of other than temporary
    impairment
                    
                    
                    574,748
                    
                    
                    
                    -Gain
      on sale of loans
                    
                    
                    19,489
                    
                    
                    
                    31,025Gain
      on redemption of equity interest in Visa
                    
                    
                    -
                    
                    
                    
                    18,391Gain
      on disposition of other real estate owned
                    
                    
                    38,020
                    
                    
                    
                    9,170Direct
      write-down of other real estate owned
                    
                    
                    (22,500
                    )
                    
                    
                    -Other
      income
                    
                    
                    7,596
                    
                    
                    
                    11,363Total
      noninterest income
                    
                    
                    829,539
                    
                    
                    
                    284,197Noninterest
      expense:Salaries
      and benefits
                    
                    
                    726,394
                    
                    
                    
                    796,468Occupancy
      and equipment
                    
                    
                    208,654
                    
                    
                    
                    227,094Professional
      fees
                    
                    
                    102,656
                    
                    
                    
                    97,927Franchise
      tax
                    
                    
                    37,500
                    
                    
                    
                    50,250Data
      processing
                    
                    
                    177,510
                    
                    
                    
                    170,256Marketing
      and advertising
                    
                    
                    27,050
                    
                    
                    
                    59,911Stationery
      and supplies
                    
                    
                    19,778
                    
                    
                    
                    27,380Amortization
      of intangible asset
                    
                    
                    16,259
                    
                    
                    
                    26,242Deposit
      expense and insurance
                    
                    
                    125,652
                    
                    
                    
                    61,137Other
      expenses
                    
                    
                    207,608
                    
                    
                    
                    148,517Total
      noninterest expense
                    
                    
                    1,649,061
                    
                    
                    
                    1,665,182Net
      earnings (loss) before income taxes
                    
                    
                    257,469
                    
                    
                    
                    (31,100
                    )Income
      tax expense (benefit)
                    
                    
                    (244,913
                    )
                    
                    
                    -Net
      earnings (loss)
                    
                    $
                    502,382
                    
                    
                    $
                    (31,100
                    )Basic
      earnings (loss) per share
                    
                    $
                    0.23
                    
                    
                    $
                    (0.01
                    )Diluted
      earnings (loss) per share
                    
                    $
                    0.23
                    
                    
                    $
                    (0.01
                    )





See notes
to the consolidated financial statements.


4.


OHIO
LEGACY CORP


CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY


For the
Three Months Ended March 31, 2009 and 2008


(Unaudited)










For
      the Three Months EndedMarch
      31,2009
                
                
                2008Shareholders’
      equity, beginning of period
                
                $
                9,520,857
                
                
                $
                15,313,643Net
      earnings (loss)
                
                
                502,382
                
                
                
                (31,100
                )Other
      comprehensive income (loss), net of tax:Net unrealized gain (loss) on
      available for sale securitiesarising during the period net of adjustments
      for amounts realized on sales of securities and other than temporary
      impairment of securities included in net earnings
                
                
                (233,142
                )
                
                
                128,690Total
      comprehensive income (loss), net of tax
                
                
                269,240
                
                
                
                97,590Additional
      paid in capital from stock based compensation expense
                
                
                6,463
                
                
                
                11,165Balance,
      end of period
                
                $
                9,796,560
                
                
                $
                15,422,398





See notes
to the consolidated financial statements.


5.


OHIO
LEGACY CORP
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 For the
Three Months Ended March 31, 2009 and 2008
 (Unaudited)


For
      the Three Months EndedMarch
      31,2009
                
                
                2008Cash
      flows from operating activities:Net
      earnings (loss)
                
                $
                502,382
                
                
                $
                (31,100
                )Adjustments
      to reconcile net earnings to net cash from
                  operating
      activities:Depreciation
      and amortization
                
                
                103,356
                
                
                
                116,888Securities
      amortization and accretion, net
                
                
                9,874
                
                
                
                6,817Origination
      of loans held for sale
                
                
                (634,039
                )
                
                
                (6,232,053
                )Proceeds
      from sales of loans held for sale
                
                
                1,357,144
                
                
                
                6,005,065Provision
      for loan losses
                
                
                181,000
                
                
                
                6,500Gain
      on sale of other real estate
                
                
                (38,020
                )
                
                
                (8,952
                )Direct
      write-down of other real estate
                
                
                22,500
                
                
                
                -Gain
      on sale of loans held for sale
                
                
                (19,489
                )
                
                
                (31,025
                )Gain
      on sale of securities available for sale
                
                
                (685,950
                )Other
      than temporary impairment of securities
                
                
                111,202FHLB
      stock dividend
                
                
                -
                
                
                
                (12,700
                )Stock
      based compensation expense
                
                
                6,463
                
                
                
                11,165Net
      change in:Accrued
      interest receivable and other assets
                
                
                205,605
                
                
                
                (299,248
                )Accrued
      interest payable and other liabilities
                
                
                (839,307
                )
                
                
                (45,141
                )Deferred
      loan fees
                
                
                (4,640
                )
                
                
                (9,886
                )Net
      cash from operating activities
                
                
                278,081
                
                
                
                (523,670
                )Cash
      flows from investing activities:Purchases of securities
      available for sale
                
                
                (34,049,155
                )
                
                
                -Sale
      of securities available for sale
                
                
                27,878,092Maturities, calls and paydowns
      of securities available for sale
                
                
                1,353,188
                
                
                
                903,482Redemptions
      of federal bank stock
                
                
                133,950
                
                
                
                -Proceeds
      from sales of other real estate owned
                
                
                694,600
                
                
                
                13,148Net change in
    loans
                
                
                5,286,841
                
                
                
                (1,683,225
                )Purchases of premises and
      equipment
                
                
                (637
                )
                
                
                (55,009
                )Net
      cash from investing activities
                
                
                1,296,879
                
                
                
                (821,604
                )Cash
      flows from financing activities:Net change in
      deposits
                
                
                13,743,780
                
                
                
                4,911,772Net change in repurchase
      agreements
                
                
                (197,889
                )
                
                
                (83,661
                )Repayment of capital lease
      obligations
                
                
                (6,649
                )
                
                
                (5,687
                )Proceeds from short term FHLB
      advances, net of repayments
                
                
                (6,850,000
                )
                
                
                (2,025,000
                )Proceeds from long
      term  FHLB advances
                
                
                3,000,000
                
                
                
                6,000,000Repayments of long term FHLB
      advances
                
                
                (5,500,000
                )
                
                
                -Net
      cash provided by financing activities
                
                
                4,189,242
                
                
                
                8,797,424Net
      change in cash and cash equivalents
                
                
                5,764,202
                
                
                
                7,452,150Cash
      and cash equivalents at beginning of period
                
                
                11,467,937
                
                
                
                7,115,205Cash
      and cash equivalents at end of period
                
                $
                17,232,139
                
                
                $
                14,567,355Supplemental
      disclosures of cash flow information:Cash
      paid during the period for:Interest
                
                $
                1,162,342
                
                
                $
                2,051,430Federal
      income taxes
                
                
                -
                
                
                
                -Non-cash
      transactions:Transfer
      of loans to other real estate owned
                
                $
                154,948
                
                
                $
                29,321





See notes
to the consolidated financial statements.


6.


OHIO
LEGACY CORP





NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS





NOTE
1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES





Nature of Operations and
Principles of Consolidation: The consolidated financial statements
include Ohio Legacy Corp (Ohio Legacy) and its wholly-owned subsidiary, Ohio
Legacy Bank, National Association (Bank). Intercompany transactions and balances
are eliminated in consolidation. References to the Company include Ohio Legacy,
consolidated with its subsidiary, the Bank.





Ohio
Legacy is a bank holding company incorporated on July 1, 1999 under the laws of
the State of Ohio. The Bank began operations on October 3, 2000. The Bank
provides financial services through its full-service offices in Wooster and
Canton, Ohio. Its primary deposit products are checking, savings and certificate
of deposit accounts, and its primary lending products are residential mortgage,
commercial and installment loans. Substantially all loans are secured by
specific items of collateral including business and consumer assets and real
estate. Commercial loans are expected to be repaid from cash flow from
operations of businesses. Real estate loans are secured by residential and
commercial real estate. Other financial instruments that potentially represent
concentrations of credit risk include deposit accounts in other financial
institutions and federal funds sold.





These
consolidated financial statements are prepared without audit and reflect all
adjustments that, in the opinion of management, are necessary to present fairly
the financial position of the Company at March 31, 2009, and its results of
operations and cash flows for the periods presented.  All such
adjustments are normal and recurring in nature.  The accounting
principles used to prepare the consolidated financial statements are in
compliance with U.S. GAAP. However, the financial statements have been prepared
in accordance with the instructions of Form 10-Q and, therefore, do not purport
to contain all necessary financial and footnote disclosures required by U.S.
GAAP.





The
financial information presented in this report should be read in conjunction
with the Company’s Form 10-K for the year ended December 31, 2008, which
includes information and disclosures not presented in this report. Reference is
made to the accounting policies of the Company described in Note 1 of the Notes
to Consolidated Financial Statements.  The Company has consistently
followed those policies in preparing this Form 10-Q.





Use of Estimates: To
prepare financial statements in conformity with U.S. GAAP, management makes
estimates and assumptions based on available information. These estimates and
assumptions affect the amounts reported in the financial statements and the
disclosures provided, and actual results could differ. The allowance for loan
losses, judgments about the other than temporary impairment of securities, fair
value of financial instruments, valuation of deferred tax assets and the fair
value of other real estate owned are particularly subject to
change.





Reclassifications:  Some
items in the prior year financial statements were reclassified to conform to the
current presentation.





Income
Taxes:  Income tax expense is the total of the current year
income tax due or refundable and the change in deferred tax assets and
liabilities.  Deferred tax assets and liabilities are the expected
future tax amounts for the temporary differences between carrying amounts and
tax bases of assets and liabilities, computed using enacted tax rates. A
valuation allowance, if needed, reduces deferred tax assets to the amount
expected to be realized.


7.


OHIO
LEGACY CORP





NOTE
2 – RECENT ACCOUNTING PRONOUNCEMENTS





Adoption
of New Accounting Pronouncements:





Accounting for Business Combinations:On December 4, 2007, the Financial Accounting Standards Board (“FASB”)
issued Statement of Financial Accounting Standards (“SFAS”) No. 141(R), “Business Combinations,” with
the objective to improve the comparability of information that a company
provides in its financial statements related to a business combination. SFAS No.
141(R) establishes principles and requirements for how the acquirer: (i)
recognizes and measures in its financial statements the identifiable assets
acquired, the liabilities assumed, and any noncontrolling interest in the
acquiree; (ii) recognizes and measures the goodwill acquired in the business
combination or a gain from a bargain purchase; and (iii) determines what
information to disclose to enable users of the financial statements to evaluate
the nature and financial effects of the business combination. The statement does
not apply to combinations between entities under common control.  The
adoption of this statement on January 1, 2009, had no impact on the Company’s
financial statements and applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008.





Noncontrolling Interests in
Consolidated Financial Statements:In December 2007, the FASB issued
Statement No. 160, “Noncontrolling Interests in
Consolidated Financial Statements,” which amends Accounting Research
Bulletin No. 51 “Consolidated
Financial Statements” (“ARB 51”). A noncontrolling interest, also known
as a “minority interest”, is the portion of equity in a subsidiary not
attributable to a parent. The objective of this statement is to improve upon the
consistency of financial information that a company provides in its consolidated
financial statements. Consistent with SFAS No. 141(R), SFAS No. 160 is effective
for fiscal years beginning on or after December 15, 2008. The adoption of this
Statement on January 1, 2009 did not have a material impact on the Company’s
consolidated financial statements.





Disclosures about Derivative
Instruments and Hedging Activities:In March 2008, FASB issued SFAS No.
161 “Disclosures about
Derivative Instruments and Hedging Activities”—an amendment to SFAS No.
133. This statement requires enhanced disclosures about an entity’s derivative
and hedging activities and therefore should improve the transparency of
financial reporting. This new accounting standard is effective for financial
statements issued for fiscal years and interim periods beginning after November
15, 2008. The adoption of this Statement on January 1, 2009, did not have a
material impact on the Company’s consolidated financial statements.





Recently
Issued but not yet Effective Accounting Pronouncements:





Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not Orderly: On April 9,
2009, the FASB issued FASB Staff Position (FSP) FAS 157-4, “Determining Fair Value When the
Volume and Level of Activity for the Asset or Liability Have Significantly
Decreased and Identifying Transactions That Are Not
Orderly.”  The FSP provides additional guidance for estimating
fair value in accordance with FASB Statement No. 157, “Fair Value Measurements”,
when the volume and level of activity for the asset or liability have
significantly decreased. The FSP also includes guidance on identifying
circumstances that indicate a transaction is not orderly. Further, the FSP
emphasizes that even if there has been a significant decrease in the volume and
level of activity for the asset or liability and regardless of the valuation
technique(s) used, the objective of a fair value measurement remains the same.
Fair value is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction (that is, not a forced
liquidation or distressed sale) between market participants at the measurement
date under current market conditions.  The FSP amends Statement 157 to
require certain additional disclosures in interim and annual periods to discuss
the inputs and valuation technique(s) used to measure fair
value.  This FSP is effective for interim and annual reporting periods
ending after June 15, 2009, with early adoption permitted for periods ending
after March 15, 2009, and shall be applied prospectively.  The Company
will adopt this new accounting pronouncement in the second quarter of
2009.  Management is still evaluating the impact of FSP
157-4.




8.


OHIO
LEGACY CORP





NOTE
2 – RECENT ACCOUNTING PRONOUNCEMENTS (continued)





Interim Disclosures about Fair Value
of Financial Instruments: On April 9, 2009, the FASB issued FASB FSP No.
FAS 107-1 and APB 28-1, “Interim Disclosures about Fair Value
of Financial Instruments.” This FSP amends FASB Statement No. 107, “Disclosures about Fair Value of
Financial Instruments”,to require disclosures about fair value of
financialinstruments for interim
reporting periods of publicly traded companies as well as in annualfinancial statements.
This FSP also amends APB Opinion No. 28, “Interim Financial Reporting”,to require those disclosures in summarized financial information at
interimreporting
periods.  This FSP is effective for interim reporting periods ending
after June 15, 2009, with early adoption permitted for periods ending after
March 15, 2009.  The Company will adopt this new accounting
pronouncement in the second quarter of 2009.  Management is still
evaluating the impact of FSP FAS 107-1 and APB 28-1.





Recognition and Presentation of
Other-Than-Temporary Impairments: On April 9, 2009, the FASB issued FSP
FAS 115-2 and FAS 124-2, “Recognition and Presentation of
Other-Than-Temporary Impairments.” This FSP amends the
other-than-temporary impairment guidance in GAAP for debt securities to make the
guidance more operational and to improve the presentation and disclosure of
other-than-temporary impairments on debt and equity securities in the financial
statements. This FSP does not amend existing recognition and measurement
guidance related to other-than-temporary impairments of equity securities. The
FSP is effective for interim and annual reporting periods ending after June 15,
2009, with early adoption permitted for periods ending after March 15, 2009. The
Company will adopt this new accounting pronouncement in the second quarter of
2009. Management is still evaluating the impact of FSP FAS 115-2 and FAS
124-2.





NOTE
3 – STOCK BASED COMPENSATION





The
Company granted 150,000 warrants (Director Warrants) to organizers of the
Company at the time of closing of the 2000 Offering. The Director Warrants vest
in equal percentages each year over a three-year period from the date of grant.
Each warrant entitles the holder to purchase a share of common stock at $10.00
per share and will expire ten years from the date of issuance. At March 31,
2009, all Director Warrants were vested and exercisable. No warrants have been
exercised to date.





No
options were granted or exercised during the first quarters of 2009 or
2008.  Following is the activity under the plan.


9.


OHIO
LEGACY CORP





Three months ended March 31,2009
                    Total options outstandingWeightedAverageExerciseShares
                  
                  
                  PriceOptions
      outstanding, beginning of period
                  
                  
                  184,700
                  
                  
                  $
                  10.86Forfeited
                  
                  
                  (7,050
                  )
                  
                  
                  9.42Exercised
                  
                  
                  -
                  
                  
                  
                  -Granted
                  
                  
                  -
                  
                  
                  
                  -Options
      outstanding, end of period
                  
                  
                  177,650
                  
                  
                  $
                  10.74Options
      exercisable, end of period
                  
                  
                  158,250
                  
                  
                  $
                  10.90





The
aggregate intrinsic value of all options outstanding and exercisable at March
31, 2009 was $0.





The
compensation cost yet to be recognized for stock options that have been awarded
but not vested is as follows:





CompensationCostsRemainder
      of 2009
                    
                    $
                    7,8322010
                    
                    
                    2,081Total
                    
                    $
                    9,913





NOTE 4 – EARNINGS (LOSS) PER
SHARE





Basic
earnings (loss) per share is net earnings (loss) divided by the weighted average
number of shares outstanding during the period.  Diluted earnings
(loss) per share includes the dilutive effect of additional potential shares
that may be issued upon the exercise of stock options and stock
warrants.  The following table details the calculation of basic and
diluted earnings (loss) per share:


10.


OHIO
LEGACY CORP





NOTE
4 – EARNINGS PER SHARE (continued)





Three
      Months Ended March 31,2009
                  
                  
                  2008BASIC:Net
      earnings (loss)
                  
                  $
                  502,382
                  
                  
                  $
                  (31,100
                  )Weighted
      average common shares outstanding
                  
                  
                  2,214,564
                  
                  
                  
                  2,214,564Basic
      earnings (loss) per share
                  
                  $
                  0.23
                  
                  
                  $
                  (0.01
                  )DILUTED:Net
      earnings (loss)
                  
                  $
                  502,382
                  
                  
                  $
                  (31,100
                  )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
                  
                  $
                  0.23
                  
                  
                  $
                  (0.01
                  )





The
following table details, as of March 31, dilutive potential common shares that
were excluded from the computation of diluted earnings per share during the
periods then ended as the effect of their exercise was
antidilutive:





Three
      months ended
                    March
      31,2009
                  
                  
                  2008Stock
      options
                  
                  
                  177,650
                  
                  
                  
                  185,350Stock
      warrants
                  
                  
                  150,000
                  
                  
                  
                  150,000Total
                  
                  
                  327,650
                  
                  
                  
                  335,350




11.


OHIO
LEGACY CORP





NOTE
5 – LOANS





Loans, by
collateral type, were as follows at March 31, 2009, and December 31,
2008:





March 31, 2009
                
                
                December 31, 2008Balance
                
                
                Percent
                
                
                Balance
                
                
                PercentResidential
      real estate
                
                $
                35,963,923
                
                
                
                28.8
                %
                
                $
                37,091,918
                
                
                
                28.5
                %Multifamily
      residential real estate
                
                
                5,507,722
                
                
                
                4.4
                
                
                
                5,558,771
                
                
                
                4.2Commercial
      real estate
                
                
                54,136,102
                
                
                
                43.4
                
                
                
                56,921,284
                
                
                
                43.7Construction
                
                
                10,878,442
                
                
                
                8.7
                
                
                
                10,799,541
                
                
                
                8.2Commercial
                
                
                11,802,685
                
                
                
                9.5
                
                
                
                12,082,242
                
                
                
                9.3Consumer
      and home equity
                
                
                6,603,168
                
                
                
                5.3
                
                
                
                7,893,464
                
                
                
                6.0Total loans
                
                
                124,892,042
                
                
                
                100.
                %
                
                
                130,347,220
                
                
                
                100.
                %Less:Allowance for loan
      losses
                
                
                (3,565,895
                )
                
                
                
                
                
                
                (3,398,284
                )Net deferred loan
      fees
                
                
                (107,823
                )
                
                
                
                
                
                
                (112,463
                )Loans, net
                
                $
                121,218,324
                
                
                
                
                
                
                $
                126,836,473





At March
31, 2009, and December 31, 2008, approximately $25,458,500 and $24,656,000,
respectively of single-family residential real estate loans were pledged as
collateral for advances from the Federal Home Loan Bank of
Cincinnati.





Activity
in the allowance for loan losses for the three months ended March 31 was as
follows:





For
      the Three Months EndedMarch
      31,2009
                
                
                2008Balance,
      beginning of period
                
                $
                3,398,284
                
                
                $
                1,622,906Provision
      for loan losses
                
                
                181,000
                
                
                
                6,500Loans
      charged-off
                
                
                (14,919
                )
                
                
                (12,245
                )Recoveries
                
                
                1,530
                
                
                
                11,250Balance,
      end of period
                
                $
                3,565,895
                
                
                $
                1,628,411Allowance
      for loan losses, percent of total loans
                
                
                2.86
                %
                
                
                1.21
                %




Loans
individually considered impaired and nonaccrual loans were as follows at March
31, 2009, and December 31, 2008:





March
      31,
                    2009
                
                
                December
      31,2008Loans
      past due over 90 days still on accrual
                
                $
                2,203,162
                
                
                $
                279,800Nonaccrual
      loans, includes smaller balance homogeneous loans
                
                
                6,915,196
                
                
                
                4,636,376Impaired
      loans with no allowance for loan losses allocated
                
                
                5,679,480
                
                
                
                3,380,537Impaired
      loans with allowance for loan loss allocated
                
                
                1,235,716
                
                
                
                1,235,839Amount
      of the allowance for loan losses allocated
                
                $
                772,000
                
                
                $
                772,000




12.


OHIO
LEGACY CORP





NOTE
6 – OTHER REAL ESTATE OWNED





Other
real estate owned was as follows at March 31, 2009 and December 31,
2008:





March
      31,2009
                
                
                December
      31,2008Residential
      real estate
                
                $
                1,906,671
                
                
                $
                2,430,803Land
      development
                
                
                2,784,893
                
                
                
                2,784,893Total
      real estate owned
                
                
                4,691,564
                
                
                
                5,215,696Less:
      valuation allowance
                
                
                -
                
                
                
                -Real
      estate owned, net
                
                $
                4,691,564
                
                
                $
                5,215,696





Assets
acquired through or instead of loan foreclosure are initially recorded at fair
value less costs to sell when acquired, establishing a new cost basis. If fair
value declines, a valuation allowance is recorded through expense. Costs after
acquisition are expensed. Improvements that improve the fair value of the
property are capitalized. It is the Company’s intention to make periodic
reassessments of the value of assets held in this category and record valuation
adjustments or write-downs as the reassessments dictate.  Real estate
owned at March 31, 2009 and December


31, 2008
includes a property placed into receivership until it can be improved and sold
in an orderly fashion.





NOTE
7 – FAIR VALUE MEASUREMENT





Statement
157 defines fair value as the exchange price that would be received for an asset
or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between
market participants on the measurement date. Statement 157 also establishes a
fair value hierarchy which requires an entity to maximize the use of observable
inputs and minimize the use of unobservable inputs when measuring fair value.
The standard describes three levels of inputs that may be used to measure fair
value:





Level 1:
Quoted prices (unadjusted) for identical assets or liabilities in active markets
that the entity has the ability to access as of the measurement
date.





Level 2:
Significant other observable inputs other than Level 1 prices, such as quoted
prices for similar assets or liabilities quoted prices in markets that are not
active, and other inputs that are observable or can be corroborated by
observable market data.





Level 3:
Significant unobservable inputs that reflect a company’s own assumptions that
market participants would use in pricing an asset or liability.





The
Company uses the following methods and significant assumptions to estimate fair
value.





Securities:
The fair values of securities available for sale are determined by obtaining
quoted prices on nationally recognized securities exchanges or matrix pricing,
which is a mathematical technique used widely in the industry to value debt
securities without relying exclusively on quoted prices for the specific
securities but rather by relying on the securities’ relationship to other
benchmark quoted securities.





Assets
measured at fair value on a recurring basis are summarized
below:


13.





OHIO
LEGACY CORP





NOTE
7 – FAIR VALUE MEASUREMENT (continued)





March
      31,2009
                
                
                December
      31,2008Available
      for sale securities
                
                $
                37,757,158
                
                
                $
                32,726,863Quoted
      prices on active markets for identical assets (Level 1)
                
                
                88,800
                
                
                
                58,000Significant
      other observable inputs (Level 2)
                
                
                37,668,358
                
                
                
                32,668,863Significant
      unobservable inputs (Level 3)
                
                $
                -
                
                
                $
                -





Assets
measured at fair value on a non-recurring basis are summarized
below:





March
      31,2009
                
                
                December
      31,2008Impaired
      loans
                
                $
                982,860
                
                
                $
                1,002,322Quoted
      prices on active markets for identical assets (Level 1)
                
                
                -
                
                
                
                -Significant
      other observable inputs (Level 2)
                
                
                -
                
                
                
                -Significant
      unobservable inputs (Level 3)
                
                $
                982,860
                
                
                
                1,002,322Other
      real estate
                
                $
                2,406,933
                
                
                $
                2,888,998Quoted
      prices on active markets for identical assets (Level 1)
                
                
                -
                
                
                
                -Significant
      other observable inputs (Level 2)
                
                
                -
                
                
                
                -Significant
      unobservable inputs (Level 3)
                
                $
                2,406,933
                
                
                $
                2,888,998





Level 2
inputs, which are quoted prices from a third party in non-active markets were
obtained on a limited number of loans. Impaired loans are generally measured for
impairment using the fair value of the loan, or the fair value of the collateral
for collateral-dependant loans, which is a Level 3 input. Some impaired loans
are charged down to the fair value of the loan or the fair value of the
collateral. Impaired loans carried at fair value had a principal balance after
partial charge downs of $1,754,860, with an additional specific allocation of
the allowance for loan losses of $772,000. Impairment charges which were
reflected as charge-offs or specific allocations through the allowance for loans
losses during the period were not material.





The
Company recorded a write-down of $22,500 to other real estate during the first
quarter of 2009.





NOTE
8 – CONSENT ORDER





The Board
of Directors of the Bank entered into a Consent Order (“Order”) with the Bank’s
primary federal regulator, the Office of the Comptroller of the Currency (“OCC”)
dated February 17, 2009. The Order required the Board of Directors to submit a
capital plan to the Assistant Deputy Controller that included specific plans to
achieve and maintain a minimum ration of Tier 1 capital to average assets of
8.75% and a minimum ratio of total capital to risk-weighted assets of 13.25% by
August 31, 2009. The Board of Directors submitted the capital plan to the OCC,
which includes the engagement of an advisory firm to seek out capital investment
from parties not currently affiliated with the Company or the Bank or attracting
a merger partner. The Company’s management and Board of Directors are in active
discussions with several parties in an attempt to achieve one of these
objectives. Additionally, the capital plan calls for management to continue to
manage the Bank’s assets with the goal of protecting and growing capital and
reducing the level of criticized assets.




The Order
provides that the OCC shall maintain the ability to take any action the OCC
deems appropriate in fulfilling its regulatory and supervisory
responsibilities during the term of the Consent Order or upon the failure of the
Bank to comply with the terms of the Consent Order.




Further
details and projections regarding the Company’s capital levels are provided
below in the Capital Resources portion of Management’s Discussion and
Analysis.




14.


OHIO
LEGACY CORP





Item
2.  Management’s Discussion and Analysis





In the
following section, management presents an analysis of Ohio Legacy Corp's
financial condition as of March 31, 2009, and December 31, 2008 and results of
operations for the three months ended March 31, 2009 and 2008.  This
discussion is provided to give shareholders a more comprehensive review of the
operating results and financial condition than could be obtained from an
examination of the financial statements alone.  This analysis should
be read in conjunction with the consolidated financial statements and related
footnotes and the selected financial data elsewhere in this report. As used
herein and except as the context may otherwise require, references to "the
Company," "we," "us," or "our" means, collectively, Ohio Legacy Corp (Ohio
Legacy) and its wholly-owned subsidiary, Ohio Legacy Bank, N.A.
(Bank).


15.


OHIO
LEGACY CORP





FORWARD-LOOKING
STATEMENTS





This
Management’s Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) includes forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of
the  Securities  Exchange Act of 1934, as amended, which can
be identified by the use of forward-looking terminology, such  as:
"may," "might," "could," "would," “should,” "believe," "expect," "intend,"
"plan," "seek," "anticipate," "estimate,"


"project"
or "continue" or the negative thereof or comparable terminology.  All
statements other than statements of historical fact included in this MD&A
regarding our financial position, capital adequacy and liquidity are
forward-looking statements.  These forward-looking statements also
include, but are not limited to:





·
            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;





·
            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.





These
forward-looking statements involve known and unknown risks, uncertainties and
other factors which may cause our actual results to be materially different from
any future results expressed or implied by such forward-looking statements.
Although we believe the expectations reflected in such forward-looking
statements are reasonable, we can give no assurance such expectations will prove
to have been correct. Important factors that could cause actual results to
differ materially from those in the forward-looking statements included herein
include, but are not limited to:





·
            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.


16.


OHIO
LEGACY CORP





OVERVIEW





The
following key factors summarize changes in our financial condition during the
three months ended March 31, 2009:





·
            The
      total risk based capital ratio increased to 8.8% from 7.6% at year
      end


·
            Real
      estate owned declined by $524,100·
            Non-accrual
      loans increased by $2.3 million


·
            Loans
      declined $5.6 million





The
following key factors summarize our results of operations during the three
months ended March 31, 2009:





·
            Net
      income for the period was $502,382


·
            Noninterest
      income was $829,539 compared to $284,200 in 2008 as a result of gains on
      the sale of $27.9 million of
securities


·
            The
      provision for loan losses was $181,000 compared to $6,500 in the prior
      year·
            A
      prior year tax refund of $244,900 was recorded due to recent changes in
      the tax law





The
following forward-looking statements describe our near term
outlook:





·
            Credit
      quality continues to be the primary focus of the
  Company


·
            Capital
      preservation is also a key priority for the
  Company


·
            The
      Company is fully engaged in exploring all alternatives to address our
      capital shortfall





CRITICAL
ACCOUNTING POLICIES





Allowance for loan
losses.  The allowance for loan losses is a valuation allowance
for probable incurred credit losses.  Loan losses are charged against
the allowance when management believes the uncollectibility of a loan balance is
confirmed.





Subsequent
recoveries, if any, are credited to the allowance. Management estimates the
allowance balance required using past loan loss experience, the nature and
volume of the portfolio, information about specific borrower situations and
estimated collateral values, economic conditions, and other
factors.  Allocations of the allowance may be made for specific loans,
but the entire allowance is available for any loan that, in management’s
judgment, should be charged off.





The
allowance consists of specific and general components.  The specific
component relates to loans that are individually classified as impaired or loans
otherwise classified as substandard or doubtful.  The general
component covers non-classified loans and is based on historical loss experience
adjusted for current factors.





A loan is
considered impaired when, based on current information and events, it is
probable that the Company will be unable to collect the scheduled payments of
principal or interest when due according to the contractual terms of the loan
agreement.  Factors considered by management in determining impairment
include payment status, collateral value, and the probability of collecting
scheduled principal and interest payments when due.  Loans that
experience insignificant payment delays and payment shortfalls generally are not
classified as impaired.  Management determines the significance of
payment delays and payment shortfalls on a case-by-case basis, taking into
consideration all of the circumstances surrounding the loan and the borrower,
including the length of the delay, the reasons for the delay, the borrower’s
prior payment record, and the amount of the shortfall in relation to the
principal and interest owed.  Impairment is measured on a loan by loan
basis for commercial and construction loans by either the present value of
expected future cash flows discounted at the loan’s effective interest rate, the
loan’s obtainable market price, or the fair value of the collateral if the loan
is collateral dependent.  Large groups of smaller balance homogeneous
loans are collectively evaluated for impairment.  Accordingly, the
Company does not separately identify individual consumer and residential loans
for impairment disclosures.




17.


OHIO
LEGACY CORP





Valuation allowance for deferred tax
assets. Another
critical accounting policy relates to valuation of the deferred tax asset for
net operating losses. Net operating loss carryforwards of approximately $1,551,000
will expire as follows: $1,419,000 on December 31, 2027 and $132,000
on December 31, 2028. A valuation allowance has been recorded for the
related deferred tax asset for these carryforwards and other net deferred tax
assets recorded by the Company to reduce the carrying amount of these assets to
zero.





FINANCIAL
CONDITION – MARCH 31, 2009, COMPARED TO DECEMBER 31, 2008





Assets.At March 31, 2009,
assets totaled $190.2 million, an increase of $3.6 million or 1.9%, from
December 31, 2008. The overall mix of the balance sheet changed as part of the
Company’s efforts to strengthen its risk based capital position.





Securities. Total securities
increased by $5.0 million to $40.8 million. The portfolio consists primarily of
mortgage backed securities issued by the Government National Mortgage
Association (GNMA), which are guaranteed by the full faith and credit of the
U.S. Government. At March 31, 2009 we believe the effective duration of the
portfolio excluding equity investments is approximately 3.6 years. The
unrealized loss on the portfolio, net of tax, was $2,000 compared to an
unrealized gain of $231,900 at year end.





Loans.  At March
31, 2009, the loan portfolio, net of the allowance for loan losses and deferred
fees, totaled $121.2 million, a decrease of approximately $5.6 million compared
to December 31, 2008. The Company is strategically working to change the
composition of the portfolio to lower its risk profile.





Allowance for loan losses and asset
quality.Nonperforming loans
totaled $6.9 million at March 31, 2009 compared to $4.6 million at December 31,
2008. The increase is the result of the addition of one loan with a balance of
$2.5 million, which was
previously rated as substandard. The loan is a participation with multiple
banks, and the borrower and the banking group are in the process of
restructuring the debt. Since the property owners made the January 2009 payment
and have indicated a willingness to consider an additional capital infusion,
management has determined that no additional provision is needed at this time.
The increase was offset in part by $151,500 that was transferred to REO and
approximately $49,500 in payoffs. Loans are considered nonperforming if
they are impaired or if they are in non-accrual status. We review nonperforming
loans on a weekly basis to assess the risk of loss.





The
allowance for loan losses totaled $3.6 million at March 31, 2009, compared to
$3.4 million at year end 2008.  As part of the Company’s quarterly
reevaluation of the ALLL, the negative outlook for the commercial real estate
market was increased, requiring the addition of $181,000 to the allowance.
Credit quality and delinquencies are closely monitored, and the allowance for
loan losses will be increased if we believe losses have been
incurred.





Accrued interest receivable and
other assets.Accrued interest receivable and other assets decreased by
$85,500 during the first quarter. Prepaid franchise taxes and insurance that are
booked at the beginning of the year and expensed on a monthly basis increased by
$90,100. The Company recorded a tax refund of $289,000 as a result of changes in
the tax code that allow net operating losses to be carried back five years,
which was offset by a $585,100 reduction in the current tax
provision.


18.




OHIO
LEGACY CORP


Deposits.  Total
deposits increased $13.7 million to $159.4 million at March 31, 2009. Core
deposit balances increased $3.6 million to $83.8 million, largely in response to
deposit promotions introduced late in 2008 that continued throughout the early
part of the quarter. Certificates of deposit increased $10.1 million, also due
to a short term promotion that began late in the fourth quarter of 2008 and
ended early in 2009. The Company’s strategy in the first quarter focused on
developing business banking relationship in both markets and reducing other
borrowings





Federal Home Loan Bank
advances.  The Company decreased its overnight borrowing
position with the Federal Home Loan Bank by $6.9 million early in the quarter.
In addition, a $3.0 million 24 month term advance maturing in January was
renewed, reducing the rate from 4.89% to 3.19%. A $2.5 million term advance with
a rate of 5.24% was paid off in February.





RESULTS
OF OPERATIONS – THREE MONTHS ENDED MARCH 31, 2009





Net
earnings (loss) totaled $502,382 for the three months ended March 31, 2009, or
$0.23 per diluted share, compared to ($31,100) or ($0.01) per diluted share
during the first quarter of 2008.





Net interest
income.  During the three months ended March 31, 2009, net
interest income was $1.3 million, compared to $1.4 million in the comparable
quarter. Net interest income year-over-year was negatively impacted by both a
decrease in earning assets and a decrease in the yield on those assets. Total
interest bearing liabilities increased, but was offset by a significant decrease
in the rates paid.





The
following table sets forth information relating to our average balance sheets
and reflects the average yield on interest-earning assets and the average cost
of interest-bearing liabilities for the periods indicated.  These
yields and costs are derived by dividing income or expense, on an annualized
basis, by the average balances of interest-earning assets or interest-bearing
liabilities for the periods presented.





19.




OHIO
LEGACY CORP


Three
      months ended March 31,2009
                      
                      
                      2008Average
                      
                      
                      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
                      
                      
                      4,602
                      
                      
                      
                      6
                      
                      
                      
                      0.55
                      %
                      
                      
                      3,992
                      
                      
                      
                      32
                      
                      
                      
                      3.24
                      %Securities
      available for sale
                      
                      
                      32,203
                      
                      
                      
                      401
                      
                      
                      
                      4.99
                      
                      
                      
                      28,688
                      
                      
                      
                      399
                      
                      
                      
                      5.56Securities
      held to maturity
                      
                      
                      3,000
                      
                      
                      
                      29
                      
                      
                      
                      3.81
                      
                      
                      
                      3,002
                      
                      
                      
                      29
                      
                      
                      
                      3.81Federal
      agency stock
                      
                      
                      1,354
                      
                      
                      
                      16
                      
                      
                      
                      4.86
                      
                      
                      
                      1,541
                      
                      
                      
                      21
                      
                      
                      
                      5.51Loans (1)
                      
                      
                      122,963
                      
                      
                      
                      1,944
                      
                      
                      
                      6.41
                      
                      
                      
                      131,011
                      
                      
                      
                      2,328
                      
                      
                      
                      7.15Total
      interest-earning assets
                      
                      
                      164,122
                      
                      
                      
                      2,397
                      
                      
                      
                      5.92
                      %
                      
                      
                      168,234
                      
                      
                      
                      2,809
                      
                      
                      
                      6.71
                      %Noninterest-earning assets
                      
                      
                      27,423
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      16,893Total
      assets
                      
                      
                      191,545
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      185,127Liabilities
      and Shareholders’ EquityInterest-bearing
      liabilities:Interest-bearing
      demand deposits
                      
                      
                      10,031
                      
                      
                      
                      19
                      
                      
                      
                      0.75
                      %
                      
                      
                      9,874
                      
                      
                      
                      35
                      
                      
                      
                      1.43
                      %Savings
      accounts
                      
                      
                      15,757
                      
                      
                      
                      85
                      
                      
                      
                      2.19
                      
                      
                      
                      5,414
                      
                      
                      
                      11
                      
                      
                      
                      0.85Money
      market accounts
                      
                      
                      39,940
                      
                      
                      
                      187
                      
                      
                      
                      1.90
                      
                      
                      
                      44,231
                      
                      
                      
                      363
                      
                      
                      
                      3.30Certificates
      of deposit
                      
                      
                      74,714
                      
                      
                      
                      649
                      
                      
                      
                      3.52
                      
                      
                      
                      74,395
                      
                      
                      
                      822
                      
                      
                      
                      4.45Total
      interest-bearing deposits
                      
                      
                      140,442
                      
                      
                      
                      940
                      
                      
                      
                      2.72
                      
                      
                      
                      133,914
                      
                      
                      
                      1,231
                      
                      
                      
                      3.70Other
      borrowings
                      
                      
                      23,240
                      
                      
                      
                      199
                      
                      
                      
                      3.48
                      
                      
                      
                      18,941
                      
                      
                      
                      221
                      
                      
                      
                      4.68Total
      interest-bearing liabilities
                      
                      
                      163,682
                      
                      
                      
                      1,139
                      
                      
                      
                      2.82
                      %
                      
                      
                      152,855
                      
                      
                      
                      1,452
                      
                      
                      
                      3.82
                      %Noninterest-bearing
      demand deposits
                      
                      
                      16,849
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      14,590Noninterest-bearing liabilities
                      
                      
                      819
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      945Total
      liabilities
                      
                      
                      181,350
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      168,390Shareholders’
      equity
                      
                      
                      10,195
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      16,737Total
      liabilities and shareholders’ equity
                      
                      
                      191,545
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      185,127Net interest income;
      interest-rate spread (2)
                      
                      
                      
                      
                      
                      
                      1,258
                      
                      
                      
                      3.10
                      %
                      
                      
                      
                      
                      
                      
                      1,357
                      
                      
                      
                      2.89
                      %Net
      earning assets
                      
                      
                      440
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      15,379Net interest margin
      (3)
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      3.12
                      %
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      3.24
                      %Average
      interest-earning assets tointerest-bearing liabilities
                      
                      
                      1.00X
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      1.10x





(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.




20.




OHIO
LEGACY CORP




Interest income. Total
interest income declined by $411,900 to $2.4 million from the same period a year
ago. The decrease reflects both a decline in average earning assets year over
year of $4.1 million, and a 77 basis point decline in the overall yield on
earning assets from 6.71% to 5.94%. The yield on loans decreased to 6.43% in the
first quarter of 2009 from 7.15% in the first quarter of 2008. These lower rates
reflect the decrease in market rates during the past year.  The yield on
securities available for sale decreased to 4.98% from 5.56% during the same
period as a result of restructuring the portfolio in the first quarter of 2009
as well as the overall decline in market rates. As part of a strategy to reduce
the Company’s risk profile, approximately $28.0 million of agency-issued
mortgage backed securities, collateralized mortgage obligations and notes with
an average yield of 5.34% were sold in February and March, 2009. The Company
recognized a gain of $685,900 on the transaction. The proceeds of the sales and
additional cash were used to purchase $33.1 million of GNMA MBS, which are
backed by the full faith and credit of the U.S. government, at an average yield
of approximately 4.25%





Interest
expense.  Total interest expense declined by $313,500 to $1.1
million year over year. The average rate fell 99 basis points from 3.82% to
2.83%, and average total interest bearing liabilities increased $10.8 million
from $152.9 million to $163.7 million. The increase in balances was primarily
the result of deposit promotions offered late in 2008 and early in 2009. The
average balances in transaction accounts increased $6.2 million, and the average
rate declined 97 basis points. Total average certificates of deposit increased
slightly from $74.4 million to $74.7 million, and the rate declined from 4.45%
to 3.53%.





Provision for loan
losses.  The provision for loan losses totaled $181,000 during
the first quarter of 2009, compared to $6,500 in the first quarter of 2008. As
discussed above in the “Allowance for loan losses,” our provision for loan
losses can be expected to fluctuate from period to period.





Noninterest
income.  Noninterest income increased by $545,300 during the
first quarter of 2009 compared to the first quarter of 2008. In 2009, the
Company recognized a gain of $685,900 on the sale of available for securities,
which was partially offset by a $111,200 other than temporary impairment of FNMA
and FHLMC preferred stock.





Noninterest
expense.  Although total noninterest expense was essentially
the same in both quarters, there were significant changes in several
categories.





Salary and benefits. Total
salaries and benefits declined $70,100 as a result of the elimination of a
number of positions at the end of 2008.





Deposit expense and
insurance. As an FDIC insured institution, the Bank is required to pay
deposit insurance premiums to the FDIC. Because the FDIC’s deposit insurance
fund fell below prescribed levels in 2008, the FDIC has announced increased
premiums for all insured depository institutions, including the Bank, in order
to begin recapitalizing the fund.  Insurance assessments range from
0.12% to 0.50% of total deposits for the first calendar quarter 2009
assessment.  Effective April 1, 2009, insurance assessments will range
from 0.07% to 0.78%, depending on an institution's risk classification and other
factors.





In
addition, under a proposed rule, the FDIC indicated its plans to impose a 20
basis point emergency assessment on insured depository institutions to be paid
on September 30, 2009, based on deposits at June 30, 2009.  FDIC
representatives subsequently indicated the amount of this special assessment
could decrease if certain events transpire.  The proposed rule would
also authorize the FDIC to impose an additional emergency assessment of up to 10
basis points after June 30, 2009, if necessary to maintain public confidence in
federal deposit insurance.





These
changes would result in increased deposit insurance expense for the Bank in
2009.  These increases will be reflected in other expenses in the
Bank's income statement in the period of enactment.





21.




OHIO
LEGACY CORP


The
increase of $64,500 from $61,600 to $125,700 was the result of the first
scheduled increase in FDIC premiums as described above.





Other expenses. Other
expenses increased by $59,100 to $207,600 in 2009 as compared to $148,500 in the
first quarter of 2008. The decrease is primarily due to higher expenses to
manage properties held in Other Real Estate.




Tax expense (benefit).As a result of a change
in the tax law late in 2008 that allows net operating losses to be carried back
five years, the Company was able to amend its 2003 tax return and record a
refund of taxes paid for that year. The refund of $289,300 was offset by a
$44,400 change in accrued taxes for 2008, resulting in a tax benefit of
$244,900. The Company does not expect to recognize any further tax benefits in
2009.




STRATEGIC
DEVELOPMENTS





As
disclosed in an 8-K on February 20, 2009, the Company entered into an Order of
Consent with the Comptroller of the Currency of the United States of America.
The Order requires the Bank to increase its capital to certain specified levels.
As disclosed in the 10-K filed on April 3, 2009, the Board of Directors has
retained the services of the investment banking firm of Stifel, Nicolaus to
explore the options of raising private equity capital, or merging with or being
acquired by another financial institution or other interested investors to
achieve compliance with the Order of Consent.





The
Company has been successful in disposing of a number of properties held in other
real estate during the first quarter. A total of five properties were sold
during the quarter, generating proceeds of $694,600 and gains of $38,000.
Subsequent to the end of the quarter, three additional properties were sold,
generating approximately $271,000 in proceeds. Another property is under
contract for a gross selling price of $162,500. Two properties carried at a
total value of $323,000 were sold at sheriff sale during the first quarter of
2009. In May, five properties carried at a total value of $510,000 are scheduled
for sheriff sale. Once the deeds from the completed sheriff sales are received,
the properties will be listed for sale. The total value of the properties
discussed above is approximately $1.8 million; converting these balances to
earning assets will generate interest income and eliminate the recurring
expenses associated with managing and maintaining the properties.





The
investment portfolio restructuring completed during the quarter benefited the
Company’s risk-based capital ratio both by generating securities gains, which
increased total capital, and by reducing total risk-weighted assets, which
lessened the base on which the ratio is calculated. As loans continue to pay
off, the Company intends to invest a portion of the proceeds into additional
GNMA securities, which will keep total risk-weighted assets near their current
level while generating interest income. Despite these improvements, second
quarter results will be negatively impacted by the increased FDIC premium
expense discussed above in “Deposit expense and insurance.”





CONTRACTUAL
OBLIGATIONS, COMMITMENTS, CONTINGENT LIABILITIES AND OFF-BALANCE SHEET
ARRANGEMENTS





There
have been no material changes in the Company’s contractual obligations since
December 31, 2008.





At March
31, 2009, we had no active unconsolidated, related special purpose entities, nor
did we engage in derivatives and hedging contracts, such as interest rate swaps,
that may expose us to liabilities greater than the amounts recorded on the
consolidated balance sheet. Our investment policy prohibits engaging in
derivatives contracts for speculative trading purposes; however, we may pursue
certain contracts, such as interest rate swaps, in our efforts to execute a
sound and defensive interest rate risk management policy.




22.


OHIO
LEGACY CORP




LIQUIDITY





Liquidity
refers to our ability to fund loan demand and customers’ deposit withdrawal
needs and to meet other commitments and contingencies. The purpose of liquidity
management is to ensure sufficient cash flow to meet all of our financial
commitments and to capitalize on opportunities for business expansion in the
context of managing the Company’s interest rate risk exposure. This ability
depends on our financial strength, asset quality and the types of deposit and
loan instruments we offer to our customers.





Our
principal sources of funds are deposits, loan and security repayments and
maturities, sales of securities, borrowings from the FHLB and capital
transactions. Alternative sources of funds include repurchase agreements and
brokered CDs and the sale of loans. While scheduled loan repayments and maturing
investments are relatively predictable, deposit flows and early loan and
security prepayments are more influenced by interest rates, general economic
conditions and competition. We maintain investments in liquid assets based upon
our assessment of our need for funds, our expected deposit flows, yields
available on short-term liquid assets and the objectives of our asset/liability
management program.





We have
implemented a liquidity contingency funding plan that identifies liquidity
thresholds and red flags that may provide evidence of impending liquidity
crises. Additionally, the liquidity contingency plan details specific actions to
be taken by management and the Board of Directors and identifies sources of
emergency liquidity, both asset and liability-based, should we encounter a
liquidity crisis. We actively monitor liquidity risk and analyze various
scenarios that could impact our ability to access emergency funding in
conjunction with our asset/liability and interest rate risk management
activities.





The
balances in cash and cash equivalents increased $5.8 million to $17.2 million at
March 31, 2009 compared to year end 2008. Cash and cash equivalents represented
9.1% of total assets at March 31, 2009 and 6.2% of total assets at December 31,
2008. The increase in cash was due largely to deposit promotions early in
2009.





CAPITAL
RESOURCES





Total
shareholders’ equity was $9.8 million at March 31, 2009, an increase of $275,700
from the prior year-end balance. The increase in equity was due to net income of
$502,400 for the period, partially offset by a $233,100 decrease in the
unrealized gain of securities available for sale during the
quarter.





The Bank
is subject to regulatory capital requirements administered by federal banking
agencies. Capital adequacy guidelines and prompt corrective action regulations
involve quantitative measures of assets, liabilities and certain off-balance
sheet items calculated under regulatory accounting practices. Capital amounts
and classifications are also subject to qualitative judgments by regulators.
Prompt corrective action regulations provide five classifications: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized, although these terms are not
used to represent overall financial condition. Failure to meet capital
requirements can initiate regulatory action. At March 31, 2009, the Bank met the
definition of adequately capitalized as described above.





On
February 17, 2009, the Company entered into an Order of Consent with the
Comptroller of the Currency of the United States of America. The Order requires
the Bank to increase its Tier 1
capital to at least 8.75% of adjusted total assets and its total risk based
capital to at least 13.25% of risk-weighted assets. To have achieved both those
levels at March 31, 2009, the Bank would have needed approximately $7.3 million
of additional capital.




The Board
of Directors has retained the services of the investment banking firm of
Stifel, Nicolaus to explore the options of raising private equity capital, or
merging with or being acquired by another financial institution or other
interested investors.




23.


OHIO
LEGACY CORP




Actual
and required capital amounts (in thousands) and ratios are presented below at
March 31, 2009:





To
      Be Well-Capitalized
      UnderFor
      Capital
                  
                  
                  Prompt
      CorrectiveActual
                  
                  
                  Adequacy Purposes
                  
                  
                  Action ProvisionsAmount
                  
                  
                  Ratio
                  
                  
                  Amount
                  
                  
                  Ratio
                  
                  
                  Amount
                  
                  
                  RatioTotal
      capital to risk-weighted assets
                  
                  $
                  11,032
                  
                  
                  
                  8.8
                  %
                  
                  $
                  9,974
                  
                  
                  
                  8.0
                  %
                  
                  $
                  12,467
                  
                  
                  
                  10.0
                  %Tier
      1 capital to risk-weighted assets
                  
                  $
                  9,449
                  
                  
                  
                  7.6
                  %
                  
                  $
                  4,987
                  
                  
                  
                  4.0
                  %
                  
                  $
                  7,480
                  
                  
                  
                  6.0
                  %Tier
      1 capital to average assets
                  
                  $
                  9,449
                  
                  
                  
                  5.0
                  %
                  
                  $
                  7,627
                  
                  
                  
                  4.0
                  %
                  
                  $
                  9,534
                  
                  
                  
                  5.0
                  %





The
payment of dividends by the Bank to Ohio Legacy is subject to restrictions by
regulatory agencies.  These restrictions generally limit dividends to
the sum of current year’s and the prior two years’ retained earnings, as
defined.  In addition, dividends may not reduce capital levels below
the minimum regulatory requirements as described above. Based on its year to
date and previous year’s earnings, the Company is not able to declare dividends
without prior approval from its regulators. In addition to the dividend
restrictions above, the Bank is not permitted to issue brokered deposits without
prior approval from its regulators





Item
3.  Not applicable for Smaller Reporting Companies.





Item
4T.  Controls and Procedures





As of
March 31, 2009, an evaluation was conducted under the supervision and with the
participation of Ohio Legacy Corp’s management, including our Chief Executive
Officer and Chief Financial Officer of the effectiveness of our disclosure
controls and procedures (as defined in Rule 13a-15(e) under the Securities
Exchange Act of 1934, as amended). Based on their evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our disclosure
controls and procedures are effective to ensure that information required to be
disclosed in reports that we file or submit under the Exchange Act is recorded,
processed, summarized and reported within the time periods specified in
Securities and Exchange Commission rules and forms. There was no change in Ohio
Legacy Corp’s internal control over financial reporting that occurred during the
Company’s fiscal quarter ended March 31, 2009, that has materially affected, or
is reasonably likely to materially affect, Ohio Legacy’s Corp’s internal control
over financial reporting.




24.


OHIO
LEGACY CORP
  PART
II – OTHER INFORMATION





Item
1.  Legal Proceedings.





There are
no matters required to be reported under this item.





Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds.





There are
no matters required to be reported under this item.





Item
3.  Defaults Upon Senior Securities.





There are
no matters required to be reported under this item.





Item
4.  Submission of Matters to a Vote of Security
Holders.





There are
no matters required to be reported under this item.





Item
5.  Other Information.





There are
no matters required to be reported under this item.





25.


OHIO
LEGACY CORP




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 Corp10.3
                                    
                                    
                                    (3)
                                    
                                    Lease
      Agreement dated August 24, 1999, by and among Jack K. and Heidi M. Gant
      and Ohio Legacy Corp10.4
                                    
                                    
                                    (3)
                                    
                                    Lease
      Agreement dated November 30, 1999, by and between Schoeppner Properties
      and Ohio Legacy Corp10.5
                                    
                                    
                                    (7)
                                    
                                    Lease
      Agreement dated August 1, 2007 by and between Allen P. Reinhardt and WMBC
      Company and Ohio Legacy Bank, N.A.10.6
                                    
                                    
                                    (5)
                                    
                                    Employment
      Agreement with Mr. Kramer10.7
                                    
                                    
                                    (6)
                                    
                                    Change
      in Control Agreement with Mr. Spradlin10.8
                                    
                                    
                                    (7)
                                    
                                    Change
      in Control Agreement with Ms. Richards11
                                    
                                    
                                    
                                    
                                    Statement
      Regarding Computation of Per Share Earnings (incorporated by reference to
      Note 4 of this Form 10-Q)31.1
                                    
                                    
                                    
                                    
                                    Rule
      13a-14(a)/15d-14(a) Certification of Principal Executive Officer and 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 8-K filed on May 6,
  2005


(6)
              -
              Incorporated
      by reference to Registrant’s Form 10-K filed on April 7,
    2008


(7)
              –
              Incorporated
      by reference to Registrants Form 10-K filed on April 3,
    2009





26.


OHIO
LEGACY CORP


SIGNATURES





In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.





OHIO
      LEGACY CORP(Registrant)Date:  May
      15, 2009
                            
                            By:  /s/
      D. Michael KramerD.
      Michael Kramer, President,President,
      Chief Executive
Officer





27.