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;

· deterioration in securities markets due to a lack of liquidity and demand for securities related to real estate,

· changes in government regulation; and

· general economic and business conditions.

OVERVIEW

The following key factors summarize the Company's financial condition through June 30, 2009:

· Other real estate decreased from $5,215,700 to $4,628,300

· Nonaccrual loans increased from $4,636,400 to $7,177,000

· Loan charge offs totaled $1,519,700

17.

The following key factors summarize our results of operations for the first half of 2009:

· Net interest income fell $363,000 compared to the same period in 2008

· The provision for loan losses increased $545,000 for the previous period

· Gains on the sale of available securities totaled $574,700

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

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

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

· Capital preservation is a key priority for the Company

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. The Company stratifies the portfolio by loan type into nine separate categories, determines and assigns the components individually then aggregates the resulting amounts. The allowance for the individual categories ranges from 1.1% to 15.0%, equating to 2.4% of the entire portfolio as of June 30, 2009.

The Company changed its estimate of credit loss in the fourth quarter 2008. It shortened the historical period that forms the basis of the loss factors used in the allowance estimate from 4 years to 2.25 years to more heavily weight recent quarters with higher charge offs. The effect of the change was to increase the total amount of allowance.

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.

Valuation allowance for deferred tax assets. Another critical accounting policy relates to valuation of the deferred tax asset for net operating losses. A valuation allowance has been recorded for the deferred tax asset for net operating loss carryforwards and other net deferred tax assets to reduce the carrying amount of these assets to zero. Additional information is included in Note 1 to our audited consolidated financial statements.

18.

FINANCIAL CONDITION - JUNE 30, 2009 COMPARED TO DECEMBER 31, 2008

Assets. At June 30, 2009, assets totaled $186.3 million, essentially unchanged from $186.5 million at December 31, 2008. The composition of the balance sheet has changed significantly as the Company executed strategies to strengthen its capital position and reduce its overall risk profile.

Securities. Total securities classified as available for sale increased by $13.3 million to $46.0 million. The portfolio consists primarily of 30-year mortgage backed securities issued by the Government National Mortgage Association (GNMA), an agency guaranteed by the full faith and credit of the U.S. government. During the first quarter, the Bank sold $28.0 million of 15, 20 and 30 year mortgage backed securities issued by FNMA and FHLMC and reinvested the proceeds into GNMA securities to improve its risk weighted capital ratio. In addition, as cash from loan repayments became available during the first and second quarters, the funds were invested in additional GNMA securities. The monthly cash flow of principal and interest can be used to fund loan growth, repay liabilities or be reinvested as needed. At June 30, 2009 we believe the effective duration of the portfolio excluding equity investments was approximately 5.3%, compared to 2.1% at December 31, 2008 as a result of the strategies noted above. The increase in duration from purchasing longer average life securities can be expected to contribute to increased volatility in the market value of the portfolio for any given change in market rates. The unrealized loss on the portfolio at June 30, 2009 was approximately $347,400, compared to a gain of $351,300 at year end. The market has continued to experience significant volatility in prices and yields due to ongoing concerns about the economy in general and the mortgage sector in particular.

Loans. At June 30, 2009, the loan portfolio, net of the allowance for loan losses and deferred fees, totaled $112.7 million, a decrease of $14.1 million compared to December 31, 2008. The Company is strategically working to change the composition of the portfolio to lower its risk profile through better diversification of product types. However, continued weakness in the economy is limiting growth opportunities in preferred sectors at the current time.

Allowance for loan losses and asset quality. The allowance for loan losses totaled $2.8 million at June 30, 2009, down from $3.4 million at December 31, 2008. Four loans totaling $1.5 million were charged off in the second quarter, including two loans for which a $772,000 specific reserve had been established at year end. The Company also posted a recovery of $379,200 from a mediated insurance settlement related to construction defects for one of the loans charged off. A provision of $375,000 including a specific reserve of $100,000 was recorded in the second quarter. As a percentage of total loans, the allowance has decreased from 2.61% at year end to 2.43% at the end of the second quarter. We continue to closely monitor credit quality and delinquencies as our loan portfolio seasons, and will increase the allowance for loan losses if we believe losses have been incurred.

Loans are considered nonperforming if they are impaired or if they are in nonaccrual status. Nonperforming loans totaled $7.2 million at June 30, 2009 compared to $4.6 million at December 31, 2008. The balance includes ten loans totaling approximately $4.6 million that were converted to nonaccrual status since year end. The majority of the loans added are well secured. In addition to the loans charged off, four loans totaling $441,000 were transferred to other real estate and payments of $167,200 were recorded.

Accrued interest receivable and other assets. Accrued interest receivable and other assets decreased by $221,500 from year end. The loan recovery of $379,000 discussed above was recorded as an account receivable pending payment from the insurance company. Changes in the accounting for income taxes as the result of the net loss booked in 2008 resulted in a decrease of $570,800; other changes in prepaid assets and accrued interest arising from normal business activities comprised the remainder.

Deposits. Total deposits increased $11.4 million from year end to $157.1 million at June 30, 2009. Overall, core deposit balances increased 4.5% to $83.8 million from $80.2 million at year end. Noninterest bearing demand deposits decreased 3.2% to $16.1 million. The certificate of deposit portfolio increased $7.8 million during the period to $73.3 million or 46.6% of total deposits compared to $65.5 million or 45.0% of total deposits at year-end. The increase was largely the result of a short-term promotion late in the fourth quarter of 2008 and the first few days of 2009.

Federal Home Loan Bank advances. Total advances decreased $9.4 million from $27.9 million to $18.5 million at June 30, 2009. An overnight advance of $6.9 million was repaid early in the first quarter. A $3.0 million 4.89% advance that matured in January was renewed at 3.19%, and a $2.5 million term advance with a rate of 5.24% was paid off at maturity in February.

19.

                                OHIO LEGACY CORP

RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 2009

The following tables set forth information relating to the average balance sheet
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.

                                                                    Three months ended June 30,
                                                      2009                                              2008
                                     Average         Interest                          Average         Interest
                                   Outstanding        earned/         Yield/         outstanding        earned/         Yield/
(Dollars in thousands)               Balance           paid            Rate            Balance           paid            Rate
Assets
Interest-earning assets:
Interest-bearing deposits and
federal funds sold                       14,338               8            0.22 %           5,176              28            2.20 %
Securities available for sale            42,424             449            4.24            33,557             457            5.44
Securities held to maturity               2,999              29            3.82             3,002              29            3.82
Federal agency stock                      1,321              16            4.81             1,466              20            5.59
Loans (1)                               112,960           1,747            6.20           127,886           2,203            6.93
Total interest-earning assets           174,042           2,249            5.18 %         171,087           2,737            6.43 %
Noninterest-earning assets               16,806                                            15,830
Total assets                            190,848                                           186,917

Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing
demand deposits                           8,821              19            0.86 %           9,556              25            1.05 %
Savings accounts                         17,139              74            1.72             5,415              10            0.78
Money market accounts                    42,214             164            1.55            48,495             320            2.65
Certificates of deposit                  75,704             642            3.40            72,724             737            4.08
Total interest-bearing deposits         143,878             899            2.50           136,190           1,093            3.23
Other borrowings                         20,109             175            3.50            19,389             205            4.25
Total interest-bearing
liabilities                             163,987           1,074            2.63 %         155,579           1,297            3.35 %
Noninterest-bearing demand
deposits                                 16,692                                            15,538
Noninterest-bearing liabilities             413                                               419
Total liabilities                       181,092                                           171,536
Shareholders' equity                      9,756                                            15,381
Total liabilities and
shareholders' equity                    190,848                                           186,917

Net interest income;
interest-rate spread (2)                                  1,175            2.55 %                           1,439            3.08 %
Net earning assets                       10,055                                            15,508
Net interest margin (3)                                                    2.71 %                                            3.38 %
Average interest-earning assets
tointerest-bearing liabilities              1.1 X                                             1.1 x

(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.

The net loss totaled $976,900 for the three months ended June 30, 2009, or $0.44 per diluted share, compared to a net loss of $95,700 or $0.04 per diluted share during the second quarter of 2008.

20.

Net interest income. During the three months ended June 30, 2009, net interest income was $1.1 million compared to $1.4 million the comparable quarter last year, due in large part to the decline in the net interest margin from 3.38% to 2.71% and further impacted by a decrease in average net earning assets from $15.5 million to $10.1 million.

Interest income. Total interest income for the quarter was $2.2 million, down $487,800 from $2.7 million in the same quarter in 2008. The increase in earning assets from $171.1 million to $174.0 million was offset by the decrease in the yield on earning assets by 125 basis points from 6.43% to 5.18%.

Interest expense. For the three months ended June 30, total interest expense was $1.1 million compared to $1.3 million in the prior year. The increase in average interest bearing liabilities from $155.6 to $164.0 million was more than offset by the decrease in the cost of interest bearing liabilities by 72 basis points from 3.35% to 2.63%.

Provision for loan losses. The provision for loan losses totaled $375,000 during the second quarter of 2009, compared to $5,000 the second 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 for the second quarter was $203,000 compared to $157,600 for the same period the prior year. In 2009, service charge income declined $35,300. Since the number of deposit accounts has remained consistent, the Company attributes the decrease to changes in customer behavior in response to general economic conditions. In 2009, gains on the sale of loans held for sale fell by $60,300 and the Company recorded a write-down of other real estate of $24,000. In comparison, the second quarter of 2008 included an other than temporary impairment charge of $159,000.

Noninterest expense. Total noninterest expense increased $298,800 to $2.0 million compared to $1.7 million for the prior year quarter. The significant changes are described below.

Salary and benefits. Continued reduction and consolidation of positions resulted in a $99,500 reduction in salary and benefits.

Professional fees. In the second quarter, professional fees were $31,500 lower than in the previous year due to legal expenses related to the establishment of the loan production offices in conjunction with Midwest Mortgage Processing LLC in 2008.

Deposit expenses. As disclosed in the first quarter, the FDIC increased premiums for all insured depository institutions for the first calendar quarter 2009 assessment. In addition, the FDIC imposed an emergency assessment for all insured depository institutions to be paid on September 30, 2009. In response to industry comments, the calculation method of the emergency assessment was changed from a percentage of deposits as of June 30, 2009 to a percentage of total assets as of that date. The combination of these changes and a revision of the Company's premium for the fourth quarter 2008 resulted in an increase of $293,300.

Other expenses. An increase of $204,800 in the most recent quarter was the result of $68,900 in legal expenses related to the foreclosure of multiple properties. Maintenance expenses for properties held as Other Real Estate increased $48,800 and delinquent and current real estate taxes on foreclosed properties increased by $116,300. These were offset in part by a $30,100 reduction in expenses related to mortgage loan origination due to lower volume.

21.

                                OHIO LEGACY CORP

RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 2009

                                                                    Six months ending June 30,
                                                      2009                                              2008
                                     Average         Interest                          Average         Interest
                                   outstanding        earned/         Yield/         outstanding        earned/         Yield/
(Dollars in thousands)               balance           Paid            Rate            balance           paid            Rate
Assets
Interest-earning assets:
Interest-bearing deposits and
federal funds sold                $       9,470              14            0.30 %   $       4,584     $        60            2.67 %
Securities available for sale            37,195             851            4.57            31,123             855            5.50
Securities held to maturity               3,000              57            3.81             3,002              57            3.81
Federal agency stock                      1,338              32            4.83             1,504              42            5.55
Loans (1)                               117,962           3,691            6.33           129,449           4,530            7.08
Total interest-earning assets           168,965           4,645            5.56 %         169,662           5,545            6.61 %
Noninterest-earning assets               22,234                                            16,362
Total assets                      $     191,199                                     $     186,024

Liabilities and Shareholders'
Equity
Interest-bearing liabilities:
Interest-bearing
demand deposits                   $       9,426              38            0.80 %   $       9,715              60            1.25 %
Savings accounts                         16,448             159            1.95             5,415              22            0.82
Money market accounts                    41,077             350            1.72            46,363             683            2.98
Certificates of deposit                  75,209           1,291            3.47            73,560           1,559            4.29
Total interest-bearing deposits         142,160           1,838            2.61           135,053           2,324            3.48
Other borrowings                         21,676             374            3.46            19,166             425            4.44
Total interest-bearing
liabilities                             163,836           2,212            2.73 %         154,219           2,750            3.61 %
Noninterest-bearing demand
deposits                                 16,771                                            15,064
Noninterest-bearing liabilities             617                                               682
Total liabilities                       181,224                                           169,965
Shareholders' equity                      9,975                                            16,059
Total liabilities and
shareholders' equity              $     191,199                                     $     186,024

Net interest income;
interest-rate spread (2)                            $     2,433            2.83 %                     $     2,796            3.00 %
Net earning assets                $       5,129                                     $      15,443
Net interest margin (3)                                                    2.91 %                                            3.33 %
Average interest-earning assets
tointerest-bearing liabilities              1.0 x                                            1.10 x

FOOTNOTES TO YIELD TABLE

(1) Net of net deferred loan fees and costs and loans in process. Nonaccrual loans are included in noninterest-earning assets.

(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.

The net loss totaled $474,500 for the six months ended June 30, 2009, or $0.21 per share, compared to a net loss of $126,800 or $0.06 per share during the first half of 2008.

Net interest income. During the six months ended June 30, 2009, net interest income was $2.4 million, compared to $2.8 million for the same period the prior year. The decrease of $10.3 million in average net earning assets was further impacted by a decrease in the net interest margin from 3.33% to 2.91%.

Interest income. Total interest income was $4.7 million for the first six months of 2009, compared to $5.6 million for the comparable period in 2008. The yield on loans dropped 0.75% during the period, from 7.08% to 6.33% as variable rate notes reset downward and new volume was added at lower rates. The yield on available for sale securities declined from 5.50% to 4.57% primarily as a result of restructuring the investment portfolio to reduce risk-weighted assets to improve the risk-based capital ratio.

Interest expense. Total interest expense fell $538,000 to $2.2 million in 2009, compared to $2.8 million for the same period in 2008, despite an increase in average volume from $154.2 million to $163.8 million. Deposit expense reductions accounted for $486,000 and other borrowings contributed approximately $50,000.

22.

Provision for loan losses. The provision for loan losses totaled $556,000 during the first half of 2009, compared to $11,500 for the same period in 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 was $1.1 million for the first six months of 2009, compared to $441,800 for the first half of 2008. The increase was primarily due to a $685,900 gain on the sale of available for sale securities during the first and second quarters of 2009. Service charge income declined approximately $37,400 during the period, and gains on the sale of loans decreased by $71,900. The Company recorded other than temporary impairment charges of $111,200 in the first quarter of 2009 and $159,000 in the second quarter of 2008.

Noninterest expense. Total noninterest expense increased $282,700 to $3.6 million compared to $3.4 million for the first half of the prior year. The significant changes are described below.

Salary and benefits. The decrease of $169,500 is due to the continuing elimination and consolidation of positions throughout the organization. Deposit expense and insurance fees. As disclosed in the first quarter, the FDIC increased premiums for all insured depository institutions for the first calendar quarter 2009 assessment as part of its transition to a risk-based assessment methodology that was adopted and implemented in the second quarter. . . .