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Ohio Legacy Corp, a bank holding company, provides
commercial and retail banking services to small businesses and consumers in Holmes, Stark
and Wayne Counties in northeast Ohio
Ohio Legacy Corp.
305 West Liberty Street
Wooster, OH 44691
L. Dwight Douce
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
February 10, 2004
Mr. Douce (55) is President and Chief Executive Officer of the Company and has more than
29 years of financial institution experience in a diverse number of positions, with 20
years of experience in the Wooster area. He has been a director of the Company since 1999
and served as its Chairman until April 2003. From October 1996 to February 1999, Mr. Douce
served as President-Chief Operating Officer of Signal Bank, N.A. From 1983 to October
1996, Mr. Douce served as Executive Vice President and Chief Financial Officer of First
Federal Savings and Loan Association (Signal Banks predecessor). During Mr.
Douces tenure, Signal Bank grew from a $200 million to a $1.8 billion financial
services institution. Mr. Douce graduated from Capital University with a B.S. in Business
Administration. He has been a resident of the Wooster area for the last 20 years and has
been very active in community organizations, including the American Red Cross, Wooster
Chamber of Commerce Board, Kiwanis and the United-Way.
Ohio Legacy Corp is a bank holding company headquartered in Wooster, Ohio. Our subsidiary,
Ohio Legacy Bank, N.A. (the Bank), provides commercial and retail banking services to
small businesses and consumers in Holmes, Stark and Wayne Counties in northeast Ohio.
On October 2, 2000, we closed a public offering of $8.9 million of common stock and opened
the Bank's doors a day later. By March 2002, the Bank had opened three branches in three
distinct markets and had originated $64.8 million of loans. We then formed Ohio Legacy
Trust I as a subsidiary of Ohio Legacy Corp and offered $3.3 million of trust-preferred
securities to provide additional capital to the Bank.
We reported our first full quarter of profitability during the three months ended
September 30, 2002; less than two years from inception. In December 2002, we successfully
completed another public offering of 1.1 million shares of common stock and registered our
shares on the NASDAQ Small Cap Market under the ticker OLCB.
Douce, will you give us some background on Ohio Legacy?
Mr. Douce: "Ohio Legacy is a new bank that started in
October 2000. We are now four years old and completed a branch purchase with another
institution in our location. We now have four offices and three separate locations and we
are at about $190 million at this point."
CEOCFOinterviews: Why the need for your bank?
Mr. Douce: "With the merger activity that was going on
we felt that there was a need for another community bank in the market."
was your original plan and how has that worked for you over the years?
Mr. Douce: "The original plan was that at the end of
five years we would be about a $150 million institution. In those three markets, we would
have deposits of about 120 to about 125 million in loans for about 115 to 120 million. It
has worked out very well for us. Growth has been stronger than we had anticipated. We have
added a new branch in one of the markets and we are looking to expand in other markets
over the year."
what do you attribute your strong growth?
Mr. Douce: "I think our growth is due primarily paying
attention to personal service and the customer."
you tell us about the economy in the area where you serve?
Mr. Douce: "We are in three different markets. The
markets are rural; part agricultural, part industrial and part service sector. The
industrial has been a little up and down and we have seen some plants close. The other
plants have been able to absorb the excess in that area. Fortunately, there is a lot of
diversified industrial. Agricultural has been very good over the last two or three years.
The other rural market we are in is primarily a service type industry. It depends upon
consumers driving in and vacation people coming in, so that market has done well in the
last two or three years."
CEOCFOinterviews: How do
you attract your customers?
Mr. Douce: "Over the first two years, we attracted
customers by people we knew. We went out and called on people, and brought customers that
we had from other institutions. On an average, the employees here probably have worked
15-20 years in other financial institutions before this one was started. We have a strong
base of customers that we have built over the last few years. Currently, we are attracting
customers through the sales process. We go out and talk to community leaders and community
businesses to show them how we can save them money or make them money in the
you primarily commercial or are you full service?
Mr. Douce: "Seventy five percent is commercial; the rest
is retail. That is by design. We wanted to concentrate primarily on the business."
does personal service mean at Ohio Legacy, and what are you doing that people are not
getting from another source?
Mr. Douce: "Personal service means we pick up the phone
and answer it. Personal services means we call the customers by name when they walk in the
lobby. Personal service means we go out and deliver a check order to a customer. All the
little things add up."
there other community banks that you are competing with and what is it that you have
figured out that they have not?
Mr. Douce: "The other community banks and the largest
community bank in our market just signed an agreement to merge with National City Bank out
of Cleveland. They had been in business for 150 years and were an $800 million
institution. They were in the market in Wayne County and that is where people went. We
took our share from the other larger regional banks. Once that merger was announced, we
had a tremendous opportunity to pick up a great deal of market share from the community
bank. The thing that we do that the other community banks do not do is we concentrate on
service and deliver the service; it is not just lip service."
do you look for other than experience in the people you want at Ohio Legacy?
Mr. Douce: "We look for people that have an
entrepreneurial spirit and we look for people that are creative and know how to get the
job done. They do not have to be bankers to do that. We can teach them things."
there services that you are not currently offering your customers that you would like to
make available, and that you plan to make available?
Mr. Douce: "The service we do not have is internet
banking. We do plan to make that available by January or February next year. That is a big
service and small businesses are starting to ask for that."
mentioned that you are looking to expand. What qualities are you looking for in a
Mr. Douce: "We are looking to where we can fill niches
between the markets where we are now. We looked at areas where there is a low
concentration of banks and where the community is stabilized and growing a little bit or
where there are opportunities for us to attract business. We look to see if there have
been consolidations that have affected the community."
should investors be interested and what should they know that they might not realize when
they first look at Ohio Legacy Corp.?
Mr. Douce: "What investors ought to know is that our
Board of Directors owns approximately 37% to 40% of the stock. They have made a commitment
to Ohio Legacy Corp. to provide value to the shareholders and they are committed to that
process. In that commitment, there is the building of the franchise value. We are not
interested in just growing for growths sake, but we are interested in building a franchise
that has value in the future and that goes hand in hand with building an
listed on NASDAQ; how do you reach your potential shareholders?
Mr. Douce: "We have shareholder lists that we had with
the original offering and we send them information on a quarterly basis. The other
institutional shareholders, those that are street named, we depend upon a brokerage to do
that and it is not done very well. I would love to change that and be able to communicate
on a timely basis with those shareholders."
have analyst coverage as well.
Mr. Douce: "We have FBR; Friedman, Billings, Ramsey
Group Inc. (NYSE: FBR) is covering us and its primarily because they did our second
CEOCFOinterviews: Do you see the company maintaining the
Mr. Douce: "I do see the company maintain growth,
however, it is obvious that the percentages are going to be a lot less than they were,
simply because of the size. However, we anticipate maintaining growth at fifteen to twenty
percent going forward."
closing, how do factor in the changing economical environment to what you are doing to
continue to make the bank work well?
Mr. Douce: "The affect we get on the macro from the
local environment is as rates move up, people start to be more attracted to mutual funds
and money market funds and that creates somewhat of a slowdown in being able to attract
deposits. On the loan side, it does not affect us that much. The economies here are doing
fine. We are able to loan money out based upon the current rate, whatever it is; as long
as we dont enter into another recession. Our biggest problem these days is trying to
comply with the new Sarbanes-Oxley requirements and having and having the staff to be able
to do that."
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