SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarterly Period Ended September 30, 2004 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File No. 000-50151 Allegheny Bancshares, Inc. (Exact name of registrant as specified in its charter) West Virginia 22-3888163 - ------------------------ --------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 300 North Main Street P. O. Box 487 Franklin, West Virginia 26807 (Address of principal executive offices, including zip code) (304) 358-2311 (Registrant's Telephone Number, Including Area Code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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 is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes No X ---- ---- State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. Common Stock, par value - $1.00 897,030 shares outstanding as of October 15, 2004 1 ALLEGHENY BANCSHARES, INC. TABLE OF CONTENTS PART I. FINANCIAL INFORMATION PAGE Item 1. Financial Statements 2 Unaudited Consolidated Statements of Income - Nine Months Ended September 30, 2004 and 2003 2 Unaudited Consolidated Statements of Income - Three Months Ended September 30, 2004 and 2003 3 Consolidated Balance Sheets - September 30, 2004 (Unaudited) and December 31, 2003 (Audited) 4 Unaudited Consolidated Statements of Changes in Stockholders' Equity - Nine Months Ended September 30, 2004 and 2003 5 Unaudited Consolidated Statements of Cash Flows - Nine Months Ended September 30, 2004 and 2003 6 Notes to Consolidated Financial Statements 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 Item 3. Quantitative and Qualitative Disclosures About Market Risk 15 Item 4. Controls and Procedures 15 PART II. OTHER INFORMATION Item 1. Legal Proceedings 15 Item 2. Changes in Securities 15 Item 3. Defaults upon Senior Securities 15 Item 4. Submission of Matters to a Vote of Security Holders 16 Item 5. Other Information 16 Item 6. Exhibits and Reports on Form 8K 16 SIGNATURES 17 2 Part I. Financial Information Item 1. Consolidated Financial Statements Allegheny Bancshares, Inc. Consolidated Statements of Income (In thousands, except for per share information) (Unaudited) Nine Months Ended September 30, September 30, 2004 2003 Interest and Dividend Income: Loans and fees $ 5,895 $ 5,733 Investment securities - taxable 469 468 Investment securities - nontaxable 538 591 Deposits and federal funds sold 12 35 ------ ------ Total Interest and Dividend Income 6,914 6,827 ------ ------ Interest Expense: Deposits 1,437 1,895 Borrowings 124 53 ------ ------ Total Interest Expense 1,561 1,948 ------ ------ Net Interest Income 5,353 4,879 Provision for loan losses 135 90 ------ ------ Net interest income after provision for loan losses 5,218 4,789 ------ ------ Noninterest Income: Service charges on deposit accounts 178 175 Other income 153 135 Gain on security transactions 47 7 ------ ------ Total Noninterest Income 378 317 ------ ------ Noninterest Expense: Salaries and benefits 1,606 1,487 Occupancy expenses 183 166 Equipment expenses 358 304 Other expenses 926 830 ------ ------ Total Noninterest Expenses 3,073 2,787 ------ ------ Income before Income Taxes 2,523 2,319 Income Tax Expense 763 678 ------ ------ Net Income $ 1,760 $ 1,641 ====== ====== Earnings Per Share Net income $ 1.96 $ 1.82 ======= ======= Weighted Average Shares Outstanding 898,064 899,325 ======= ======= The accompanying notes are an integral part of these statements. 3 Part I. Financial Information Item 1. Consolidated Financial Statements Allegheny Bancshares, Inc. Consolidated Statements of Income (In thousands, except for per share information) (Unaudited) Three Months Ended September 30, September 30, 2004 2003 Interest and Dividend Income: Loans and fees $ 2,035 $ 1,949 Investment securities - taxable 146 146 Investment securities - nontaxable 177 192 Deposits and federal funds sold 4 15 ------ ------ Total Interest and Dividend Income 2,362 2,302 ------ ------ Interest Expense: Deposits 483 593 Borrowings 41 32 ------ ------ Total Interest Expense 524 625 ------ ------ Net Interest Income 1,838 1,677 Provision for loan losses 45 30 ------ ------ Net interest income after provision for loan losses 1,793 1,647 ------ ------ Noninterest Income: Service charges on deposit accounts 69 55 Other income 56 46 Gain on security transactions 1 3 ------ ------ Total Noninterest Income 126 104 ------ ------ Noninterest Expense: Salaries and benefits 522 487 Occupancy expenses 62 54 Equipment expenses 121 95 Other expenses 305 258 ------ ------ Total Noninterest Expenses 1,010 894 ------ ------- Income before Income Taxes 909 857 Income Tax Expense 276 248 ------ ------ Net Income $ 633 $ 609 ====== ====== Earnings Per Share Net income $ .71 $ .68 ======= ======= Weighted Average Shares Outstanding 897,207 899,323 ======= ======= The accompanying notes are an integral part of these statements. 4 Allegheny Bancshares, Inc. Consolidated Balance Sheets (In thousands) September 30, 2004 December 31, 2003 Unaudited Audited ASSETS Cash and due from banks $ 2,613 $ 2,975 Federal funds sold 7,074 684 Interest bearing deposits in banks 221 240 Investment securities available for sale 30,999 36,858 Investment securities held to maturity 500 500 Loans receivable, net of allowance for loan losses of $1,075 and $1,052 respectively 119,412 110,516 Bank premises and equipment, net 4,465 4,213 Other assets 1,913 1,771 -------- -------- Total Assets $ 167,197 $ 157,757 ======== ======== LIABILITIES Deposits Noninterest bearing demand $ 17,540 $ 15,106 Interest bearing Demand 24,303 18,446 Savings 25,937 26,632 Time deposits over $100,000 19,248 18,689 Other time deposits 49,902 49,680 -------- -------- Total Deposits 136,930 128,553 Accrued expenses and other liabilities 529 806 Short-term borrowings 1,685 1,507 Long-term debt 3,581 3,838 -------- -------- Total Liabilities 142,725 134,704 -------- -------- STOCKHOLDERS' EQUITY Common stock; $1 par value, 2,000,000 shares authorized, 900,000 issued 900 900 Additional paid in capital 900 900 Retained earnings 22,379 20,619 Accumulated other comprehensive income 414 649 Treasury stock (at cost, 2,970 shares in 2004 and 417 shares in 2003) (121) (15) -------- --------- Total Stockholders' Equity 24,472 23,053 -------- -------- Total Liabilities and Stockholders' Equity $ 167,197 $ 157,757 ======== ========= The accompanying notes are an integral part of these statements. 5 Allegheny Bancshares, Inc. Consolidated Statements of Changes in Stockholders' Equity (In thousands) (Unaudited) Accumulated Additional Other Common Paid In Retained Comprehensive Treasury Total Stock Capital Earnings Income Stock Balance, December 31, 2003 $ 23,053 $ 900 $ 900 $ 20,619 $ 649 $ (15) Comprehensive Income Net income 1,760 1,760 Change in unrealized gain on available for sale securities, net of income tax effect of $(204) (235) (235) ------- Total Comprehensive Income 1,525 Purchase of treasury stock (106) (106) ------- ------- ---- ------- ------ ------ Balance, September 30, 2004 $ 24,472 $ 900 $ 900 $ 22,379 $ 414 $ (121) ======= ==== ===== ======= ====== ======== Balance, December 31, 2002 $ 21,927 $ 900 $ 900 $ 19,238 $ 889 $ 0 Comprehensive Income Net income 1,641 1,641 Change in unrealized gain on available for sale securities, net of income tax effect of $(154) (240) (240) ------- Total Comprehensive Income 1,401 Purchase of treasury stock (24) (24) ------- ----- ----- ------ ----- ------- Balance, September 30, 2003 $ 23,304 $ 900 $ 900 $ 20,879 $ 649 $ (24) ======= ===== ==== ======= ====== ====== The accompanying notes are an integral part of these statements. 6 Allegheny Bancshares, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30, 2004 2003 Cash Flows from Operating Activities: Net income $ 1,760 $ 1,641 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 135 90 Depreciation and amortization 271 245 Net amortization of securities 69 86 Gain on sale of securities (47) (7) Gain on sale of equipment (6) (3) Gain on sale of other real estate (13) Net change in: Accrued income (63) (36) Other assets (129) (439) Accrued expense and other liabilities (73) 292 -------- ------ Net Cash Provided by Operating Activities 1,904 1,869 ------- ------ Cash Flows from Investing Activities: Net change in federal funds sold (6,390) (6,550) Net change in interest bearing deposits in banks 19 37 Proceeds from sales, calls and maturities of securities available for sale 10,749 9,629 Proceeds from call of security held to maturity 500 Purchase of securities available for sale (5,352) (12,578) Purchase of securities held to maturity (500) (1,000) Net increase in loans (9,031) (4,543) Proceeds from sale of other real estate 63 Proceeds from sale of bank premises and equipment 6 3 Purchase of bank premises and equipment (522) (506) -------- ------- Net Cash Used in Investing Activities (10,458) (15,508) -------- ------- Cash Flows from Financing Activities: Net change in: Demand and savings deposits 7,596 7,015 Time deposits 781 3,875 Proceeds from borrowings 1,415 3,824 Curtailments of borrowings (1,494) (729) Purchase of treasury stock (106) (24) ------- ------- Net Cash Provided by Financing Activities 8,192 13,961 ------- ------ Cash and Cash Equivalents Net increase (decrease) in cash and cash equivalents (362) 322 Cash and Cash Equivalents, beginning of period 2,975 3,094 ------- ------ Cash and Cash Equivalents, end of period $ 2,613 $ 3,416 ======= ====== The accompanying notes are an integral part of these statements. 7 Allegheny Bancshares, Inc. Consolidated Statements of Cash Flows (In thousands) (Unaudited) Nine Months Ended September 30, 2004 2003 Supplemental Disclosure of Cash Paid During the Period for: Interest $ 1,561 $ 1,994 Income taxes $ 756 $ 545 The accompanying notes are an integral part of these statements. 8 ALLEGHENY BANCSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1 ACCOUNTING PRINCIPLES: The financial statements conform to accounting principles generally accepted in the United States of America and to general industry practices. In the opinion of management, the accompanying unaudited financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of September 30, 2004, and the results of operations for the periods ended September 30, 2004 and 2003. The notes included herein should be read in conjunction with the notes to the financial statements included in the 2003 annual report to stockholders of Allegheny Bancshares, Inc. NOTE 2 INVESTMENT SECURITIES: The amortized costs of investment securities and their approximate fair values at September 30, 2004 and December 31, 2003 follows (in thousands): September 30, 2004 December 31, 2003 Amortized Fair Amortized Fair Cost Value Cost Value Securities available for sale: U.S. Treasury and agency obligations $ 5,485 $ 5,680 $ 7,030 $ 7,331 State and municipal 17,894 18,376 17,892 18,693 Mortgage-backed securities 7,021 6,943 10,897 10,834 ------- ------- ------ ------- Total $ 30,400 $ 30,999 $35,819 $ 36,858 ======= ======= ====== ======= Securities held to maturity: U.S. Treasury and agency Obligations $ 500 $ 500 $ 500 $ 513 ======= ======= ====== ======= 9 ALLEGHENY BANCSHARES, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 3 LOANS: Loans outstanding are summarized as follows (in thousands): September 30, December 31, 2004 2003 Real estate loans $ 57,105 $54,144 Commercial and industrial loans 48,334 42,857 Loans to individuals, primarily collateralized by autos 11,324 11,683 All other loans 3,724 2,884 ------- ------ Total Loans 120,487 111,568 Less allowance for loan losses 1,075 1,052 ------- ------ Net Loans Receivable $119,412 $110,516 ======= ======= NOTE 4 ALLOWANCE FOR LOAN LOSSES: A summary of transactions in the allowance for loan losses for the nine months ended September 30, 2004 and 2003 follows (in thousands): Nine Months Ended September 30, 2004 2003 Balance, beginning of period $ 1,052 $ 1,028 Provision charged to operating expenses 135 90 Recoveries of loans charged off 29 24 Loans charged off (141) (88) ------- ------- Balance, end of period $ 1,075 $ 1,054 ======= ======= 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward Looking Statements The following discussion contains statements that refer to future expectations, contain projections of the results of operations or of financial condition or state other information that is "forward-looking." "Forward-looking" statements are easily identified by the use of words such as "could," "could anticipate," "estimate," "believe," and similar words that refer to the future outlook. There is always a degree of uncertainty associated with "forward-looking" statements. The Company's management believes that the expectations reflected in such statements are based upon reasonable assumptions and on the facts and circumstances existing at the time of these disclosures. Actual results could differ significantly from those anticipated. Many factors could cause the Company's actual results to differ materially from the results contemplated by the forward-looking statements. Some factors, which could negatively affect the results, include: o General economic conditions, either nationally or within the Company's markets, could be less favorable than expected; o Changes in market interest rates could affect interest margins and profitability; o Competitive pressures could be greater than anticipated; and o Legal or accounting changes could affect the Company's results. Overview Net income increased from $1,641,000 for the nine months ended September 30, 2003 to $1,760,000 for the nine months ended September 30, 2004 and earnings per share increased from $1.82 to $1.96. The increase in earnings was a result of the increase in net interest income offset somewhat by increased operating expenses. Net Interest Income The Company's taxable equivalent net interest income increased from $5,184,000 for the nine months ended September 30, 2003 to $5,630,000 for the nine months ended September 30, 2004, due to the net growth of earning assets, and improved net yield on earning assets. The Company's net yield on earnings assets for 2004 was 4.97% compared to 4.73% for 2003 as the yield on earning assets declined less than the cost of funds. The cost of funds declined due to the repricing of maturing time deposits at lower current rates. Table I shows the average balances for interest bearing assets and liabilities, the rates earned on earning assets and the rates paid on deposits and borrowed funds. Allowance for Loan Losses and Provision for Loan Losses The provision for loan losses were $135,000 and $90,000 for the nine months ended September 30, 2004 and 2003, respectively. The allowance for loan losses ("ALL") was $1,075,000 (.89% of loans) at the end of the third quarter of 2004 compared with $1,052,000 (.94% of loans) at December 31, 2003. The ALL is evaluated on a regular basis by management and is based upon management's periodic review of the collectibility of the loans, industry historical experience, the nature and volume of the loan portfolio, adverse situations that may affect the borrower's ability to repay, estimated value of any underlying collateral and prevailing economic conditions. This evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. The calculation of the ALL is considered to be a critical accounting policy. 11 Noninterest Income Noninterest income was $378,000 and $317,000 for the nine months ended September 30, 2004 and 2003, respectively. Noninterest income (excluding security gains and losses) as a percentage of average assets increased slightly from .27% to .28% (annualized). A portion of the increase in other noninterest income was attributable to higher volume of ATM fees and commissions earned on insurance premiums. Noninterest Expenses Noninterest expenses were $3,073,000 and $2,787,000 for the nine months ended September 30, 2004 and 2003, respectively. Noninterest expenses as a percentage of average assets was 2.59% (annualized) for the nine months ended September 30, 2004, up from 2.43% for the same period of 2003. Salaries and benefits increased due to an increase in the number of employees, as well as normal salary increases. Equipment expenses, including software maintenance contract expense and depreciation expense, increased as a result of the final stages of a computer system upgrade. Directors fees, which are included in other expenses, increased due to an increase in fees and the formation of new committees. Income Tax Expense Income tax expense equaled 30.24% of income before income taxes for the nine months ended September 30, 2004 compared with 29.24% for the nine months ended September 30, 2003. Federal Funds Sold Federal funds sold were $7,074,000 and $684,000 as of September 30, 2004 and December 31, 2003, respectively. This increase was due to an increase in deposit volume during the third quarter of 2004 which outpaced growth of other assets. Investments Investments decreased from $37,358,000 at December 31, 2003 to $31,499,000 at September 30, 2004 as a result of funding the increase in the loan portfolio. Loans Total loans increased from $111,568,000 at December 31, 2003 to $120,487,000 at September 30, 2004. A schedule of loans by type is shown in Note 3 to the financial statements. Approximately 81% of the loan portfolio is secured by real estate. Loan Portfolio Risk Factors Loans accounted for on a nonaccrual basis were $65,000 at September 30, 2004 (.05% of total loans). Accruing loans which are contractually past due 90 days or more as to principal or interest totaled $1,071,000 (.89% of total loans). Loans are placed in a nonaccrual status when management has information that indicates that principal or interest may not be collectable. Management has not identified any additional loans as "troubled debt restructurings" or "potential problem loans." 12 Deposits The Company's deposits increased $8,377,000 during the first nine months of 2004 to $136,930,000 at September 30, 2004. This increase reflected normal growth throughout the Company. A schedule of deposits by type is shown in the balance sheets. Time deposits of $100,000 or more were 14.05% and 14.54% of total deposits at September 30, 2004 and December 31, 2003, respectively. Capital Capital as a percentage of total assets was 14.64% at September 30, 2004 and significantly exceeded regulatory requirements. The Company is considered to be well capitalized under the regulatory framework for prompt corrective actions. During the third quarter of 2004, the company purchased 601 shares of treasury stock at an average price of $45 per share in private transactions, not pursuant to any repurchase program. Uncertainties and Trends Management is not aware of any known trends, events or uncertainties that will have or that are reasonably likely to have a material effect on liquidity, capital resources or operations. Additionally, management is not aware of any current recommendations by the regulatory authorities which, if they were to be implemented, would have such an effect. Liquidity and Interest Sensitivity At September 30, 2004, the Company had liquid assets of approximately $9.9 million in the form of cash and due from banks and federal funds sold. Management believes that the Company's liquid assets are adequate at September 30, 2004. Additional liquidity may be provided by the growth in deposit accounts and loan repayments. In the event the Company would need additional funds, it has the ability to purchase federal funds and borrow under established lines of credit of $17.1 million. At September 30, 2004, the Company had a negative cumulative Gap Rate Sensitivity Ratio of -35.51% for the one year repricing period. This ratio does not reflect the historical movement of funds during varying interest rate environments. Adjusted for historical repricing trends in response to interest rate changes, the adjusted Gap Ratio is 1.92%. This generally indicates that net interest income would remain stable in both a declining and increasing interest rate environment. Management constantly monitors the Company's interest rate risk and has decided that the current position is an acceptable risk for a growing community bank operating in a rural environment. Table II shows the Company's interest sensitivity. 13 TABLE I Allegheny Bancshares, Inc. Net Interest Margin Analysis (On a fully taxable equivalent basis)(Dollar amounts in thousands) Nine Months Ended Nine Months Ended September 30, 2004 September 30, 2003 Average Income/ Average Income/ Balance Expense Rates Balance Expense Rates Interest Income Loans 1 $115,691 $ 5,895 6.79% $107,176 $ 5,733 7.13% Federal funds sold 1,169 9 1.03% 4,214 31 .98% Interest bearing deposits 229 3 1.75% 205 4 2.60% Investments Taxable 16,411 469 3.81% 15,446 468 4.04% Nontaxable 2 17,545 815 6.19% 18,991 896 6.29% ------ ------- ------- ------ ------ ----- Total Earning Assets 151,045 7,191 6.35% 146,032 7,132 6.51% ------- ------- -------- ------- ------ ----- Interest Expense Demand deposits 16,087 96 .80% 16,543 129 1.04% Savings 28,988 165 .76% 28,047 218 1.04% Time deposits 68,117 1,176 2.30% 69,529 1,548 2.97% Short-term borrowings 1,854 24 1.33% 1,292 18 1.86% Long-term debt 3,714 100 3.59% 1,420 35 3.19% ------ ------- -------- ------ ------- ------ Total Interest Bearing Liabilities $118,760 $ 1,561 1.75% $ 116,831 $ 1,948 2.22% ------- ------- -------- ------- ------ ----- Net Interest Margin 1 5,630 5,184 ======= ===== Net Yield on Interest Earning Assets 4.97% 4.73% ======= ===== 1 Interest on loans includes loan fees 2 An incremental tax rate of 34% was used to calculate the tax equivalent income 14 TABLE II Allegheny Bancshares, Inc. Interest Sensitivity Analysis September 30, 2004 (In Thousands of Dollars) 0-3 4-12 1-5 Over 5 Total Months Months Years Years Uses of Funds: Loans: Commercial $ 13,481 $ 5,626 $ 20,384 $ 12,287 $ 51,778 Consumer 805 790 8,647 1,082 11,324 Real estate 7,876 4,675 9,758 34,796 57,105 Credit card 280 280 Federal funds sold 7,074 7,074 Interest bearing deposits 221 221 Investment securities 500 936 11,001 19,062 31,499 ------- ------- ------ ------- ------ Total 30,237 12,027 49,790 67,227 159,281 ------ ------- ------ ------- ------- Sources of Funds: Deposits: Interest bearing demand 24,303 24,303 Savings 25,937 25,937 Time deposits over $100,000 4,670 7,902 6,676 19,248 Other time deposits 16,017 17,957 15,264 664 49,902 Short-term borrowings 1,275 410 1,685 Long-term debt 87 266 1,549 1,679 3,581 ------ ------- ------ ------- ------ Total 72,289 26,535 23,489 2,343 124,656 ------ ------- ------ ------- ------- Discrete Gap (42,052) (14,508) 26,301 64,884 34,625 Cumulative Gap (42,052) (56,560) (30,259) 34,625 Ratio of Cumulative Gap To Total Earning Assets -26.40% -35.51% -19.00% 21.74% Table II reflects the earlier of the maturity or repricing dates for various assets and liabilities at September 30, 2004. In preparing the above table, no assumptions are made with respect to loan prepayments or deposit run offs. Loan principal payments are included in the earliest period in which the loan matures or can be repriced. Principal payments on installment loans scheduled prior to maturity are included in the period of maturity or repricing. 15 Item 3. Quantitative and Qualitative Disclosures About Market Risk Not Applicable Item 4. Controls and Procedures Evaluation of Disclosure Controls and Procedures As a result of the enactment of the Sarbanes-Oxley Act of 2002, issuers that file periodic reports under the Securities Exchange Act of 1934 (the "Act") are now required to include in those reports certain information concerning the issuer's controls and procedures for complying with the disclosure requirements of the federal securities laws. Under rules adopted by the Securities and Exchange Commission effective August 29, 2002, these disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports it files or submits under the Act, is communicated to the issuer's management, including its principal executive officer or officers and principal financial officer or officers, or persons performing similar functions, as appropriate to allow timely decisions regarding disclosure. We have established disclosure controls and procedures to ensure that material information related to Allegheny Bancshares, Inc. and its subsidiary is made known to our principal executive officer and principal financial officer on a regular basis, in particular during the periods in which our quarterly and annual reports are being prepared. These disclosure controls and procedures consist principally of communications between and among the Chief Executive Officer and the Chief Financial Officer to identify any new transactions, events, trends, contingencies or other matters that may be material to the Company's operations. As required, we have evaluated the effectiveness of these disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, the Company's management, including the Chief Financial Officer, concluded that such disclosure controls and procedures were operating effectively as designed as of the date of such evaluation. Changes in Internal Controls During the period reported upon, there were no significant changes in the Company's internal controls pertaining to its financial reporting and control of its assets or in other factors that could significantly affect these controls. Part II. Other Information Item 1. Legal Proceedings - Not Applicable Item 2. Changes in Securities - Not Applicable Item 3. Defaults Upon Senior Securities - Not Applicable 16 Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable Item 5. Other Information - Not Applicable Item 6. Exhibits and Reports on 8-K - a. Exhibits The following Exhibits are filed as part of this Form 10-Q No. Description - ---- ------------ 31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) (filed herewith). 31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) (filed herewith). 32 Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (filed herewith). The following exhibit is incorporated by reference to the Exhibits to Allegheny Bancshares, Inc. Form 10-QSB filed May 14, 2003. No. Description Exhibit Number 3.1 Articles of Incorporation - Allegheny Bancshares, Inc. E2 The following exhibit is incorporated by reference to the Exhibits to Allegheny Bancshares, Inc. Form 10-KSB filed March 26, 2004. No. Description Exhibit Number 3.2 Bylaws of Allegheny Bancshares, Inc. 3.3 b. Reports on 8K No reports were filed for the quarter ended September 30, 2004. 17 SIGNATURE In accordance with Section 12 of the Securities Exchange Act of 1934, the registrant causes this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized. ALLEGHENY BANCSHARES, INC. By: /s/ WILLIAM A. LOVING ---------------------------------- William A. Loving, Jr. Executive Vice President and Chief Executive Officer By: /s/ CLAUDIA L. ACORD ---------------------------------- Claudia L Acord Chief Financial Officer Date: November 12, 2004