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 June 30, 2005
[ ]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
896,595 shares outstanding as of July 31, 2005
1
ALLEGHENY BANCSHARES, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements 2
Unaudited Consolidated Statements of Income -
Six Months ended June 30, 2005 and 2004 2
Unaudited Consolidated Statements of Income -
Three Months ended June 30, 2005 and 2004 3
Consolidated Balance Sheets -
June 30, 2005 (Unaudited) and
December 31, 2004 (Audited) 4
Unaudited Consolidated Statements of Changes in
Stockholders' Equity - Six Months Ended
June 30, 2005 and 2004 5
Unaudited Consolidated Statements of Cash Flows -
Six Months Ended June 30, 2005 and 2004 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
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)
Six Months Ended
June 30, June 30,
2005 2004
Interest and Dividend Income:
Loans and fees $ 4,202 $ 3,860
Investment securities - taxable 300 323
Investment securities - nontaxable 362 361
Deposits and federal funds sold 17 8
------ ------
Total Interest and Dividend Income 4,881 4,552
------ ------
Interest Expense:
Deposits 1,146 954
Borrowings 103 83
------ ------
Total Interest Expense 1,249 1,037
------ ------
Net Interest Income 3,632 3,515
Provision for loan losses 109 90
------ ------
Net interest income after provision
for loan losses 3,523 3,425
------ ------
Noninterest Income:
Service charges on deposit accounts 292 108
Other income 106 97
Gain on security transactions 2 46
------ ------
Total Noninterest Income 400 251
------ ------
Noninterest Expense:
Salaries and benefits 1,140 1,084
Occupancy expenses 136 121
Equipment expenses 262 237
Other expenses 642 621
------ ------
Total Noninterest Expenses 2,180 2,063
------ ------
Income before Income Taxes 1,743 1,613
Income Tax Expense 541 486
------ ------
Net Income $ 1,202 $ 1,127
====== ======
Earnings Per Share
Net income $ 1.34 $ 1.25
====== ======
Weighted Average Shares Outstanding 896,596 898,497
======= =======
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
June 30, June 30,
2005 2004
Interest and Dividend Income:
Loans and fees $ 2,166 $ 1,938
Investment securities - taxable 146 151
Investment securities - nontaxable 180 177
Deposits and federal funds sold 8 5
------ ------
Total Interest and Dividend Income 2,500 2,271
------ ------
Interest Expense:
Deposits 608 472
Borrowings 57 41
------ ------
Total Interest Expense 665 513
------ ------
Net Interest Income 1,835 1,758
Provision for loan losses 55 45
------ ------
Net interest income after provision
for loan losses 1,780 1,713
------ ------
Noninterest Income:
Service charges on deposit accounts 161 60
Other income 65 47
Gain on security transactions 36
------ ------
Total Noninterest Income 226 143
------ ------
Noninterest Expense:
Salaries and benefits 563 538
Occupancy expenses 69 60
Equipment expenses 139 121
Other expenses 339 319
------ ------
Total Noninterest Expenses 1,110 1,038
------ ------
Income before Income Taxes 896 818
Income Tax Expense 272 248
------ ------
Net Income $ 624 $ 570
====== ======
Earnings Per Share
Net income $ .70 $ .63
====== ======
Weighted Average Shares Outstanding 896,596 898,006
======= =======
The accompanying notes are an integral part of these statements.
4
Allegheny Bancshares, Inc.
Consolidated Balance Sheets
(In thousands)
June 30, 2005 December 31, 2004
Unaudited Audited
ASSETS
Cash and due from banks $ 2,494 $ 2,695
Federal funds sold 435 2,018
Interest bearing deposits in banks 114 225
Investment securities available for sale 31,283 33,048
Investment securities held to maturity 500 500
Loans receivable, net of allowance for loan
losses of $1,133 and $1,094 respectively 125,431 117,228
Bank premises and equipment, net 5,812 4,763
Other assets 1,741 1,762
-------- --------
Total Assets $ 167,810 $ 162,239
======== ========
LIABILITIES
Deposits
Noninterest bearing demand $ 16,258 $ 16,348
Interest bearing
Demand 22,833 20,746
Savings 23,031 25,732
Time deposits over $100,000 19,683 18,992
Other time deposits 52,047 49,759
-------- --------
Total Deposits 133,852 131,577
Accrued expenses and other liabilities 493 577
Short-term borrowings 4,087 2,544
Long-term debt 4,317 3,494
-------- --------
Total Liabilities 142,749 138,192
-------- --------
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 23,219 22,017
Accumulated other comprehensive income 183 371
Treasury stock (at cost, 3,405 shares in
2005 and 1,931 shares in 2004) (141) (141)
-------- --------
Total Stockholders' Equity 25,061 24,047
-------- --------
Total Liabilities and Stockholders'
Equity $ 167,810 $ 162,239
======== ========
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,
2004 $ 24,047 $ 900 $ 900 $ 22,017 $ 371 $ (141)
Comprehensive Income
Net income 1,202 1,202
Change in unrealized
gain on
available for sale
securities, net of
income tax effect of
$(85) (188) (188)
--------
Total Comprehensive
Income 1,014
-------- ------- ------- --------- ------- -------
Balance, June 30,
2005 $ 25,061 $ 900 $ 900 $ 23,219 $ 183 $ (141)
======== ======= ======= ========= ======= =======
Balance, December 31,
2003 $ 23,053 $ 900 $ 900 $ 20,619 $ 649 $ (15)
Comprehensive Income
Net income 1,127 1,127
Change in unrealized
gain on
available for sale
securities, net of
income tax effect of
$(384) (635) (635)
--------
Total Comprehensive
Income 492
Purchase of treasury
stock (79) (79)
------- ------- ------- --------- ------- ------
Balance, June 30,
2004 $ 23,466 $ 900 $ 900 $ 21,746 $ 14 $ (94)
======== ======= ======= ========= ======= ======
The accompanying notes are an integral part of these statements.
6
Allegheny Bancshares, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Six Months Ended
June 30,
2005 2004
Cash Flows from Operating Activities:
Net income $ 1,202 $ 1,127
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 109 90
Depreciation and amortization 207 177
Net amortization of securities 29 51
Gain on sale of securities (2) (46)
Gain on sale of equipment (6)
Net change in:
Accrued income (56) 23
Other assets 78 (56)
Accrued expense and other liabilities (2) (163)
-------- -------
Net Cash Provided by Operating Activities 1,565 1,197
------- ------
Cash Flows from Investing Activities:
Net change in federal funds sold 1,583 683
Net change in interest bearing deposits in banks 111 21
Proceeds from sales, calls and maturities
of securities available for sale 4,087 8,021
Purchase of securities available for sale (2,621) (3,792)
Net increase in loans (8,312) (6,286)
Proceeds from sale of bank premises and equipment 6
Purchase of bank premises and equipment (1,255) (145)
-------- -------
Net Cash Provided by (Used in) Investing Activities (6,407) (1,492)
-------- -------
Cash Flows from Financing Activities:
Net change in:
Demand and savings deposits (704) (914)
Time deposits 2,979 (353)
Proceeds from borrowings 2,543 1,408
Curtailments of borrowings (177) (171)
Purchase of treasury stock (79)
------- -------
Net Cash Provided by (Used in) Financing Activities 4,641 (109)
------- -------
Cash and Cash Equivalents
Net increase (decrease) in cash and cash equivalents (201) (404)
Cash and Cash Equivalents, beginning of period 2,695 2,975
------- ------
Cash and Cash Equivalents, end of period $ 2,494 $ 2,571
======= ======
Supplemental Disclosure of Cash Paid During
the Period for:
Interest $ 1,208 $ 1,049
Income taxes 529 $ 474
The accompanying notes are an integral part of these statements.
7
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 June 30, 2005, and the results of
operations for the periods ended June 30, 2005 and 2004. The notes included
herein should be read in conjunction with the notes to the financial statements
included in the 2004 annual report to stockholders of Allegheny Bancshares, Inc.
NOTE 2 INVESTMENT SECURITIES:
The amortized costs of investment securities and their approximate fair
values at June 30, 2005 and December 31, 2004 follows (in thousands):
June 30, 2005 December 31, 2004
Amortized Fair Amortized Fair
Cost Value Cost Value
Securities available for sale:
U.S. Treasury and agency
obligations $ 6,976 $ 7,034 $ 7,484 $ 7,601
State and municipal 18,228 18,561 18,450 18,983
Mortgage-backed securities 5,813 5,688 6,575 6,464
------- ------- ------ -------
Total $ 31,017 $ 31,283 $32,509 $ 33,048
======= ======= ====== =======
Securities held to maturity:
U.S. Treasury and agency
obligations $ 500 $ 501 $ 500 $ 501
======= ======= ====== =======
8
ALLEGHENY BANCSHARES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 LOANS:
Loans outstanding are summarized as follows (in thousands):
June 30, December 31,
2005 2004
Real estate loans $ 57,283 $ 55,406
Commercial and industrial loans 55,403 49,023
Loans to individuals, primarily
collateralized by autos 10,887 11,144
All other loans 2,991 2,749
------- -------
Total Loans 126,564 118,322
Less allowance for loan losses 1,133 1,094
------- -------
Net Loans Receivable $125,431 $117,228
======= =======
NOTE 4 ALLOWANCE FOR LOAN LOSSES:
A summary of transactions in the allowance for loan losses for the six
months ended June 30, 2005 and 2004 follows (in thousands):
Six Months Ended
June 30,
2005 2004
Balance, beginning of period $ 1,094 $ 1,052
Provision charged to operating expenses 109 90
Recoveries of loans charged off 5 13
Loans charged off (75) (117)
------- -------
Balance, end of period $ 1,133 $ 1,038
======= =======
9
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 of $1,202,000 for the first six months of 2005 represents an
increase of 6.65% compared to the same period a year ago. For the quarter ended
June 30, 2005, net income was 9.47% higher than the same quarter ended June 30,
2004. Returns on average equity and average assets for the first half of 2005
were 9.88% and 1.48%, respectively, compared with 9.66% and 1.45% for the same
period of 2004.
Net Interest Income
The Company's taxable equivalent net interest income increased 3.16% for
the first six months of 2005 compared to the first six months of 2004. This
increase resulted from substantial growth in interest earning assets, primarily
loans, which served to offset the increase in the cost of funds. The Company's
net yield on earnings assets for 2005 was 4.89% compared to 4.93% for 2004 as
the cost of funds increased 27 basis points while the yield on earning assets
increased 17 basis points. Recent increases by the Federal Reserve Board of the
target rate of fed funds has caused the average rates earned on earning assets
and the average rates paid on interest bearing liabilities to increase slightly
as compared to recent quarters. Average loan balances increased $7.7 million
during 2005 as compared to the same period in 2004. The increase in average loan
balances was funded by reductions in balances of taxable securities investments,
increases in deposits, and increases in term and daily sweep repurchase
agreements. 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.
10
Allowance for Loan Losses and Provision for Loan Losses
The provision for loan losses were $109,000 and $90,000 for the six months
ended June 30, 2005 and 2004, respectively. The allowance for loan losses
("ALL") was $1,133,000 (.90% of loans) at the end of the first half of 2005
compared with $1,094,000 (.92% of loans) at December 31, 2004. 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.
Noninterest Income
Noninterest income increased 59.36% during the first six months of 2005
as compared to the same period in 2004 and 58.04% for the second quarter 2005 as
compared to the second quarter of 2004. In both instances, the increase was
largely due to an increase in overdraft fees as a result of the Company's
overdraft bounce protection program introduced in December 2004.
Noninterest Expenses
Total noninterest expense increased $117,000 or 5.67% for the first six
months of 2005, as compared to 2004 and 6.93% for the second quarter 2005 as
compared to the same period in 2004. Salaries and benefits increased due to the
increase in the number of employees, merit increases, and higher benefit costs.
Occupancy and equipment expenses increased as a result of the completed Franklin
office renovations in December 2004 and the relocation and construction of the
new Marlinton office completed in May 2005. Other contributors to the increase
in noninterest expense were the costs incurred in connection with implementing
and complying with Sarbanes-Oxley Rule 404.
Income Tax Expense
Income tax expense equaled 31.03% of income before income taxes for the
six months ended June 30, 2005 compared with 30.13% for the six months ended
June 30, 2004.
Loans
Total loans were $126,564,000 at June 30, 2005, compared to $118,322,000
at December 31, 2004, representing a 6.97% increase. Loan growth during the
first six months of 2005 occurred principally in the commercial and real estate
portfolios. A schedule of loans by type is shown in Note 3 to the financial
statements. Approximately 82% of the loan portfolio is secured by real estate.
Loan Portfolio Risk Factors
Loans accounted for on a nonaccrual basis were $151,000 at June 30, 2005
(.12% of total loans). Accruing loans which are contractually past due 90 days
or more as to principal or interest totaled $486,000 (.38% 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."
11
Deposits
The Company's deposits increased $2,275,000 during the first six months of
2005. As rates continue to increase, competition for deposits increased. A
schedule of deposits by type is shown in the balance sheets. Time deposits of
$100,000 or more were 14.70% and 14.43% of total deposits at June 30, 2005 and
December 31, 2004, respectively.
Borrowings
Short-term borrowings increased during 2005 due to commercial customers
utilizing Term and Daily Sweep Repurchase Agreements.
The increase in long-term debt was due to the bank signing a 20-year
$1,000,000 fixed rate note with FHLB at 4.58% on June 8, 2005. The bank also
signed a 10-year $1,000,000 fixed rate note with FHLB at 3.77% on March 18,
2003, a 10-year $2,000,000 fixed rate note with FHLB at 3.15% on June 18, 2003,
and a $1,000,000 fixed rate note with FHLB at 4.28% on October 20, 2003. The
purpose of the notes was to fund a long-term, fixed rate loan product to
qualifying customers.
Capital
The Company continues to maintain a strong capital position to provide an
attractive financial return to our shareholders and to support future growth.
Capital as a percentage of total assets was 14.93% at June 30, 2005 and
significantly exceeded regulatory requirements. The Company is considered to be
well capitalized under the regulatory framework for prompt corrective actions.
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
Liquidity reflects our ability to ensure that funds are available to meet
present and future obligations. At June 30, 2005, the Company had liquid assets
of approximately $2.9 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
June 30, 2005. 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 June 30, 2005, the Company had a negative cumulative Gap Rate
Sensitivity Ratio of -34.30% for the one year repricing period. This rate 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 .44%. 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.
12
Subsequent Events
On July 21, 2005, an agreement was signed with a contractor to construct a
new office in Harrisonburg, Virginia. The total cost of the new building is
expected to approximate $776,000. The project will be financed through existing
capital resources.
13
TABLE I
Allegheny Bancshares, Inc.
Net Interest Margin Analysis
(On a Fully Taxable Equivalent Basis)(Dollar Amounts in Thousands)
Six Months Ended Six Months Ended
June 30, 2005 June 30, 2004
------------- -------------
Average Income/ Average Income/
Balance Expense Rates Balance Expense Rates
Interest Income
Loans 1 $121,676 $ 4,202 6.91% $113,899 $ 3,860 6.78%
Federal funds sold 1,130 15 2.65% 1,277 5 .78%
Interest bearing
deposits 243 2 1.65% 230 2 1.74%
Investments
Taxable 14,832 300 4.05% 17,274 324 3.75%
Nontaxable 2 18,263 548 6.00% 17,308 546 6.31%
------- ------- ----- ------- ------ ----
Total Earning Assets 156,144 5,067 6.49% 149,988 4,737 6.32%
------- ------- ----- ------- ------ -----
Interest Expense
Demand deposits 22,001 138 1.25% 18,127 74 .82%
Savings 24,136 94 .78% 26,586 99 .74%
Time deposits 70,545 915 2.59% 67,961 781 2.30%
Short-term
borrowings 3,283 39 2.38% 1,905 15 1.57%
Long-term debt 3,536 64 3.62% 3,758 68 3.62%
------- ------- ----- ------- ------ -----
Total Interest
Bearing
Liabilities $123,501 $ 1,250 2.02% $118,337 $ 1,037 1.75%
------- ------- ----- ------- ------ -----
Net Interest Margin 1 3,817 3,700
======= =====
Net Yield on Interest
Earning Assets 4.89% 4.93%
===== =====
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
June 30, 2005
(In Thousands of Dollars)
0-3 4-12 1-5 Over 5 Total
Months Months Years Years
Uses of Funds:
Loans:
Commercial $ 15,662 $ 8,652 $ 23,474 $ 10,607 $ 58,395
Consumer 634 813 7,834 1,317 10,598
Real estate 8,096 4,964 9,184 35,039 57,283
Credit card 289 289
Federal funds sold 435 435
Interest bearing deposits 114 114
Investment securities 302 13,534 17,947 31,783
------- ------- ------- ------- -------
Total 25,230 14,731 54,026 64,910 158,897
------ ------- ------- ------- -------
Sources of Funds:
Deposits:
Interest bearing demand 22,833 22,833
Savings 23,031 23,031
Time deposits over
$100,000 4,206 6,114 9,363 19,683
Other time deposits 16,814 16,987 17,523 723 52,047
Short-term borrowings 1,675 2,412 4,087
Long-term debt 97 297 1,732 2,191 4,317
------ ------- ------- ------- -------
Total 68,656 25,810 28,618 2,914 125,998
------ ------- ------- ------- -------
Discrete Gap (43,426) (11,079) 25,408 61,996 32,899
Cumulative Gap (43,426) (54,505) (29,097) 32,899
Ratio of Cumulative Gap
To Total Earning Assets -27.33% -34.30% -18.31% 20.70%
Table II reflects the earlier of the maturity or repricing dates for various
assets and liabilities at June 30, 2005. 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. A loan with a
floating rate that has reached a contractual floor or ceiling level is being
treated as a fixed rate loan until the rate is again free to float.
15
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in Quantitative and Qualitative
Disclosures about Market Risk as reported in the 2004 Form 10-K.
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 -
At the Annual Shareholders Meeting held on April 4, 2005, the officers and
directors were introduced and the following directors whose terms had expired,
Roger D. Champ, Carole H. Hartman, John D. Heavner, and William A. Loving, Jr.
were considered for election. The directors above were duly elected for
three-year terms commencing in 2005 with voting results as follows: 628,188 of
631,378 shares represented voted "for", 3,180 of 631,378 shares represented
voted "against". The following board members were retained for their respective
terms: Thomas J. Bowman, John E. Glover, Richard W. Homan, Dolan Irvine,
William McCoy, Jr., Jerry D. Moore, and Richard C. Phares. S. B. Hoover &
Company, L.L.P. was selected as Independent External Auditors for 2005 with the
voting results as follows: 624,897 of 631,378 shares represented voted "for",
0 of 631,378 shares represented voted "against".
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-KSB filed March 30, 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
3.3 Bylaws of Allegheny Bancshares, Inc. 3.3
b. Reports on 8K
No reports were filed for the quarter ended June 30, 2005.
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/ L. KIRK BILLINGSLEY
----------------------------------
L. Kirk Billingsley
Chief Financial Officer
Date: August 4, 2005