##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For Quarterly Period Ended March 31, 2010
 o
    
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File No. 000-50151
 Allegheny Bancshares, Inc.
  West Virginia
    
    22-3888163(State or other jurisdiction of
    
    (I.R.S. Employer Identification No.)incorporation or organization)
 
  (Registrants Telephone Number)
 þ o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer o
    
    Smaller reporting company þ
 o þ




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##### 



PAGEPART I. FINANCIAL INFORMATIONItem 1. Financial Statements
    
    
    2Unaudited Consolidated Statements of Income  Three Months ended March 31, 2010 and 2009
    
    
    2Consolidated Balance Sheets  March 31, 2010 (Unaudited) and December 31, 2009 (Audited)
    
    
    3Unaudited Consolidated Statements of Changes in Stockholders Equity  Three Months Ended
March 31, 2010 and 2009
    
    
    4Unaudited Consolidated Statements of Cash Flows  Three Months Ended March 31, 2010 and 2009
    
    
    5Notes to Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    12Item 4T. Controls and Procedures
    
    
    18PART II. OTHER INFORMATION
    
    
    18Item 1. Legal Proceedings
    
    
    18Item 2. Changes in Securities
    
    
    18Item 3. Defaults upon Senior Securities
    
    
    18Item 5. Other Information
    
    
    18Item 6. Exhibits
    
    
    18SIGNATURES
    
    
    19Exhibit 31.1Exhibit 31.2Exhibit 32
   1




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##### Table of Contents



Part I. Financial Information
 
 Item 1. Consolidated Financial Statements
 Allegheny Bancshares, Inc.
 
 Consolidated Statements of Income
 (In thousands, except for share and per share information)
  Three Months EndedMarch 31,2010
    
    
    2009Interest and Dividend Income:Loans and fees
    
    $
    2,951
    
    
    $
    2,666Investment securities  taxable
    
    
    114
    
    
    
    103Investment securities  nontaxable
    
    
    141
    
    
    
    149Deposits and federal funds sold
    
    
    27
    
    
    
    28Total Interest and Dividend Income
    
    
    3,233
    
    
    
    2,946Interest Expense:Deposits
    
    
    904
    
    
    
    945Borrowings
    
    
    58
    
    
    
    74Total Interest Expense
    
    
    962
    
    
    
    1,019Net Interest Income
    
    
    2,271
    
    
    
    1,927Provision for loan losses
    
    
    320
    
    
    
    77Net Interest Income After Provision for Loan Losses
    
    
    1,951
    
    
    
    1,850Noninterest Income:Service charges on deposit accounts
    
    
    226
    
    
    
    189Restricted equity security impairment
    
    
    
    
    
    
    (604
    )Gain on sale of securities
    
    
    
    
    
    
    (10
    )Other income
    
    
    191
    
    
    
    159Total Noninterest Income
    
    
    417
    
    
    
    (266
    )Noninterest Expense:Salaries and benefits
    
    
    860
    
    
    
    745Occupancy expenses
    
    
    112
    
    
    
    94Equipment expenses
    
    
    172
    
    
    
    147Other expenses
    
    
    540
    
    
    
    492Total Noninterest Expenses
    
    
    1,684
    
    
    
    1,478Income before Income Taxes
    
    
    684
    
    
    
    106Income Tax Expense
    
    
    180
    
    
    
    148Net Income (Loss)
    
    $
    504
    
    
    $
    (42
    )Earnings Per ShareNet income (loss)
    
    $
    .58
    
    
    $
    (.05
    )Weighted Average Shares Outstanding
    
    
    867,459
    
    
    
    871,064
   2




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##### Table of Contents



Allegheny Bancshares, Inc.
 
 Consolidated Balance Sheets
 (In thousands, except for share and per share information)
 March 31, 2010
    
    
    December 31, 2009Unaudited
    
    
    AuditedASSETSCash and due from banks
    
    $
    8,144
    
    
    $
    3,810Interest bearing deposits in banks
    
    
    5,251
    
    
    
    8,249Investment securities available for sale
    
    
    31,791
    
    
    
    31,338Restricted equity securities
    
    
    748
    
    
    
    748Loans receivable, net of allowance for loan losses of $1,976 and $1,790 respectively
    
    
    184,373
    
    
    
    182,864Bank premises and equipment, net
    
    
    6,889
    
    
    
    6,958Interest receivable
    
    
    1,304
    
    
    
    1,436Goodwill
    
    
    1,087
    
    
    
    1,087Bank owned life insurance
    
    
    3,907
    
    
    
    3,867Other assets
    
    
    2,701
    
    
    
    2,530Total Assets
    
    $
    246,195
    
    
    $
    242,887LIABILITIESDepositsNoninterest bearing demand
    
    $
    27,559
    
    
    $
    26,689Interest bearingDemand
    
    
    29,149
    
    
    
    28,005Savings
    
    
    27,524
    
    
    
    27,282Time deposits over $100,000
    
    
    44,858
    
    
    
    42,645Other time deposits
    
    
    82,770
    
    
    
    84,218Total Deposits
    
    
    211,860
    
    
    
    208,839Accrued expenses and other liabilities
    
    
    698
    
    
    
    814Short-term borrowings
    
    
    901
    
    
    
    931Long-term debt
    
    
    4,637
    
    
    
    4,695Total Liabilities
    
    
    218,096
    
    
    
    215,279STOCKHOLDERS EQUITYCommon stock; $1 par value, 2,000,000 sharesAuthorized, 900,000 issued, 867,459 outstanding
    
    
    900
    
    
    
    900Additional paid in capital
    
    
    900
    
    
    
    900Retained earnings
    
    
    27,686
    
    
    
    27,182Accumulated other comprehensive income
    
    
    430
    
    
    
    443Treasury stock (at cost, 32,541 shares in 2010 and 2009)
    
    
    (1,817
    )
    
    
    (1,817
    )Total Stockholders Equity
    
    
    28,099
    
    
    
    27,608Total Liabilities and Stockholders Equity
    
    $
    246,195
    
    
    $
    242,887
   3




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##### Table of Contents



Allegheny Bancshares, Inc.
 
 Consolidated Statements of Changes in Stockholders Equity
 (In thousands)
  Accumulated OtherCommon
    
    
    Additional
    
    
    Retained
    
    
    Comprehensive
    
    
    TreasuryTotal
    
    
    Stock
    
    
    Paid In Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    StockBalance, December 31, 2009
    
    $
    27,608
    
    
    $
    900
    
    
    $
    900
    
    
    $
    27,182
    
    
    $
    443
    
    
    $
    (1,817
    )Comprehensive IncomeNet Income
    
    
    504
    
    
    
    
    
    
    
    
    
    
    
    504Change in unrealized
gain on
available for sale
securities, net of
income tax effect of
$(7)
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (13
    )Total Comprehensive Income
    
    
    491Balance, March 31, 2010
    
    $
    28,099
    
    
    $
    900
    
    
    $
    900
    
    
    $
    27,686
    
    
    $
    430
    
    
    $
    (1,817
    )Balance, December 31, 2008
    
    $
    27,160
    
    
    $
    900
    
    
    $
    900
    
    
    $
    26,631
    
    
    $
    320
    
    
    $
    (1,591
    )Comprehensive IncomeNet income
    
    
    (42
    )
    
    
    
    
    
    
    
    
    
    
    (42
    )Change in unrealized
gain on
available for sale
securities, net of
income tax effect of
$(45)
    
    
    (87
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (87
    )Total Comprehensive Income
    
    
    (129
    )Purchase of Treasury Stock
    
    
    (28
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28
    )Balance, March 31, 2009
    
    $
    27,003
    
    
    $
    900
    
    
    $
    900
    
    
    $
    26,589
    
    
    $
    233
    
    
    $
    (1,619
    )
   4




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Allegheny Bancshares, Inc.
 
 Consolidated Statements of Cash Flows
 (In thousands)
  Three Months EndedMarch 31,2010
    
    
    2009Cash Flows from Operating Activities:Net income (loss)
    
    $
    504
    
    
    $
    (42
    )Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    320
    
    
    
    77Depreciation and amortization
    
    
    125
    
    
    
    111Loss on disposal of fixed assets
    
    
    
    
    
    
    10Net amortization (accretion) of securities
    
    
    (12
    )
    
    
    10Loss on restricted equity other than temporary impairment
    
    
    
    
    
    
    604Deferred income tax benefit
    
    
    (85
    )
    
    
    (63
    )Income from life insurance investment
    
    
    (41
    )
    
    
    (42
    )Net change in:Accrued income
    
    
    133
    
    
    
    30Other assets
    
    
    (80
    )
    
    
    (274
    )Accrued expense and other liabilities
    
    
    (116
    )
    
    
    (260
    )Net Cash Provided by Operating Activities
    
    
    748
    
    
    
    161Cash Flows from Investing Activities:Net change in federal funds sold
    
    
    
    
    
    
    1,570Net change in interest bearing deposits in banks
    
    
    2,998
    
    
    
    617Proceeds from sales, calls and maturities of available for sale securities
    
    
    3,042
    
    
    
    611Purchase of securities available for sale
    
    
    (3,504
    )
    
    
    Net increase in loans
    
    
    (1,829
    )
    
    
    (1,541
    )Purchase of bank premises and equipment
    
    
    (55
    )
    
    
    (38
    )Net Cash Provided by Investing Activities
    
    
    652
    
    
    
    1,219Cash Flows from Financing Activities:Net change in:Demand and savings deposits
    
    
    2,256
    
    
    
    (1,121
    )Time deposits
    
    
    766
    
    
    
    5,263Short-term borrowings
    
    
    (30
    )
    
    
    (2,190
    )Curtailments of long-term borrowings
    
    
    (58
    )
    
    
    (55
    )Purchase of treasury stock
    
    
    
    
    
    
    (28
    )Net Cash Provided by Financing Activities
    
    
    2,934
    
    
    
    1,869Cash and due from banksNet increase in cash and due from banks
    
    
    4,334
    
    
    
    3,249Cash and due from banks, beginning of period
    
    
    3,810
    
    
    
    2,562Cash and due from banks, end of period
    
    $
    8,144
    
    
    $
    5,811Supplemental Disclosure of Cash Paid During the Period for:Interest
    
    $
    978
    
    
    $
    1,019Income taxes
    
    $
    285
    
    
    $
    275
   5




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NOTE 1 ACCOUNTING PRINCIPLES:
   Recent Accounting Pronouncements 
   Subsequent events 
 NOTE 2 INVESTMENT SECURITIES:
  Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    UnrealizedMarch 31, 2010
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueSecurities available for sale:Mortgaged backed obligations of federal agencies
    
    $
    3,025
    
    
    $
    74
    
    
    $
    
    
    
    $
    3,099Government sponsored enterprises
    
    
    12,204
    
    
    
    132
    
    
    
    24
    
    
    
    12,312Obligations of states and political subdivisions
    
    
    15,276
    
    
    
    467
    
    
    
    18
    
    
    
    15,725Corporate obligations
    
    
    501
    
    
    
    22
    
    
    
    
    
    
    
    523Other equities
    
    
    132
    
    
    
    
    
    
    
    
    
    
    
    132Total
    
    $
    31,138
    
    
    $
    695
    
    
    $
    42
    
    
    $
    31,791
 Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    UnrealizedDecember 31, 2009
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    Fair ValueSecurities available for sale:Mortgaged backed obligations of federal agencies
    
    $
    3,401
    
    
    $
    61
    
    
    $
    
    
    
    $
    3,462Government sponsored enterprises
    
    
    9,985
    
    
    
    164
    
    
    
    
    
    
    
    10,149Obligations of states and political subdivisions
    
    
    16,647
    
    
    
    470
    
    
    
    34
    
    
    
    17,083Corporate obligations
    
    
    501
    
    
    
    12
    
    
    
    
    
    
    
    513Other equities
    
    
    131
    
    
    
    
    
    
    
    
    
    
    
    131Total
    
    $
    30,665
    
    
    $
    707
    
    
    $
    34
    
    
    $
    31,338
  6




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Less than 12 months
    
    
    12 Months or greaterUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    TotalMarch 31, 2010
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair ValueDescription of Securities:Mortgaged backed obligations of federal agencies
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Government sponsored enterprises
    
    
    3,480
    
    
    
    24
    
    
    
    
    
    
    
    
    
    
    
    3,480Obligations of states and political subdivisions
    
    
    1,072
    
    
    
    18
    
    
    
    566
    
    
    
    < 1
    
    
    
    1,638Corporate obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    4,552
    
    
    $
    42
    
    
    $
    566
    
    
    $
    < 1
    
    
    $
    5,118
 Less than 12 months
    
    
    12 Months or greaterUnrealized
    
    
    
    
    
    
    Unrealized
    
    
    TotalDecember 31, 2009
    
    Fair Value
    
    
    Losses
    
    
    Fair Value
    
    
    Losses
    
    
    Fair ValueDescription of Securities:Mortgaged backed obligations of
federal agencies
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Government sponsored enterprises
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Obligations of states and political
subdivisions
    
    
    1,540
    
    
    
    28
    
    
    
    560
    
    
    
    6
    
    
    
    2,100Corporate obligations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    1,540
    
    
    $
    28
    
    
    $
    560
    
    
    $
    6
    
    
    $
    2,100
  AmortizedCost
    
    
    Fair ValueDue:In one year or less
    
    $
    1,335
    
    
    $
    1,349After one year through five years
    
    
    23,476
    
    
    
    23,949After five years through ten years
    
    
    5,234
    
    
    
    5,388After ten years through fifteen years
    
    
    1,093
    
    
    
    1,105Total
    
    $
    31,138
    
    
    $
    31,791
   7




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NOTE 3 RESTRICTED EQUITY SECURITIES:
   NOTE 4 LOANS RECEIVABLE:
  March 31,
    
    
    December 31,2010
    
    
    2009Real estate loans
    
    $
    83,078
    
    
    $
    83,465Commercial and industrial loans
    
    
    85,676
    
    
    
    83,169Loans to individuals, primarily collateralized by autos
    
    
    12,393
    
    
    
    12,913All other loans
    
    
    5,202
    
    
    
    5,107Total Loans
    
    
    186,349
    
    
    
    184,654Less allowance for loan losses
    
    
    1,976
    
    
    
    1,790Net Loans Receivable
    
    $
    184,373
    
    
    $
    182,864
 NOTE 5 ALLOWANCE FOR LOAN LOSSES:
  Three Months EndedMarch 31,2010
    
    
    2009Balance, beginning of period
    
    $
    1,790
    
    
    $
    1,396Provision charged to operating expenses
    
    
    320
    
    
    
    77Recoveries of loans charged off
    
    
    37
    
    
    
    34Loans charged off
    
    
    (171
    )
    
    
    (203
    )Balance, end of period
    
    $
    1,976
    
    
    $
    1,304
  8




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##### Table of Contents



NOTE 6 LONG TERM DEBT:
  NOTE 7 BANK OWNED LIFE INSURANCE:
  NOTE 8 FAIR VALUE:
 Fair Value Measurements,
    
 Investment securities available for sale:
 Loans:
  9




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##### Table of Contents



Other Real Estate Owned:
  Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    TotalAssets recorded at fair value on a recurring basis:Mortgaged backed obligations of federal agencies
    
    $
    
    
    
    $
    3,099
    
    
    $
    
    
    
    $
    3,099Government sponsored enterprises
    
    
    12,312
    
    
    
    
    
    
    
    
    
    
    
    12,312Obligations of states and political subdivisions
    
    
    
    
    
    
    15,725
    
    
    
    
    
    
    
    15,725Corporate obligations
    
    
    
    
    
    
    523
    
    
    
    
    
    
    
    523Other equities
    
    
    
    
    
    
    132
    
    
    
    
    
    
    
    132Total
    
    $
    12,312
    
    
    $
    19,479
    
    
    $
    
    
    
    $
    31,791Assets recorded at fair value on a non recurring basis:Impaired Consumer Real Estate Loans
    
    $
    
    
    
    $
    
    
    
    $
    430
    
    
    $
    430Impaired Commercial Loans
    
    
    
    
    
    
    
    
    
    
    2,864
    
    
    
    2,864Other real estate owned
    
    
    
    
    
    
    
    
    
    
    720
    
    
    
    720Total
    
    $
    
    
    
    $
    
    
    
    $
    4,014
    
    
    $
    4,014
  NOTE 9 GOODWILL:
 Goodwill and Other Intangible Assets,
 NOTE 10 BENEFIT PLANS:
 Executive Performance Driven Plan th
   Supplemental Retirement Agreement SERP
  10




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NOTE 11 CAPITAL:
  NOTE 12 DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS:
  Cash and short-term deposits:
 Investment securities:
 Restricted investments:
 Loans:
 Deposits:
 Short term debt and interest payable or receivable:
 Long-term debt:
 Off-balance sheet items:
 March 31, 2010
    
    
    December 31, 2009Carrying
    
    
    
    
    
    
    Carrying(In Thousands)
    
    Fair Value
    
    
    Value
    
    
    Fair Value
    
    
    ValueCash and due from banks
    
    $
    8,144
    
    
    $
    8,144
    
    
    $
    3,810
    
    
    $
    3,810Interest bearing deposits in banks
    
    
    5,251
    
    
    
    5,251
    
    
    
    8,250
    
    
    
    8,250Securities available for sale
    
    
    31,791
    
    
    
    31,791
    
    
    
    31,338
    
    
    
    31,338Restricted equity securities
    
    
    748
    
    
    
    748
    
    
    
    748
    
    
    
    748Loans
    
    
    186,021
    
    
    
    184,373
    
    
    
    184,753
    
    
    
    182,864Interest receivable
    
    
    1,304
    
    
    
    1,304
    
    
    
    1,436
    
    
    
    1,436Bank owned life insurance
    
    
    3,907
    
    
    
    3,907
    
    
    
    3,867
    
    
    
    3,867Demand deposits
    
    
    29,149
    
    
    
    29,149
    
    
    
    26,689
    
    
    
    26,689Savings deposits
    
    
    27,524
    
    
    
    27,524
    
    
    
    27,282
    
    
    
    27,282Time deposits
    
    
    128,100
    
    
    
    127,628
    
    
    
    127,599
    
    
    
    126,862Short-term borrowings
    
    
    901
    
    
    
    901
    
    
    
    931
    
    
    
    931Accrued interest payable
    
    
    328
    
    
    
    328
    
    
    
    344
    
    
    
    344Long-term debt
    
    
    4,884
    
    
    
    4,637
    
    
    
    4,927
    
    
    
    4,695
  11




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##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    Forward Looking Statements
   
    
    General economic conditions, either nationally or within the Companys markets, could
be less favorable than expected;
    
    Changes in market interest rates could affect interest margins and profitability;
    
    Competitive pressures could be greater than anticipated; and
    
    Legal or accounting changes could affect the Companys results.
 Critical Accounting Policy
   Allowance for Loan Losses and Provision for Loan Losses
   12




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Goodwill and Intangibles
  Results of Operations Overview
  Net Interest Income
    13




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##### Table of Contents



Allegheny Bancshares, Inc.
Net Interest Margin Analysis  (On a Fully Taxable Equivalent Basis) (Dollar Amounts in Thousands)
 Three Months Ended
    
    
    Three Months EndedMarch 31, 2010
    
    
    March 31, 2009Average
    
    
    Income/
    
    
    
    
    
    
    Average
    
    
    Income/Balance
    
    
    Expense
    
    
    Rates
    
    
    Balance
    
    
    Expense
    
    
    RatesInterest IncomeLoans 1,2
    
    $
    185,448
    
    
    $
    2,983
    
    
    
    6.43
    %
    
    $
    158,921
    
    
    $
    2,688
    
    
    
    6.77
    %Federal funds sold
    
    
    
    
    
    
    
    
    
    
    0
    %
    
    
    90
    
    
    
    0
    
    
    
    0
    %Interest bearing deposits
    
    
    6,136
    
    
    
    27
    
    
    
    1.76
    %
    
    
    3,845
    
    
    
    28
    
    
    
    2.91
    %InvestmentsTaxable
    
    
    14,827
    
    
    
    114
    
    
    
    3.08
    %
    
    
    10,789
    
    
    
    103
    
    
    
    3.82
    %Nontaxable 2
    
    
    14,976
    
    
    
    215
    
    
    
    5.74
    %
    
    
    15,591
    
    
    
    226
    
    
    
    5.80
    %Total Earning Assets
    
    
    221,387
    
    
    
    3,339
    
    
    
    6.03
    %
    
    
    189,236
    
    
    
    3,045
    
    
    
    6.44
    %Interest ExpenseDemand deposits
    
    
    22,206
    
    
    
    64
    
    
    
    1.15
    %
    
    
    18,531
    
    
    
    41
    
    
    
    0.89
    %Savings
    
    
    33,145
    
    
    
    18
    
    
    
    0.22
    %
    
    
    27,499
    
    
    
    21
    
    
    
    0.31
    %Time deposits
    
    
    127,611
    
    
    
    822
    
    
    
    2.58
    %
    
    
    101,985
    
    
    
    883
    
    
    
    3.46
    %Short-term borrowings
    
    
    1,085
    
    
    
    1
    
    
    
    0.37
    %
    
    
    1,690
    
    
    
    1
    
    
    
    0.24
    %Long-term debt
    
    
    4,674
    
    
    
    57
    
    
    
    4.88
    %
    
    
    6,905
    
    
    
    73
    
    
    
    4.23
    %Total Interest Bearing Liabilities
    
    $
    188,721
    
    
    $
    962
    
    
    
    2.04
    %
    
    $
    156,610
    
    
    $
    1,019
    
    
    
    2.60
    %Net Interest Margin 1
    
    
    
    
    
    
    2,377
    
    
    
    
    
    
    
    
    
    
    
    2,026Net Yield on Interest
Earning Assets
    
    
    
    
    
    
    
    
    
    
    4.29
    %
    
    
    
    
    
    
    
    
    
    
    4.28
    %
 1
    
    Interest on loans includes loan fees2
    
    An incremental tax rate of 34% was used to calculate the tax equivalent income Noninterest Income
  Noninterest Expenses
   14




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##### Table of Contents



Income Tax Expense
  Loans and Provision for Loan Loss
   Loan Portfolio Risk Factors
   March 31,
    
    
    December 31,2010
    
    
    2009Nonaccrual loans
    
    $
    686
    
    
    $
    104Restructured loans
    
    
    132
    
    
    
    133Loans delinquent 90 days or more
    
    
    797
    
    
    
    5,290Total Nonperforming Loans
    
    $
    1,615
    
    
    
    5,527
 st
  15




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##### Table of Contents



Deposits
  Borrowings
  Capital
  Uncertainties and Trends
  Liquidity and Interest Sensitivity
    16




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##### Table of Contents



Allegheny Bancshares, Inc.
Interest Sensitivity Analysis  March 31, 2010
 0-3
    
    
    4-12
    
    
    1-5
    
    
    Over 5Months
    
    
    Months
    
    
    Years
    
    
    Years
    
    
    TotalUses of Funds:Loans
    
    $
    19,315
    
    
    $
    28,598
    
    
    $
    47,065
    
    
    $
    91,371
    
    
    $
    186,349Interest bearing deposits
    
    
    1,770
    
    
    
    2,024
    
    
    
    1,457
    
    
    
    
    
    
    
    5,251Investment securities
    
    
    256
    
    
    
    1,093
    
    
    
    21,871
    
    
    
    8,751
    
    
    
    31,971Restricted Investments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    748
    
    
    
    748Total
    
    
    21,341
    
    
    
    31,715
    
    
    
    70,393
    
    
    
    100,870
    
    
    
    224,319Sources of Funds:Deposits:Interest bearing demand
    
    
    29,149
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29,149Savings
    
    
    27,524
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,524Time deposits over $100,000
    
    
    6,003
    
    
    
    18,000
    
    
    
    15,541
    
    
    
    5,314
    
    
    
    44,858Other time deposits
    
    
    17,021
    
    
    
    32,198
    
    
    
    27,094
    
    
    
    6,457
    
    
    
    82,770Short-term borrowings
    
    
    1,028
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,028Long-term debt
    
    
    59
    
    
    
    1,181
    
    
    
    586
    
    
    
    2,811
    
    
    
    4,637Total
    
    $
    80,784
    
    
    $
    51,379
    
    
    $
    43,221
    
    
    $
    14,582
    
    
    $
    189,966Discrete Gap
    
    $
    (59,443
    )
    
    $
    (19,664
    )
    
    $
    27,172
    
    
    $
    86,288
    
    
    $Cumulative Gap
    
    $
    (59,443
    )
    
    $
    (79,107
    )
    
    $
    (51,935
    )
    
    $
    34,353
    
    
    $Ratio of Cumulative Gap 
To Total Earning Assets
    
    
    -26.50
    %
    
    
    -35.27
    %
    
    
    -23.15
    %
    
    
    15.31
    %
   17




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##### Table of Contents



Item 4T. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
   Changes in Internal Controls
  
 Part II. Other Information
 
 Item 1. Legal Proceedings 
 
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 
 
 Item 3. Defaults Upon Senior Securities 
 
 Item 5. Other Information 
 
 Item 6. Exhibits
  No.
    
    Description31.1
    
    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).
  18




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##### Table of Contents



No.
    
    Description
    
    Exhibit Number3.1
    
    Articles of Incorporation  Allegheny Bancshares,
Inc.
    
    E2
  No.
    
    Description
    
    Exhibit Number3.3
    
    Bylaws of Allegheny Bancshares, Inc.
    
    3.3
 
 SIGNATURE
  ALLEGHENY BANCSHARES, INC.By:
    /s/ William A. Loving, Jr.Name:
    William A. Loving, Jr.Title:
    Executive Vice President and Chief Executive OfficerBy:
    /s/ L. Kirk BillingsleyName:
    L. Kirk BillingsleyTitle:
    Senior Vice President and Chief Financial Officer   19