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, 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
             895,257 shares outstanding as of October 31, 2005


<PAGE> 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, 2005 and 2004           2

            Unaudited Consolidated Statements of Income -
            Three Months ended September 30, 2005 and 2004          3

            Consolidated Balance Sheets - September 30, 2005
            (Unaudited) and December 31, 2004 (Audited)             4

            Unaudited Consolidated Statements of Changes in
            Stockholders' Equity - Nine Months Ended
            September 30, 2005 and 2004                             5

            Unaudited Consolidated Statements of Cash Flows -
            Nine Months Ended September 30, 2005 and 2004           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


<PAGE> 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,
                                                       2005          2004
Interest and Dividend Income:
   Loans and fees                                    $ 6,497      $ 5,895
   Investment securities - taxable                       440          469
   Investment securities - nontaxable                    536          538
   Deposits and federal funds sold                        39           12
                                                      ------       ------

   Total Interest and Dividend Income                  7,512        6,914
                                                      ------       ------

Interest Expense:
   Deposits                                            1,826        1,437
   Borrowings                                            180          124
                                                      ------       ------

   Total Interest Expense                              2,006        1,561
                                                      ------       ------

Net Interest Income                                    5,506        5,353

Provision for loan losses                                163          135
                                                      ------       ------

Net interest income after provision
   for loan losses                                     5,343        5,218
                                                      ------       ------

Noninterest Income:
   Service charges on deposit accounts                   456          178
   Other income                                          165          153
   Gain on security transactions                           8           47
                                                      ------       ------

   Total Noninterest Income                              629          378
                                                      ------       ------

Noninterest Expense:
   Salaries and benefits                               1,726        1,606
   Occupancy expenses                                    211          183
   Equipment expenses                                    415          358
   Other expenses                                        995          926
                                                      ------       ------

   Total Noninterest Expenses                          3,347        3,073
                                                      ------       ------

Income before Income Taxes                             2,625        2,523

Income Tax Expense                                       797          763
                                                      ------       ------

   Net Income                                        $ 1,828      $ 1,760
                                                      ======       ======

Earnings Per Share
   Net income                                        $  2.04      $  1.96
                                                      =======      =======

   Weighted Average Shares Outstanding               896,470      898,064
                                                     =======      =======

       The accompanying notes are an integral part of these statements.


<PAGE> 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,
                                                       2005          2004
Interest and Dividend Income:
   Loans and fees                                    $ 2,295      $ 2,035
   Investment securities - taxable                       140          146
   Investment securities - nontaxable                    174          177
   Deposits and federal funds sold                        22            4
                                                      ------       ------

   Total Interest and Dividend Income                  2,631        2,362
                                                      ------       ------

Interest Expense:
   Deposits                                              680          483
   Borrowings                                             77           41
                                                      ------       ------

   Total Interest Expense                                757          524
                                                      ------       ------

Net Interest Income                                    1,874        1,838

Provision for loan losses                                 54           45
                                                      ------       ------

Net interest income after provision
   for loan losses                                     1,820        1,793
                                                      ------       ------

Noninterest Income:
   Service charges on deposit accounts                   164           69
   Other income                                           59           56
   Gain on security transactions                           6            1
                                                      ------       ------

   Total Noninterest Income                              229          126
                                                      ------       ------

Noninterest Expense:
   Salaries and benefits                                 586          522
   Occupancy expenses                                     75           62
   Equipment expenses                                    153          121
   Other expenses                                        353          305
                                                      ------       ------

   Total Noninterest Expenses                          1,167        1,010
                                                      ------       ------

Income before Income Taxes                               882          909

Income Tax Expense                                       256          276
                                                      ------       ------

   Net Income                                        $   626      $   633
                                                      ======       ======

Earnings Per Share
   Net income                                        $   .70      $   .71
                                                      =======      =======

   Weighted Average Shares Outstanding               896,222      897,207
                                                     =======      =======

       The accompanying notes are an integral part of these statements.


<PAGE> 4


                           Allegheny Bancshares, Inc.
                           Consolidated Balance Sheets
                                 (In thousands)

                                          September 30, 2005  December 31, 2004
                                               Unaudited         Audited
ASSETS

Cash and due from banks                      $   2,218        $   2,695
Federal funds sold                               3,742            2,018
Interest bearing deposits in banks                 403              225
Investment securities available for sale        31,631           33,048
Investment securities held to maturity             500              500
Loans receivable, net of allowance for loan
   losses of $1,134 and $1,094 respectively    125,743          117,228
Bank premises and equipment, net                 5,840            4,763
Other assets                                     2,032            1,762
                                              --------         --------

   Total Assets                              $ 172,109        $ 162,239
                                              ========         ========

LIABILITIES

Deposits
   Noninterest bearing demand                $  17,691        $  16,348
   Interest bearing
      Demand                                    20,148           20,746
      Savings                                   26,874           25,732
      Time deposits over $100,000               19,560           18,992
      Other time deposits                       52,721           49,759
                                              --------         --------

   Total Deposits                              136,994          131,577

Accrued expenses and other liabilities             536              577
Short-term borrowings                            3,785            2,544
Long-term debt                                   5,214            3,494
                                              --------         --------

   Total Liabilities                           146,529          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                               23,845           22,017
Accumulated other comprehensive income             106              371
Treasury stock (at cost, 4,006 shares in
   2005 and 3,404 shares in 2004)                 (171)            (141)
                                              --------         ---------

   Total Stockholders' Equity                   25,580           24,047
                                              --------         --------

   Total Liabilities and Stockholders'
      Equity                                 $ 172,109        $ 162,239
                                              ========         ========


              The accompanying notes are an integral part of these statements.


<PAGE> 5
<TABLE>


                                                Allegheny Bancshares, Inc.
                              Consolidated Statements of Changes in Stockholders' Equity
                                                     (In thousands)
                                                       (Unaudited)
<CAPTION>

                                                                              Accumulated
                                                    Additional                    Other
                                          Common      Paid In      Retained   Comprehensive   Treasury
                              Total       Stock       Capital      Earnings       Income        Stock
<S>                        <C>          <C>          <C>         <C>            <C>          <C>

Balance, December 31,
   2004                    $  24,047    $    900     $    900    $   22,017     $    371     $   (141)

Comprehensive Income
   Net income                  1,828                                  1,828
   Change in unrealized
     gain on
     available for sale
     securities, net of
     income tax effect of
     $(119)                     (265)                                               (265)
                           ---------
   Total Comprehensive
     Income                    1,563
   Purchase of Treasury
     Stock                       (30)                                                             (30)
                           ---------     ---------     -------     ---------       -------    ---------


Balance, September 30,
   2005                    $  25,580    $    900     $    900    $   23,845     $    106     $   (171)
                           ========      =======      =======     =========      =======      ========

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)
                            ========     =======      =======     =========      =========     =======

</TABLE>


            The accompanying notes are an integral part of these statements.


<PAGE> 6


                           Allegheny Bancshares, Inc.
                      Consolidated Statements of Cash Flows
                                 (In thousands)
                                   (Unaudited)
                                                          Nine Months Ended
                                                            September 30,
                                                            2005      2004
Cash Flows from Operating Activities:
   Net income                                            $  1,828   $  1,760
   Adjustments to reconcile net income to net
    cash provided by operating activities:
      Provision for loan losses                               163        135
      Depreciation and amortization                           325        271
      Net amortization of securities                           41         69
      Gain on sale of securities                               (8)       (47)
      Gain on sale of equipment                                           (6)
      Gain on sale of other real estate                                  (13)
      Net change in:
       Accrued income                                         (89)       (63)
       Other assets                                          (164)      (129)
       Accrued expense and other liabilities                   59        (73)
                                                          -------    --------

   Net Cash Provided by Operating Activities                2,155      1,904
                                                          -------    -------

Cash Flows from Investing Activities:
   Net change in federal funds sold                        (1,724)    (6,390)
   Net change in interest bearing deposits in banks          (178)        19
   Proceeds from sales, calls and maturities
    of securities available for sale                        5,579     10,749
   Proceeds from call of security held to maturity                       500
   Purchase of securities available for sale               (4,580)    (5,352)
   Purchase of securities held to maturity                              (500)
   Net increase in loans                                   (8,678)    (9,031)
   Proceeds from sale of other real estate                                63
   Proceeds from sale of bank premises and equipment                       6
   Purchase of bank premises and equipment                 (1,400)      (522)
                                                          --------   --------

   Net Cash Used in Investing Activities                  (10,981)   (10,458)
                                                          --------  ---------

Cash Flows from Financing Activities:
   Net change in:
    Demand and savings deposits                             1,887      7,596
    Time deposits                                           3,530        781
   Proceeds from borrowings                                 3,241      1,415
   Curtailments of borrowings                                (279)    (1,494)
   Purchase of treasury stock                                 (30)      (106)
                                                          --------   --------

   Net Cash Provided by Financing Activities                8,349      8,192
                                                          -------    -------

Cash and Cash Equivalents
   Net decrease in cash and cash equivalents                 (477)      (362)
   Cash and Cash Equivalents, beginning of period           2,695      2,975
                                                          -------    -------

   Cash and Cash Equivalents, end of period              $  2,218   $  2,613
                                                          =======    =======

      The accompanying notes are an integral part of these statements.


<PAGE> 7


                           Allegheny Bancshares, Inc.
              Consolidated Statements of Cash Flows (Continued)
                                 (In thousands)
                                   (Unaudited)
                                                          Nine Months Ended
                                                            September 30,
                                                            2005      2004

Supplemental Disclosure of Cash Paid During the Period for:
   Interest                                              $  1,931   $ 1,561
   Income taxes                                               774   $   756


              The accompanying notes are an integral part of these statements.


<PAGE> 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, 2005, and the
results of operations for the periods ended September 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 September 30, 2005 and December 31, 2004 follows (in thousands):


                                 September 30, 2005    December 31, 2004

                                  Amortized  Fair    Amortized     Fair
                                    Cost     Value     Cost        Value

 Securities available for sale:

   U.S. Treasury and agency
    obligations                  $  7,968  $  7,970   $ 7,484   $  7,601
   State and municipal
    obligations                    18,153    18,452    18,450     18,983
   Mortgage-backed securities       5,356     5,209     6,575      6,464
                                  -------   -------    ------    -------

    Total                        $ 31,477  $ 31,631   $32,509   $ 33,048
                                  =======   =======    ======    =======

 Securities held to maturity:

   U.S. Treasury and agency
      obligations                $    500  $    499   $   500   $    501
                                  =======   =======    ======    =======


<PAGE> 9

                           ALLEGHENY BANCSHARES, INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS



NOTE 3      LOANS:

      Loans outstanding are summarized as follows (in thousands):
                                               September  30,  December 31,
                                                    2005           2004

 Real estate loans                                 $ 58,337    $ 55,406
 Commercial and industrial loans                     54,504      49,023
 Loans to individuals, primarily
   collateralized by autos                           11,137      11,144
 All other loans                                      2,899       2,749
                                                    -------      ------

   Total Loans                                      126,877     118,322

 Less allowance for loan losses                       1,134       1,094
                                                    -------      ------

   Net Loans Receivable                            $125,743    $117,228
                                                    =======     =======


NOTE 4      ALLOWANCE FOR LOAN LOSSES:

      A summary of transactions in the allowance for loan losses for the nine
months ended September 30, 2005 and 2004 follows (in thousands):

                                                     Nine Months Ended
                                                       September 30,
                                                     2005         2004
 Balance, beginning of period                      $  1,094     $  1,052
 Provision charged to operating expenses                163           90
 Recoveries of loans charged off                         11           13
 Loans charged off                                     (134)        (117)
                                                    -------      -------

 Balance, end of period                            $  1,134     $  1,038
                                                    =======      =======


<PAGE> 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 of $1,828,000 for the first nine months of 2005 represents an
increase of 3.87% compared to the same period a year ago. For the quarter ended
September 30, 2005, net income was 1.10% lower than the same quarter ended
September 30, 2004. Annualized returns on average equity and average assets for
the nine months ended September 30, 2005 were 9.83% and 1.47%, respectively,
compared with 9.92% and 1.49% for the same period in 2004.

Net Interest Income

      The Company's taxable equivalent net interest income increased 2.74% for
the first nine months of 2005 compared to the first nine 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 4.88% compared to 4.97% for 2004 as
the cost of funds increased 40 basis points while the yield on earning assets
increased 23 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 $7.5 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, increases in term and daily sweep repurchase agreements,
and long term borrowings. 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.


<PAGE> 11


Allowance for Loan Losses and Provision for Loan Losses

      The provision for loan losses were $163,000 and $135,000 for the nine
months ended September 30, 2005 and 2004, respectively. The allowance for loan
losses ("ALL") was $1,134,000 (.89% of loans) at the end of the first nine
months 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 67.20% during the first nine months of 2005
as compared to the same period in 2004 and 84.13% for the third quarter 2005 as
compared to the third 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 $277,000 or 9.01% for the first nine
months of 2005, as compared to 2004 and 15.84% for the third 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. In August 2005, the bank subsidiary
changed its name from Pendleton County Bank to Pendleton Community Bank.
Additional expenses were incurred to replace stationary, supplies, and
promotional items. 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 30.36% of income before income taxes for the
nine months ended September 30, 2005 compared with 30.24% for the nine months
ended September 30, 2004.

Loans

      Total loans were $126,877,000 at September 30, 2005, compared to
$118,322,000 at December 31, 2004, representing a 7.23% increase. Loan growth
during the first nine 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 $109,000 at September 30,
2005 (.09% of total loans). Accruing loans which are contractually past due 90
days or more as to principal or interest totaled $442,000 (.35% 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."


<PAGE> 12


Deposits

      The Company's deposits increased $5,417,000 or 4.11% during the first nine
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 14.28% and 14.43% of total deposits at
September 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 Company borrows funds from the Federal Home Loan Bank (FHLB) to
provide liquidity and to reduce interest rate risk. As competition for deposits
have increased during 2005, FHLB borrowings have been utilized to fund loan
growth. These borrowings have a fixed rate of interest and are amortized over a
period of 10 to 20 years. Interest rates on these obligations range from 3.15%
to 4.77%. During the first nine months of 2005, the Company has borrowed
$2,000,000 in additional long-term borrowings from the FHLB.

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 14.86% at September 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 September 30, 2005, the Company had liquid
assets of approximately $6.3 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, 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 $18.2 million.

      At September 30, 2005, the Company had a negative cumulative Gap Rate
Sensitivity Ratio of -29.78% 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 .05%. 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.


<PAGE> 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, 2005           September 30, 2004
                       Average    Income/            Average   Income/
                       Balance    Expense   Rates    Balance   Expense   Rates

Interest Income
    Loans (1)          $123,196  $ 6,497    7.03%   $115,691   $ 5,895   6.79%
    Federal funds sold    1,470       34    3.08%      1,169         9   1.03%
    Interest bearing
      deposits              260        5    2.56%        229         3   1.75%
Investments
      Taxable            14,526      440    4.04%     16,411       469   3.81%
      Nontaxable (2)     18,442      813    5.88%     17,545       815   6.19%
                         ------   ------   ------     ------    ------   -----

Total Earning Assets    157,894    7,789    6.58%    151,045     7,191   6.35%
                        -------   ------   ------    -------    ------   -----

Interest Expense
    Demand deposits      18,339      172    1.25%     16,087        96    .80%
    Savings              27,587      202     .98%     28,988       165    .76%
    Time deposits        71,089    1,452    2.72%     68,117     1,176   2.30%
    Short-term
      borrowings          3,362       64    2.54%      1,854        24   1.33%
    Long-term debt        4,084      115    3.75%      3,714       100   3.59%
                         ------   ------   ------     ------    ------  -------

    Total Interest Bearing
       Liabilities     $124,461  $ 2,005    2.15%   $118,760   $ 1,561   1.75%
                        -------  -------  --------   -------   ------    -----

    Net Interest
       Margin (1)                  5,784                         5,630
                                  =======                        =====

Net Yield on Interest
   Earning Assets                           4.88%                        4.97%
                                           =======                        =====

(1)  Interest on loans includes loan fees
(2)  An incremental tax rate of 34% was used to calculate the tax equivalent
       income


<PAGE> 14


                                    TABLE II
Allegheny Bancshares, Inc.
Interest Sensitivity Analysis
September 30, 2005

(In Thousands of Dollars)
                              0-3       4-12       1-5        Over 5     Total
                            Months     Months      Years      Years
Uses of Funds:

Loans:
  Commercial              $ 16,817    $ 8,388    $ 20,676    $11,522   $ 57,403
  Consumer                     838        841       7,687      1,489     10,855
  Real estate                7,969      5,423       9,381     35,564     58,337
  Credit card                  282                                          282
Federal funds sold           3,742                                        3,742
Interest bearing deposits      403                                          403
Investment securities                              14,606     17,525     32,131
                           -------    -------     ------     -------     ------

Total                       30,051     14,652      52,350     66,100    163,153
                            ------    -------      ------    -------    -------


Sources of Funds:

Deposits:
  Interest bearing
     demand                 20,148                                       20,148
  Savings                   26,874                                       26,874
  Time deposits
     over $100,000           3,034      5,239      11,287                19,560
  Other time deposits       16,535     17,239      18,298        649     52,721
Short-term borrowings        2,180      1,605                             3,785
Long-term debt                 106        323       1,886      2,899      5,214
                            ------    -------      ------    -------    ------

Total                       68,877     24,406      31,471      3,548    128,302
                            ------    -------      ------    -------    -------

Discrete Gap               (38,826)    (9,754)     20,879     62,552     34,851

Cumulative Gap             (38,826)   (48,580)    (27,701)    34,851
Ratio of Cumulative Gap
  To Total Earning Assets   -23.80%    -29.78%     -16.98%     21.36%


Table II reflects the earlier of the maturity or repricing dates for various
assets and liabilities at September 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.


<PAGE> 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


<PAGE> 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-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 September 30, 2005.

<PAGE> 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:  November 10, 2005