Exhibit 10.1

                              EMPLOYMENT AGREEMENT


         This Agreement is made as of the 30th day of September, 2003, by and
between PENDLETON COUNTY BANK, a West Virginia corporation (the "Bank"), WILLIAM
A. LOVING ("Employee"), and joined in by Allegheny Bancshares, Inc.
("Allegheny"), parent of "Bank"..

                                    RECITALS

         The Bank desires to employ Employee, and Employee desires to provide
services to the Bank, upon the terms and conditions hereinafter set forth.

                                   WITNESSETH:

         NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the parties hereto, each intending to be legally bound hereby,
agree as follows:

1)    Employment

      a) The Bank hereby employs Employee and Employee hereby accepts such
         employment. During the term of Employee's employment under this
         Agreement (the "Employment Term"), Employee shall serve as the Chief
         Executive Officer of the Bank, and shall perform such duties as are
         reasonably requested from time to time by the Board of Directors of
         the Bank.

      b) Employee represents to the Bank that he is not subject, or a party, to
         any employment agreement, non-competition covenant, non-disclosure
         agreement or any other agreement, covenant, understanding or
         restriction of any nature which would prohibit Employee from executing
         this Agreement and performing fully his duties and responsibilities
         hereunder, or which would in any manner, directly or indirectly, limit
         or affect the duties and responsibilities which may now or in the
         future be assigned to Employee by the Bank.

2)    Performance. Employee shall devote his entire business efforts to the
      performance of his duties hereunder; provided, however, that Employee may
      engage in any of the following activities so long as they do not interfere
      with the performance of his duties hereunder: (i) serve on such civic,
      charitable or trade association boards or committees; and (ii) manage his
      personal investments.

3)    Term. The Employment Term shall begin on the date hereof and shall
      continue until September 30, 2006 ("Anniversary Date") and shall
      automatically renew for additional three (3) year periods, unless
      terminated prior thereto in accordance with Sections 5 or 6 of this
      agreement or either party gives notice, at least 90 days prior to the
      Anniversary Date, of their intent not to renew this agreement.


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                                                                  Exhibit 10.1

4)       Compensation for Employment

         a) The basic annual rate of compensation of Employee for his employment
            services during the Employment term shall be One Hundred Twenty-Five
            Thousand and no/100 Dollars ($125,000.00) (such amount, as adjusted
            in accordance with this Section 4(a), is referred to herein as the
            "Salary"), which the Bank shall pay to Employee in equal
            installments in accordance with the normal payroll policies of the
            Bank. The Salary may be adjusted upward on an annual basis as the
            Board of Directors may approve, in its sole discretion, but the
            Salary shall not be decreased.

         b) During the Employment Term, the Bank shall reimburse Employee for
            reasonable expenses incurred in connection with the performance of
            his services hereunder and the Bank shall provide Employee with
            fringe benefits that are substantially equivalent, but not limited
            to the fringe benefits specified in "Exhibit A" hereto (the "Fringe
            Benefits").

5)       Termination Without Compensation

         a) Total  Disability.  If employee  becomes totally  disabled (as
            defined below),  the Bank may terminate the
            Employment Term by notice to the Employee,  and as of the
            termination  date,  defined as the date Employee  is  eligible
            for Long Term  Disability  coverages  under  bank's  plan,  the Bank
            shall  have no further liability or obligation to Employee
            hereunder  except as follow:  Employee shall receive:  (i) any
            unpaid Salary,  Fringe  Benefits  and  bonuses  that  have  accrued
            through  the date of  termination;  and (ii) whatever benefits that
            he may be entitled to receive under any then existing  disability
            benefit plans of the Bank,  including any such plans included in the
            Fringe  Benefits.  For the purposes  hereof,  Employee shall be
            deemed to be "totally  disabled"  if  Employee is  considered
            totally  disabled  under any group disability  plan  maintained
            by the Bank and in effect at that time,  or in the absence of any
            such plan, under  applicable  Social  Security  regulations.  In
            the event of any dispute  under this  Section  5(a), Employee
            shall submit to a physical  examination by a licensed  physician
            mutually  satisfactory  to the Bank and Employee,  the cost of such
            examination  to be paid by the Bank, and the  determination  of such
            physician shall be conclusive.

        b)  Death. If Employee dies, this Employment Agreement shall terminate
            on the date of death, and thereafter the Bank shall not have any
            further liability or obligation to Employee, his executors,
            administrators, heirs, assigns or any other person claiming under
            or through him, except that Employee's estate shall receive any
            unpaid Salary, Fringe Benefits and bonuses that have accrued
            through the date of termination.


<PAGE> 3


                                                                  Exhibit 10.1

        c)  Cause.  The  Bank may  terminate  the  Employment  Term for  "cause"
            by  giving  Employee  notice  of the termination  date (which may be
            immediate),  and as of the  termination  date, the Bank shall not
            have any further  liability or  obligation to Employee,  except that
            Employee  shall receive any unpaid Salary and fringe  Benefits  that
            have  accrued  through the date of  termination.  For  purposes of
            this  Agreement, "cause"  shall mean:  (i) the failure of Employee
            to observe or perform  (other than by reason of illness,
            injury or  incapacity)  any of the material  terms or  provisions
            of this  Agreement;  (ii) the failure of Employee to comply fully
            with the lawful  directives of the Board of Directors of the Bank
            (the  "Board"); (iii) willful  misconduct;  (iv) material  neglect
            of the business of the Bank; (v) conviction of a felony
            or other crime involving moral turpitude;  (vi)  misappropriation
            of funds; or (vii) habitual  insobriety or drug  addiction.  In the
            case of a  termination  for "cause," the notice of  termination
            shall specify the basis for the Bank's  determination  of "cause".
            Any act or failure to act based upon authority given
            pursuant  to a  resolution  duly  adopted by the Board or based
            upon the  advice of counsel  for the Bank shall be  conclusively
            presumed to be done,  or omitted to be done, by the Executive in
            good faith and in the best  interests  of the Bank.  It is also
            expressly  understood  that the  Executive's  attention  to
            matters not  directly  related to the business of the Bank shall
            not provide a basis for  termination  for Cause.  Notwithstanding
            the  foregoing,  the Executive  shall not be deemed to have been
            terminated  for Cause unless and until there shall have been
            delivered to him a copy of a resolution  duly adopted by the
            affirmative  vote of a majority of the Board at a meeting of the
            Board  called and held for such  purposes (after  reasonable
            notice to the Executive and an opportunity for him,  together with
            his counsel,  to be heard before the Board),  finding that in the
            good faith  opinion of the board the Executive was guilty of
            the conduct set forth above and specifying the particulars thereof
            in detail.

        d)  Resignation. Employee shall have the right to terminate the
            Employment Term at any time by giving the Bank 90 days notice of
            the termination date. Under such circumstances, the Bank shall not
            have any further liability or obligation to Employee, except that
            Employee shall receive any unpaid Salary and Fringe Benefits that
            have accrued through the date of termination.


<PAGE> 4


                                                                  Exhibit 10.1


6)       Termination With Compensation. The Bank shall have the right to
         terminate the Employment term without cause at any time by giving
         Employee 60 days notice of the termination date. Under such
         circumstances, the Bank shall continue to pay to Employee based upon
         the Salary at time of notice of termination earned in the prior year
         and provide to Employee the Fringe Benefits which it is permitted by
         law to provide through the earlier of: (i) the end of the Employment
         Term; or (ii) twelve (12) months after such date of termination. Such
         period is referred to herein as the "Pay-Out Period" and the Salary and
         the Fringe Benefits to be provided under this Section 6 are referred to
         herein as the "Termination Compensation". As of the termination date,
         the Bank shall not have any further liability or obligation to Employee
         other than to continue providing the Termination Compensation for the
         period specified in this Section 6. Employee shall not be entitled to
         any Termination Compensation unless Employee executes and delivers to
         the Bank after a notice of termination a release in a form satisfactory
         to the Bank in its reasonable discretion by which Employee releases the
         Bank from any obligations and liabilities of any type whatsoever,
         except for the Bank's obligations with respect to the Termination
         Compensation. The parties hereto acknowledge that the Termination
         Compensation to be provided under this Section 6 is to be provided in
         consideration for the above-specified release.

7)       Agreement Not to Compete.

         a) During the period (the "Restricted  Period")  beginning on the
            expiration of the term of this Agreement or the termination of
            Employee's  employment  hereunder and in doing on the second
            anniversary of the date of such  termination of employment
            hereunder,  employee  shall not,  directly or  indirectly,  own,
            manage, operate,  join,  control,  finance or  participate  in the
            ownership,  management,  operation,  control or financing  of,
            or  be  connected  as  a  partner,  principal,  member,  manager,
            agent,  representative, consultant  or otherwise  with or use or
            permit his name to be used in  connection  with,  any business or
            enterprise engaged directly or indirectly in competition with the
            business  ("Business")  conducted by the Bank at any time during
            such period within the Counties of Pendleton,  Grant, Hardy, and
            Pocahontas,  West Virginia,  and  any  other  County  the  Bank
            may  have an  office  of  operation,  regardless  of  state
            ("Restricted  Area").  It is  recognized  by Employee and the Bank
            that the Business is and is expected to continue to be conducted
            throughout the Restricted Area and that more narrow geographical
            limitations of any nature on this non-competition  covenant (and
            the non-solicitation  covenant set forth in Section 7(b)
            are  therefore  not  appropriate.  The  foregoing  restriction
            shall not be  construed  to  prohibit  the ownership by Employee
            as a passive  investment  of not more than one percent of any class
            of securities of any  corporation  which is  engaged  in any of the
            foregoing  businesses  having  a class  of  securities
            registered pursuant to the Securities Exchange Act of 1934.

<PAGE> 5


                                                                  Exhibit 10.1

            b) During the Restricted Period, Employee shall not, either directly
               or indirectly, (i) call on or solicit any person who or which has
               been a customer of the Bank with respect to the activities
               prohibited by Section 7 (a); or (ii) solicit the employment of
               any person who is employed by the Bank during such period on a
               full or part-time basis.

            c) Employee acknowledges that the restrictions contained in this
               Section 7 are reasonable and necessary to protect the legitimate
               interests of the Bank, and that any violation will result in
               irreparable injury to the Bank.

            d) The Bank shall be entitled to preliminary and permanent
               injunctive relief, without the necessity of proving actual
               damages, as well as an equitable accounting of all earnings,
               profits and other benefits arising from any violation of this
               Section 7 should ever be adjudicated to exceed the time,
               geographic, product or service, or other limitations permitted
               by applicable law in any jurisdiction, then such
               provisions shall be deemed reformed in such jurisdiction to the
               maximum time, geographic, product or service, or other
               limitations permitted by applicable law.

8)       Confidential Information.

            a) Employee  has had and will have  possession  of or  access to
               confidential  information  relating  to the business of the Bank,
               including writings,  processes,  reports, manuals,  financial
               information,  business plans,  customer  lists,  the identity of
               or other facts relating to prospective  customers,  arrangements
               with  customers,  computer  programs,  or other  material
               embodying  trade  secrets,  customer or product
               information  or  technical  or business  information  of the
               bank.  All such  information,  other than any information  that
               is in the  public  domain  through  no act or  omission  of
               Employee  or  which  he is authorized  to  disclose,  is referred
               to  collectively  as the "Bank  Information".  During and after
               the Employment  Term,  Employee shall not: (i) use or exploit
               in any manner the Bank  information  for himself or any person,
               partnership,  association,  corporation  or other entity other
               than the Bank;  (ii) remove any Bank information,  or any
               reproduction  thereof,  from the possession or control of the
               bank; or (iii) treat Bank information otherwise than in a
               confidential manner.

           b)  All Bank information developed, created or maintained by
               Employee, alone or with others while employed by the Bank, and
               all Bank information maintained by Employee thereafter, shall
               remain at all times the exclusive property of the Bank. Employee
               shall return to the Bank all Bank information, and reproductions
               thereof, whether prepared by him or others, that are in his
               possession immediately upon request and in any event upon the
               completion of his employment by the Bank.


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                                                                  Exhibit 10.1

9)       Remedies. Employee expressly acknowledges that the remedy of law for
         any breach of Sections 7 and 8 will be inadequate and that upon any
         such breach or threatened breach, the Bank shall be entitled as a
         matter of right to injunctive relief in any court of competent
         jurisdiction, in equity or otherwise, and to enforce the specific
         performance of Employee's obligations under these provisions without
         the necessity of proving actual damage to the Bank or the inadequacy of
         a legal remedy. The rights conferred upon the Bank by the preceding
         sentence shall not be exclusive of, but shall be in addition to, any
         other rights or remedies which the Bank may have at law, in equity or
         otherwise.

10)      General.

         a)  Governing Law. The terms of this Agreement shall be governed by the
             laws of the State of West Virginia (exclusive of its provisions
             regarding conflicts of laws).

         b)  Bank. For purposes of Sections 7, 8, 9 and 10, the term "Bank"
             shall be deemed to include any incorporated or unincorporated
             entities that are controlled by, or under common control with,
             directly or indirectly, the Bank through ownership, agreement
             or otherwise.

         c)  Binding Effect. All of the terms and provisions of this Agreement
             shall be binding upon and inure to the benefit and be enforceable
             by the respective heirs, representatives, successors (including
             any successor as a result of a merger or similar reorganization)
             and assigns of the parties hereto, except that the duties and
             responsibilities of Employee hereunder are of a personal nature
             and shall not be assignable in whole or in part by Employee.

         d)  Notices. All notices that are required or permitted hereunder shall
             be in writing and shall be sufficient if personally delivered or
             sent by mail, facsimile message or federal express or other
             national, recognized overnight delivery service. Any notices
             shall be deemed given upon the earlier of the date when received,
             or the third day after the date when sent by registered or
             certified mail or the day after the date when sent by Federal
             express or other national, recognized overnight delivery service
             to, the address or fax number is changed by notice to the other
             party hereto, given in accordance with the foregoing notice
             procedures:

              If to the Bank:

              Pendleton County Bank
              PO Box 487
              Franklin, WV  26807
              Attn:  Chairman of the Board


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                                                                  Exhibit 10.1

              With a copy to:

              Charles Dunbar
              Jackson Kelly Associates, LLC
              P.O. Box 553 Charleston, WV 25322
              Fax: (304) 340-1080

              If to Employee:

              William A. Loving
              P.O. Box 238
              Franklin, WV  26807

              With a copy to:

              ---------------------
              ---------------------
              Fax:__________________
              Attn:__________________


         e) Entire Agreement; Modification. This Agreement and the Executive
            Severance Agreement of even date herewith, constitutes the entire
            agreement of the parties hereto with respect to the subject matter
            hereof and may not be modified or amended in any way except in
            writing by the parties hereto. In the event that terms in this
            Agreement conflict with the Executive Severance Agreement, the
            term(s) shall be interrupted most favorable to Employee.

        f)  Duration. Notwithstanding the termination of the Employment Term
            and of Employee's employment by the Bank, this Agreement shall
            continue to bind the parties for so long as any obligations remain
            under the terms of this Agreement.

        g)  Waiver. No waiver of any breach of this Agreement shall be construed
            to be a waiver as to succeeding breaches.

        h)  Severability. If any provision of this Agreement or application
            thereof to anyone under any circumstances is adjucated to be
            invalid or unenforceable in any jurisdiction, such invalidity or
            unenforceability shall not affect any other provisions or
            applications of this Agreement which can be given effect without
            the invalid or unenforceable provision or application and shall
            not invalidate or render unenforceable such provision in any other
            jurisdiction.

        i)  Joinder. Allegheny Bancshares, Inc. joins into this agreement as
            evidence and consent and agrees to employ employee as it's Executive
            Vice President and CEO without additional pay and on the terms and
            conditions herein.


<PAGE> 8


                                                                   Exhibit 10.1



         IN WITNESS WHEREOF, the parties hereto, intending to be legally bound,
have hereunto duly executed this Agreement as of the day and year first written
above.


                                            Pendleton County Bank,
                                            a West Virginia Corporation

                                            By ______________________________
                                            President

                                            By ______________________________
                                            Chairman of the Board


                                            Allegheny Bancshares, Inc.

                                            By: _____________________________
                                            President

                                            By: _____________________________
                                            Chairman of the Board

                                            By: _____________________________
                                            Executive William A. Loving, Jr.,
                                            CLBB


<PAGE> 9


                                                                  Exhibit 10.1

                                   "EXHIBIT A"

                                 FRINGE BENEFITS


A)   Term Life, Disability, and Health insurance, including family coverage in
     amounts in accordance with Bank's policies.

B)   Paid holidays in accordance with the Bank's policies.

C)   Paid vacation in accordance with Bank's policies..


D)   Participation, when eligible, in Bank's 401K or other retirement plans.

E)   Participation in any Bonus Plan, if any, adopted by the Bank in accordance
     with its terms and conditions.

F)   Bank will provide automobile for employee's use. Employee will be taxed,
     according to IRS rules and regulations, according to economic benefit
     provided.