Investor Relations

Allegheny Bancshares, Inc. Announces 2014 Earnings

Allegheny Bancshares, Inc. (Allegheny), the parent company of Pendleton Community Bank, is pleased to announce its results of operations for the 4th quarter and year ending December 31, 2014.

Allegheny's net income for 2014 was $3,001,817 or $3.47 per share. This represents a 10.50% increase in net income over 2013's level of $2,716,464. It also represents a 9.81% increase in earnings per share over 2013 earnings per share of $3.16. The 4th quarter of 2014 net income was $702,112 down $11,352 (1.59%) over the same period in 2013.

Net interest income grew $419,000 (4.25%) from $9,844,000 in 2013 to $10,263,000 in 2014. While assets grew by $5.3 million (2.00%) in 2014, loans increased by $13.9 million (7.54%) which provided the growth in net interest income in 2014. Deposit balances decreased by 0.25% during 2014. As a result, the increase in loan volume was funded by utilizing excess cash, cash flow from the $2.0 million reduction in the investment portfolio, and year-end short term borrowings. Assets, at year end totaled $267,652,000 and total loans were $198,285,000. Total loan loss provision for 2014 was $750,000 compared to $900,000 in 2013 and 4th quarter provision totaled $300,000 in 2014 as compared to $150,000 in fourth quarter 2013.

Allegheny's key financial performance indicators continued to be strong considering the economic environment and compare favorably with local peer group data. Allegheny produced a return on average assets (ROAA) of 1.13% and a return on average equity (ROAE) of 9.33%. These 2014 ratios compare to Allegheny's 2013 ROAA of 1.04% and 2013 ROAE of 8.72%.

W.A. (Bill) Loving, President and CEO, indicated he was pleased with 2014's performance. According to Loving, "Despite the continuance of the historically low interest rate environment, 2014 was an exceptional year, both in terms of industry comparison and actual performance. Reported net income of $3.0 million is record profits for Allegheny Bancshares and continues the year over year increases we've enjoyed for the past few years.

The national economy continues to show slow improvement; and, during 2014, we saw increased loan demand in some of our markets. This is a welcome change over the past several years. During 2014 we have also focused on repositioning our balance sheet, strategic pricing, and placing emphasis on core deposit growth. This has allowed us to offset the net interest margin compression created by the current historically low interest rate environment. In fact, not only were we able to sustain our margin, we are reporting a higher net interest margin at year-end. We believe we will be able to maintain this level well into 2015.

As we look to 2015 and beyond, we are optimistic that we can continue to build upon our strengths and traditional banking services, while continuing to offer state of the art products and services. Products, such as online account opening that began in 2014, and the suite of electronic banking products that we now offer our customers, has positioned us well for our current customers as well as the next customer that walks through our door, whether that's one of our 5 physical branches or our online branch.

We realize there are challenges that will continue to face our industry and our bank, that's really nothing new, there have always been challenges, and our bank is well positioned to step up to the next challenge and accept it like we have for the past 86 years."

This press release includes forward-looking statements, which are not historical facts and pertain to future operating results. These forward-looking statements are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. These statements are subject to significant business, economic, and competitive uncertainties and contingencies, many of which are beyond our control. Accordingly, actual results may differ materially from anticipated results.

Pendleton Community Bank, an independent community bank since 1925, currently has five full-service financial centers located in the West Virginia communities of Franklin, Moorefield, Marlinton, Petersburg, and in the Virginia community of Harrisonburg, in addition to a loan production office in Wardensville, West Virginia. Allegheny Mortgage Company, a division of Pendleton Community Bank, originates residential mortgage loans and is headquartered in Franklin.