ALLEGHENY BANCSHARES, INC. ANNOUNCES THIRD QUARTER 2016 FINANCIAL RESULTS
Allegheny Bancshares, Inc., the parent company of Pendleton Community Bank, is pleased to announce third quarter 2016 net income of $765,000 or $0.90 per share. This represents a 4.38% decrease from third quarter 2015 income of $800,000 or $0.93 per share.
For the first nine months of 2016, Allegheny had net income of $2,384,000, which is a decrease of 2.26% from the net income of $2,439,000 earned the first nine months of 2015 and a decrease in earnings per share of $.05 to $2.79 for the first 9 months of 2016. Return on Average Assets (ROAA) for the first 9 months was 1.16% and the Return on Average Equity (ROAE) was 8.90%. This compares to a ROAA of 1.22% and a ROAE of 9.53% for the same period of 2015.
Assets increased 5.08% from December 31, 2015 to September 30, 2016 and on that date, totaled $283,151,000. Shareholders' Equity at the end of the third quarter totaled $36,663,000.
The decrease in earnings resulted from an increase in costs associated with the opening our newest office in downtown Harrisonburg. In addition, depreciation primarily due to information technology improvements and an increase in information technology management costs are higher than 2015. Net Interest Income actually increased 2.9% or $239,000 over last year and provision for loan loss decreased by 20% or $135,000 comparing September 30 year to date 2015 and 2016. However, this increase was more than offset by an increase in noninterest expense.
W.A. (Bill) Loving, President and CEO, indicated he was extremely pleased with the 2016 year to date performance. According to Loving, "While we see a decrease in quarterly earnings, our net income remains very strong. The reported 1.16% ROAA in today's environment continues to be above the state's industry average and compares very favorably to our local peers and our specific FDIC Peer Group. Our focus on balance sheet management provided a 2.9% increase ($239,000) in our net interest margin. Additionally, as we continue to see improvement in the economy, we were able to decrease our loan loss contribution; and, collectively, these income enhancements allowed us to fund the cost of the investments we made to better position our technology infrastructure and service locations for the future. We are particularly excited about the recent opening of our 6th financial center in downtown Harrisonburg, VA that opened on September 6, 2016. We believe this financial center will augment our existing location in Virginia and provide long-term earnings potential. We believe our investment in this location and expanding our presence in Harrisonburg, along with the increased investment in technology and cyber security tools, will provide the catalyst for growth in the "traditional banking channels" as well as the continually growing electronic world. As this specific banking channel (electronic) continues to demand more options, we believe it prudent to make the necessary investment to meet these demands; and, to that end, we are excited about the roll-out of Apple-Pay@ to complement our existing slate of electronic products.
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 forward looking 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 six full-service financial centers located in the West Virginia communities of Franklin, Moorefield, Marlinton, Petersburg, and in the Virginia community of Harrisonburg. Pendleton Community Bank also has a Loan Production office in Wardensville, WV. Allegheny Mortgage Company, a division of Pendleton Community Bank, originates residential mortgage loans and is headquartered in our Harrisonburg location.