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Allegheny Bancshares, Inc. Announces 2012 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, 2012.
Allegheny’s net income for 2012 was $2,636,181 or $3.03 per share. This represents a 19.23% increase in net income over 2011’s level of $2,211,062. It also represents a 19.29% increase in earnings per share over 2011 earnings per share of $2.54. The 4th quarter of 2012 net income was $683,181 up $83,000 (13.83%) over the same period in 2011.
Net interest income grew from $9,796,000 in 2011 to $9,999,000 in 2012, but the increase came as the bank was able to increase its average balances of deposits and earning assets. Assets have increased by $8.7 million dollars which represents an increase of 3.44%. This increase in assets was funded primarily by an $8.5 million dollar increase in customer deposits. Loans decreased by $2.5 million and investment securities increased by $8.2 million and interest bearing deposits in banks held, as investments, increased by $2.7 million. Total loan loss provision for 2011 was $1,750,000 compared to $1,200,000 in 2012 and 4th quarter provision totaled $477,000 in 2011 as compared to $300,000 for 4th quarter 2012.
Allegheny’s key financial performance indicators continued to be strong considering the economic environment, producing a return on average assets (ROAA) of 1.01% and a return on average equity (ROAE) of 8.62%. These 2012 ratios compare to Allegheny’s 2011 ROAA of 0.87% and 2011 ROAE of 7.54%. Allegheny’s key financial performance indicators continue to be strong and compare favorably with local peer group data.
W.A. (Bill) Loving, President and CEO, indicated he was pleased with 2012’s performance. According to Loving, “During this year in which the economy seems to lack a clear direction on which way it wants to move, we have record net income and a substantial 19.23% increase over last year . This was achieved in the face of many challenges, yet possible because of the support of our customers, dedicated staff, and continuing to focus on our community bank model. One specific challenge is we are continuing to experience a decline in loan demand and have actually seen loan volume drop during 2012. Past due loans continue to be a concern, but the bulk of our delinquencies are concentrated in a few credits and we continue to make progress as we work with our customers to help them get through these trying economic times. In the face of this, however, we have managed to maintain a strong net interest margin and low operating expenses to produce very solid results in this economic environment.
As we look to 2013 and beyond, we are cautiously optimistic that we can continue to build upon our strengths; and, with our infrastructure of electronic banking products, as well as our traditional banking services, we can continue to meet our consumer’s expectations. We are confident that our strength allows us to provide the services that only a strong community bank can offer. We are committed and ready to help our communities grow and get beyond the slow economic times we have experienced in the past few 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 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 five full-service financial centers located in the West Virginia communities of Franklin, Moorefield, Marlinton, Petersburg, and in the Virginia community of Harrisonburg. Allegheny Mortgage Company, a division of Pendleton Community Bank, originates residential mortgage loans and is headquartered in Franklin.
Allegheny Bancshares, Inc. Announces Second Quarter 2012 Financial Results Allegheny Bancshares, Inc., the parent company of Pendleton Community Bank, is pleased to announce second quarter 2012 net income of $644,000 or $0.74 per share. This represents a 9.9% increase over second quarter 2011 income of $586,000 or $0.68 per share.
For the first half of 2012, Allegheny had net income of $1,276,000, which is a 22% increase from the net income of $1,046,000 earned the first half of 2011. Earnings per share increased from $1.21 in the first half of 2011 to $1.46 for the first half of 2012. Return on Average Assets (ROAA) for the first 6 months was 1.00% and the Return on Average Equity (ROAE) was 8.51%. This compares to a ROAA of 0.84% and a ROAE of 7.31% for the same period of 2011.
Assets increased 2.99% from December 31, 2011 to June 30, 2012 and on that date, totaled $261,085,210. Shareholders’ Equity at the end of the second quarter totaled $30,592,162.
W.A. (Bill) Loving, President and CEO, indicated he was pleased with the first six month’s performance. According to Loving, “Given the slow economic environment we have been operating in, I am especially pleased with the performance in 2012. While we are continuing to experience low loan demand, we have been able to somewhat offset the impact through a stable net interest margin, reduction in the level of contribution to loan loss, and expense control. The end result is a 9.9% increase in 2nd quarter income and 22% increase in year to date income over same periods in 2011.
The economy continues to struggle to gain traction; and, the recent announcement of the Federal Reserve regarding their intention to maintain interest rates at their historical low level well into 2014, to us, signals a slower recovery and a repeat of slow to no growth for some time to come. We believe this position and the global economic landscape will continue to produce an environment of lower loan demand and a resulting lower net interest margin. Consequently, we will continue to monitor our key indicators to determine what adjustments, if any, are necessary in our growth and profitability strategic plan as we work through to sustained recovery.
During this time, however, we will continue to both help our customers work through this slowdown and identify specific issues in our portfolio. By doing so, we are confident that we will be strategically positioned to take advantage of opportunities that avail themselves as the economy improves.
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 five full-service financial centers located in the West Virginia communities of Franklin, Moorefield, Marlinton, Petersburg, and in the Virginia community of Harrisonburg. Allegheny Mortgage Company, a division of Pendleton Community Bank, originates residential mortgage loans and is headquartered in Franklin.
Allegheny Bancshares, Inc. Announces First Quarter 2012 Financial Results Allegheny Bancshares, Inc., the parent company of Pendleton Community Bank, is pleased to announce first quarter 2012 net income of $632,000 or $0.72 per share. This compares with first quarter 2011 income of $461,000 or $0.53 per share. Return on Average Assets (ROAA) for the quarter was 1.00% and the Return on Average Equity (ROAE) was 8.51%. This compares to a ROAA of 0.74% and ROAE of 6.59% for the same period of 2011.
The increase in income for the first quarter in 2012 compared to first quarter 2011 was primarily due to a decrease in the provision for loan loss. The loan loss provision for the quarter ending March 31, 2011 was $300,000, as compared to $422,365 for the same period in 2011. In addition Net Interest Income was 2,423,779 for the first quarter 2012, as compared to $2,342,869 for the same period in 2011.
Assets increased 1.83% from December 31, 2011 to March 31, 2012 and, at the end of the quarter, totaled $257,045,000. This increase was primarily as a result of deposit growth. Deposits have grown by $4,187,000 or 1.92% in the first three months of 2012. Shareholders’ Equity at the end of the quarter totaled $29,848,000.
W.A. (Bill) Loving, President and CEO, indicated he was pleased with the first quarter’s performance. According to Loving “The current banking environment continues to be extremely challenging for all financial institutions. We have enjoyed a continued growth in deposits, and at this time we are above budget for deposits. However, while there have been some encouraging signs in the national economy, economic recovery in the communities which we serve loan demand continues to be weak in the communities in which we serve. Income for the first quarter is strong, but without loan growth we could see pressure on our net interest margin for the remainder of 2012. Our asset quality, while still remains under pressure, appears to have stabilized, and past due ratios for the last two quarters show some improvement from the prior two years. Consequently we have reduced our contribution to the Reserve for Loan Loss. We believe this reduced allocation is appropriate based upon our analysis of our loan portfolio. But as always this will be monitored and adjusted based upon economic conditions to be a prudent decision and one we will review throughout the remainder of the year.
However, operating results and ratios continue to be very strong. This performance has supported the higher levels of allocation and operating results that compare favorably to our industry peer group and state performance data.
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 five full-service financial centers located in the West Virginia communities of Franklin, Moorefield, Marlinton, Petersburg, and in the Virginia community of Harrisonburg. Allegheny Mortgage Company, a division of Pendleton Community Bank, originates residential mortgage loans and is headquartered in Franklin.
Allegheny Bancshares, Inc. Announces Fourth Quarter 2011 Financial Results 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, 2011.
Allegheny’s net income for 2011 was $2,211,000 or $2.55 per share. This represents an 11.39% increase in net income over 2010’s level of $1,985,000. It also represents an 11.35% increase in earnings per share over 2010 earnings per share of $2.29. The 4th quarter of 2011 net income was $600,000 up $381,000 (174%) over the same period in 2010.
Net interest income grew from $9,566,000 in 2010 to $9,796,000 in 2011 resulting from a growth in average deposits and earning assets. The lower interest rate environment of the last two years has had the effect of decreasing the bank’s cost of deposits from 1.58% in 2010 to 1.29% in 2011 which is a drop of 29 basis points, meanwhile yields on earning assets dropped from 5.80% in 2010 to 5.49% in 2011, which represents a drop of 31 basis points. While year to date net income is up 11.40%, the increase in quarter over quarter income during the fourth quarter was due to a special provision to the allowance for loan loss during the fourth quarter of 2010.
Allegheny’s key financial performance indicators continued to be strong, considering the economic environment, producing a return on average assets (ROAA) of 0.87% and a return on average equity (ROAE) of 7.54%. These 2011 ratios compare to 2010’s of 0.80% and 6.94%, respectively, and compare favorably with industry and local peer group data.
W.A. (Bill) Loving, President and CEO, indicated he was pleased with 2011’s performance. According to Loving, “We are continuing to experience a decline in loan demand and elevated delinquencies; however, we have been able to manage both the operating side and the net interest component of the income statement to produce this year’s results. Despite the current low interest rate environment and increased regulatory mandates, we have been able to maintain a stable net interest margin and efficiency ratio. We ended the year with a net interest margin of 4.30% and efficiency ratio of 59.46%, both considered to be strong performance metrics. The challenge going forward will be management of the margin, given the anticipated extension of the current rate environment.
Recent announcements of anticipated changes in the local work force, continued soft economy and higher unemployment, along with rising gasoline prices, will assuredly continue pressure on consumer and business payment habits and repayment ability. Consequently we continue to monitor our level of delinquencies and allocate to the allowance for loan loss as deemed prudent, as 2011 levels were similar to 2010’s.
As we look to 2012 and beyond, we believe we are strategically poised to take advantage of improvements in the economy and business opportunities that may avail themselves in the future.
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 five full-service financial centers located in the West Virginia communities of Franklin, Moorefield, Marlinton, Petersburg, and in the Virginia community of Harrisonburg. Allegheny Mortgage Company, a division of Pendleton Community Bank, originates residential mortgage loans and is headquartered in Franklin.
Corporate Reorganization of Pendleton Community Bank Stock The Board of Directors of Allegheny Bancshares, Inc. (the “Company”) is announcing that it has approved a corporate reorganization that will cause those Company shareholders who hold, in the aggregate, less than 1,100, but more than 99 Common Stock shares to exchange their existing Common Stock shares for newly created Class A Common Stock shares and cause those Company shareholders who hold, in the aggregate, 99 or less shares of Common Stock to exchange their existing Common Stock shares for newly created Class B Common Shares. Those Company shareholders who hold, in the aggregate, 1,100 or more Common Stock shares will continue to hold their existing Common Stock. This reorganization, which is known as a “going private” transaction, will result in the Company having less than 300 shareholders owning the Company’s existing Common Stock less than 500 shareholders owning the newly created Class A Common Stock and less than 500 shareholders owning newly created Class B Common Stock. As a result of this going private transaction, the Company will be able to terminate and suspend its SEC reporting obligations, which will allow the Company to save approximately $92,000 in 2011 and $103,510 in subsequent years.
Audit Committee Charter Allegheny Bancshares, Inc. Audit Committee Charter
I. Role
The committee’s role is to act on behalf of the board of directors and oversee all material aspects of the company’s financial reporting, control and audit functions, except those specifically related to the responsibilities of another standing committee of the board. The audit committee’s role includes a particular focus on the qualitative aspects of financial reporting to shareholders and on company processes for the management of business/financial risk and for compliance with significant applicable legal, ethical and regulatory requirements.
The role also includes coordination with other board committees and maintenance of strong, positive working relationships with management, external and internal auditors, counsel and other committee advisors.
II. Membership
The committee shall consist of at least three, and no more than six, independent, non-executive board members. Committee members shall have: (1) knowledge of the primary industries in which the company operates; (2) the ability to read and understand fundamental financial statements, including a company’s balance sheet, income statement, statement of cash flows and key performance indicators; and (3) the ability to understand key business and financial risks and related controls and control processes. The committee shall have access to its own counsel and other advisors at the committee’s sole discretion.
At least one member, preferably the chair, should be literate in business and financial reporting and control, including knowledge of the regulatory requirements, and should have past employment experience in finance or accounting or other comparable experience or background. Committee appointments shall be approved annually by the full board. The committee chairperson shall be selected by the committee members.
III. Operating Principles
The committee shall fulfill its responsibilities within the context of the following overriding principles:
1. Communications: The chair and others on the committee shall, to the extent appropriate, maintain an open avenue of contact throughout the year with senior management, other committee chairs and other key committee advisors (external and internal auditors, etc.), as applicable, to strengthen the committee’s knowledge of relevant current and prospective business issues.
2. Education/Orientation: The committee, with management, shall develop and participate in a process for review of important financial and operating topics that present potential significant risk to the company. Additionally, individual committee members are encouraged to participate in relevant and appropriate self-study education to ensure understanding of the business and environment in which the company operates.
3. Annual Plan: The committee, with input from management and other key committee advisors, shall develop an annual plan responsive to the “primary committee responsibilities” detailed herein. The annual plan shall be reviewed and approved by the full board.
4. Meeting Agenda: Committee meeting agendas shall be the responsibility of the committee chair, with input from committee members. It is expected that the chair would also ask for management and key committee advisors, and perhaps others, to participate in this process.
5. Expectations and Information Needs: The committee shall communicate committee expectations and the nature, timing and extent of committee information needs to management, internal auditors and external parties, including external auditors. Written materials, including key performance indicators and measures related to key business and financial risks, shall be received from management, auditors and others materials in sufficient depth to participate in committee/board dialogue.
6. External Resources: The committee shall be authorized to access internal and external resources, as the committee requires, to carry out its responsibilities.
7. Meeting Attendees: The committee shall request members of management, counsel, internal and external auditors, as applicable, to participate in committee meetings, as necessary, to carry out the committee’s responsibilities. Periodically and at least annually, the committee shall meet in private session with only the committee members. It shall be understood that either internal or external auditors, or counsel, may, at any time, request a meeting with the audit committee or committee chair with or without management’s attendance. In any case, the committee shall meet in executive session separately with internal and external auditors, at least annually.
8. Meeting Frequency: The committee shall meet at least quarterly. Additional meetings shall be scheduled as considered necessary by the committee or chair.
9. Reporting to the Board of Directors: The committee, through the committee chair, shall report periodically, as deemed necessary, but at least annually, to the full board. In addition, summarized minutes from committee meetings, separately identifying monitoring activities from approvals, shall be available to each board member .
10. Self-Assessment: The committee shall review, discuss and assess its own performance as well as its role and responsibilities, seeking input from senior management, the full board and others. Changes in role and/or responsibilities, if any, shall be recommended to the full board for approval.
IV. Responsibilities
Financial Reporting:
1. Review and assess the annual and interim financial statements before they are released to the public or filed with the SEC.
2. Review and assess the key financial statement issues and risks, their impact or potential effect on reported financial information, the processes used by management to address such matters, related auditors’ views, and the basis for audit conclusions.
3. Approve changes in important accounting principles and the
application thereof in both interim and annual financial reports.
4. Advise financial management and the external auditors that they are expected to provide a timely analysis of significant current financial reporting issues and practices.
Risks and Controls:
1. Review and assess the company’s business and financial risk management process, including the adequacy of the overall control environment and controls in selected areas representing significant risk.
2. Review and assess the company’s system of internal controls for detecting accounting and financial reporting errors, fraud and defalcations, and legal violations. In that regard, review the related findings and recommendations of the external and internal auditors, together with management’s responses.
3. Review with legal counsel any regulatory matters that may have a material impact on the financial statements.
4. Review the results of the annual audits of directors’ and officers’ expense accounts and management perquisites prepared by the internal auditors.
External and Internal Audits:
1. Recommend the selection of the external auditors for approval by the board of directors.
2. Instruct the external auditors that they are responsible to the board of directors and the audit committee as representatives of the shareholders. In that regard, confirm that the external auditors will report all relevant issues to the committee in response to agreed-upon expectations.
3. Review the performance of the external and internal auditors.
4. Obtain a formal written statement from the external auditors consistent with standards set by the Independence Standards Board. Additionally, discuss with the auditors any relationships or non-audit services that may affect their objectivity or independence.
5. Consider, in consultation with the external and internal auditors, their audit scopes and plans to ensure completeness of coverage, reduction of redundant efforts and the effective use of audit resources.
6. Review and approve requests for any consulting services to be performed by the external auditors, and be advised of any other study undertaken at the request of management that is beyond the scope of the audit engagement letter.
7. Review with management and the external auditors the results of the annual audits and related comments in consultation with other committees as deemed appropriate, including any difficulties or disputes with management, any significant changes in the audit plans, the rationale behind adoptions and changes in accounting principles, and accounting estimates requiring significant judgments.
8. Provide a medium for the external auditors to discuss with the audit committee their judgments about the quality, not just the acceptability, of accounting principles and financial disclosure practices used or proposed to be adopted by the company.
9. Approve changes in the directors of the internal audit function.
10. Instruct the internal auditors that they are responsible to the board of directors through the committee.
11. Review with the internal auditors any changes in the scope of their plans.
12. Review with the internal auditors the results of their monitoring of compliance with the code of conduct.
Other:
1. Review and update the committee’s charter.
2. Review and approve significant conflicts of interest and related party transactions.
3. Conduct and authorize investigations into any matters within the committee’s scope of responsibilities. The committee will be empowered to retain independent counsel and other professionals to assist in conducting any investigation.
4. Oversee Compliance Department. (See Statement of Policy for Compliance Department).
V. Documentation of Meetings
Minutes of all meetings of the Audit & Compliance Review Committee will fully document topics of discussion. Such minutes are considered official only when they bear the signature of the chairman of the Committee. Due to the nature of such meetings, minutes of Audit & Compliance Review Committee meetings are retained by the Corporate Secretary. These minutes are available upon request to external auditors, regulatory agencies and any outside member of the Board of Directors. All records, reports or such documents created by this Committee are confidential. The minutes of the Audit & Compliance Review Committee will be reviewed with the Board of Directors.
