Allegheny Bancshares, Inc. Announces Third Quarter 2011 Financial Results Allegheny Bancshares, Inc., the parent company of Pendleton Community Bank, is pleased to announce third quarter 2011 net income of $565,000 or $0.65 per share. This represents an 18.5% decrease from third quarter 2010 income of $693,000 or $0.80 per share.
For the first nine months of 2011, Allegheny had net income of $1,611,000, which is an 8.8% decrease from the net income of $1,766,000 earned the nine months of 2010. Earnings per share decreased from $2.04 in the first nine months of 2010 to $1.86 for the first nine months of 2011. Return on Average Assets (ROAA) for the first 9 months was 0.86% and the Return on Average Equity (ROAE) was 7.41%. This compares to a ROAA of 0.96% and a ROAE of 8.27% for the same period of 2010.
Assets increased 4.62% from December 31, 2010 to September 31, 2011 and on that date, totaled $260,690,000. Shareholders’ Equity at the end of the quarter totaled $30,251,000.
W.A. (Bill) Loving, President and CEO, indicated he was pleased with the first nine month’s performance. According to Loving, “ We are continuing to see strong results from operations and accordingly strong performance metrics, such as net interest margin, loan to deposit ratio, and efficiency ratio to name a few. The economy continues to struggle to gain traction and the protracted characteristic of the anemic recovery will continue to place pressure on loan quality. We are continuing to experience higher levels of delinquencies and therefore have continued to set aside higher levels of earnings to the allowance for loan and lease loss account accordingly. This higher level of allowance has obviously impacted our earnings somewhat; however, while earnings are down slightly in comparison with last year, we are posting results consistent with our state and national peer groups.
While we have seen growth since year end, the majority of this deposit growth has not been matched with loan growth, as loan growth is relatively flat for the first nine months. This anemic loan growth, along with the continued low interest rate environment has and will place additional pressure on our net interest margin. Despite this pressure, we have been able to maintain a healthy margin, and these earnings, in addition to our strong performance in non-interest income, have supported a continuance in the higher than normal level contribution to our allowance for loan and lease loss reserve.
We can’t change the economic environment we operate in; yet, we can have success by focusing on what we believe is essential- our customers and providing products and services with the customer in mind. Products that are designed to meet today’s customer demands. Products that can be accessed from the teller line or the internet, as we continue to expand our electronic and mobile banking platforms, while enhancing the customer focused “face to face” options we’ve offered for decades. I’m confident this focus is one of the reasons for our healthy deposit growth; and, while we remain committed to the communities we serve and making as many loans as possible, the existence of minimal loan growth is more a component of the economy than strategy.
Today’s headlines are focused on “banks”, and not “community banks”…There is a difference. I’m confident that our dedication to offering competitive products and services, while focusing on the customer, has allowed us to foster new relationships at the same time strengthening long-term relationships; and, that is what “Community Banking” is all about….focusing on the customer, regardless of the economic environment we operate in.”
This press release includes forward-looking statements, which are not historical facts and pertain to future operating results. These forward-looking 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 2011 Financial Results Allegheny Bancshares, Inc., the parent company of Pendleton Community Bank, is pleased to announce second quarter 2011 net income of $586,000 or $0.68 per share. This represents a 2.9% increase over second quarter 2010 income of $569,000 or $0.66 per share.
For the first half of 2011, Allegheny had net income of $1,046,000, which is a 2.5% decrease from the net income of $1,073,000 earned the first half of 2010. Earnings per share decreased from $1.24 in the first half of 2010 to $1.21 for the first half of 2011. Return on Average Assets (ROAA) for the first 6 months was 0.84% and the Return on Average Equity (ROAE) was 7.31%. This compares to a ROAA of 0.88% and a ROAE of 7.68% for the same period of 2010.
Assets increased 1.48% from December 31, 2010 to June 30, 2011 and on that date, totaled $252,872,000. Shareholders’ Equity at the end of the quarter totaled $29,410,000.
W.A. (Bill) Loving, President and CEO, indicated he was pleased with the first six month’s performance. According to Loving, “Given the continued soft economy and current banking environment I am especially pleased that our 1st half earnings essentially mirror last year’s 1st half results. While we were able to grow our loan portfolio last year despite the continued economic downturn, we are, like most financial institutions, seeing a slowdown in loan demand in 2011. This does and will place pressure on our net interest margin, given the low interest rate environment we operate in today and expect to operate in for the foreseeable future. Despite this pressure, we have been able to improve our net interest margin, and these earnings, in addition to our strong performance in non-interest income, has supported a continuance in the higher than normal level contribution to our Allowance for Loan and Lease Loss Reserve.
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 2013, to us, signals a slower recovery and a repeat of slow to no growth for some time to come. 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, 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 prevail 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.
Reference is made to the additional risks and factors described from time to time in Allegheny’s reports and registration statements filed with the Securities and Exchange Commission. Allegheny undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
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 Moorefield.
Allegheny Bancshares, Inc. Announces First Quarter 2011 Financial Results Allegheny Bancshares, Inc., the parent company of Pendleton Community Bank, is pleased to announce first quarter 2011 net income of $461,000 or $0.53 per share. This compares with first quarter 2010 income of $504,000 or $0.58 per share. Return on Average Assets (ROAA) for the quarter was 0.74% and the Return on Average Equity (ROAE) was 6.59%. This compares to a ROAA of 0.84% and ROAE of 7.45% for the same period of 2010.
The decrease in income for the first quarter in 2011 compared to first quarter 2010 was primarily due to an increase in the provision for loan loss. The loan loss provision for the quarter ending March 31, 2011 was $422,365, as compared to $319,913 for the same period in 2010.
Assets increased 1.48% from December 31, 2010 to March 31, 2011 and, at the end of the quarter, totaled $252,854,000. Shareholders’ Equity at the end of the quarter totaled $28,596,700.
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, while the national economy appears to have stabilized, loan demand continues to be very weak, thus placing pressure on our net interest margin. Economic pressures are continuing to stress certain components of our loan portfolio and producing a continuance in higher delinquencies. In answer to this trend, we continue to contribute higher levels to our Reserve for Loan Loss. We believe this allocation 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 very 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 & Year-End 2010 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, 2010.
Allegheny’s net income for 2010 was $1,984,809 or $2.29 per share. This represents a 7.14% increase in net income over 2009’s level of $1,852,525. It also represents a 7.51% increase in earnings per share over 2009 earnings per share of $2.13. The 4th quarter of 2010 net income was $219,000 down $471,000 (68.26%) over the same period in 2009.
Net interest income grew from $8,486,321 in 2009 to $9,565,877 in 2010, as the bank was able to increase its interest margin primarily through a reduction in its cost of funds. The lower interest rate environment of the last two years has had the effect of decreasing the bank’s cost of deposits from 1.88% in 2009 to 1.43% in 2010 which is a drop of 45 basis points, meanwhile our yields on earning assets dropped from 5.78% in 2009 to 5.57% in 2010, which represents a drop of 21 basis points. While year to date net income is up 7.14%, the decrease in quarter over quarter income during the fourth quarter was a special provision made to the allowance for loan loss during the quarter. Total loan loss provision for 2010 was $1,797,774 compared to $616,649 in 2009 and 4th quarter provision totaled $827,000 in 2010 as compared to $324,000 for 4th quarter 2009. The increased provision expense for the year and 4th quarter was due to the increased delinquency rates the Company is experiencing and reclassification of several large commercial loans to nonperforming during 2010.
Allegheny’s key financial performance indicators continued to be strong considering the economic environment, producing a return on average assets (ROAA) of 0.80% and a return on average equity (ROAE) of 6.94%. These 2010 ratios compare to Allegheny’s 2009 ROAA of 0.81% and 2009 ROAE of 6.54%. Allegheny’s key financial performance indicators continue to be strong and compare favorably with industry and local peer group data.
W.A. (Bill) Loving, President and CEO, indicated he was pleased with 2010’s performance. According to Loving, “The soft economy and current banking environment continues to limit loan demand and growth. While growth has been less than at our historical levels, and thus restricting revenue growth, we have been able to increase operating earnings through continued improvement in our net interest margin and non-interest income categories.
With the continued slowness in the economy, higher delinquencies, and an increase in non-performing loans, we continued to set aside a higher level of loan loss reserves in 2010. The coverage level is higher than historical levels; however, given economic conditions, we believe it a prudent decision to maintain this level of reserves.
As we look to 2011, we believe we should continue to see a strong net interest margin next year; however, recent changes in interchange legislation and other regulatory mandates, could restrict non-interest income and increase the cost of compliance, thereby placing additional pressure on next year’s bottom line.
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.
Reference is made to the additional risks and factors described from time to time in Allegheny’s reports and registration statements filed with the Securities and Exchange Commission. Allegheny undertakes no obligation to update these forward-looking statements to reflect events or circumstances that occur after the date on which such statements were made.
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.
