2.
JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
---------------------------------------------
CONSOLIDATED BALANCE SHEETS
---------------------------
September 30, December 31,
1995 1994
---------- ----------
(In thousands)
(Unaudited)
ASSETS:
Cash and due from banks $ 5,415 $ 5,978
Interest-bearing deposits with banks 20 7
Federal funds Sold 4,290 -
--------- ----------
Total cash and cash equivalents 9,725 5,985
Securities available for sale 19,369 13,057
Securities held to maturity, fair value of
$46,034 and $42,728 respectively 45,991 44,157
Loans, receivable net of unearned discount of
$4,404 and $4,095, respectively 121,951 123,191
Less: Allowance for loan losses 1,606 1,523
--------- ----------
Net Loans receivable 120,345 121,668
Bank premises and equipment, net 1,677 1,681
Accrued interest receivable and other assets 4,300 3,628
--------- ----------
TOTAL ASSETS $ 201,407 $ 190,176
========= ==========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Non-interest bearing deposits $ 19,363 $ 18,971
Interest bearing deposits 154,639 146,180
--------- ----------
Total deposits 174,002 165,151
Accrued interest and other liabilities 3,156 2,591
--------- ----------
Total liabilities 177,158 167,742
--------- ----------
Stockholders' Equity:
Preferred stock, no par value, authorized
500,000 shares, no shares issued or outstanding - -
Common stock, par value $1.00, per share;
authorized 2,000,000 shares; issued and
outstanding 890,692 shares 891 891
Capital surplus 14,956 14,956
Retained earnings 8,275 6,749
Net unrealized appreciation (depreciation)
on securities available for sale, net of
taxes of $65 and ($84) 127 (162)
--------- ----------
Total stockholders' equity 24,249 22,434
--------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $ 201,407 $ 190,176
========= ==========
3.
JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Quarter Ended For Nine Months Ended
---------------------- --------------------
Sept 30, Sept 30, Sept 30, Sept 30,
1995 1994 1995 1994
---------- --------- --------- ---------
(In thousands, except per share amount)
INTEREST INCOME:
Loans receivable $ 2,902 $ 2,675 $ 8,509 $ 7,792
Taxable securities 631 565 1,534 1,475
Tax-exempt securities 268 298 934 1,051
Other 73 19 176 112
---------- ---------- ---------- ---------
Total interest income 3,874 3,557 11,153 10,430
INTEREST EXPENSE ON DEPOSITS 1,843 1,469 5,094 4,312
---------- ---------- ---------- ---------
Net interest income 2,031 2,088 6,059 6,118
PROVISION FOR LOAN LOSSES 45 45 135 135
---------- ---------- ---------- ---------
Net interest income, after
provision for loan losses 1,986 2,043 5,924 5,983
---------- ---------- ---------- ---------
OTHER INCOME:
Trust department 50 45 130 110
Customer service fees 56 56 166 164
Other 53 55 138 129
---------- ---------- ---------- ---------
Total other income 159 156 434 403
---------- ---------- ---------- ---------
OTHER EXPENSES:
Salaries and wages 522 505 1,578 1,528
Employee benefits 145 138 455 426
Occupancy 84 80 225 242
Equipment 81 91 227 296
Federal deposit insurance (37) 95 181 281
Director compensation 104 81 305 296
Taxes, other than income 54 48 160 146
Other 247 253 791 690
---------- ---------- ---------- --------
Total other expenses 1,200 1,291 3,922 3,905
---------- ---------- ---------- --------
INCOME BEFORE INCOME TAXES 945 908 2,436 2,481
FEDERAL INCOME TAXES 184 216 536 585
---------- ---------- ---------- ---------
Net income $ 761 $ 692 $ 1,900 $ 1,896
========== ========== ========== ==========
PER SHARE DATA:
Net income $ .85 $ .78 $ 2.13 $ 2.13
========== ========== ========== ==========
Weighted average number of
shares outstanding 890,692 890,692 890,692 890,692
======= ======= ======= =======
4.
JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995
(Unaudited)
Unrealized
Appreciation
(Depreciation)
on Securities
Common Capital Retained Available
Stock Surplus Earnings For Sale Total
---------- ----------- ----------- ------------- -----------
(In thousands)
BALANCE,
DECEMBER 31,
1994 $ 891 $ 14,956 $ 6,749 (162)$ 22,434
Net income for the
nine months
ended September
30, 1995 - - 1,900 - 1,900
Cash Dividend,
$.42 per share - - (374) - (374)
Net change in
unrealized
appreciation on
securities available
for sale, net of
taxes - - - 289 289
---------- ----------- ----------- ------------- -----------
Balance September
30, 1995 $ 891 $ 14,956 $ 8,275 $ 127 $ 24,249
========== =========== =========== ============= ===========
5.
JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Increase (Decrease) in Cash and Cash Equivalents
For the Nine Months Ended
-------------------------
Sept 30, Sept 30,
1995 1994
------------ -----------
(In thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 1,900 $ 1,896
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 135 135
Provision for depreciation and amortization 134 136
Deferred directors' fees and supplemental
retirement plan expense 238 220
Payment of deferred compensation (99) (93)
Deferred income taxes (66) (50)
(Increase) decrease in accrued interest
receivable and other assets (633) (428)
Increase (decrease) in interest payable
and other liabilities 305 148
------------ -----------
Net cash provided by operating activities 1,914 1,964
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of securities available for sale (10,278) (1,998)
Proceeds from maturities of and principal
repayments on securities available for sale 4,402 2,690
Purchases of securities held to maturity (6,577) (14,693)
Proceeds from maturities of and principal
repayments on securities held to maturity 4,744 13,342
Net (increase) decrease in loans receivable 1,188 (5,712)
Purchases of bank premises and equipment (130) (63)
------------ -----------
Net cash provided by (used in)
investing activities (6,651) (6,434)
____________ ____________
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits 8,851 578
Cash Dividends (374) (371)
Net increase in short term borrowings - 250
____________ ____________
Net cash provided by (used in)
financing activities 8,477 457
------------ ----------
Increase (decrease) in cash and
cash equivalents 3,740 (4,013)
CASH AND CASH EQUIVALENTS:
Beginning 5,985 8,968
------------ -----------
Ending $ 9,725 $ 4,955
============ ===========
CASH PAYMENTS FOR:
Interest $ 4,926 $ 4,296
============ ============
Income taxes $ 560 $ 639
============ ============
6.
JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
NOTES TO THE INTERIM FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
NOTE A - Basis of Presentation
The financial information includes the accounts of the Juniata Valley Financial
Corp. and its wholly owned subsidiary, The Juniata Valley Bank. All
significant intercompany accounts and transactions have been eliminated.
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments considered
necessary for fair presentation have been included. Operating results for the
nine-month period ended September 30, 1995, are not necessarily indicative of
the results that may be expected for the year ended December 31, 1995. For
further information, refer to the consolidated financial statements and
footnotes thereto included in Juniata Valley Financial Corp. annual report on
Form 10-K for the year ended December 31, 1994.
7.
Management's Discussion and Analysis
Financial Condition:
Total assets of Juniata Valley Financial Corp. reached $201,407,000 as of
September 30, 1995, an increase of $11,231,000 or 5.91% from December 31, 1994.
An increase in securities available for sale of $6,312,000 and in cash and cash
equivalents of $3,740,000 from December 31, 1994, to September 30, 1995 were
the primary reasons for the growth in assets. The cash provided by financing
activities of $8,477,000 and by operating activities of $1,914,000 for the
period ended September 30, 1995, were used to purchase securities which
exceeded repayments and maturities by $7,709,000. The remaining cash increase
was attributed to the increase in cash and cash equivalents. Net loans
outstanding declined by $1,188,000 since the beginning of the year. Additions
to bank premises and equipment were $130,000.
There are no material loans classified for regulatory purposes as loss,
doubtful, substandard or special mention which management expects to
significantly impact future operating results, liquidity or capital resources.
Additionally, management is not aware of any information which would give
serious doubt as to the ability of its borrowers to substantially comply with
their loan repayment terms. The Corporation's problem loans (i.e., 90 days
past due and restructured loans) were not material for all periods presented.
Management is not aware of any current recommendations of the regulatory
authorities which, if implemented, would have a material effect on the
Corporation's liquidity, capital resources or operations.
Results of operations:
Interest income increased $723,000 or 6.93% for the first nine months of 1995
compared to 1994, while the increase for the quarter was $317,000 or 8.91%.
Interest income increased $782,000 or 18.14% for the first nine months while
the increase for the quarter was $374,000 or 25.46%. These increases in
interest income and expense for the first nine months and three months ended
September 30, 1995, versus 1994, are reflective of an increase of both interest
earning assets and interest bearing liabilities and overall higher rates
offered and paid in 1995 versus 1994. However, repricing of the assets is
lagging behind the repricing of the liabilities, resulting in a decline in net
interest income of $59,000 or .96% for the first nine months and $57,000 for
the three months ended September 30, 1995, versus 1994.
Other income has increased $31,000 or 7.69% for the first nine months of 1995
over 1994. The increase for the quarter was $3,000. The increase for the
first nine months was due to an increase in all categories, especially trust
department income, as a result of the settlement of two large estates. The
increase in the other category for the first nine months can all be attributed
to an increase in commissions earned as a result of increased volume. Other
expenses for the first nine months increased $17,000 or .44% from 1994 to 1995
and for the quarter ended September 30, 1995, versus 1994, the decrease in
expenses was $91,000 or 7.05%. For the nine month period, the $50,000 increase
in salaries and wages can be attributed to annual merit increases and
promotions of employees. The $17,000 decrease in occupancy expense is a direct
result of a decrease in repairs and maintenance. The $69,000 decrease in
equipment costs can be primarily attributed to the expiration of a lease and a
8.
Results of operations (continued):
less costly replacement lease. The decrease in federal deposit insurance
premiums of $100,000, can be attributed to a $105,000 refund of deposit
insurance premiums previously paid and a decrease in the assessment rate from
$.23 to $.04 per 100 of insured deposits effective September 30, 1995. The
effect of the decrease in the deposit insurance premium assessment rate will
continue to have a favorable impact to the bank in the future. The $99,000
increase in the other category, is due to a $15,000 consulting fee incurred in
1995 not incurred in 1994; a $22,000 increase in examination fees by the
Pennsylvania Department of Banking; a $15,000 increase in errors and omissions;
and an $18,000 increase in repossession and loan collection expense. All of
these factors combined have contributed to an increase in net income of $4,000
or .21% for the nine months ended, September 30, 1995, while the net income for
the quarter increased $69,000.
Liquidity:
The objective of liquidity management is to ensure that sufficient funding is
available at a reasonable cost to meet the ongoing operational cash needs of
the Corporation and to take advantage of income producing opportunities as they
arise. While the desired level of liquidity will vary depending upon a variety
of factors, it is the primary goal of the Corporation to maintain a high level
of liquidity in all economic environments.
Principal sources of asset liquidity are provided by securities maturing in one
year or less, other short-term investments such as Federal Funds sold and cash
and due from banks. Liability liquidity, which is more difficult to measure,
can be met by attracting deposits and maintaining the core deposit base. The
Corporation joined the Federal Home Loan Bank of Pittsburgh in August of 1993
for the purpose of providing short term liquidity when other sources are unable
to fill these needs.
In view of the primary and secondary sources previously mentioned, Management
believes that the Corporation's liquidity is capable of providing the funds
needed to meet loan demand.
Interest rate sensitivity:
Interest rate sensitivity management is the responsibility of the
Asset/Liability Management Committee. This process involves the development
and implementation of strategies to maximize net interest margin, while
minimizing the earnings risk associated with changing interest rates. The
traditional gap analysis identifies the maturity and repricing terms of all
assets and liabilities.
As of September 30, 1995, the Corporation had a six-month negative gap of
$6,960,000. Generally a liability sensitive position indicates that more
liabilities than assets are expected to reprice within the time period and that
falling interest rates could positively affect net interest income while rising
interest rates could negatively affect net interest income. However, the
traditional analysis does not accurately reflect the Bank's interest rate
sensitivity since the rates on core deposits generally do not change as quickly
as market rates. Historically net interest income has, in fact, not been
subject to the degree of sensitivity indicated by the traditional analysis at
The Juniata Valley Bank.
9.
Interest rate sensitivity (continued):
Capital Adequacy:
The Bank's regulatory capital ratios for the periods presented are as
follows:
Risk Weighted Assets Ratio:
Actual Required
------ --------
September 30, December 31, September 30, December 31,
1995 1994 1995 1994
------------- ------------ ------------- ------------
TIER I 18.60% 17.16% 8.0% 8.0%
TIER I & II 19.84% 18.34% 8.0% 8.0%
Total Assets Leveraged Ratio:
TIER I 12.36% 11.47% 3.0% 3.0%
At September 30, 1995, the Corporation exceeds the regulatory requirements
to be considered a "well capitalized" financial institution.
10.
Part II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
Not applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Reports on Form 8-K
None
(b) Exhibits
(27) Financial Data Schedules
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Juniata Valley Financial Corp.
(Registrant)
Date_______________________________ By_______________________________
A. Jerome Cook, President
Date_______________________________ By_______________________________
Linda L. Engle, Treasurer