Exhibit 13.1
 Five-Year Financial Summary   Selected Financial Data
 2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands of dollars, except share and per share data)BALANCE
SHEET INFORMATION at December 31Assets
    
    $
    442,109
    
    
    $
    428,084
    
    
    $
    420,146
    
    
    $
    415,931
    
    
    $
    410,802Deposits
    
    
    377,397
    
    
    
    357,031
    
    
    
    359,457
    
    
    
    355,169
    
    
    
    343,466Loans, net of allowance for loan losses
    
    
    308,911
    
    
    
    312,522
    
    
    
    295,678
    
    
    
    303,246
    
    
    
    295,300Investments
    
    
    80,973
    
    
    
    71,843
    
    
    
    73,676
    
    
    
    65,619
    
    
    
    77,208Intangible assets
    
    
    299
    
    
    
    344
    
    
    
    389
    
    
    
    434
    
    
    
    Goodwill
    
    
    2,046
    
    
    
    2,046
    
    
    
    2,046
    
    
    
    2,046
    
    
    
    Short-term borrowings
    
    
    3,207
    
    
    
    10,579
    
    
    
    5,431
    
    
    
    6,112
    
    
    
    9,801Long-term debt
    
    
    5,000
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000Stockholders equity
    
    
    50,603
    
    
    
    48,485
    
    
    
    48,572
    
    
    
    47,786
    
    
    
    47,119Number of shares outstanding
    
    
    4,337,587
    
    
    
    4,341,055
    
    
    
    4,409,445
    
    
    
    4,457,934
    
    
    
    4,503,392Average for the yearAssets
    
    
    435,285
    
    
    
    428,744
    
    
    
    424,847
    
    
    
    414,048
    
    
    
    406,706Stockholders equity
    
    
    49,514
    
    
    
    48,674
    
    
    
    47,635
    
    
    
    47,503
    
    
    
    48,403Weighted average shares outstanding
    
    
    4,341,097
    
    
    
    4,376,077
    
    
    
    4,434,859
    
    
    
    4,480,245
    
    
    
    4,550,483INCOME
STATEMENT INFORMATIONYears Ended December 31Total interest income
    
    $
    23,268
    
    
    $
    25,230
    
    
    $
    26,723
    
    
    $
    24,663
    
    
    $
    22,707Total interest expense
    
    
    7,279
    
    
    
    9,057
    
    
    
    11,060
    
    
    
    10,111
    
    
    
    8,015Net interest income
    
    
    15,989
    
    
    
    16,173
    
    
    
    15,663
    
    
    
    14,552
    
    
    
    14,692Provision for loan losses
    
    
    627
    
    
    
    421
    
    
    
    120
    
    
    
    54
    
    
    
    28Other income
    
    
    4,171
    
    
    
    4,037
    
    
    
    4,199
    
    
    
    3,830
    
    
    
    3,323Other expenses
    
    
    12,619
    
    
    
    12,008
    
    
    
    12,209
    
    
    
    11,245
    
    
    
    11,680Income before income taxes
    
    
    6,914
    
    
    
    7,781
    
    
    
    7,533
    
    
    
    7,083
    
    
    
    6,307Federal income tax expense
    
    
    1,808
    
    
    
    2,057
    
    
    
    2,099
    
    
    
    2,081
    
    
    
    1,741Net income
    
    $
    5,106
    
    
    $
    5,724
    
    
    $
    5,434
    
    
    $
    5,002
    
    
    $
    4,566PER SHARE DATAEarnings per share  basic
    
    $
    1.18
    
    
    $
    1.31
    
    
    $
    1.23
    
    
    $
    1.12
    
    
    $
    1.00Earnings per share  diluted
    
    
    1.18
    
    
    
    1.31
    
    
    
    1.22
    
    
    
    1.11
    
    
    
    1.00Cash dividends
    
    
    0.78
    
    
    
    0.74
    
    
    
    0.95
    
    
    
    0.66
    
    
    
    1.11Book value
    
    
    11.67
    
    
    
    11.17
    
    
    
    11.02
    
    
    
    10.72
    
    
    
    10.46FINANCIAL RATIOSReturn on average assets
    
    
    1.17
    %
    
    
    1.34
    %
    
    
    1.28
    %
    
    
    1.21
    %
    
    
    1.12
    %Return on average equity
    
    
    10.31
    
    
    
    11.76
    
    
    
    11.41
    
    
    
    10.53
    
    
    
    9.43Dividend payout
    
    
    66.31
    
    
    
    56.62
    
    
    
    77.48
    
    
    
    59.12
    
    
    
    110.71Average equity to average assets
    
    
    11.38
    
    
    
    11.35
    
    
    
    11.21
    
    
    
    11.47
    
    
    
    11.90Loans to deposits (year end)
    
    
    81.85
    
    
    
    87.53
    
    
    
    82.26
    
    
    
    85.38
    
    
    
    85.98




---



##### 



MANAGEMENTS DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 OVERVIEW
  FORWARD LOOKING STATEMENTS
  Nature of Operations




---



##### 



Economic and Industry-Wide Factors Relevant to Juniata
   Focus of Management
  Customer Relationships
  Shareholder Satisfaction
  Balance Sheet Growth
  Operating Results




---



##### 



Commitment to the Community
  Juniatas Opportunities
 Soundness and stability
  Expansion of customer base
  Delivery system improvements
  Juniatas Challenges
 Economic recession
  Public perception




---



##### 



Competition
  Rate environment
  Regulated Company
  APPLICATION OF CRITICAL ACCOUNTING POLICIES




---



##### 



RESULTS OF OPERATIONS
 2009
Financial Performance Overview
    2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Return on average assets
    
    
    1.17
    %
    
    
    1.34
    %
    
    
    1.28
    %
    
    
    1.21
    %
    
    
    1.12
    %Return on average equity
    
    
    10.31
    
    
    
    11.76
    
    
    
    11.41
    
    
    
    10.53
    
    
    
    9.43Yield on earning assets
    
    
    5.88
    
    
    
    6.48
    
    
    
    6.88
    
    
    
    6.43
    
    
    
    6.00Cost to fund earning assets
    
    
    1.84
    
    
    
    2.33
    
    
    
    2.85
    
    
    
    2.63
    
    
    
    2.12Net interest margin (fully tax equivalent)
    
    
    4.23
    
    
    
    4.34
    
    
    
    4.17
    
    
    
    3.91
    
    
    
    4.00Noninterest income (excluding gains on
sales of securities and securities
impairment charges) to average assets
    
    
    1.01
    
    
    
    1.06
    
    
    
    0.99
    
    
    
    0.88
    
    
    
    0.77Noninterest expense to average assets
    
    
    2.90
    
    
    
    2.80
    
    
    
    2.87
    
    
    
    2.72
    
    
    
    2.87Net noninterest expense to average assets
    
    
    1.89
    
    
    
    1.74
    
    
    
    1.88
    
    
    
    1.84
    
    
    
    2.10
  For the nine months ended September 30, 2009Net InterestROA
    
    
    ROE
    
    
    MarginJuniata Valley Financial Corp
    
    
    1.18
    %
    
    
    10.48
    %
    
    
    4.24
    %Peer Group Average
    
    
    0.79
    %
    
    
    8.96
    %
    
    
    3.42
    %




---



##### 



2009
    
    
    2008% of Average
    
    
    
    
    
    
    % of AverageAssets
    
    
    
    
    
    
    AssetsNet interest income
    
    $
    15,989
    
    
    
    3.67
    %
    
    $
    16,173
    
    
    
    3.77
    %Provision for loan losses
    
    
    (627
    )
    
    
    (0.14
    )
    
    
    (421
    )
    
    
    (0.10
    )Trust fees
    
    
    361
    
    
    
    0.08
    
    
    
    389
    
    
    
    0.09Deposit service fees
    
    
    1,673
    
    
    
    0.38
    
    
    
    1,660
    
    
    
    0.39BOLI
    
    
    444
    
    
    
    0.10
    
    
    
    486
    
    
    
    0.11Commissions from sales of non-deposit products
    
    
    446
    
    
    
    0.10
    
    
    
    704
    
    
    
    0.16Income from unconsolidated subsidiary
    
    
    217
    
    
    
    0.05
    
    
    
    207
    
    
    
    0.05Other fees
    
    
    935
    
    
    
    0.21
    
    
    
    875
    
    
    
    0.20Insurance-related income
    
    
    323
    
    
    
    0.07
    
    
    
    179
    
    
    
    0.04Security gains (losses) and impairment charges
    
    
    (209
    )
    
    
    (0.05
    )
    
    
    (521
    )
    
    
    (0.12
    )Gains (losses) on sale of other assets
    
    
    (19
    )
    
    
    (0.00
    )
    
    
    58
    
    
    
    0.01Total noninterest income
    
    
    4,171
    
    
    
    0.96
    
    
    
    4,037
    
    
    
    0.94Employee expense
    
    
    (6,625
    )
    
    
    (1.52
    )
    
    
    (6,451
    )
    
    
    (1.50
    )Occupancy and equipment
    
    
    (1,552
    )
    
    
    (0.36
    )
    
    
    (1,638
    )
    
    
    (0.38
    )Data processing expense
    
    
    (1,325
    )
    
    
    (0.30
    )
    
    
    (1,375
    )
    
    
    (0.32
    )Director compensation
    
    
    (416
    )
    
    
    (0.10
    )
    
    
    (417
    )
    
    
    (0.10
    )Professional fees
    
    
    (392
    )
    
    
    (0.09
    )
    
    
    (379
    )
    
    
    (0.09
    )Taxes, other than income
    
    
    (476
    )
    
    
    (0.11
    )
    
    
    (500
    )
    
    
    (0.12
    )FDIC insurance premiums
    
    
    (634
    )
    
    
    (0.15
    )
    
    
    (59
    )
    
    
    (0.01
    )Intangible amortization
    
    
    (45
    )
    
    
    (0.01
    )
    
    
    (45
    )
    
    
    (0.01
    )Other noninterest expense
    
    
    (1,154
    )
    
    
    (0.27
    )
    
    
    (1,144
    )
    
    
    (0.27
    )Total noninterest expense
    
    
    (12,619
    )
    
    
    (2.90
    )
    
    
    (12,008
    )
    
    
    (2.80
    )Income tax expense
    
    
    (1,808
    )
    
    
    (0.42
    )
    
    
    (2,057
    )
    
    
    (0.48
    )Net income
    
    $
    5,106
    
    
    
    1.17
    %
    
    $
    5,724
    
    
    
    1.34
    %Average assets
    
    $
    435,285
    
    
    
    
    
    
    $
    428,744
 Net Interest Income




---



##### 



Table 1
 AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/
    
    
    Average
    
    
    
    
    
    
    Yield/Balance (1)
    
    
    Interest
    
    
    Rate
    
    
    Balance (1)
    
    
    Interest
    
    
    Rate
    
    
    Balance (1)
    
    
    Interest
    
    
    RateASSETSInterest earning assets:Taxable loans (5)
    
    $
    300,913
    
    
    $
    20,429
    
    
    
    6.79
    %
    
    $
    298,947
    
    
    $
    21,774
    
    
    
    7.28
    %
    
    $
    294,938
    
    
    $
    22,638
    
    
    
    7.68
    %Tax-exempt loans
    
    
    9,900
    
    
    
    358
    
    
    
    3.62
    
    
    
    8,659
    
    
    
    326
    
    
    
    3.76
    
    
    
    5,669
    
    
    
    213
    
    
    
    3.76Total loans (8)
    
    
    310,813
    
    
    
    20,787
    
    
    
    6.69
    
    
    
    307,606
    
    
    
    22,100
    
    
    
    7.18
    
    
    
    300,607
    
    
    
    22,851
    
    
    
    7.60Taxable investment securities
    
    
    39,571
    
    
    
    1,163
    
    
    
    2.94
    
    
    
    38,646
    
    
    
    1,666
    
    
    
    4.31
    
    
    
    51,746
    
    
    
    2,438
    
    
    
    4.71Tax-exempt investment securities
    
    
    34,793
    
    
    
    1,152
    
    
    
    3.31
    
    
    
    31,999
    
    
    
    1,082
    
    
    
    3.38
    
    
    
    24,040
    
    
    
    857
    
    
    
    3.56Total investment securities
    
    
    74,364
    
    
    
    2,315
    
    
    
    3.11
    
    
    
    70,645
    
    
    
    2,748
    
    
    
    3.89
    
    
    
    75,786
    
    
    
    3,295
    
    
    
    4.35Interest bearing deposits
    
    
    4,402
    
    
    
    158
    
    
    
    3.59
    
    
    
    6,389
    
    
    
    258
    
    
    
    4.04
    
    
    
    5,876
    
    
    
    254
    
    
    
    4.32Federal funds sold
    
    
    6,422
    
    
    
    8
    
    
    
    0.12
    
    
    
    4,846
    
    
    
    124
    
    
    
    2.56
    
    
    
    6,358
    
    
    
    323
    
    
    
    5.08Total interest earning assets
    
    
    396,001
    
    
    
    23,268
    
    
    
    5.88
    
    
    
    389,486
    
    
    
    25,230
    
    
    
    6.48
    
    
    
    388,627
    
    
    
    26,723
    
    
    
    6.88Non-interest earning assets:Cash and due from banks
    
    
    9,791
    
    
    
    
    
    
    
    
    
    
    
    10,167
    
    
    
    
    
    
    
    
    
    
    
    9,384Allowance for loan losses
    
    
    (2,524
    )
    
    
    
    
    
    
    
    
    
    
    (2,391
    )
    
    
    
    
    
    
    
    
    
    
    (2,460
    )Premises and equipment
    
    
    7,148
    
    
    
    
    
    
    
    
    
    
    
    5,968
    
    
    
    
    
    
    
    
    
    
    
    6,366Other assets (7)
    
    
    24,869
    
    
    
    
    
    
    
    
    
    
    
    25,514
    
    
    
    
    
    
    
    
    
    
    
    22,930Total assets
    
    $
    435,285
    
    
    
    
    
    
    
    
    
    
    $
    428,744
    
    
    
    
    
    
    
    
    
    
    $
    424,847LIABILITIES
AND STOCKHOLDERS EQUITYInterest bearing liabilities:Interest bearing demand deposits (2)
    
    $
    68,847
    
    
    
    309
    
    
    
    0.45
    
    
    $
    72,051
    
    
    
    541
    
    
    
    0.75
    
    
    $
    82,877
    
    
    
    1,751
    
    
    
    2.11Savings deposits
    
    
    40,705
    
    
    
    212
    
    
    
    0.52
    
    
    
    37,248
    
    
    
    362
    
    
    
    0.97
    
    
    
    35,247
    
    
    
    556
    
    
    
    1.58Time deposits
    
    
    209,779
    
    
    
    6,595
    
    
    
    3.14
    
    
    
    204,809
    
    
    
    7,992
    
    
    
    3.90
    
    
    
    199,239
    
    
    
    8,437
    
    
    
    4.23Other, including short-term borrowings,
long-term debt and other
interest bearing liabilities
    
    
    8,679
    
    
    
    163
    
    
    
    1.88
    
    
    
    10,253
    
    
    
    162
    
    
    
    1.58
    
    
    
    7,804
    
    
    
    316
    
    
    
    4.05Total interest bearing liabilities
    
    
    328,010
    
    
    
    7,279
    
    
    
    2.22
    
    
    
    324,361
    
    
    
    9,057
    
    
    
    2.79
    
    
    
    325,167
    
    
    
    11,060
    
    
    
    3.40Non-interest bearing liabilities:Demand deposits
    
    
    51,337
    
    
    
    
    
    
    
    
    
    
    
    49,137
    
    
    
    
    
    
    
    
    
    
    
    45,433Other
    
    
    6,424
    
    
    
    
    
    
    
    
    
    
    
    6,572
    
    
    
    
    
    
    
    
    
    
    
    6,612Stockholders equity
    
    
    49,514
    
    
    
    
    
    
    
    
    
    
    
    48,674
    
    
    
    
    
    
    
    
    
    
    
    47,635Total liabilities
and stockholders equity
    
    $
    435,285
    
    
    
    
    
    
    
    
    
    
    $
    428,744
    
    
    
    
    
    
    
    
    
    
    $
    424,847Net interest income
    
    
    
    
    
    $
    15,989
    
    
    
    
    
    
    
    
    
    
    $
    16,173
    
    
    
    
    
    
    
    
    
    
    $
    15,663Net margin on interest earning assets (3)
    
    
    
    
    
    
    
    
    
    
    4.04
    %
    
    
    
    
    
    
    
    
    
    
    4.15
    %
    
    
    
    
    
    
    
    
    
    
    4.03
    %Net interest income and margin -
Tax equivalent basis (4)
    
    
    
    
    
    $
    16,767
    
    
    
    4.23
    %
    
    
    
    
    
    $
    16,898
    
    
    
    4.34
    %
    
    
    
    
    
    $
    16,214
    
    
    
    4.17
    %
 Notes:(1)
    
    Average balances were calculated using a daily average.(2)
    
    Includes Super Now and money market accounts.(3)
    
    Net margin on interest earning assets is net interest income divided by average interest
earning assets.(4)
    
    Interest on obligations of states and municipalities is not subject to federal income tax. In
order to make the net yield comparable on a fully taxable basis, a tax equivalent adjustment
is applied against the tax-exempt income utilizing a federal tax rate of 34%.




---



##### 



Table 2
 RATE  VOLUME ANALYSIS OF NET INTEREST INCOME
 2009 Compared to 2008
    
    
    2008 Compared to 2007Increase (Decrease) Due To (6)
    
    
    Increase (Decrease) Due To (6)Volume
    
    
    Rate
    
    
    Total
    
    
    Volume
    
    
    Rate
    
    
    TotalASSETSInterest earning assets:Taxable loans (5)
    
    $
    141
    
    
    $
    (1,486
    )
    
    $
    (1,345
    )
    
    $
    310
    
    
    $
    (1,174
    )
    
    $
    (864
    )Tax-exempt loans
    
    
    45
    
    
    
    (13
    )
    
    
    32
    
    
    
    113
    
    
    
    
    
    
    
    113Total loans
    
    
    186
    
    
    
    (1,499
    )
    
    
    (1,313
    )
    
    
    423
    
    
    
    (1,174
    )
    
    
    (751
    )Taxable investment securities
    
    
    39
    
    
    
    (543
    )
    
    
    (504
    )
    
    
    (578
    )
    
    
    (194
    )
    
    
    (772
    )Tax-exempt investment securities
    
    
    93
    
    
    
    (22
    )
    
    
    71
    
    
    
    270
    
    
    
    (45
    )
    
    
    225Total investment securities
    
    
    132
    
    
    
    (565
    )
    
    
    (433
    )
    
    
    (308
    )
    
    
    (239
    )
    
    
    (547
    )Interest bearing deposits
    
    
    (73
    )
    
    
    (27
    )
    
    
    (100
    )
    
    
    21
    
    
    
    (17
    )
    
    
    4Federal funds sold
    
    
    30
    
    
    
    (146
    )
    
    
    (116
    )
    
    
    (65
    )
    
    
    (134
    )
    
    
    (199
    )Total interest earning assets
    
    
    275
    
    
    
    (2,237
    )
    
    
    (1,962
    )
    
    
    71
    
    
    
    (1,564
    )
    
    
    (1,493
    )LIABILITIES
AND STOCKHOLDERS EQUITYInterest bearing liabilities:Interest bearing demand deposits (2)
    
    
    (23
    )
    
    
    (209
    )
    
    
    (232
    )
    
    
    (204
    )
    
    
    (1,006
    )
    
    
    (1,210
    )Savings deposits
    
    
    31
    
    
    
    (181
    )
    
    
    (150
    )
    
    
    31
    
    
    
    (225
    )
    
    
    (194
    )Time deposits
    
    
    190
    
    
    
    (1,587
    )
    
    
    (1,397
    )
    
    
    230
    
    
    
    (675
    )
    
    
    (445
    )Other, including short-term borrowings,
long-term debt and other
interest bearing liabilities
    
    
    (27
    )
    
    
    28
    
    
    
    1
    
    
    
    79
    
    
    
    (233
    )
    
    
    (154
    )Total interest bearing liabilities
    
    
    171
    
    
    
    (1,949
    )
    
    
    (1,778
    )
    
    
    136
    
    
    
    (2,139
    )
    
    
    (2,003
    )Net interest income
    
    $
    104
    
    
    $
    (288
    )
    
    $
    (184
    )
    
    $
    (65
    )
    
    $
    575
    
    
    $
    510
 (5)
    
    Non-accruing loans are included in the above table until they are charged off.(6)
    
    The change in interest due to rate and volume has been allocated to volume and rate changes
in proportion to the relationship of the absolute dollar amounts of the change in each.(7)
    
    Includes gross unrealized gains (losses) on securities available for sale: $1,118 in 2009,
$436 in 2008 and $(127) in 2007.(8)
    
    Interest income includes loan fees of $202, $347 and $608, in 2009, 2008 and 2007,
respectively.




---



##### 



Provision for Loan Losses
  Noninterest Income




---



##### 



Noninterest Expense




---



##### 



Income Taxes
  Net Income
  2009
    
    
    2008
    
    
    2007Net income
    
    $
    5,106
    
    
    $
    5,724
    
    
    $
    5,434Return on average assets
    
    
    1.17
    %
    
    
    1.34
    %
    
    
    1.28
    %Return on average equity
    
    
    10.31
    %
    
    
    11.76
    %
    
    
    11.41
    %
 Outlook for 2010




---



##### 



2008
Financial Performance Overview
   
    
    Interest rate environment  an increase in net interest margin during swiftly changing
rate environment
    
    Allowance for loan loss adequacy
    
    Loan growth
    
    Changes in depositor preferences
    
    Other-than-temporary impairment charges
    
    Staffing turnover
    
    Noninterest income improvement
   2008
    
    
    2007% of Average
    
    
    
    
    
    
    % of AverageAssets
    
    
    
    
    
    
    AssetsNet interest income
    
    $
    16,173
    
    
    
    3.77
    %
    
    $
    15,663
    
    
    
    3.69
    %Provision for loan losses
    
    
    (421
    )
    
    
    (0.10
    )
    
    
    (120
    )
    
    
    (0.03
    )Trust fees
    
    
    389
    
    
    
    0.09
    
    
    
    444
    
    
    
    0.10Deposit service fees
    
    
    1,660
    
    
    
    0.39
    
    
    
    1,656
    
    
    
    0.39BOLI
    
    
    486
    
    
    
    0.11
    
    
    
    440
    
    
    
    0.10Commissions from sales of non-deposit products
    
    
    704
    
    
    
    0.16
    
    
    
    711
    
    
    
    0.17Income from unconsolidated subsidiary
    
    
    207
    
    
    
    0.05
    
    
    
    192
    
    
    
    0.05Other fees
    
    
    875
    
    
    
    0.20
    
    
    
    774
    
    
    
    0.18Gain from life insurance proceeds
    
    
    179
    
    
    
    0.04
    
    
    
    
    
    
    
    0.00Security gains (losses) and impairment charges
    
    
    (521
    )
    
    
    (0.12
    )
    
    
    (19
    )
    
    
    (0.00
    )Gains on sale of other assets
    
    
    58
    
    
    
    0.01
    
    
    
    1
    
    
    
    0.00Total noninterest income
    
    
    4,037
    
    
    
    0.94
    
    
    
    4,199
    
    
    
    0.99Employee expense
    
    
    (6,451
    )
    
    
    (1.50
    )
    
    
    (6,592
    )
    
    
    (1.55
    )Occupancy and equipment
    
    
    (1,638
    )
    
    
    (0.38
    )
    
    
    (1,580
    )
    
    
    (0.37
    )Data processing expense
    
    
    (1,375
    )
    
    
    (0.32
    )
    
    
    (1,332
    )
    
    
    (0.31
    )Director compensation
    
    
    (417
    )
    
    
    (0.10
    )
    
    
    (455
    )
    
    
    (0.11
    )Professional fees
    
    
    (379
    )
    
    
    (0.09
    )
    
    
    (437
    )
    
    
    (0.10
    )Taxes, other than income
    
    
    (500
    )
    
    
    (0.12
    )
    
    
    (546
    )
    
    
    (0.13
    )Intangible amortization
    
    
    (45
    )
    
    
    (0.01
    )
    
    
    (45
    )
    
    
    (0.01
    )Other noninterest expense
    
    
    (1,203
    )
    
    
    (0.28
    )
    
    
    (1,222
    )
    
    
    (0.29
    )Total noninterest expense
    
    
    (12,008
    )
    
    
    (2.80
    )
    
    
    (12,209
    )
    
    
    (2.87
    )Income tax expense
    
    
    (2,057
    )
    
    
    (0.48
    )
    
    
    (2,099
    )
    
    
    (0.49
    )Net income
    
    $
    5,724
    
    
    
    1.34
    %
    
    $
    5,434
    
    
    
    1.28
    %Average assets
    
    $
    428,744
    
    
    
    
    
    
    $
    424,847




---



##### 



Net Interest Income
      Provision for Loan Losses
  Noninterest Income




---



##### 



Noninterest Expense
     Income Taxes




---



##### 



Net Income
  2008
    
    
    2007
    
    
    2006Net income
    
    $
    5,724
    
    
    $
    5,434
    
    
    $
    5,002Return on average assets
    
    
    1.34
    %
    
    
    1.28
    %
    
    
    1.21
    %Return on average equity
    
    
    11.76
    %
    
    
    11.41
    %
    
    
    10.53
    %
 FINANCIAL CONDITION
 Balance Sheet Summary
  Table 3
 
 2009
    
    
    
    
    
    
    
    
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    2007Average
    
    
    Increase(Decrease)
    
    
    Average
    
    
    Increase(Decrease)
    
    
    AverageBalance
    
    
    Amount
    
    
    %
    
    
    Balance
    
    
    Amount
    
    
    %
    
    
    BalanceFunding Uses:Loans:Commercial
    
    $
    85,745
    
    
    $
    4,454
    
    
    
    5.5
    %
    
    $
    81,291
    
    
    $
    (2,248
    )
    
    
    (2.7
    %)
    
    $
    83,539Tax-exempt loans
    
    
    9,900
    
    
    
    1,241
    
    
    
    14.3
    
    
    
    8,659
    
    
    
    2,990
    
    
    
    52.7
    
    
    
    5,669Mortgage
    
    
    149,580
    
    
    
    5,552
    
    
    
    3.9
    
    
    
    144,028
    
    
    
    8,054
    
    
    
    5.9
    
    
    
    135,974Consumer, including Home Equity
    
    
    65,588
    
    
    
    (8,040
    )
    
    
    (10.9
    )
    
    
    73,628
    
    
    
    (1,797
    )
    
    
    (2.4
    )
    
    
    75,425Securities
    
    
    39,571
    
    
    
    925
    
    
    
    2.4
    
    
    
    38,646
    
    
    
    (13,100
    )
    
    
    (25.3
    )
    
    
    51,746Tax-exempt securities
    
    
    34,793
    
    
    
    2,794
    
    
    
    8.7
    
    
    
    31,999
    
    
    
    7,959
    
    
    
    33.1
    
    
    
    24,040Interest bearing deposits
    
    
    4,402
    
    
    
    (1,987
    )
    
    
    (31.1
    )
    
    
    6,389
    
    
    
    513
    
    
    
    8.7
    
    
    
    5,876Federal funds sold
    
    
    6,422
    
    
    
    1,576
    
    
    
    32.5
    
    
    
    4,846
    
    
    
    (1,512
    )
    
    
    (23.8
    )
    
    
    6,358Total interest earning assets
    
    
    396,001
    
    
    
    6,515
    
    
    
    1.7
    
    
    
    389,486
    
    
    
    859
    
    
    
    0.2
    
    
    
    388,627Investment in unconsolidated subsidiary
    
    
    3,258
    
    
    
    181
    
    
    
    5.9
    
    
    
    3,077
    
    
    
    172
    
    
    
    5.9
    
    
    
    2,905Bank-owned life insurance and annuities
    
    
    12,815
    
    
    
    373
    
    
    
    3.0
    
    
    
    12,442
    
    
    
    998
    
    
    
    8.7
    
    
    
    11,444Goodwill and intangible assets
    
    
    2,369
    
    
    
    (45
    )
    
    
    (1.9
    )
    
    
    2,414
    
    
    
    (45
    )
    
    
    (1.8
    )
    
    
    2,459Other non-interest earning assets
    
    
    22,248
    
    
    
    (1,032
    )
    
    
    (4.4
    )
    
    
    23,280
    
    
    
    1,281
    
    
    
    5.8
    
    
    
    21,999Unrealized gains (losses) on securities
    
    
    1,118
    
    
    
    682
    
    
    
    156.4
    
    
    
    436
    
    
    
    563
    
    
    
    443.3
    
    
    
    (127
    )Less: Allowance for loan losses
    
    
    (2,524
    )
    
    
    (133
    )
    
    
    (5.6
    )
    
    
    (2,391
    )
    
    
    69
    
    
    
    2.8
    
    
    
    (2,460
    )Total uses
    
    $
    435,285
    
    
    $
    6,541
    
    
    
    1.5
    %
    
    $
    428,744
    
    
    $
    3,897
    
    
    
    0.9
    %
    
    $
    424,847Funding Sources:Interest bearing demand deposits
    
    $
    68,847
    
    
    $
    (3,204
    )
    
    
    (4.4
    %)
    
    $
    72,051
    
    
    $
    (10,826
    )
    
    
    (13.1
    %)
    
    $
    82,877Savings deposits
    
    
    40,705
    
    
    
    3,457
    
    
    
    9.3
    
    
    
    37,248
    
    
    
    2,001
    
    
    
    5.7
    
    
    
    35,247Time deposits under $100,000
    
    
    169,411
    
    
    
    3,132
    
    
    
    1.9
    
    
    
    166,279
    
    
    
    2,491
    
    
    
    1.5
    
    
    
    163,788Time deposits over $100,000
    
    
    40,368
    
    
    
    1,838
    
    
    
    4.8
    
    
    
    38,530
    
    
    
    3,079
    
    
    
    8.7
    
    
    
    35,451Repurchase agreements
    
    
    2,369
    
    
    
    (2,999
    )
    
    
    (55.9
    )
    
    
    5,368
    
    
    
    (1,454
    )
    
    
    (21.3
    )
    
    
    6,822Short-term borrowings
    
    
    200
    
    
    
    (2,179
    )
    
    
    (91.6
    )
    
    
    2,379
    
    
    
    2,364
    
    
    
    15,760.0
    
    
    
    15Long-term debt
    
    
    5,000
    
    
    
    3,552
    
    
    
    245.3
    
    
    
    1,448
    
    
    
    1,448
    
    
    
    
    
    
    
    Other interest bearing liabilities
    
    
    1,110
    
    
    
    52
    
    
    
    4.9
    
    
    
    1,058
    
    
    
    91
    
    
    
    9.4
    
    
    
    967Total interest bearing liabilities
    
    
    328,010
    
    
    
    3,649
    
    
    
    1.1
    
    
    
    324,361
    
    
    
    (806
    )
    
    
    (0.2
    )
    
    
    325,167Demand deposits
    
    
    51,337
    
    
    
    2,200
    
    
    
    4.5
    
    
    
    49,137
    
    
    
    3,704
    
    
    
    8.2
    
    
    
    45,433Other liabilities
    
    
    6,424
    
    
    
    (148
    )
    
    
    (2.3
    )
    
    
    6,572
    
    
    
    (40
    )
    
    
    (0.6
    )
    
    
    6,612Stockholders equity
    
    
    49,514
    
    
    
    840
    
    
    
    1.7
    
    
    
    48,674
    
    
    
    1,039
    
    
    
    2.2
    
    
    
    47,635Total sources
    
    $
    435,285
    
    
    $
    6,541
    
    
    
    1.5
    %
    
    $
    428,744
    
    
    $
    3,897
    
    
    
    0.9
    %
    
    $
    424,847




---



##### 



Loans
  December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Commercial, financial and agricultural
    
    $
    33,783
    
    
    $
    38,755
    
    
    $
    28,842
    
    
    $
    23,341
    
    
    $
    21,661Real estate  commercial
    
    
    39,299
    
    
    
    32,171
    
    
    
    29,021
    
    
    
    29,492
    
    
    
    27,588Real estate  construction
    
    
    24,578
    
    
    
    22,144
    
    
    
    27,223
    
    
    
    29,489
    
    
    
    28,323Real estate  mortgage
    
    
    135,854
    
    
    
    140,016
    
    
    
    127,324
    
    
    
    132,572
    
    
    
    135,992Home equity
    
    
    52,957
    
    
    
    61,094
    
    
    
    63,960
    
    
    
    67,842
    
    
    
    62,288Obligations of states and political subdivisions
    
    
    13,553
    
    
    
    7,177
    
    
    
    6,593
    
    
    
    5,129
    
    
    
    4,827Personal
    
    
    11,670
    
    
    
    13,920
    
    
    
    15,319
    
    
    
    18,545
    
    
    
    18,498Unearned interest
    
    
    (64
    )
    
    
    (145
    )
    
    
    (282
    )
    
    
    (592
    )
    
    
    (1,114
    )Total
    
    $
    311,630
    
    
    $
    315,132
    
    
    $
    298,000
    
    
    $
    305,818
    
    
    $
    298,063
  2009
    
    
    2008
    
    
    2007Beginning balance
    
    $
    315,132
    
    
    $
    298,000
    
    
    $
    305,818New loans, net of repayments
    
    
    (2,049
    )
    
    
    17,595
    
    
    
    (7,051
    )Loans charged off
    
    
    (529
    )
    
    
    (156
    )
    
    
    (418
    )Loans transferred to other real estate owned and
other adjustments to carrying value
    
    
    (924
    )
    
    
    (307
    )
    
    
    (349
    )Net change
    
    
    (3,502
    )
    
    
    17,132
    
    
    
    (7,818
    )Ending balance
    
    $
    311,630
    
    
    $
    315,132
    
    
    $
    298,000




---



##### 



Table 4
Non-Performing Loans
 December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands)Nonaccrual loans
    
    $
    2,629
    
    
    $
    1,255
    
    
    $
    
    
    
    $
    1,240
    
    
    $
    1,515Accruing loans past due 90 days or more
    
    
    1,369
    
    
    
    664
    
    
    
    837
    
    
    
    214
    
    
    
    724Restructured loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total non-performing loans
    
    $
    3,998
    
    
    $
    1,919
    
    
    $
    837
    
    
    $
    1,454
    
    
    $
    2,239




---



##### 



Allowance for Loan Losses
   Component for impaired loans
   Component for contingencies




---



##### 




    
    Historical trends: Historical net charge-offs are computed as a percentage of average
loans, by loan type. This percentage is applied to the ending period balance of the loan
type to determine the amount to be included in the allowance to cover charge-off
probability. This factor is computed on an annual basis, by
major type of loan. It is a ten year average of actual losses as a percentage of outstanding
loan balances within the groupings of homogeneous loans. This timeframe is used in order to
include periods of economic downturns and upturns;
 
    
    Individual loan performance: Management identifies a list of loans which are
individually assigned a risk rating grade because the loan has not performed according to
payment terms and there is reason to believe that repayment of the loan principal, in whole
or part, is unlikely. The specific portion of the allowance for these loans is the total
amount of potential losses for these individual loans which has not previously been charged
off;
 
    
    General economic environment: Current economic indicators are reviewed to assess the
level of change in risk in the loan portfolio due to possible changes in our customers
ability to repay debt. These indicators generally include:
 
    
    State and National unemployment rates, as well as local counties;
 
    
    Managements knowledge of the local economy, i.e. businesses moving in or closing down.
 
    
    Managements knowledge of other local events that could have an impact
on our borrowers ability to pay.
  
    
    Other relevant factors: Certain specific risks inherent in the loan portfolio are
identified and examined to determine if an additional allowance is warranted and, if so,
management assigns a percentage to the loan category. Such factors consist of:
 
    
    Credit concentration: Juniatas loans are classified in pre-defined
groups. Any groups total that exceeds 25% of the Banks total capital is
considered to be a credit concentration and as such, is determined to have an
additional level of associated risk. Any group that exceeds 15% of capital may be
assigned a factor, based upon managements assessment;
 
    
    Changes in loan volumes;
 
    
    Changes in experience, ability and depth of management; and
 
    
    External influences, such as competition, legal and regulatory requirements.




---



##### 



Years Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Balance of allowance  beginning of
period
    
    $
    2,610
    
    
    $
    2,322
    
    
    $
    2,572
    
    
    $
    2,763
    
    
    $
    2,989Loans charged off:Commercial, financial and agricultural
    
    
    47
    
    
    
    43
    
    
    
    291
    
    
    
    159
    
    
    
    171Real estate  commercial
    
    
    32
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    Real estate  construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30Real estate  mortgage
    
    
    343
    
    
    
    15
    
    
    
    66
    
    
    
    19
    
    
    
    3Personal
    
    
    107
    
    
    
    62
    
    
    
    61
    
    
    
    129
    
    
    
    75Total charge-offs
    
    
    529
    
    
    
    156
    
    
    
    418
    
    
    
    307
    
    
    
    279Recoveries of loans previously charged
off:Commercial, financial and agricultural
    
    
    
    
    
    
    5
    
    
    
    8
    
    
    
    5
    
    
    
    6Real estate  construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5Real estate  mortgage
    
    
    
    
    
    
    5
    
    
    
    8
    
    
    
    
    
    
    
    Personal
    
    
    11
    
    
    
    13
    
    
    
    32
    
    
    
    25
    
    
    
    14Total recoveries
    
    
    11
    
    
    
    23
    
    
    
    48
    
    
    
    30
    
    
    
    25Net charge-offs
    
    
    518
    
    
    
    133
    
    
    
    370
    
    
    
    277
    
    
    
    254Provision for loan losses
    
    
    627
    
    
    
    421
    
    
    
    120
    
    
    
    54
    
    
    
    28Branch acquisition loan loss reserve
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    Balance of allowance  end of period
    
    $
    2,719
    
    
    $
    2,610
    
    
    $
    2,322
    
    
    $
    2,572
    
    
    $
    2,763Ratio of net charge-offs during period to
average loans outstanding
    
    
    0.17
    %
    
    
    0.04
    %
    
    
    0.12
    %
    
    
    0.09
    %
    
    
    0.09
    %
  Allocation of the Allowance for Loan Losses (in thousands)2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Commercial
    
    $
    993
    
    
    $
    707
    
    
    $
    660
    
    
    $
    864
    
    
    $
    956Real estate
    
    
    1,146
    
    
    
    1,202
    
    
    
    933
    
    
    
    1,011
    
    
    
    1,112Consumer
    
    
    580
    
    
    
    701
    
    
    
    729
    
    
    
    697
    
    
    
    695Unallocated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total allowance for
loan losses
    
    $
    2,719
    
    
    $
    2,610
    
    
    $
    2,322
    
    
    $
    2,572
    
    
    $
    2,763
 Percent of Loan Type to Total Loans2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005Commercial
(non-real estate)
    
    
    15.2
    %
    
    
    14.6
    %
    
    
    11.9
    %
    
    
    9.3
    %
    
    
    8.9
    %Real estate
    
    
    81.1
    %
    
    
    81.0
    %
    
    
    83.0
    %
    
    
    84.6
    %
    
    
    84.9
    %Consumer
    
    
    3.7
    %
    
    
    4.4
    %
    
    
    5.1
    %
    
    
    6.1
    %
    
    
    6.2
    %100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %




---



##### 



Investments
  2009
    
    
    2008
    
    
    2007Beginning balance
    
    $
    72,036
    
    
    $
    81,946
    
    
    $
    66,921Purchases of investment securities
    
    
    56,245
    
    
    
    36,063
    
    
    
    63,295Sales and maturities of investment securities
    
    
    (42,895
    )
    
    
    (38,996
    )
    
    
    (55,357
    )Impairment charge
    
    
    (226
    )
    
    
    (554
    )
    
    
    (33
    )Adjustment in market value of AFS securities
    
    
    131
    
    
    
    878
    
    
    
    372Amortization/Accretion
    
    
    (220
    )
    
    
    (126
    )
    
    
    (104
    )Federal Home Loan Bank stock, net change
    
    
    
    
    
    
    1,102
    
    
    
    19Federal funds sold, net change
    
    
    1,200
    
    
    
    (7,500
    )
    
    
    6,300Interest bearing deposits with others, net
change
    
    
    (4,016
    )
    
    
    (777
    )
    
    
    533Net change
    
    
    10,219
    
    
    
    (9,910
    )
    
    
    15,025Ending balance
    
    $
    82,255
    
    
    $
    72,036
    
    
    $
    81,946




---



##### 



December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedSecurities
    
    Carrying
    
    
    Average
    
    
    Carrying
    
    
    Average
    
    
    Carrying
    
    
    AverageType and maturity
    
    Value
    
    
    Yield
    
    
    Value
    
    
    Yield
    
    
    Value
    
    
    YieldU.S. Treasury securities and obligations of U.S.
Government agencies and corporationsWithin one year
    
    $
    
    
    
    
    
    
    
    $
    21,851
    
    
    
    3.92
    %
    
    $
    3,680
    
    
    
    4.38
    %After one year but within five years
    
    
    32,620
    
    
    
    2.31
    %
    
    
    3,117
    
    
    
    4.68
    %
    
    
    17,115
    
    
    
    5.08
    %After five years but within ten years
    
    
    933
    
    
    
    1.99
    %
    
    
    
    
    
    
    
    
    
    
    6,021
    
    
    
    5.27
    %33,553
    
    
    
    2.30
    %
    
    
    24,968
    
    
    
    4.01
    %
    
    
    26,816
    
    
    
    5.03
    %Obligations of state and political subdivisionsWithin one year
    
    
    6,863
    
    
    
    3.06
    %
    
    
    9,727
    
    
    
    4.98
    %
    
    
    11,616
    
    
    
    5.70
    %After one year but within five years
    
    
    32,972
    
    
    
    3.12
    %
    
    
    24,735
    
    
    
    4.72
    %
    
    
    17,903
    
    
    
    5.93
    %After five years but within ten years
    
    
    562
    
    
    
    3.23
    %
    
    
    1,053
    
    
    
    5.23
    %
    
    
    6,288
    
    
    
    5.73
    %40,397
    
    
    
    3.11
    %
    
    
    35,515
    
    
    
    4.81
    %
    
    
    35,807
    
    
    
    5.82
    %Corporate Notes and OtherAfter one year but within five years
    
    
    1,026
    
    
    
    4.00
    %
    
    
    957
    
    
    
    4.00
    %
    
    
    
    
    
    
    1,026
    
    
    
    4.00
    %
    
    
    957
    
    
    
    4.00
    %Mortgage-backed securitiesWithin one year
    
    
    
    
    
    
    
    
    
    
    210
    
    
    
    4.58
    %
    
    
    360
    
    
    
    4.00
    %After one year but within five years
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    288
    
    
    
    4.97
    %After five years but within ten years
    
    
    1,515
    
    
    
    5.43
    %
    
    
    1,657
    
    
    
    5.48
    %
    
    
    2,283
    
    
    
    5.35
    %1,515
    
    
    
    5.43
    %
    
    
    1,867
    
    
    
    5.38
    %
    
    
    2,931
    
    
    
    5.14
    %Equity securities
    
    
    865
    
    
    
    
    
    
    
    1,014
    
    
    
    
    
    
    
    1,502$
    77,356
    
    
    
    
    
    
    $
    64,321
    
    
    
    
    
    
    $
    67,056
 Bank Owned Life Insurance and Annuities
  2009
    
    
    2008
    
    
    2007Beginning balance
    
    $
    12,582
    
    
    $
    12,344
    
    
    $
    11,017Bank-owned life insurance
    
    
    530
    
    
    
    282
    
    
    
    1,365Annuities
    
    
    (46
    )
    
    
    (44
    )
    
    
    (38
    )Net change
    
    
    484
    
    
    
    238
    
    
    
    1,327Ending balance
    
    $
    13,066
    
    
    $
    12,582
    
    
    $
    12,344




---



##### 



Investment in Unconsolidated Subsidiary
  Goodwill and Intangible Assets
  Deferred Taxes
  Other Non-Interest Earning Assets
  2009
    
    
    2008
    
    
    2007Beginning balance
    
    $
    25,378
    
    
    $
    24,771
    
    
    $
    29,375Cash and due from banks
    
    
    6,349
    
    
    
    10
    
    
    
    (4,222
    )Premises and equipment, net
    
    
    (496
    )
    
    
    102
    
    
    
    730Other real estate owned
    
    
    171
    
    
    
    (6
    )
    
    
    154Other receivables and prepaid expenses
    
    
    792
    
    
    
    501
    
    
    
    (1,266
    )Net change
    
    
    6,816
    
    
    
    607
    
    
    
    (4,604
    )Ending balance
    
    $
    32,194
    
    
    $
    25,378
    
    
    $
    24,771




---



##### 



Deposits
  2009
    
    
    2008
    
    
    2007Beginning balance
    
    $
    357,031
    
    
    $
    359,457
    
    
    $
    355,169Demand deposits
    
    
    830
    
    
    
    5,445
    
    
    
    5,926Interest bearing demand deposits
    
    
    13,667
    
    
    
    (12,722
    )
    
    
    (365
    )Savings deposits
    
    
    5,422
    
    
    
    3,237
    
    
    
    (2,340
    )Time deposits, $100,000 and
greater
    
    
    (606
    )
    
    
    2,751
    
    
    
    (1,724
    )Time deposits, other
    
    
    1,053
    
    
    
    (1,137
    )
    
    
    2,791Net change
    
    
    20,366
    
    
    
    (2,426
    )
    
    
    4,288Ending balance
    
    $
    377,397
    
    
    $
    357,031
    
    
    $
    359,457
  
 2009
    
    
    
    
    
    
    
    
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    2007Average
    
    
    Increase(Decrease)
    
    
    Average
    
    
    Increase(Decrease)
    
    
    AverageBalance
    
    
    Amount
    
    
    %
    
    
    Balance
    
    
    Amount
    
    
    %
    
    
    BalanceIndexed money market deposits
    
    $
    22,437
    
    
    $
    (4,957
    )
    
    
    (18.1
    )%
    
    $
    27,394
    
    
    $
    (10,517
    )
    
    
    (27.7
    )%
    
    $
    37,911Interest bearing demand deposits
    
    
    46,410
    
    
    
    1,753
    
    
    
    3.9
    
    
    
    44,657
    
    
    
    (309
    )
    
    
    (0.7
    )
    
    
    44,966Savings deposits
    
    
    40,705
    
    
    
    3,457
    
    
    
    9.3
    
    
    
    37,248
    
    
    
    2,001
    
    
    
    5.7
    
    
    
    35,247Demand deposits
    
    
    51,337
    
    
    
    2,200
    
    
    
    4.5
    
    
    
    49,137
    
    
    
    3,704
    
    
    
    8.2
    
    
    
    45,433Total core (transaction)
accounts
    
    
    160,889
    
    
    
    2,453
    
    
    
    1.5
    
    
    
    158,436
    
    
    
    (5,121
    )
    
    
    (3.1
    )
    
    
    163,557Time deposits, $100,000 and
greater
    
    
    40,368
    
    
    
    1,838
    
    
    
    4.8
    
    
    
    38,530
    
    
    
    3,079
    
    
    
    8.7
    
    
    
    35,451Time deposits, other
    
    
    169,411
    
    
    
    3,132
    
    
    
    1.9
    
    
    
    166,279
    
    
    
    2,491
    
    
    
    1.5
    
    
    
    163,788Total time deposits
    
    
    209,779
    
    
    
    4,970
    
    
    
    2.4
    
    
    
    204,809
    
    
    
    5,570
    
    
    
    2.8
    
    
    
    199,239Total deposits
    
    $
    370,668
    
    
    $
    7,423
    
    
    
    2.0
    %
    
    $
    363,245
    
    
    $
    449
    
    
    
    0.1
    %
    
    $
    362,796




---



##### 



Other Interest Bearing Liabilities
  
 2009
    
    
    
    
    
    
    
    
    
    
    2008
    
    
    
    
    
    
    
    
    
    
    2007Average
    
    
    Increase(Decrease)
    
    
    Average
    
    
    Increase(Decrease)
    
    
    AverageBalance
    
    
    Amount
    
    
    %
    
    
    Balance
    
    
    Amount
    
    
    %
    
    
    BalanceRepurchase agreements
    
    $
    2,369
    
    
    $
    (2,999
    )
    
    
    (55.9
    )%
    
    $
    5,368
    
    
    $
    (1,454
    )
    
    
    (21.3
    )%
    
    $
    6,822Short-term borrowings
    
    
    200
    
    
    
    (2,179
    )
    
    
    (91.6
    )
    
    
    2,379
    
    
    
    2,364
    
    
    
    15,760.0
    
    
    
    15Long-term debt
    
    
    5,000
    
    
    
    3,552
    
    
    
    245.3
    
    
    
    1,448
    
    
    
    1,448
    
    
    
    
    
    
    
    Other interest
bearing liabilities
    
    
    1,110
    
    
    
    52
    
    
    
    4.9
    
    
    
    1,058
    
    
    
    91
    
    
    
    9.4
    
    
    
    967$
    8,679
    
    
    $
    (1,574
    )
    
    
    (15.4
    )%
    
    $
    10,253
    
    
    $
    2,449
    
    
    
    31.4
    %
    
    $
    7,804
 Pension Plans




---



##### 



Stockholders Equity
  2009
    
    
    2008
    
    
    2007Beginning balance
    
    $
    48,485
    
    
    $
    48,572
    
    
    $
    47,786Net income
    
    
    5,106
    
    
    
    5,724
    
    
    
    5,434Dividends
    
    
    (3,386
    )
    
    
    (3,241
    )
    
    
    (4,210
    )Stock-based compensation
    
    
    40
    
    
    
    40
    
    
    
    43Repurchase of stock, net of re-issuance
    
    
    (84
    )
    
    
    (1,440
    )
    
    
    (1,022
    )Net change in unrealized security gains
    
    
    69
    
    
    
    563
    
    
    
    260Defined benefit retirement plan
adjustments net of tax
    
    
    373
    
    
    
    (1,253
    )
    
    
    281Effect of implementation of ASC Topic
715
    
    
    
    
    
    
    (480
    )
    
    
    Net change
    
    
    2,118
    
    
    
    (87
    )
    
    
    786Ending balance
    
    $
    50,603
    
    
    $
    48,485
    
    
    $
    48,572




---



##### 



Asset / Liability Management Objectives
  
    
    Liquidity Risk
 
    
    Capital Risk
 
    
    Market / Interest Rate Risk
 
    
    Investment Portfolio Risk
 
    
    Economic Risk
 Liquidity Risk




---



##### 








---



##### 



Payments Due by PeriodOne to
    
    
    Three to
    
    
    More thanNote
    
    
    
    
    
    
    One Year
    
    
    Three
    
    
    Five
    
    
    FiveReference
    
    
    Total
    
    
    or Less
    
    
    Years
    
    
    Years
    
    
    YearsCertificates of deposits
    
    
    11
    
    
    $
    204,065
    
    
    $
    134,745
    
    
    $
    41,358
    
    
    $
    27,962
    
    
    $
    Federal Funds borrowed and
security repurchase agreements
    
    
    12
    
    
    
    3,207
    
    
    
    3,207
    
    
    
    
    
    
    
    
    
    
    
    Long-term debt
    
    
    12
    
    
    
    5,000
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    13
    
    
    
    322
    
    
    
    103
    
    
    
    155
    
    
    
    42
    
    
    
    22Other long-term liabilities
3rd party data processor
contract
    
    
    22
    
    
    
    4,326
    
    
    
    366
    
    
    
    1,056
    
    
    
    1,056
    
    
    
    1,848Supplemental retirement and
deferred compensation
    
    
    19
    
    
    
    4,385
    
    
    
    504
    
    
    
    843
    
    
    
    703
    
    
    
    2,335$
    221,305
    
    
    $
    143,925
    
    
    $
    43,412
    
    
    $
    29,763
    
    
    $
    4,205
  Capital Risk
  Market / Interest Rate Risk




---



##### 



Change in Net
    
    
    Change in NetInterest Income
    
    
    Interest IncomeChange in
    
    Due to Interest
    
    
    Due to
    

    
    Total Change inInterest Rates
    
    Rate Risk
    
    
    Imbedded
    
    
    Net Interest(Basis Points)
    
    (Static)
    
    
    Options
    
    
    Income300
    
    $
    (412
    )
    
    $
    202
    
    
    $
    (210
    )200
    
    
    (275
    )
    
    
    90
    
    
    
    (185
    )100
    
    
    (137
    )
    
    
    33
    
    
    
    (104
    )0
    
    
    
    
    
    
    
    
    
    
    -25
    
    
    34
    
    
    
    
    
    
    
    34




---



##### 



Table 5
MATURITY DISTRIBUTION
AS OF DECEMBER 31, 2009   Remaining Maturity / Earliest Possible Repricing
 Over Three
    
    
    Over Six
    
    
    Over OneThree
    
    
    Months But
    
    
    Months But
    
    
    Year But
    
    
    OverMonths
    
    
    Within Six
    
    
    Within One
    
    
    Within Five
    
    
    Fiveor Less
    
    
    Months
    
    
    Year
    
    
    Years
    
    
    Years
    
    
    TotalInterest Earning AssetsInterest bearing deposits
    
    $
    157
    
    
    $
    
    
    
    $
    249
    
    
    $
    1,096
    
    
    $
    
    
    
    $
    1,502Federal funds sold
    
    
    1,200
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,200Investment securities:Debt securities  taxable
    
    
    
    
    
    
    589
    
    
    
    355
    
    
    
    32,702
    
    
    
    933
    
    
    
    34,579Debt securities  tax-exempt
    
    
    
    
    
    
    
    
    
    
    5,920
    
    
    
    33,915
    
    
    
    562
    
    
    
    40,397Mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,515
    
    
    
    
    
    
    
    1,515Stocks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    865
    
    
    
    865Loans:Commercial, financial, and agricultural
    
    
    27,816
    
    
    
    1,341
    
    
    
    256
    
    
    
    1,456
    
    
    
    2,914
    
    
    
    33,783Real estate  construction
    
    
    13,134
    
    
    
    480
    
    
    
    849
    
    
    
    4,292
    
    
    
    5,823
    
    
    
    24,578Tax-exempt loans
    
    
    
    
    
    
    674
    
    
    
    3,509
    
    
    
    1,481
    
    
    
    7,889
    
    
    
    13,553Other loans
    
    
    43,563
    
    
    
    12,807
    
    
    
    23,805
    
    
    
    38,038
    
    
    
    121,503
    
    
    
    239,716Total Interest Earning Assets
    
    
    85,870
    
    
    
    15,891
    
    
    
    34,943
    
    
    
    114,495
    
    
    
    140,489
    
    
    
    391,688Interest Bearing LiabilitiesDemand deposits
    
    
    34,958
    
    
    
    758
    
    
    
    3,031
    
    
    
    10,607
    
    
    
    26,412
    
    
    
    75,766Savings deposits
    
    
    2,366
    
    
    
    2,791
    
    
    
    2,884
    
    
    
    5,955
    
    
    
    28,540
    
    
    
    42,536Certificates of deposit over $100,000
    
    
    9,705
    
    
    
    10,416
    
    
    
    6,049
    
    
    
    12,283
    
    
    
    
    
    
    
    38,453Time deposits
    
    
    33,879
    
    
    
    43,758
    
    
    
    30,838
    
    
    
    57,137
    
    
    
    
    
    
    
    165,612Securities sold under agreements to repurchase
    
    
    3,207
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,207Long-term debt
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,000Other interest bearing liabilities
    
    
    1,146
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,146Total Interest Bearing Liabilities
    
    
    90,261
    
    
    
    57,723
    
    
    
    42,802
    
    
    
    85,982
    
    
    
    54,952
    
    
    
    331,720Gap
    
    $
    (4,391
    )
    
    $
    (41,832
    )
    
    $
    (7,859
    )
    
    $
    28,513
    
    
    $
    85,537
    
    
    $
    59,968Cumulative Gap
    
    $
    (4,391
    )
    
    $
    (46,223
    )
    
    $
    (54,082
    )
    
    $
    (25,569
    )
    
    $
    59,968Cumulative sensitivity ratio
    
    
    0.95
    
    
    
    0.69
    
    
    
    0.72
    
    
    
    0.91
    
    
    
    1.18Commercial, financial and agricultural
loans maturing after one year with:Fixed interest rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,120
    
    
    $
    2,309
    
    
    $
    3,429Variable interest rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    336
    
    
    
    605
    
    
    
    941Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    1,456
    
    
    $
    2,914
    
    
    $
    4,370
 Investment Portfolio Risk
  Economic Risk




---



##### 



Off-Balance Sheet Arrangements




---



##### 



Effects of Inflation
   Report on Managements Assessment of Internal Control over Financial Reporting
  Internal Control  Integrated
Framework
  -s- Francis J. EvanitskyFrancis J. Evanitsky, President and Chief Executive Officer-s- JoAnn N. McMinnJoAnn N. McMinn, Chief Financial Officer




---



##### 



Report of Independent Registered Public Accounting Firm on Effectiveness of Internal Control over Financial Reporting
  
 Internal Control-Integrated Framework
    Internal
Control-Integrated Framework




---



##### 



Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements
  
    Internal Control-Integrated Framework




---



##### 



Juniata Valley Financial Corp. and Subsidiary
   December 31,
    
    
    December 31,2009
    
    
    2008ASSETSCash and due from banks
    
    $
    18,613
    
    
    $
    12,264Interest bearing deposits with banks
    
    
    82
    
    
    
    193Federal funds sold
    
    
    1,200
    
    
    
    Cash and cash equivalents
    
    
    19,895
    
    
    
    12,457Interest bearing time deposits with banks
    
    
    1,420
    
    
    
    5,325Securities available for sale
    
    
    77,356
    
    
    
    64,321Restricted investment in Federal Home Loan Bank (FHLB) stock
    
    
    2,197
    
    
    
    2,197Investment in unconsolidated subsidiary
    
    
    3,338
    
    
    
    3,176Total loans, net of unearned interest
    
    
    311,630
    
    
    
    315,132Less: Allowance for loan losses
    
    
    (2,719
    )
    
    
    (2,610
    )Total loans, net of allowance for loan losses
    
    
    308,911
    
    
    
    312,522Premises and equipment, net
    
    
    6,878
    
    
    
    7,374Other real estate owned
    
    
    476
    
    
    
    305Bank owned life insurance and annuities
    
    
    13,066
    
    
    
    12,582Core deposit intangible
    
    
    299
    
    
    
    344Goodwill
    
    
    2,046
    
    
    
    2,046Accrued interest receivable and other assets
    
    
    6,227
    
    
    
    5,435Total assets
    
    $
    442,109
    
    
    $
    428,084LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Non-interest bearing
    
    $
    55,030
    
    
    $
    54,200Interest bearing
    
    
    322,367
    
    
    
    302,831Total deposits
    
    
    377,397
    
    
    
    357,031Securities sold under agreements to repurchase
    
    
    3,207
    
    
    
    1,944Short-term borrowings
    
    
    
    
    
    
    8,635Long-term debt
    
    
    5,000
    
    
    
    5,000Other interest bearing liabilities
    
    
    1,146
    
    
    
    1,096Accrued interest payable and other liabilities
    
    
    4,756
    
    
    
    5,893Total liabilities
    
    
    391,506
    
    
    
    379,599Stockholders Equity:Preferred stock, no par value:Authorized  500,000 shares, none issued
    
    
    
    
    
    
    Common stock, par value $1.00 per share:Authorized  20,000,000 sharesIssued  4,745,826 sharesOutstanding 4,337,587 shares at December 31, 2009; 
4,341,055 shares at December 31, 2008
    
    
    4,746
    
    
    
    4,746Surplus
    
    
    18,315
    
    
    
    18,324Retained earnings
    
    
    36,478
    
    
    
    34,758Accumulated other comprehensive loss
    
    
    (805
    )
    
    
    (1,247
    )Cost of common stock in Treasury:408,239
shares at December 31, 2009; 
404,771 shares at December 31, 2008
    
    
    (8,131
    )
    
    
    (8,096
    )Total stockholders equity
    
    
    50,603
    
    
    
    48,485Total liabilities and stockholders equity
    
    $
    442,109
    
    
    $
    428,084




---



##### 



Juniata
Valley Financial Corp. and Subsidiary
   Years Ended December 31,2009
    
    
    2008
    
    
    2007Interest income:Loans, including fees
    
    $
    20,787
    
    
    $
    22,100
    
    
    $
    22,851Taxable securities
    
    
    1,163
    
    
    
    1,666
    
    
    
    2,438Tax-exempt securities
    
    
    1,152
    
    
    
    1,082
    
    
    
    857Other interest income
    
    
    166
    
    
    
    382
    
    
    
    577Total interest income
    
    
    23,268
    
    
    
    25,230
    
    
    
    26,723Interest expense:Deposits
    
    
    7,116
    
    
    
    8,895
    
    
    
    10,744Securities sold under agreements to repurchase
    
    
    2
    
    
    
    69
    
    
    
    276Short-term borrowings
    
    
    1
    
    
    
    21
    
    
    
    1Long-term debt
    
    
    140
    
    
    
    41
    
    
    
    Other interest bearing liabilities
    
    
    20
    
    
    
    31
    
    
    
    39Total interest expense
    
    
    7,279
    
    
    
    9,057
    
    
    
    11,060Net interest income
    
    
    15,989
    
    
    
    16,173
    
    
    
    15,663Provision for loan losses
    
    
    627
    
    
    
    421
    
    
    
    120Net interest income after provision for loan losses
    
    
    15,362
    
    
    
    15,752
    
    
    
    15,543Noninterest income:Trust fees
    
    
    361
    
    
    
    389
    
    
    
    444Customer service fees
    
    
    1,673
    
    
    
    1,660
    
    
    
    1,656Earnings on bank owned life insurance and annuities
    
    
    444
    
    
    
    486
    
    
    
    440Commissions from sales of non-deposit products
    
    
    446
    
    
    
    704
    
    
    
    711Income from unconsolidated subsidiary
    
    
    217
    
    
    
    207
    
    
    
    192Securities impairment charge
    
    
    (226
    )
    
    
    (554
    )
    
    
    (33
    )Gain on sales of securities
    
    
    17
    
    
    
    33
    
    
    
    14Gain (Loss) on sales of other assets
    
    
    (19
    )
    
    
    58
    
    
    
    1Gain on life insurance proceeds
    
    
    
    
    
    
    179
    
    
    
    Prior period income from insurance sales
    
    
    323
    
    
    
    
    
    
    
    Other noninterest income
    
    
    935
    
    
    
    875
    
    
    
    774Total noninterest income
    
    
    4,171
    
    
    
    4,037
    
    
    
    4,199Noninterest expense:Employee compensation expense
    
    
    4,958
    
    
    
    5,078
    
    
    
    5,137Employee benefits
    
    
    1,667
    
    
    
    1,373
    
    
    
    1,455Occupancy
    
    
    940
    
    
    
    928
    
    
    
    892Equipment
    
    
    612
    
    
    
    710
    
    
    
    688Data processing expense
    
    
    1,325
    
    
    
    1,375
    
    
    
    1,332Director compensation
    
    
    416
    
    
    
    417
    
    
    
    455Professional fees
    
    
    392
    
    
    
    379
    
    
    
    437Taxes, other than income
    
    
    476
    
    
    
    500
    
    
    
    546FDIC Insurance premiums
    
    
    634
    
    
    
    59
    
    
    
    42Intangible amortization
    
    
    45
    
    
    
    45
    
    
    
    45Other noninterest expense
    
    
    1,154
    
    
    
    1,144
    
    
    
    1,180Total noninterest expense
    
    
    12,619
    
    
    
    12,008
    
    
    
    12,209Income before income taxes
    
    
    6,914
    
    
    
    7,781
    
    
    
    7,533Provision for income taxes
    
    
    1,808
    
    
    
    2,057
    
    
    
    2,099Net income
    
    $
    5,106
    
    
    $
    5,724
    
    
    $
    5,434Earnings per shareBasic
    
    $
    1.18
    
    
    $
    1.31
    
    
    $
    1.23Diluted
    
    $
    1.18
    
    
    $
    1.31
    
    
    $
    1.22Cash dividends declared per share
    
    $
    0.78
    
    
    $
    0.74
    
    
    $
    0.95Weighted average basic shares outstanding
    
    
    4,341,097
    
    
    
    4,376,077
    
    
    
    4,434,859Weighted average diluted shares outstanding
    
    
    4,345,236
    
    
    
    4,385,612
    
    
    
    4,444,466




---



##### 



Juniata Valley Financial Corp. and Subsidiary
   Years Ended December 31, 2009, 2008 and 2007Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at December 31, 2006
    
    
    4,457,934
    
    
    $
    4,746
    
    
    $
    18,259
    
    
    $
    31,531
    
    
    $
    (1,098
    )
    
    $
    (5,652
    )
    
    $
    47,786Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,434
    
    
    
    
    
    
    
    
    
    
    
    5,434Change in unrealized gains on
securities
available for sale, net of
reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    260
    
    
    
    
    
    
    
    260Defined benefit retirement plan
adjustments, net of tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    281
    
    
    
    
    
    
    
    281Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,975Cash dividends at $0.95 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,210
    )
    
    
    
    
    
    
    
    
    
    
    (4,210
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    43
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43Purchase of treasury stock, at cost
    
    
    (51,175
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,069
    )
    
    
    (1,069
    )Treasury stock issued for stock option
and stock purchase plans
    
    
    2,686
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    47Balance at December 31, 2007
    
    
    4,409,445
    
    
    
    4,746
    
    
    
    18,297
    
    
    
    32,755
    
    
    
    (557
    )
    
    
    (6,669
    )
    
    
    48,572Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,724
    
    
    
    
    
    
    
    
    
    
    
    5,724Change in unrealized gains on
securities
available for sale, net of
reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    563
    
    
    
    
    
    
    
    563Defined benefit retirement plan
adjustments, net of tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,253
    )
    
    
    
    
    
    
    (1,253
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,034Implementation of ASC Topic 715
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (480
    )
    
    
    
    
    
    
    
    
    
    
    (480
    )Cash dividends at $0.74 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,241
    )
    
    
    
    
    
    
    
    
    
    
    (3,241
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40Purchase of treasury stock, at cost
    
    
    (72,955
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,518
    )
    
    
    (1,518
    )Treasury stock issued for stock option
and stock purchase plans
    
    
    4,565
    
    
    
    
    
    
    
    (13
    )
    
    
    
    
    
    
    
    
    
    
    91
    
    
    
    78Balance at December 31, 2008
    
    
    4,341,055
    
    
    
    4,746
    
    
    
    18,324
    
    
    
    34,758
    
    
    
    (1,247
    )
    
    
    (8,096
    )
    
    
    48,485Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,106
    
    
    
    
    
    
    
    
    
    
    
    5,106Change in unrealized gains on
securities
available for sale, net of
reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69
    
    
    
    
    
    
    
    69Defined benefit retirement plan
adjustments, net of tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    373
    
    
    
    
    
    
    
    373Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,548Cash dividends at $0.78 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,386
    )
    
    
    
    
    
    
    
    
    
    
    (3,386
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    40
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40Purchase of treasury stock, at cost
    
    
    (12,600
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (217
    )
    
    
    (217
    )Treasury stock issued for stock option
and stock purchase plans
    
    
    9,132
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    182
    
    
    
    133Balance at December 31, 2009
    
    
    4,337,587
    
    
    $
    4,746
    
    
    $
    18,315
    
    
    $
    36,478
    
    
    $
    (805
    )
    
    $
    (8,131
    )
    
    $
    50,603




---



##### 



Juniata Valley Financial Corp. and Subsidiary
   Years Ended December 31,2009
    
    
    2008
    
    
    2007Operating activities:Net income
    
    $
    5,106
    
    
    $
    5,724
    
    
    $
    5,434Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    627
    
    
    
    421
    
    
    
    120Provision for depreciation
    
    
    587
    
    
    
    691
    
    
    
    653Net amortization of securities premiums
    
    
    220
    
    
    
    126
    
    
    
    104Net amortization of loan origination costs
    
    
    45
    
    
    
    25
    
    
    
    Amortization of core deposit intangible
    
    
    45
    
    
    
    45
    
    
    
    45Securities impairment charge
    
    
    226
    
    
    
    554
    
    
    
    33Net realized gains on sales of securities
    
    
    (17
    )
    
    
    (33
    )
    
    
    (14
    )Net losses (gains) on sales of other assets
    
    
    19
    
    
    
    (58
    )
    
    
    (1
    )Earnings on bank owned life insurance and annuities
    
    
    (444
    )
    
    
    (486
    )
    
    
    (440
    )Bank owned life insurance proceeds in excess of cash surrender value
    
    
    
    
    
    
    (179
    )
    
    
    Deferred income tax expense
    
    
    223
    
    
    
    609
    
    
    
    94Equity in earnings of unconsolidated subsidiary,
net of dividends of $46, $0 and $126
    
    
    (171
    )
    
    
    (207
    )
    
    
    (66
    )Stock-based compensation expense
    
    
    40
    
    
    
    40
    
    
    
    43Decrease (increase) in accrued interest receivable and other assets
    
    
    (927
    )
    
    
    (962
    )
    
    
    901Increase (decrease) in accrued interest payable and other liabilities
    
    
    (869
    )
    
    
    (2,066
    )
    
    
    248Net cash provided by operating activities
    
    
    4,710
    
    
    
    4,244
    
    
    
    7,154Investing activities:Purchases of:Securities available for sale
    
    
    (56,245
    )
    
    
    (36,063
    )
    
    
    (59,340
    )Securities held to maturity
    
    
    
    
    
    
    
    
    
    
    (3,955
    )FHLB stock
    
    
    
    
    
    
    (1,419
    )
    
    
    (197
    )Premises and equipment
    
    
    (128
    )
    
    
    (838
    )
    
    
    (1,383
    )Bank owned life insurance and annuities
    
    
    (120
    )
    
    
    (94
    )
    
    
    (963
    )Proceeds from:Sales of securities available for sale
    
    
    5,004
    
    
    
    9
    
    
    
    585Maturities of and principal repayments on:Securities available for sale
    
    
    37,908
    
    
    
    38,987
    
    
    
    48,331Securities held to maturity
    
    
    
    
    
    
    
    
    
    
    6,455Redemption of FHLB stock
    
    
    
    
    
    
    317
    
    
    
    178Bank owned life insurance and annuities
    
    
    68
    
    
    
    511
    
    
    
    76Sale of other real estate owned
    
    
    603
    
    
    
    311
    
    
    
    244Sale of property owned for investment and other assets
    
    
    160
    
    
    
    322
    
    
    
    Net decrease in interest bearing time deposits
    
    
    3,905
    
    
    
    200
    
    
    
    135Net decrease (increase) in loans receivable
    
    
    2,049
    
    
    
    (17,595
    )
    
    
    7,051Net cash used in investing activities
    
    
    (6,796
    )
    
    
    (15,352
    )
    
    
    (2,783
    )Financing activities:Net increase (decrease) in deposits
    
    
    20,366
    
    
    
    (2,426
    )
    
    
    4,288Net (decrease) increase in short-term borrowings and securities
sold under agreements to repurchase
    
    
    (7,372
    )
    
    
    5,148
    
    
    
    (681
    )Issuance of long-term debt
    
    
    
    
    
    
    5,000
    
    
    
    Cash dividends
    
    
    (3,386
    )
    
    
    (3,241
    )
    
    
    (4,210
    )Purchase of treasury stock
    
    
    (217
    )
    
    
    (1,518
    )
    
    
    (1,069
    )Treasury stock issued for employee stock plans
    
    
    133
    
    
    
    78
    
    
    
    47Net cash provided by (used in) financing activities
    
    
    9,524
    
    
    
    3,041
    
    
    
    (1,625
    )Net increase (decrease) in cash and cash equivalents
    
    
    7,438
    
    
    
    (8,067
    )
    
    
    2,746Cash and cash equivalents at beginning of year
    
    
    12,457
    
    
    
    20,524
    
    
    
    17,778Cash and cash equivalents at end of year
    
    $
    19,895
    
    
    $
    12,457
    
    
    $
    20,524Supplemental information:Interest paid
    
    $
    7,399
    
    
    $
    9,255
    
    
    $
    11,060Income taxes paid
    
    
    1,340
    
    
    
    2,100
    
    
    
    1,885Supplemental schedule of noncash investing and financing activities:Transfer of loans to other real estate owned
    
    $
    814
    
    
    $
    305
    
    
    $
    397Transfer of loans to other assets owned
    
    
    74
    
    
    
    
    
    
    
    Transfer of fixed asset to other assets
    
    
    
    
    
    
    45
    
    
    
    




---



##### 



JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2009, 2008 AND 2007
 Nature Of Operations
  1. Summary of Significant Accounting Policies
  Principles of consolidation
  Use of estimates
  Basis of presentation




---



##### 



Significant group concentrations of credit risk
   Cash and cash equivalents
  Interest bearing time deposits with banks
  Securities
    Restricted Investment in Federal Home Loan Bank Stock




---



##### 



Loans
    Loan origination fees and costs
  Allowance for loan losses




---



##### 



(1)
    
    principal or interest has been in default for 120 days or more and for which no
payment has been received during the previous four months,
 (2)
    
    all collateral securing the loan has been liquidated and a deficiency balance
remains,
 (3)
    
    a bankruptcy notice is received for an unsecured loan, or(4)
    
    the loan is deemed to be uncollectible for any other reason.
     Other real estate owned
  Business combinations




---



##### 



Goodwill and other intangible assets
   Premises and equipment and depreciation
  Trust assets and revenues
  Bank owned life insurance and annuities
   Income taxes




---



##### 



Advertising
  Off-balance sheet financial instruments
  Transfer of financial assets
  Stock-based compensation
  2009
    
    
    2008
    
    
    2007Expected life of options
    
    7 years
    
    
    7 years
    
    
    7 yearsRisk-free interest rate
    
    
    2.93
    %
    
    
    3.08
    %
    
    
    4.47
    %Expected volatility
    
    
    21.77
    %
    
    
    19.47
    %
    
    
    19.98
    %Expected dividend yield
    
    
    3.68
    %
    
    
    3.20
    %
    
    
    3.20
    %
  Segment reporting
   Subsequent events




---



##### 



2. Recent Accounting Pronouncements
 ASU 2009-16
 Transfers and Servicing (Topic 860)  Accounting for
Transfers of Financial Assets. Accounting for Transfers of Financial Assets-an amendment of FASB Statement No.
140
   ASU 2009-17
 Consolidations (Topic 810)  Improvements to
Financial Reporting by Enterprises Involved with Variable Interest Entities Amendments to FASB Interpretation No.
46(R)
   ASU 2010-01
 Equity (Topic 505)  Accounting for Distributions to
Shareholders with Components of Stock and Cash




---



##### 



ASU 2010-02
 Consolidation (Topic 810)  Accounting and Reporting
for Decreases in Ownership of a Subsidiary  A Scope Clarification
  
    
    A subsidiary or group of assets that is a business or nonprofit activity;
 
    
    A subsidiary that is a business or nonprofit activity that is transferred to an equity
method investee or joint venture; and
 
    
    An exchange of a group of assets that constitutes a business or nonprofit activity for
a noncontrolling interest in an entity (including an equity method investee or joint
venture).
 a b
  
    
    The valuation techniques used to measure the fair value of any retained investment;
 
    
    The nature of any continuing involvement with the subsidiary or entity acquiring the
group of assets; and
 
    
    Whether the transaction that resulted in the deconsolidation or derecognition was with
a related party or whether the former subsidiary or entity acquiring the assets will
become a related party after the transaction.
 Noncontrolling Interests in Consolidated Financial Statements  an amendment of ARB 51
 ASU 2010-06
 Fair Value Measurements and Disclosures (Topic 820): Improving
Disclosures about Fair Value Measurements.
 
    
    A reporting entity to disclose separately the amounts of significant transfers in and
out of Level 1 and Level 2 fair value measurements and describe the reasons for the
transfers; and
 
    
    In the reconciliation for fair value measurements using significant unobservable
inputs, a reporting entity should present separately information about purchases, sales,
issuances, and settlements.
  
    
    For purposes of reporting fair value measurement for each class of assets and
liabilities, a reporting entity needs to use judgment in determining the appropriate
classes of assets and liabilities; and
 
    
    A reporting entity should provide disclosures about the valuation techniques and inputs
used to measure fair value for both recurring and nonrecurring fair value measurements.




---



##### 



3. Restrictions on Cash and Due From Banks
  4. Securities
  December 31, 2009Gross
    
    
    GrossSecurities Available for Sale
    
    Amortized
    
    
    Fair
    
    
    Unrealized
    
    
    UnrealizedType and maturity
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    LossesU.S. Treasury securities and obligations of
U.S. Government agencies and corporationsAfter one year but within five years
    
    $
    32,503
    
    
    $
    32,620
    
    
    $
    194
    
    
    $
    (77
    )After five years but within ten years
    
    
    940
    
    
    
    933
    
    
    
    
    
    
    
    (7
    )33,443
    
    
    
    33,553
    
    
    
    194
    
    
    
    (84
    )Obligations of state and political subdivisionsWithin one year
    
    
    6,775
    
    
    
    6,863
    
    
    
    88
    
    
    
    After one year but within five years
    
    
    32,022
    
    
    
    32,972
    
    
    
    958
    
    
    
    (8
    )After five years but within ten years
    
    
    544
    
    
    
    562
    
    
    
    18
    
    
    
    39,341
    
    
    
    40,397
    
    
    
    1,064
    
    
    
    (8
    )Corporate notesAfter one year but within five years
    
    
    1,000
    
    
    
    1,026
    
    
    
    26
    
    
    
    1,000
    
    
    
    1,026
    
    
    
    26
    
    
    
    Mortgage-backed securities
    
    
    1,425
    
    
    
    1,515
    
    
    
    90
    
    
    
    Equity securities
    
    
    975
    
    
    
    865
    
    
    
    58
    
    
    
    (168
    )Total
    
    $
    76,184
    
    
    $
    77,356
    
    
    $
    1,432
    
    
    $
    (260
    )
 December 31, 2008Gross
    
    
    GrossSecurities Available for Sale
    
    Amortized
    
    
    Fair
    
    
    Unrealized
    
    
    UnrealizedType and maturity
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    LossesU.S. Treasury securities and obligations of
U.S. Government agencies and corporationsWithin one year
    
    $
    4,627
    
    
    $
    4,732
    
    
    $
    105
    
    
    $
    After one year but within five years
    
    
    19,961
    
    
    
    20,236
    
    
    
    275
    
    
    
    24,588
    
    
    
    24,968
    
    
    
    380
    
    
    
    Obligations of state and political subdivisionsWithin one year
    
    
    3,571
    
    
    
    3,593
    
    
    
    22
    
    
    
    After one year but within five years
    
    
    27,622
    
    
    
    28,343
    
    
    
    727
    
    
    
    (6
    )After five years but within ten years
    
    
    3,485
    
    
    
    3,579
    
    
    
    95
    
    
    
    (1
    )34,678
    
    
    
    35,515
    
    
    
    844
    
    
    
    (7
    )Corporate notesAfter one year but within five years
    
    
    1,000
    
    
    
    957
    
    
    
    
    
    
    
    (43
    )1,000
    
    
    
    957
    
    
    
    
    
    
    
    (43
    )Mortgage-backed securities
    
    
    1,803
    
    
    
    1,867
    
    
    
    64
    
    
    
    Equity securities
    
    
    1,210
    
    
    
    1,014
    
    
    
    29
    
    
    
    (225
    )Total
    
    $
    63,279
    
    
    $
    64,321
    
    
    $
    1,317
    
    
    $
    (275
    )




---



##### 



Years Ended December 31,2009
    
    
    2008
    
    
    2007Gross proceeds from sales of securities
    
    $
    5,004
    
    
    $
    9
    
    
    $
    585Securities available for sale:Gross realized gains
    
    $
    22
    
    
    $
    
    
    
    $
    Gross realized losses
    
    
    (5
    )
    
    
    (8
    )
    
    
    (9
    )Gross gains from business
combinations
    
    
    
    
    
    
    41
    
    
    
    23
  Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. Treasury securities and obligations of
U.S. Government agencies and corporations
    
    $
    10,897
    
    
    $
    (84
    )
    
    $
    
    
    
    $
    
    
    
    $
    10,897
    
    
    $
    (84
    )Obligations of state and political subdivisions
    
    
    2,532
    
    
    
    (8
    )
    
    
    
    
    
    
    
    
    
    
    2,532
    
    
    
    (8
    )Debt securities
    
    
    13,429
    
    
    
    (92
    )
    
    
    
    
    
    
    
    
    
    
    13,429
    
    
    
    (92
    )Equity securities
    
    
    140
    
    
    
    (23
    )
    
    
    496
    
    
    
    (145
    )
    
    
    636
    
    
    
    (168
    )Total temporarily impaired securities
    
    $
    13,569
    
    
    $
    (115
    )
    
    $
    496
    
    
    $
    (145
    )
    
    $
    14,065
    
    
    $
    (260
    )




---



##### 



Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesU.S. Treasury securities and
obligations of U.S. Government
agencies and corporations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Obligations of state and political
subdivisions
    
    
    1,016
    
    
    
    (7
    )
    
    
    
    
    
    
    
    
    
    
    1,016
    
    
    
    (7
    )Mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Corporate and other securities
    
    
    957
    
    
    
    (43
    )
    
    
    
    
    
    
    
    
    
    
    957
    
    
    
    (43
    )Debt securities
    
    
    1,973
    
    
    
    (50
    )
    
    
    
    
    
    
    
    
    
    
    1,973
    
    
    
    (50
    )Equity securities
    
    
    743
    
    
    
    (181
    )
    
    
    99
    
    
    
    (44
    )
    
    
    842
    
    
    
    (225
    )Total temporarily impaired securities
    
    $
    2,716
    
    
    $
    (231
    )
    
    $
    99
    
    
    $
    (44
    )
    
    $
    2,815
    
    
    $
    (275
    )




---



##### 



5. Loans
  December 31,2009
    
    
    2008Commercial, financial and agricultural
    
    $
    33,783
    
    
    $
    38,755Real estate  commercial
    
    
    39,299
    
    
    
    32,171Real estate  construction
    
    
    24,578
    
    
    
    22,144Real estate  mortgage
    
    
    135,854
    
    
    
    140,016Home equity
    
    
    52,957
    
    
    
    61,094Obligations of states and political subdivisions
    
    
    13,553
    
    
    
    7,177Personal
    
    
    11,670
    
    
    
    13,920Unearned interest
    
    
    (64
    )
    
    
    (145
    )Total
    
    $
    311,630
    
    
    $
    315,132
  December 31,2009
    
    
    2008Nonaccrual loans
    
    $
    2,629
    
    
    $
    1,255Accruing loans past due 90 days or more
    
    
    1,369
    
    
    
    664Restructured loans
    
    
    
    
    
    
    Total non-performing loans
    
    $
    3,998
    
    
    $
    1,919
   Pledged Loans




---



##### 



6. Allowance For Loan Losses
   Years Ended December 31,2009
    
    
    2008
    
    
    2007Balance of allowance  beginning of
period
    
    $
    2,610
    
    
    $
    2,322
    
    
    $
    2,572Loans charged off:Commercial, financial and agricultural
    
    
    47
    
    
    
    43
    
    
    
    291Real estate  commercial
    
    
    32
    
    
    
    36
    
    
    
    Real estate  mortgage
    
    
    343
    
    
    
    15
    
    
    
    66Personal
    
    
    107
    
    
    
    62
    
    
    
    61Total charge-offs
    
    
    529
    
    
    
    156
    
    
    
    418Recoveries of loans previously charged
off:Commercial, financial and agricultural
    
    
    
    
    
    
    5
    
    
    
    8Real estate  mortgage
    
    
    
    
    
    
    5
    
    
    
    8Personal
    
    
    11
    
    
    
    13
    
    
    
    32Total recoveries
    
    
    11
    
    
    
    23
    
    
    
    48Net charge-offs
    
    
    518
    
    
    
    133
    
    
    
    370Provision for loan losses
    
    
    627
    
    
    
    421
    
    
    
    120Balance of allowance  end of period
    
    $
    2,719
    
    
    $
    2,610
    
    
    $
    2,322Ratio of net charge-offs during period to
average loans outstanding
    
    
    0.17
    %
    
    
    0.04
    %
    
    
    0.12
    %
  December 31,2009
    
    
    2008Impaired loans:Recorded investment at period end
    
    $
    8,245
    
    
    $
    1,933Impaired loan balance for which:There is a related allowance
    
    
    1,445
    
    
    
    512There is no related allowance
    
    
    6,800
    
    
    
    1,421Related allowance on impaired loans
    
    
    278
    
    
    
    142
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Average recorded investment in impaired
loans
    
    $
    5,865
    
    
    $
    1,640
    
    
    $
    846Interest income recognized (on a cash basis)
    
    
    611
    
    
    
    82
    
    
    
    19




---



##### 



7. Bank Owned Life Insurance and Annuities
  Life
    
    
    Deferred
    
    
    PayoutInsurance
    
    
    Annuities
    
    
    Annuities
    
    
    TotalBalance as of December 31,
2007
    
    $
    11,879
    
    
    $
    230
    
    
    $
    235
    
    
    $
    12,344Earnings
    
    
    456
    
    
    
    10
    
    
    
    10
    
    
    
    476Premiums on existing policies
    
    
    84
    
    
    
    10
    
    
    
    
    
    
    
    94Annuity payments received
    
    
    
    
    
    
    
    
    
    
    (74
    )
    
    
    (74
    )Proceeds from surrendered
policy
    
    
    (258
    )
    
    
    
    
    
    
    
    
    
    
    (258
    )Balance as of December 31,
2008
    
    
    12,161
    
    
    
    250
    
    
    
    171
    
    
    
    12,582Earnings
    
    
    424
    
    
    
    11
    
    
    
    (3
    )
    
    
    432Premiums on existing policies
    
    
    106
    
    
    
    14
    
    
    
    
    
    
    
    120Annuity payments received
    
    
    
    
    
    
    
    
    
    
    (68
    )
    
    
    (68
    )Balance as of December 31,
2009
    
    $
    12,691
    
    
    $
    275
    
    
    $
    100
    
    
    $
    13,066
  8. Premises And Equipment
  December 31,2009
    
    
    2008Land
    
    $
    864
    
    
    $
    864Buildings and improvements
    
    
    8,393
    
    
    
    8,425Furniture, computer software
and equipment
    
    
    5,117
    
    
    
    5,01214,374
    
    
    
    14,301Less: accumulated depreciation
    
    
    (7,496
    )
    
    
    (6,927
    )$
    6,878
    
    
    $
    7,374




---



##### 



9. Acquisition
   10. Investment in Unconsolidated Subsidiary
  11. Deposits
  December 31,2009
    
    
    2008Demand, non-interest bearing
    
    $
    55,030
    
    
    $
    54,200NOW and Money Market
    
    
    75,766
    
    
    
    62,099Savings
    
    
    42,536
    
    
    
    37,114Time deposits, $100,000 or more
    
    
    38,453
    
    
    
    39,059Other time deposits
    
    
    165,612
    
    
    
    164,559$
    377,397
    
    
    $
    357,031
  Time Deposits$100,000 or more
    
    
    OtherMaturing in:2010
    
    $
    26,270
    
    
    $
    108,4752011
    
    
    5,330
    
    
    
    23,7832012
    
    
    2,251
    
    
    
    9,9942013
    
    
    1,784
    
    
    
    10,9222014
    
    
    2,818
    
    
    
    12,438$
    38,453
    
    
    $
    165,612




---



##### 



12. Borrowings
  December 31, 2009
    
    
    December 31, 2008
    
    
    December 31, 2007
    
    
    For the year 2009WeightedOutstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Outstanding
    
    
    
    
    
    
    Average
    
    
    AverageBalance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    RateSecurities sold under agreements
to repurchase
    
    $
    3,207
    
    
    
    0.10
    %
    
    $
    1,944
    
    
    
    0.10
    %
    
    $
    5,431
    
    
    
    3.01
    %
    
    $
    2,369
    
    
    
    0.10
    %Short-term borrowings  Federal
Home Loan Bank overnight advances
    
    
    
    
    
    
    
    
    
    
    8,635
    
    
    
    0.59
    %
    
    
    
    
    
    
    
    
    
    
    200
    
    
    
    0.60
    %Long-term debt  Note payable to
Federal Home Loan Bank
    
    
    5,000
    
    
    
    2.75
    %
    
    
    5,000
    
    
    
    2.75
    %
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    2.75
    %$
    8,207
    
    
    
    1.71
    %
    
    $
    15,579
    
    
    
    1.22
    %
    
    $
    5,431
    
    
    
    3.01
    %
    
    $
    7,569
    
    
    
    1.86
    %




---



##### 



13. Operating Lease Obligations
   Years ending December 31,2010
    
    $
    1032011
    
    
    972012
    
    
    582013
    
    
    202014
    
    
    222015 and beyond
    
    
    22Total minimum payments required
    
    $
    322
 14. Income Taxes
  2009
    
    
    2008
    
    
    2007Current tax expense
    
    $
    1,585
    
    
    $
    1,448
    
    
    $
    2,005Deferred tax expense
    
    
    223
    
    
    
    609
    
    
    
    94Total tax expense
    
    $
    1,808
    
    
    $
    2,057
    
    
    $
    2,099
   Years Ended December 31,2009
    
    
    2008
    
    
    2007Income before income taxes
    
    $
    6,914
    
    
    $
    7,781
    
    
    $
    7,533Effective tax rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %Federal tax at statutory rate
    
    
    2,351
    
    
    
    2,646
    
    
    
    2,561Tax-exempt interest
    
    
    (439
    )
    
    
    (398
    )
    
    
    (298
    )Net earnings on BOLI
    
    
    (121
    )
    
    
    (130
    )
    
    
    (141
    )Life insurance proceeds
    
    
    
    
    
    
    (61
    )
    
    
    Dividend from unconsolidated
subsidiary
    
    
    (13
    )
    
    
    
    
    
    
    (34
    )Stock-based compensation
    
    
    14
    
    
    
    14
    
    
    
    15Other permanent differences
    
    
    16
    
    
    
    (14
    )
    
    
    (4
    )Total tax expense
    
    $
    1,808
    
    
    $
    2,057
    
    
    $
    2,099Effective tax rate
    
    
    26.1
    %
    
    
    26.4
    %
    
    
    27.9
    %




---



##### 



December 31,2009
    
    
    2008Deferred Tax AssetsAllowance for loan losses
    
    $
    787
    
    
    $
    750Deferred directors compensation
    
    
    654
    
    
    
    681Employee and director benefits
    
    
    668
    
    
    
    672Qualified pension liability
    
    
    
    
    
    
    296Unrealized loss from securities impairment
    
    
    208
    
    
    
    167Other
    
    
    102
    
    
    
    68Total deferred tax assets
    
    
    2,419
    
    
    
    2,634Deferred Tax LiabilitiesDepreciation
    
    
    (207
    )
    
    
    (168
    )Equity income from unconsolidated subsidiary
    
    
    (178
    )
    
    
    (120
    )Qualified pension asset
    
    
    (122
    )
    
    
    Loan origination costs
    
    
    (147
    )
    
    
    (94
    )Prepaid expense
    
    
    (114
    )
    
    
    (46
    )Unrealized gains on securities available for
sale
    
    
    (398
    )
    
    
    (369
    )Annuity earnings
    
    
    (39
    )
    
    
    (44
    )Goodwill
    
    
    (154
    )
    
    
    (108
    )Total deferred tax liabilities
    
    
    (1,359
    )
    
    
    (949
    )Net deferred tax asset
included in other assets
    
    $
    1,060
    
    
    $
    1,685




---



##### 



15. Stockholders Equity and Regulatory Matters




---



##### 



Juniata Valley Financial Corp. (Consolidated)
 Minimum RequirementFor CapitalActual
    
    
    Adequacy PurposesAmount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAs of December 31, 2009:Total Capital
    
    $
    51,773
    
    
    
    18.49
    %
    
    $
    22,396
    
    
    
    8.00
    %(to Risk Weighted Assets)Tier 1 Capital
    
    
    49,054
    
    
    
    17.52
    %
    
    
    11,198
    
    
    
    4.00
    %(to Risk Weighted Assets)Tier 1 Capital
    
    
    49,054
    
    
    
    11.33
    %
    
    
    17,318
    
    
    
    4.00
    %(to Average Assets)As of December 31, 2008:Total Capital
    
    $
    49,959
    
    
    
    18.26
    %
    
    $
    21,888
    
    
    
    8.00
    %(to Risk Weighted Assets)Tier 1 Capital
    
    
    47,349
    
    
    
    17.31
    %
    
    
    10,944
    
    
    
    4.00
    %(to Risk Weighted Assets)Tier 1 Capital
    
    
    47,349
    
    
    
    11.11
    %
    
    
    17,054
    
    
    
    4.00
    %(to Average Assets)
 The Juniata Valley Bank
 Minimum RegulatoryRequirements to beMinimum Requirement
    
    
    Well CapitalizedFor Capital
    
    
    under PromptActual
    
    
    Adequacy Purposes
    
    
    Corrective Action ProvisionsAmount
    
    
    Ratio
    
    
    Amount
    
    
    Ratio
    
    
    Amount
    
    
    RatioAs of December 31, 2009:Total Capital
    
    $
    45,675
    
    
    
    16.54
    %
    
    $
    22,086
    
    
    
    8.00
    %
    
    $
    27,608
    
    
    
    10.00
    %(to Risk Weighted Assets)Tier 1 Capital
    
    
    42,956
    
    
    
    15.56
    %
    
    
    11,043
    
    
    
    4.00
    %
    
    
    16,565
    
    
    
    6.00
    %(to Risk Weighted Assets)Tier 1 Capital
    
    
    42,956
    
    
    
    10.01
    %
    
    
    17,168
    
    
    
    4.00
    %
    
    
    21,460
    
    
    
    5.00
    %(to Average Assets)As of December 31, 2008:Total Capital
    
    $
    44,191
    
    
    
    16.38
    %
    
    $
    21,589
    
    
    
    8.00
    %
    
    $
    26,987
    
    
    
    10.00
    %(to Risk Weighted Assets)Tier 1 Capital
    
    
    41,581
    
    
    
    15.41
    %
    
    
    10,795
    
    
    
    4.00
    %
    
    
    16,192
    
    
    
    6.00
    %(to Risk Weighted Assets)Tier 1 Capital
    
    
    41,581
    
    
    
    9.78
    %
    
    
    17,006
    
    
    
    4.00
    %
    
    
    21,258
    
    
    
    5.00
    %(to Average Assets)




---



##### 



16. Calculation Of Earnings Per Share
  Years Ended December 31,2009
    
    
    2008
    
    
    2007(Amounts, except earnings per share, in thousands)Net income
    
    $
    5,106
    
    
    $
    5,724
    
    
    $
    5,434Weighted-average common shares outstanding
    
    
    4,341
    
    
    
    4,376
    
    
    
    4,435Basic earnings per share
    
    $
    1.18
    
    
    $
    1.31
    
    
    $
    1.23Weighted-average common shares outstanding
    
    
    4,341
    
    
    
    4,376
    
    
    
    4,435Common stock equivalents due to effect of
stock options
    
    
    4
    
    
    
    10
    
    
    
    9Total weighted-average common shares and
equivalents
    
    
    4,345
    
    
    
    4,386
    
    
    
    4,444Diluted earnings per share
    
    $
    1.18
    
    
    $
    1.31
    
    
    $
    1.22Anti-dilutive stock options outstanding
    
    
    73
    
    
    
    33
    
    
    
    21




---



##### 



17. Comprehensive Income
  Year ended December 31, 2009Before
    
    
    Tax (Expense)Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    Benefit
    
    
    AmountNet income
    
    $
    6,914
    
    
    $
    (1,808
    )
    
    $
    5,106Other comprehensive income (loss):Unrealized losses on available for sale securities:Unrealized holding losses arising during the period
    
    
    (79
    )
    
    
    27
    
    
    
    (52
    )Unrealized holding losses from unconsolidated
subsidiary
    
    
    (17
    )
    
    
    
    
    
    
    (17
    )Less reclassification adjustment for:gains included in net income
    
    
    (17
    )
    
    
    6
    
    
    
    (11
    )securities impairment charge
    
    
    226
    
    
    
    (77
    )
    
    
    149Unrecognized pension net gain
    
    
    413
    
    
    
    (140
    )
    
    
    273Unrecognized pension cost due to change in assumptions
    
    
    (7
    )
    
    
    2
    
    
    
    (5
    )Amortization of pension prior service cost
    
    
    (2
    )
    
    
    1
    
    
    
    (1
    )Amortization of pension net actuarial loss
    
    
    161
    
    
    
    (55
    )
    
    
    106Other comprehensive income
    
    
    678
    
    
    
    (236
    )
    
    
    442Total comprehensive income
    
    $
    7,592
    
    
    $
    (2,044
    )
    
    $
    5,548
 Year ended December 31, 2008Before
    
    
    Tax (Expense)Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    Benefit
    
    
    AmountNet income
    
    $
    7,781
    
    
    $
    (2,057
    )
    
    $
    5,724Other comprehensive income (loss):Unrealized gains on available for sale securities :Unrealized holding gains arising during the period
    
    
    324
    
    
    
    (110
    )
    
    
    214Unrealized holding gains from unconsolidated
subsidiary
    
    
    5
    
    
    
    
    
    
    
    5Less reclassification adjustment for:gains included in net income
    
    
    (33
    )
    
    
    11
    
    
    
    (22
    )securities impairment charge
    
    
    554
    
    
    
    (188
    )
    
    
    366Unrecognized pension net loss
    
    
    (1,894
    )
    
    
    644
    
    
    
    (1,250
    )Unrecognized pension cost due to change in assumptions
    
    
    (42
    )
    
    
    14
    
    
    
    (28
    )Amortization of pension prior service cost
    
    
    (2
    )
    
    
    1
    
    
    
    (1
    )Amortization of pension net actuarial loss
    
    
    38
    
    
    
    (12
    )
    
    
    26Other comprehensive loss
    
    
    (1,050
    )
    
    
    360
    
    
    
    (690
    )Total comprehensive income
    
    $
    6,731
    
    
    $
    (1,697
    )
    
    $
    5,034
 Year ended December 31, 2007Before
    
    
    Tax (Expense)Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    Benefit
    
    
    AmountNet income
    
    $
    7,533
    
    
    $
    (2,099
    )
    
    $
    5,434Other comprehensive income (loss):Unrealized gains on available for sale securities :Unrealized holding gains arising during the period
    
    
    353
    
    
    
    (120
    )
    
    
    233Unrealized holding gains from unconsolidated
subsidiary
    
    
    14
    
    
    
    
    
    
    
    14Less reclassification adjustment for:gains included in net income
    
    
    (14
    )
    
    
    5
    
    
    
    (9
    )securities impairment charge
    
    
    33
    
    
    
    (11
    )
    
    
    22Unrecognized pension net gain
    
    
    374
    
    
    
    (127
    )
    
    
    247Amortization of pension prior service cost
    
    
    (2
    )
    
    
    
    
    
    
    (2
    )Amortization of pension net actuarial loss
    
    
    54
    
    
    
    (18
    )
    
    
    36Other comprehensive income
    
    
    812
    
    
    
    (271
    )
    
    
    541Total comprehensive income
    
    $
    8,345
    
    
    $
    (2,370
    )
    
    $
    5,975




---



##### 



12/31/2009
    
    
    12/31/2008
    
    
    12/31/2007Unrealized gains on available for sale securities
    
    $
    776
    
    
    $
    707
    
    
    $
    144Unrecognized expense for defined benefit pension
    
    
    (1,581
    )
    
    
    (1,954
    )
    
    
    (701
    )Accumulated other comprehensive loss
    
    $
    (805
    )
    
    $
    (1,247
    )
    
    $
    (557
    )
 18. Fair Value Measurements
 Fair Value Measurements and Disclosures




---



##### 



Securities Available for Sale.
 Impaired Loans.
 Other Real Estate Owned




---



##### 



(Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Quoted Prices in
    
    
    Significant
    
    
    SignificantActive Markets
    
    
    Other
    
    
    OtherDecember 31,
    
    
    for Identical
    
    
    Observable
    
    
    Unobservable2009
    
    
    Assets
    
    
    Inputs
    
    
    InputsMeasured at fair value on a recurring basis:Equity securities available-for-sale
    
    $
    865
    
    
    $
    865
    
    
    $
    
    
    
    $
    Debt securities available-for-sale
    
    
    76,491
    
    
    
    
    
    
    
    76,491
    
    
    
    Measured at fair value on a non-recurring basis:Impaired loans
    
    
    1,167
    
    
    
    
    
    
    
    
    
    
    
    1,167Other real estate owned
    
    
    476
    
    
    
    
    
    
    
    
    
    
    
    476
 (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Quoted Prices in
    
    
    Significant
    
    
    SignificantActive Markets
    
    
    Other
    
    
    OtherDecember 31,
    
    
    for Identical
    
    
    Observable
    
    
    Unobservable2008
    
    
    Assets
    
    
    Inputs
    
    
    InputsMeasured at fair value on a recurring basis:Equity securities available-for-sale
    
    $
    1,014
    
    
    $
    1,014
    
    
    $
    
    
    
    $
    Debt securities available-for-sale
    
    
    63,307
    
    
    
    
    
    
    
    63,307
    
    
    
    Measured at fair value on a non-recurring basis:Impaired loans
    
    
    370
    
    
    
    
    
    
    
    
    
    
    
    370Other real estate owned
    
    
    305
    
    
    
    
    
    
    
    
    
    
    
    305
  Fair Value of Financial Instruments
  Financial Instruments
 December 31, 2009
    
    
    December 31, 2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and due from banks
    
    $
    18,613
    
    
    $
    18,613
    
    
    $
    12,264
    
    
    $
    12,264Interest bearing deposits with banks
    
    
    82
    
    
    
    82
    
    
    
    193
    
    
    
    193Federal funds sold
    
    
    1,200
    
    
    
    1,200
    
    
    
    
    
    
    
    Interest bearing time deposits with banks
    
    
    1,420
    
    
    
    1,447
    
    
    
    5,325
    
    
    
    5,471Securities
    
    
    77,356
    
    
    
    77,356
    
    
    
    64,321
    
    
    
    64,321Restricted investment in FHLB stock
    
    
    2,197
    
    
    
    2,197
    
    
    
    2,197
    
    
    
    2,197Total loans, net of unearned interest
    
    
    308,911
    
    
    
    321,342
    
    
    
    312,522
    
    
    
    323,289Accrued interest receivable
    
    
    2,284
    
    
    
    2,284
    
    
    
    2,315
    
    
    
    2,315Financial liabilities:Non-interest bearing deposits
    
    
    55,030
    
    
    
    55,030
    
    
    
    54,200
    
    
    
    54,200Interest bearing deposits
    
    
    322,367
    
    
    
    327,724
    
    
    
    302,831
    
    
    
    306,500Securities sold under agreements to
repurchase
    
    
    3,207
    
    
    
    3,207
    
    
    
    1,944
    
    
    
    1,944Short-term borrowings
    
    
    
    
    
    
    
    
    
    
    8,635
    
    
    
    8,635Long-term debt
    
    
    5,000
    
    
    
    5,077
    
    
    
    5,000
    
    
    
    5,021Other interest bearing liabilities
    
    
    1,146
    
    
    
    1,148
    
    
    
    1,096
    
    
    
    1,096Accrued interest payable
    
    
    681
    
    
    
    681
    
    
    
    801
    
    
    
    801Off-balance sheet financial instruments:Commitments to extend credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Letters of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    




---



##### 



Interest bearing time deposits with banks
 Securities Available for Sale
 Loans
 Impaired Loans
 Fixed rate time deposits
 Long-term debt
 Commitments to extend credit and letters of credit




---



##### 



19. Employee Benefit Plans
 Stock Compensation Plan
     2009
    
    
    2008
    
    
    2007Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Exercise
    
    
    
    
    
    
    ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding at beginning of year
    
    
    85,985
    
    
    $
    18.73
    
    
    
    79,512
    
    
    $
    18.31
    
    
    
    65,746
    
    
    $
    17.83Granted
    
    
    19,864
    
    
    
    17.22
    
    
    
    13,317
    
    
    
    21.10
    
    
    
    15,513
    
    
    
    20.05Exercised
    
    
    (6,698
    )
    
    
    14.14
    
    
    
    (2,477
    )
    
    
    14.72
    
    
    
    (1,747
    )
    
    
    15.77Forfeited
    
    
    (1,678
    )
    
    
    20.02
    
    
    
    (4,367
    )
    
    
    20.59
    
    
    
    Outstanding at end of year
    
    
    97,473
    
    
    $
    18.71
    
    
    
    85,985
    
    
    $
    18.73
    
    
    
    79,512
    
    
    $
    18.31Options exercisable at year-end
    
    
    61,254
    
    
    $
    18.62
    
    
    
    58,187
    
    
    $
    17.69
    
    
    
    49,035
    
    
    $
    16.79Weighted-average fair value of
of options granted
during the year
    
    $
    2.75
    
    
    
    
    
    
    $
    3.37
    
    
    
    
    
    
    $
    3.92Intrinsic value of options
exercised during the year
    
    $
    15,792
    
    
    
    
    
    
    $
    15,598
    
    
    
    
    
    
    $
    9,058




---



##### 



Outstanding
    
    
    ExercisableContractual
    
    
    Average
    
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    
    Average Life
    
    
    Exercise
    
    
    
    
    
    
    ExerciseGrant Date
    
    Price
    
    
    Shares
    
    
    (Years)
    
    
    Price
    
    
    Shares
    
    
    Price11/20/2001
    
    $
    14.10
    
    
    
    5,626
    
    
    
    1.35
    
    
    $
    14.10
    
    
    
    5,626
    
    
    $
    14.1011/19/2002
    
    
    14.25
    
    
    
    8,978
    
    
    
    2.41
    
    
    
    14.25
    
    
    
    8,978
    
    
    
    14.2511/18/2003
    
    
    15.13
    
    
    
    10,030
    
    
    
    2.95
    
    
    
    15.13
    
    
    
    10,030
    
    
    
    15.1311/15/2004
    
    
    20.25
    
    
    
    7,832
    
    
    
    3.75
    
    
    
    20.25
    
    
    
    7,832
    
    
    
    20.2510/18/2005
    
    
    24.00
    
    
    
    9,150
    
    
    
    4.32
    
    
    
    24.00
    
    
    
    8,528
    
    
    
    24.0010/17/2006
    
    
    21.00
    
    
    
    9,716
    
    
    
    5.71
    
    
    
    21.00
    
    
    
    8,227
    
    
    
    21.0010/16/2007
    
    
    20.05
    
    
    
    12,960
    
    
    
    6.70
    
    
    
    20.05
    
    
    
    8,014
    
    
    
    20.0510/21/2008
    
    
    21.10
    
    
    
    13,317
    
    
    
    8.81
    
    
    
    21.10
    
    
    
    4,019
    
    
    
    21.1010/20/2009
    
    
    17.22
    
    
    
    19,864
    
    
    
    9.80
    
    
    
    17.22
    
    
    
    
 Defined Benefit Retirement Plan
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Quoted Prices in
    
    
    Significant
    
    
    SignificantActive Markets
    
    
    Other
    
    
    OtherDecember 31,
    
    
    for Identical
    
    
    Observable
    
    
    Unobservable2009
    
    
    Assets
    
    
    Inputs
    
    
    InputsMeasured at fair value on a recurring basis:Bank certificates of deposit
    
    $
    2,705
    
    
    $
    2,705
    
    
    $
    
    
    
    $
    U.S. Government and agency securities
    
    
    127
    
    
    
    
    
    
    
    127
    
    
    
    Corporate bonds and notes
    
    
    1,734
    
    
    
    
    
    
    
    1,734
    
    
    
    Mutual funds
    
    
    2,534
    
    
    
    2,534
    
    
    
    
    
    
    
    Common stocks
    
    
    4
    
    
    
    4
    
    
    
    
    
    
    
    Short-term investment
    
    
    1,257
    
    
    
    1,257
    
    
    
    
    
    
    
    $
    8,361
    
    
    $
    6,500
    
    
    $
    1,861
    
    
    $
    




---



##### 



Years ended December 31,2009
    
    
    2008Change in projected benefit obligation (PBO)PBO at beginning of year
    
    $
    7,585
    
    
    $
    7,041Service cost
    
    
    187
    
    
    
    179Interest cost
    
    
    449
    
    
    
    441Actuarial loss
    
    
    104
    
    
    
    221Benefits paid
    
    
    (323
    )
    
    
    (297
    )PBO at end of year
    
    $
    8,002
    
    
    $
    7,585Change in plan assetsFair value of plan assets at beginning of year
    
    $
    6,715
    
    
    $
    6,102Actual return on plan assets, net of expenses
    
    
    969
    
    
    
    (1,290
    )Employer contribution
    
    
    1,000
    
    
    
    2,200Benefits paid
    
    
    (323
    )
    
    
    (297
    )Fair value of plan assets at end of year
    
    $
    8,361
    
    
    $
    6,715Reconciliation of funded status to net amount
recognizedOver (under) funded status
    
    $
    359
    
    
    $
    (870
    )Accumulated benefit obligation
    
    $
    6,731
    
    
    $
    6,606
  2009
    
    
    2008
    
    
    2007Service cost during the year
    
    $
    187
    
    
    $
    179
    
    
    $
    281Interest
cost on projected benefit obligation
    
    
    449
    
    
    
    441
    
    
    
    387Expected return on plan assets
    
    
    (459
    )
    
    
    (425
    )
    
    
    (392
    )Net amortization
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )Recognized net actuarial loss
    
    
    161
    
    
    
    39
    
    
    
    54Net periodic benefit cost
    
    $
    336
    
    
    $
    232
    
    
    $
    328
  2009
    
    
    2008
    
    
    2007Discount rate
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    6.25
    %Rate of compensation increase
    
    
    4.00
    
    
    
    4.00
    
    
    
    4.25
  2009
    
    
    2008
    
    
    2007Discount rate
    
    
    6.00
    %
    
    
    6.00
    %
    
    
    5.75
    %Expected long-term return on plan assets
    
    
    7.00
    
    
    
    7.00
    
    
    
    7.00Rate of compensation increase
    
    
    4.00
    
    
    
    4.00
    
    
    
    3.75
   2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    2015-2019Estimated future benefit payments
    
    $
    375
    
    
    $
    374
    
    
    $
    386
    
    
    $
    397
    
    
    $
    418
    
    
    $
    2,378




---



##### 



Defined Contribution Plan
  Employee Stock Purchase Plan
  Supplemental Retirement Plans
  Deferred Compensation Plans
  Salary Continuation Plans
  20. Financial Instruments With Off-Balance Sheet Risk




---



##### 



December 31,2009
    
    
    2008Commitments to grant loans
    
    $
    31,587
    
    
    $
    32,590Unfunded commitments under lines of credit
    
    
    15,002
    
    
    
    15,148Outstanding letters of credit
    
    
    974
    
    
    
    639
    21. Related-Party Transactions
  22. Commitments And Contingent Liabilities




---



##### 



23 . Subsequent Events
  24. Juniata Valley Financial Corp. (Parent Company Only)
  CONDENSED BALANCE SHEETS
 December 31,2009
    
    
    2008ASSETS:Cash and cash equivalents
    
    $
    451
    
    
    $
    194Interest bearing deposits with banks
    
    
    75
    
    
    
    155Investment in bank subsidiary
    
    
    44,554
    
    
    
    42,798Investment in unconsolidated subsidiary
    
    
    3,338
    
    
    
    3,176Investment securities available for sale
    
    
    2,097
    
    
    
    2,040Other assets
    
    
    113
    
    
    
    151TOTAL ASSETS
    
    $
    50,628
    
    
    $
    48,514LIABILITIES:Income tax payable
    
    $
    
    
    
    $
    29Accounts payable and other liabilities
    
    
    25
    
    
    
    STOCKHOLDERS EQUITY
    
    
    50,603
    
    
    
    48,485TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    50,628
    
    
    $
    48,514
 CONDENSED STATEMENTS OF INCOME
 Years Ended December 31,2009
    
    
    2008
    
    
    2007INCOME:Interest on deposits with banks
    
    $
    8
    
    
    $
    10
    
    
    $
    17Interest and dividends on investment securities available for sale
    
    
    48
    
    
    
    103
    
    
    
    168Dividends from bank subsidiary
    
    
    3,765
    
    
    
    2,611
    
    
    
    4,968Income from unconsolidated subsidiary
    
    
    217
    
    
    
    207
    
    
    
    192Securities impairment charge
    
    
    (153
    )
    
    
    (554
    )
    
    
    Gain (Loss) on the sale of investment securities
    
    
    (5
    )
    
    
    5
    
    
    
    TOTAL INCOME
    
    
    3,880
    
    
    
    2,382
    
    
    
    5,345EXPENSE:Non-interest expense
    
    
    102
    
    
    
    111
    
    
    
    153TOTAL EXPENSE
    
    
    102
    
    
    
    111
    
    
    
    153INCOME BEFORE INCOME TAXES (BENEFIT) AND EQUITY
IN UNDISTRIBUTED NET INCOME OF SUBSIDIARY
    
    
    3,778
    
    
    
    2,271
    
    
    
    5,192Income tax expense (benefit)
    
    
    (22
    )
    
    
    (131
    )
    
    
    323,800
    
    
    
    2,402
    
    
    
    5,160Undistributed net income of subsidiary
    
    
    1,306
    
    
    
    3,322
    
    
    
    274NET INCOME
    
    $
    5,106
    
    
    $
    5,724
    
    
    $
    5,434




---



##### 



CONDENSED
STATEMENTS OF CASH FLOWS
 Years Ended December 31,2009
    
    
    2008
    
    
    2007Cash flows from operating activities:Net income
    
    $
    5,106
    
    
    $
    5,724
    
    
    $
    5,434Adjustments to reconcile net income to net cash provided
by operating activities:Undistributed net income of subsidiary
    
    
    (1,306
    )
    
    
    (3,322
    )
    
    
    (274
    )Net amortization of securities premiums
    
    
    2
    
    
    
    3
    
    
    
    Realized losses (gains) on sales of investment
securities
    
    
    5
    
    
    
    (5
    )
    
    
    Securities impairment charges
    
    
    153
    
    
    
    554
    
    
    
    Income from unconsolidated subsidiary, net of
dividends of $46, $0 and $126
    
    
    (171
    )
    
    
    (207
    )
    
    
    (66
    )Decrease in interest and other assets
    
    
    5
    
    
    
    73
    
    
    
    355Decrease in taxes payable
    
    
    (29
    )
    
    
    (9
    )
    
    
    (64
    )Increase (decrease) in accounts payable and other
liabilities
    
    
    25
    
    
    
    (6
    )
    
    
    32Net cash provided by operating activities
    
    
    3,790
    
    
    
    2,805
    
    
    
    5,417Cash flows from investing activities:Purchases of available for sale securities
    
    
    (1,492
    )
    
    
    (720
    )
    
    
    (762
    )Proceeds from the sale of available for sale securities
    
    
    4
    
    
    
    5
    
    
    
    Proceeds from the maturity and principal repayments of
available for sale investment securities
    
    
    1,345
    
    
    
    2,350
    
    
    
    340Proceeds from the maturity of interest bearing time
deposits
    
    
    80
    
    
    
    200
    
    
    
    135Net cash (used in) provided by investing activities
    
    
    (63
    )
    
    
    1,835
    
    
    
    (287
    )Cash flows from financing activities:Cash dividends
    
    
    (3,386
    )
    
    
    (3,241
    )
    
    
    (4,210
    )Purchase of treasury stock
    
    
    (217
    )
    
    
    (1,518
    )
    
    
    (1,069
    )Treasury stock issued for dividend reinvestment and
employee stock purchase plan
    
    
    133
    
    
    
    78
    
    
    
    47Net cash used in financing activities
    
    
    (3,470
    )
    
    
    (4,681
    )
    
    
    (5,232
    )Net increase (decrease) in cash and cash equivalents
    
    
    257
    
    
    
    (41
    )
    
    
    (102
    )Cash and cash equivalents at beginning of year
    
    
    194
    
    
    
    235
    
    
    
    337Cash and cash equivalents at end of year
    
    $
    451
    
    
    $
    194
    
    
    $
    235




---



##### 



25. Quarterly Results Of Operations (Unaudited)
  2009 Quarter endedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Total interest income
    
    $
    5,936
    
    
    $
    5,915
    
    
    $
    5,747
    
    
    $
    5,670Total interest expense
    
    
    1,919
    
    
    
    1,862
    
    
    
    1,812
    
    
    
    1,686Net interest income
    
    
    4,017
    
    
    
    4,053
    
    
    
    3,935
    
    
    
    3,984Provision for loan losses
    
    
    135
    
    
    
    77
    
    
    
    165
    
    
    
    250Gains (losses) from the sale of assets
    
    
    6
    
    
    
    27
    
    
    
    (33
    )
    
    
    (2
    )Securities impairment charge
    
    
    
    
    
    
    (226
    )
    
    
    
    
    
    
    Other income
    
    
    1,236
    
    
    
    1,108
    
    
    
    985
    
    
    
    1,070Other expense
    
    
    3,191
    
    
    
    3,315
    
    
    
    3,004
    
    
    
    3,109Income before income taxes
    
    
    1,933
    
    
    
    1,570
    
    
    
    1,718
    
    
    
    1,693Income tax expense
    
    
    523
    
    
    
    405
    
    
    
    430
    
    
    
    450Net income
    
    $
    1,410
    
    
    $
    1,165
    
    
    $
    1,288
    
    
    $
    1,243Per-share data:Basic earnings
    
    $
    .32
    
    
    $
    .27
    
    
    $
    .30
    
    
    $
    .29Diluted earnings
    
    
    .32
    
    
    
    .27
    
    
    
    .30
    
    
    
    .29Cash dividends
    
    
    .19
    
    
    
    .19
    
    
    
    .20
    
    
    
    .20
 2008 Quarter endedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Total interest income
    
    $
    6,363
    
    
    $
    6,283
    
    
    $
    6,345
    
    
    $
    6,239Total interest expense
    
    
    2,481
    
    
    
    2,320
    
    
    
    2,223
    
    
    
    2,033Net interest income
    
    
    3,882
    
    
    
    3,963
    
    
    
    4,122
    
    
    
    4,206Provision for loan losses
    
    
    32
    
    
    
    112
    
    
    
    147
    
    
    
    130Gains (losses) from the
sale of assets
    
    
    7
    
    
    
    87
    
    
    
    (9
    )
    
    
    6Securities impairment charge
    
    
    
    
    
    
    (393
    )
    
    
    
    
    
    
    (161
    )Other income
    
    
    1,125
    
    
    
    1,228
    
    
    
    1,112
    
    
    
    1,035Other expense
    
    
    3,041
    
    
    
    2,945
    
    
    
    3,098
    
    
    
    2,924Income before income taxes
    
    
    1,941
    
    
    
    1,828
    
    
    
    1,980
    
    
    
    2,032Income tax expense
    
    
    539
    
    
    
    431
    
    
    
    529
    
    
    
    558Net income
    
    $
    1,402
    
    
    $
    1,397
    
    
    $
    1,451
    
    
    $
    1,474Per-share data:Basic earnings
    
    $
    .32
    
    
    $
    .32
    
    
    $
    .33
    
    
    $
    .34Diluted earnings
    
    
    .32
    
    
    
    .32
    
    
    
    .33
    
    
    
    .34Cash dividends
    
    
    .18
    
    
    
    .18
    
    
    
    .19
    
    
    
    .19




---



##### 



Common Stock Market Prices and Dividends
   2009DividendsQuarter Ended
    
    High
    
    
    Low
    
    
    DeclaredMarch 31
    
    $
    19.00
    
    
    $
    16.00
    
    
    $
    0.19June 30
    
    
    18.50
    
    
    
    16.00
    
    
    
    0.19September 30
    
    
    18.00
    
    
    
    16.80
    
    
    
    0.20December 31
    
    
    17.95
    
    
    
    17.10
    
    
    
    0.20
 2008DividendsQuarter Ended
    
    High
    
    
    Low
    
    
    DeclaredMarch 31
    
    $
    21.50
    
    
    $
    19.50
    
    
    $
    0.18June 30
    
    
    21.50
    
    
    
    20.05
    
    
    
    0.18September 30
    
    
    22.00
    
    
    
    19.60
    
    
    
    0.19December 31
    
    
    21.15
    
    
    
    19.00
    
    
    
    0.19
   Corporate
Information
 Corporate Headquarters
 Investor Information      JoAnn.McMinn@JVBonline.com




---



##### 



Information Availability
 www.JVBonline.com
 www.SEC.gov
   
 Investment Considerations
  Registrar and Transfer Agent
 www.RTCo.com  info@RTCo.com
 www.RTCo.com
   Annual Meeting of Shareholders