Exhibit 13.1
Excerpts from Annual Report to Shareholders
Five-Year Financial Summary   Selected Financial Data
 2008
    
    2007
    
    2006
    
    2005
    
    2004(In thousands of dollars, except share and per share data)BALANCE SHEET INFORMATIONat December 31Assets
    
    $
    428,084
    
    
    $
    420,146
    
    
    $
    415,931
    
    
    $
    410,802
    
    
    $
    397,074Deposits
    
    
    357,031
    
    
    
    359,457
    
    
    
    355,169
    
    
    
    343,466
    
    
    
    332,642Loans, net of allowance for
loan losses
    
    
    312,522
    
    
    
    295,678
    
    
    
    303,246
    
    
    
    295,300
    
    
    
    276,759Investments
    
    
    71,843
    
    
    
    73,676
    
    
    
    65,619
    
    
    
    77,208
    
    
    
    84,157Intangible assets
    
    
    344
    
    
    
    389
    
    
    
    434
    
    
    
    
    
    
    
    Goodwill
    
    
    2,046
    
    
    
    2,046
    
    
    
    2,046
    
    
    
    
    
    
    
    Short-term borrowings
    
    
    10,579
    
    
    
    5,431
    
    
    
    6,112
    
    
    
    9,801
    
    
    
    4,716Long-term debt
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    5,000Stockholders equity
    
    
    48,485
    
    
    
    48,572
    
    
    
    47,786
    
    
    
    47,119
    
    
    
    50,153Number of shares
outstanding *
    
    
    4,341,055
    
    
    
    4,409,445
    
    
    
    4,457,934
    
    
    
    4,503,392
    
    
    
    4,561,258Average for the yearAssets
    
    
    428,744
    
    
    
    424,847
    
    
    
    414,048
    
    
    
    406,706
    
    
    
    393,554Stockholders equity
    
    
    48,674
    
    
    
    47,635
    
    
    
    47,503
    
    
    
    48,403
    
    
    
    48,776Weighted average shares
outstanding *
    
    
    4,376,077
    
    
    
    4,434,859
    
    
    
    4,480,245
    
    
    
    4,550,483
    
    
    
    4,559,168INCOME STATEMENT INFORMATIONYears Ended December 31Total interest income
    
    $
    25,230
    
    
    $
    26,723
    
    
    $
    24,663
    
    
    $
    22,707
    
    
    $
    21,717Total interest expense
    
    
    9,057
    
    
    
    11,060
    
    
    
    10,111
    
    
    
    8,015
    
    
    
    6,438Net interest income
    
    
    16,173
    
    
    
    15,663
    
    
    
    14,552
    
    
    
    14,692
    
    
    
    15,279Provision for loan losses
    
    
    421
    
    
    
    120
    
    
    
    54
    
    
    
    28
    
    
    
    326Other income
    
    
    4,037
    
    
    
    4,199
    
    
    
    3,830
    
    
    
    3,323
    
    
    
    3,445Other expenses
    
    
    12,008
    
    
    
    12,209
    
    
    
    11,245
    
    
    
    11,680
    
    
    
    10,600Income before income taxes
    
    
    7,781
    
    
    
    7,533
    
    
    
    7,083
    
    
    
    6,307
    
    
    
    7,798Federal income tax expense
    
    
    2,057
    
    
    
    2,099
    
    
    
    2,081
    
    
    
    1,741
    
    
    
    1,969Net income
    
    $
    5,724
    
    
    $
    5,434
    
    
    $
    5,002
    
    
    $
    4,566
    
    
    $
    5,829PER SHARE DATA *Earnings per share  basic
    
    $
    1.31
    
    
    $
    1.23
    
    
    $
    1.12
    
    
    $
    1.00
    
    
    $
    1.28Earnings per share  diluted
    
    
    1.31
    
    
    
    1.22
    
    
    
    1.11
    
    
    
    1.00
    
    
    
    1.27Cash dividends
    
    
    0.74
    
    
    
    0.95
    
    
    
    0.66
    
    
    
    1.11
    
    
    
    1.07Book value
    
    
    11.17
    
    
    
    11.02
    
    
    
    10.72
    
    
    
    10.46
    
    
    
    11.00FINANCIAL RATIOSReturn on average assets
    
    
    1.34
    %
    
    
    1.28
    %
    
    
    1.21
    %
    
    
    1.12
    %
    
    
    1.48
    %Return on average equity
    
    
    11.76
    
    
    
    11.41
    
    
    
    10.53
    
    
    
    9.43
    
    
    
    11.95Dividend payout
    
    
    56.62
    
    
    
    77.48
    
    
    
    59.12
    
    
    
    110.71
    
    
    
    83.70Average equity to average
assets
    
    
    11.35
    
    
    
    11.21
    
    
    
    11.47
    
    
    
    11.90
    
    
    
    12.39Loans to deposits (year end)
    
    
    87.53
    
    
    
    82.26
    
    
    
    85.38
    
    
    
    85.98
    
    
    
    83.20
 
 *
    
    All share and per-share data have been restated for effect of the 2 for 1 stock split on October 31, 2005.




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##### 



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
 2008
Financial Performance Overview
  2008
    
    2007
    
    2006
    
    2005
    
    2004Return on average assets
    
    
    1.34
    %
    
    
    1.28
    %
    
    
    1.21
    %
    
    
    1.12
    %
    
    
    1.48
    %Return on average equity
    
    
    11.76
    
    
    
    11.41
    
    
    
    10.53
    
    
    
    9.43
    
    
    
    11.95Yield on earning assets
    
    
    6.48
    
    
    
    6.88
    
    
    
    6.43
    
    
    
    6.00
    
    
    
    5.98Cost to fund earning assets
    
    
    2.33
    
    
    
    2.85
    
    
    
    2.63
    
    
    
    2.12
    
    
    
    1.77Net interest margin (fully tax equivalent)
    
    
    4.34
    
    
    
    4.17
    
    
    
    3.91
    
    
    
    4.00
    
    
    
    4.34Noninterest income (excluding gains on
sales of securities and security
impairment charges) to average assets
    
    
    1.06
    
    
    
    0.99
    
    
    
    0.88
    
    
    
    0.77
    
    
    
    0.78Noninterest expense to average assets
    
    
    2.80
    
    
    
    2.87
    
    
    
    2.72
    
    
    
    2.87
    
    
    
    2.69Net noninterest expense to average assets
    
    
    1.74
    
    
    
    1.88
    
    
    
    1.84
    
    
    
    2.10
    
    
    
    1.91
  
    
    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




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##### 



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




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##### 



Table 1
AVERAGE BALANCE SHEETS AND NET INTEREST INCOME ANALYSIS
 Years Ended December 31,2008
    
    
    
    2007
    
    
    
    2006Average
    
    
    
    
    
    
    Yield/
    
    
    
    Average
    
    
    
    
    
    
    Yield/
    
    
    
    Average
    
    
    
    
    
    
    Yield/Balance (1)
    
    
    Interest
    
    
    Rate
    
    
    
    Balance (1)
    
    
    Interest
    
    
    Rate
    
    
    
    Balance (1)
    
    
    Interest
    
    
    RateASSETSInterest earning assets:Taxable loans (5)
    
    
    $
    298,947
    
    
    $
    21,774
    
    
    
    7.28
    %
    
    
    $
    294,938
    
    
    $
    22,638
    
    
    
    7.68
    %
    
    
    $
    299,488
    
    
    $
    21,622
    
    
    
    7.22
    %Tax-exempt loans
    
    
    
    8,659
    
    
    
    326
    
    
    
    3.76
    
    
    
    
    5,669
    
    
    
    213
    
    
    
    3.76
    
    
    
    
    4,500
    
    
    
    146
    
    
    
    3.24Total loans
    
    
    
    307,606
    
    
    
    22,100
    
    
    
    7.18
    
    
    
    
    300,607
    
    
    
    22,851
    
    
    
    7.60
    
    
    
    
    303,988
    
    
    
    21,768
    
    
    
    7.16Taxable investment securities
    
    
    
    38,646
    
    
    
    1,666
    
    
    
    4.31
    
    
    
    
    51,746
    
    
    
    2,438
    
    
    
    4.71
    
    
    
    
    54,198
    
    
    
    1,975
    
    
    
    3.64Tax-exempt investment securities
    
    
    
    31,999
    
    
    
    1,082
    
    
    
    3.38
    
    
    
    
    24,040
    
    
    
    857
    
    
    
    3.56
    
    
    
    
    19,027
    
    
    
    659
    
    
    
    3.46Total investment securities
    
    
    
    70,645
    
    
    
    2,748
    
    
    
    3.89
    
    
    
    
    75,786
    
    
    
    3,295
    
    
    
    4.35
    
    
    
    
    73,225
    
    
    
    2,634
    
    
    
    3.60Interest bearing deposits
    
    
    
    6,389
    
    
    
    258
    
    
    
    4.04
    
    
    
    
    5,876
    
    
    
    254
    
    
    
    4.32
    
    
    
    
    5,730
    
    
    
    244
    
    
    
    4.26Federal funds sold
    
    
    
    4,846
    
    
    
    124
    
    
    
    2.56
    
    
    
    
    6,358
    
    
    
    323
    
    
    
    5.08
    
    
    
    
    324
    
    
    
    17
    
    
    
    5.25Total interest earning assets
    
    
    
    389,486
    
    
    
    25,230
    
    
    
    6.48
    
    
    
    
    388,627
    
    
    
    26,723
    
    
    
    6.88
    
    
    
    
    383,267
    
    
    
    24,663
    
    
    
    6.43Non-interest earning assets:Cash and due from banks
    
    
    
    10,167
    
    
    
    
    
    
    
    
    
    
    
    
    9,384
    
    
    
    
    
    
    
    
    
    
    
    
    9,764Allowance for loan losses
    
    
    
    (2,391
    )
    
    
    
    
    
    
    
    
    
    
    
    (2,460
    )
    
    
    
    
    
    
    
    
    
    
    
    (2,761
    )Premises and equipment
    
    
    
    5,968
    
    
    
    
    
    
    
    
    
    
    
    
    6,366
    
    
    
    
    
    
    
    
    
    
    
    
    6,147Other assets (7)
    
    
    
    25,514
    
    
    
    
    
    
    
    
    
    
    
    
    22,930
    
    
    
    
    
    
    
    
    
    
    
    
    17,631Total assets
    
    
    $
    428,744
    
    
    
    
    
    
    
    
    
    
    
    $
    424,847
    
    
    
    
    
    
    
    
    
    
    
    $
    414,048LIABILITIES
AND STOCKHOLDERS EQUITYInterest bearing liabilities:Interest bearing demand deposits (2)
    
    
    $
    72,051
    
    
    
    541
    
    
    
    0.75
    
    
    
    $
    82,877
    
    
    
    1,751
    
    
    
    2.11
    
    
    
    $
    77,570
    
    
    
    1,675
    
    
    
    2.16Savings deposits
    
    
    
    37,248
    
    
    
    362
    
    
    
    0.97
    
    
    
    
    35,247
    
    
    
    556
    
    
    
    1.58
    
    
    
    
    40,031
    
    
    
    629
    
    
    
    1.57Time deposits
    
    
    
    204,809
    
    
    
    7,992
    
    
    
    3.90
    
    
    
    
    199,239
    
    
    
    8,437
    
    
    
    4.23
    
    
    
    
    187,283
    
    
    
    7,168
    
    
    
    3.83Other, including short-term borrowings,
long-term debt and other
interest bearing liabilities
    
    
    
    10,253
    
    
    
    162
    
    
    
    1.58
    
    
    
    
    7,804
    
    
    
    316
    
    
    
    4.05
    
    
    
    
    14,822
    
    
    
    639
    
    
    
    4.31Total interest bearing liabilities
    
    
    
    324,361
    
    
    
    9,057
    
    
    
    2.79
    
    
    
    
    325,167
    
    
    
    11,060
    
    
    
    3.40
    
    
    
    
    319,706
    
    
    
    10,111
    
    
    
    3.16Non-interest bearing liabilities:Demand deposits
    
    
    
    49,137
    
    
    
    
    
    
    
    
    
    
    
    
    45,433
    
    
    
    
    
    
    
    
    
    
    
    
    41,587Other
    
    
    
    6,572
    
    
    
    
    
    
    
    
    
    
    
    
    6,612
    
    
    
    
    
    
    
    
    
    
    
    
    5,252Stockholders equity
    
    
    
    48,674
    
    
    
    
    
    
    
    
    
    
    
    
    47,635
    
    
    
    
    
    
    
    
    
    
    
    
    47,503Total liabilities
and stockholders equity
    
    
    $
    428,744
    
    
    
    
    
    
    
    
    
    
    
    $
    424,847
    
    
    
    
    
    
    
    
    
    
    
    $
    414,048Net interest income
    
    
    
    
    
    
    $
    16,173
    
    
    
    
    
    
    
    
    
    
    
    $
    15,663
    
    
    
    
    
    
    
    
    
    
    
    $
    14,552Net margin on interest earning assets (3)
    
    
    
    
    
    
    
    
    
    
    
    4.15
    %
    
    
    
    
    
    
    
    
    
    
    
    4.03
    %
    
    
    
    
    
    
    
    
    
    
    
    3.80
    %Net interest income and margin 
Tax equivalent basis (4)
    
    
    
    
    
    
    $
    16,898
    
    
    
    4.34
    %
    
    
    
    
    
    
    $
    16,214
    
    
    
    4.17
    %
    
    
    
    
    
    
    $
    14,967
    
    
    
    3.91
    %
 
 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
 
 2008 Compared to 2007

    
    
    
    2007 Compared to 2006Increase (Decrease) Due To (6)
    
    
    
    Increase (Decrease) Due To (6)Volume
    
    
    Rate
    
    
    Total
    
    
    
    Volume
    
    
    Rate
    
    
    TotalASSETSInterest earning assets:Taxable loans (5)
    
    
    $
    310
    
    
    $
    (1,174
    )
    
    $
    (864
    )
    
    
    $
    (335
    )
    
    $
    1,351
    
    
    $
    1,016Tax-exempt loans
    
    
    
    113
    
    
    
    
    
    
    
    113
    
    
    
    
    42
    
    
    
    25
    
    
    
    67Total loans
    
    
    
    423
    
    
    
    (1,174
    )
    
    
    (751
    )
    
    
    
    (293
    )
    
    
    1,376
    
    
    
    1,083Taxable investment securities
    
    
    
    (578
    )
    
    
    (194
    )
    
    
    (772
    )
    
    
    
    (93
    )
    
    
    556
    
    
    
    463Tax-exempt investment securities
    
    
    
    270
    
    
    
    (45
    )
    
    
    225
    
    
    
    
    178
    
    
    
    20
    
    
    
    198Total investment securities
    
    
    
    (308
    )
    
    
    (239
    )
    
    
    (547
    )
    
    
    
    85
    
    
    
    576
    
    
    
    661Interest bearing deposits
    
    
    
    21
    
    
    
    (17
    )
    
    
    4
    
    
    
    
    7
    
    
    
    3
    
    
    
    10Federal funds sold
    
    
    
    (65
    )
    
    
    (134
    )
    
    
    (199
    )
    
    
    
    307
    
    
    
    (1
    )
    
    
    306Total interest earning assets
    
    
    
    71
    
    
    
    (1,564
    )
    
    
    (1,493
    )
    
    
    
    106
    
    
    
    1,954
    
    
    
    2,060LIABILITIES
AND STOCKHOLDERS EQUITYInterest bearing liabilities:Interest bearing demand deposits (2)
    
    
    
    (204
    )
    
    
    (1,006
    )
    
    
    (1,210
    )
    
    
    
    115
    
    
    
    (39
    )
    
    
    76Savings deposits
    
    
    
    31
    
    
    
    (225
    )
    
    
    (194
    )
    
    
    
    (77
    )
    
    
    4
    
    
    
    (73
    )Time deposits
    
    
    
    230
    
    
    
    (675
    )
    
    
    (445
    )
    
    
    
    482
    
    
    
    787
    
    
    
    1,269Other, including short-term
borrowings,
long-term debt and other
interest bearing liabilities
    
    
    
    79
    
    
    
    (233
    )
    
    
    (154
    )
    
    
    
    (286
    )
    
    
    (37
    )
    
    
    (323
    )Total interest bearing liabilities
    
    
    
    136
    
    
    
    (2,139
    )
    
    
    (2,003
    )
    
    
    
    234
    
    
    
    715
    
    
    
    949Net interest income
    
    
    $
    (65
    )
    
    $
    575
    
    
    $
    510
    
    
    
    $
    (128
    )
    
    $
    1,239
    
    
    $
    1,111
 
 (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: $436 in 2008,
$(127) in 2007 and $(495) in 2006.




---



##### 



Provision for Loan Losses
  Noninterest Income
 www.JVBonline.com




---



##### 



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
    %
 Outlook for 2009
     
    
    There is a higher value in a strong net interest margin than in high growth
levels.
    
    Solid, repeatable non-interest revenues result from service-focused strategies.
    
    Centralized cost controls are imperative.




---



##### 



2007
Financial Performance Overview
   
    
    Interest rate environment  an increase in net interest margin despite a sustained
flat/inverted yield curve
    
    Full-year effect of acquisitions made in 2006
    
    Restructured investment portfolio
    
    Noninterest income improvement
   2007
    
    2006% of Average
    
    
    
    
    
    % of AverageAssets
    
    
    
    
    
    AssetsNet interest income
    
    $
    15,663
    
    
    
    3.69
    %
    
    $
    14,552
    
    
    
    3.51
    %Provision for loan losses
    
    
    (120
    )
    
    
    (0.03
    )
    
    
    (54
    )
    
    
    (0.01
    )Trust fees
    
    
    444
    
    
    
    0.10
    
    
    
    435
    
    
    
    0.11Deposit service fees
    
    
    1,656
    
    
    
    0.39
    
    
    
    1,497
    
    
    
    0.36BOLI
    
    
    440
    
    
    
    0.10
    
    
    
    433
    
    
    
    0.10Commissions
from sales of non-deposit products
    
    
    711
    
    
    
    0.17
    
    
    
    513
    
    
    
    0.12Income from unconsolidated subsidiary
    
    
    192
    
    
    
    0.05
    
    
    
    80
    
    
    
    0.02Other fees
    
    
    774
    
    
    
    0.18
    
    
    
    681
    
    
    
    0.16Security gains (losses)
    
    
    (19
    )
    
    
    (0.00
    )
    
    
    181
    
    
    
    0.04Gains on sale of other assets
    
    
    1
    
    
    
    0.00
    
    
    
    10
    
    
    
    0.00Total noninterest income
    
    
    4,199
    
    
    
    0.99
    
    
    
    3,830
    
    
    
    0.93Employee expense
    
    
    (6,592
    )
    
    
    (1.55
    )
    
    
    (6,064
    )
    
    
    (1.46
    )Occupancy and equipment
    
    
    (1,580
    )
    
    
    (0.37
    )
    
    
    (1,424
    )
    
    
    (0.34
    )Data processing expense
    
    
    (1,332
    )
    
    
    (0.31
    )
    
    
    (1,204
    )
    
    
    (0.29
    )Director compensation
    
    
    (455
    )
    
    
    (0.11
    )
    
    
    (465
    )
    
    
    (0.11
    )Professional fees
    
    
    (437
    )
    
    
    (0.10
    )
    
    
    (378
    )
    
    
    (0.09
    )Taxes, other than income
    
    
    (546
    )
    
    
    (0.13
    )
    
    
    (505
    )
    
    
    (0.12
    )Intangible amortization
    
    
    (45
    )
    
    
    (0.01
    )
    
    
    (15
    )
    
    
    (0.00
    )Other noninterest expense
    
    
    (1,222
    )
    
    
    (0.29
    )
    
    
    (1,190
    )
    
    
    (0.29
    )Total noninterest expense
    
    
    (12,209
    )
    
    
    (2.87
    )
    
    
    (11,245
    )
    
    
    (2.72
    )Income tax expense
    
    
    (2,099
    )
    
    
    (0.49
    )
    
    
    (2,081
    )
    
    
    (0.50
    )Net income
    
    $
    5,434
    
    
    
    1.28
    %
    
    $
    5,002
    
    
    
    1.21
    %Average assets
    
    $
    424,847
    
    
    
    
    
    
    $
    414,048




---



##### 



Net Interest Income
       Provision for Loan Losses
  Noninterest Income




---



##### 



Noninterest Expense
     Income Taxes
  Net Income




---



##### 



2007
    
    2006
    
    2005Net income
    
    $
    5,434
    
    
    $
    5,002
    
    
    $
    4,566Return on average assets
    
    
    1.28
    %
    
    
    1.21
    %
    
    
    1.12
    %Return on average equity
    
    
    11.41
    %
    
    
    10.53
    %
    
    
    9.43
    %




---



##### 



FINANCIAL CONDITION
 Balance Sheet Summary
  Table 3
 2008
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    2006Average
    
    
    Increase(Decrease)
    
    
    Average
    
    
    Increase(Decrease)
    
    
    AverageBalance
    
    
    Amount
    
    
    %
    
    
    Balance
    
    
    Amount
    
    
    %
    
    
    BalanceFunding Uses:Loans:Commercial
    
    $
    81,291
    
    
    $
    (2,248
    )
    
    
    (2.7
    %)
    
    $
    83,539
    
    
    $
    (3,704
    )
    
    
    (4.2
    %)
    
    $
    87,243Tax-exempt loans
    
    
    8,659
    
    
    
    2,990
    
    
    
    52.7
    
    
    
    5,669
    
    
    
    1,169
    
    
    
    26.0
    
    
    
    4,500Mortgage
    
    
    144,028
    
    
    
    8,054
    
    
    
    5.9
    
    
    
    135,974
    
    
    
    (2,449
    )
    
    
    (1.8
    )
    
    
    138,423Consumer, including Home Equity
    
    
    73,628
    
    
    
    (1,797
    )
    
    
    (2.4
    )
    
    
    75,425
    
    
    
    1,603
    
    
    
    2.2
    
    
    
    73,822Securities
    
    
    38,646
    
    
    
    (13,100
    )
    
    
    (25.3
    )
    
    
    51,746
    
    
    
    (2,452
    )
    
    
    (4.5
    )
    
    
    54,198Tax-exempt securities
    
    
    31,999
    
    
    
    7,959
    
    
    
    33.1
    
    
    
    24,040
    
    
    
    5,013
    
    
    
    26.3
    
    
    
    19,027Interest bearing deposits
    
    
    6,389
    
    
    
    513
    
    
    
    8.7
    
    
    
    5,876
    
    
    
    146
    
    
    
    2.5
    
    
    
    5,730Federal funds sold
    
    
    4,846
    
    
    
    (1,512
    )
    
    
    (23.8
    )
    
    
    6,358
    
    
    
    6,034
    
    
    
    1,862.3
    
    
    
    324Total interest earning assets
    
    
    389,486
    
    
    
    859
    
    
    
    0.2
    
    
    
    388,627
    
    
    
    5,360
    
    
    
    1.4
    
    
    
    383,267Investment in unconsolidated subsidiary
    
    
    3,077
    
    
    
    172
    
    
    
    5.9
    
    
    
    2,905
    
    
    
    2,025
    
    
    
    230.1
    
    
    
    880Bank-owned life insurance and annuities
    
    
    12,442
    
    
    
    998
    
    
    
    8.7
    
    
    
    11,444
    
    
    
    675
    
    
    
    6.3
    
    
    
    10,769Goodwill and intangible assets
    
    
    2,414
    
    
    
    (45
    )
    
    
    (1.8
    )
    
    
    2,459
    
    
    
    1,679
    
    
    
    215.3
    
    
    
    780Other non-interest earning assets
    
    
    23,280
    
    
    
    1,281
    
    
    
    5.8
    
    
    
    21,999
    
    
    
    391
    
    
    
    1.8
    
    
    
    21,608Unrealized gains (losses) on securities
    
    
    436
    
    
    
    563
    
    
    
    443.3
    
    
    
    (127
    )
    
    
    368
    
    
    
    74.3
    
    
    
    (495
    )Less: Allowance for loan losses
    
    
    (2,391
    )
    
    
    69
    
    
    
    2.8
    
    
    
    (2,460
    )
    
    
    301
    
    
    
    10.9
    
    
    
    (2,761
    )Total uses
    
    $
    428,744
    
    
    $
    3,897
    
    
    
    0.9
    %
    
    $
    424,847
    
    
    $
    10,799
    
    
    
    2.6
    %
    
    $
    414,048Funding Sources:Interest bearing demand deposits
    
    $
    72,051
    
    
    $
    (10,826
    )
    
    
    (13.1
    %)
    
    $
    82,877
    
    
    $
    5,307
    
    
    
    6.8
    %
    
    $
    77,570Savings deposits
    
    
    37,248
    
    
    
    2,001
    
    
    
    5.7
    
    
    
    35,247
    
    
    
    (4,784
    )
    
    
    (12.0
    )
    
    
    40,031Time deposits under $100,000
    
    
    166,279
    
    
    
    2,491
    
    
    
    1.5
    
    
    
    163,788
    
    
    
    9,481
    
    
    
    6.1
    
    
    
    154,307Time deposits over $100,000
    
    
    38,530
    
    
    
    3,079
    
    
    
    8.7
    
    
    
    35,451
    
    
    
    2,475
    
    
    
    7.5
    
    
    
    32,976Repurchase agreements
    
    
    5,368
    
    
    
    (1,454
    )
    
    
    (21.3
    )
    
    
    6,822
    
    
    
    1,294
    
    
    
    23.4
    
    
    
    5,528Short-term borrowings
    
    
    2,379
    
    
    
    2,364
    
    
    
    15,760.0
    
    
    
    15
    
    
    
    (5,389
    )
    
    
    (99.7
    )
    
    
    5,404Long-term debt
    
    
    1,448
    
    
    
    1,448
    
    
    
    
    
    
    
    
    
    
    
    (3,014
    )
    
    
    (100.0
    )
    
    
    3,014Other interest bearing liabilities
    
    
    1,058
    
    
    
    91
    
    
    
    9.4
    
    
    
    967
    
    
    
    91
    
    
    
    10.4
    
    
    
    876Total interest bearing liabilities
    
    
    324,361
    
    
    
    (806
    )
    
    
    (0.2
    )
    
    
    325,167
    
    
    
    5,461
    
    
    
    1.7
    
    
    
    319,706Demand deposits
    
    
    49,137
    
    
    
    3,704
    
    
    
    8.2
    
    
    
    45,433
    
    
    
    3,846
    
    
    
    9.2
    
    
    
    41,587Other liabilities
    
    
    6,572
    
    
    
    (40
    )
    
    
    (0.6
    )
    
    
    6,612
    
    
    
    1,360
    
    
    
    25.9
    
    
    
    5,252Shareholders equity
    
    
    48,674
    
    
    
    1,039
    
    
    
    2.2
    
    
    
    47,635
    
    
    
    132
    
    
    
    0.3
    
    
    
    47,503Total sources
    
    $
    428,744
    
    
    $
    3,897
    
    
    
    0.9
    %
    
    $
    424,847
    
    
    $
    10,799
    
    
    
    2.6
    %
    
    $
    414,048




---



##### 



Loans
  December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Commercial, financial and agricultural
    
    $
    38,755
    
    
    $
    28,842
    
    
    $
    23,341
    
    
    $
    21,661
    
    
    $
    23,301Real estate  commercial
    
    
    32,171
    
    
    
    29,021
    
    
    
    29,492
    
    
    
    27,588
    
    
    
    25,068Real estate  construction
    
    
    22,144
    
    
    
    27,223
    
    
    
    29,489
    
    
    
    28,323
    
    
    
    24,968Real estate  mortgage
    
    
    140,016
    
    
    
    127,324
    
    
    
    132,572
    
    
    
    135,992
    
    
    
    132,243Home equity
    
    
    61,094
    
    
    
    63,960
    
    
    
    67,842
    
    
    
    62,288
    
    
    
    54,249Obligations of states and political subdivisions
    
    
    7,177
    
    
    
    6,593
    
    
    
    5,129
    
    
    
    4,827
    
    
    
    4,294Personal
    
    
    13,920
    
    
    
    15,319
    
    
    
    18,545
    
    
    
    18,498
    
    
    
    17,735Unearned interest
    
    
    (145
    )
    
    
    (282
    )
    
    
    (592
    )
    
    
    (1,114
    )
    
    
    (2,110
    )Total
    
    $
    315,132
    
    
    $
    298,000
    
    
    $
    305,818
    
    
    $
    298,063
    
    
    $
    279,748
  2008
    
    
    2007
    
    
    2006Beginning balance
    
    $
    298,000
    
    
    $
    305,818
    
    
    $
    298,063New loans, net of repayments
    
    
    17,595
    
    
    
    (7,051
    )
    
    
    4,916Loans acquired in branch purchase
    
    
    
    
    
    
    
    
    
    
    3,810Loans charged off
    
    
    (156
    )
    
    
    (418
    )
    
    
    (307
    )Loans transferred to other real estate owned and
other adjustments to carrying value
    
    
    (307
    )
    
    
    (349
    )
    
    
    (664
    )Net change
    
    
    17,132
    
    
    
    (7,818
    )
    
    
    7,755Ending balance
    
    $
    315,132
    
    
    $
    298,000
    
    
    $
    305,818




---



##### 



Table 4
Non-Performing Loans
 December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(In thousands)Nonaccrual loans
    
    $
    1,255
    
    
    $
    
    
    
    $
    1,240
    
    
    $
    1,515
    
    
    $
    Accruing loans past due 90 days or more
    
    
    664
    
    
    
    837
    
    
    
    214
    
    
    
    724
    
    
    
    365Restructured loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total non-performing loans
    
    $
    1,919
    
    
    $
    837
    
    
    $
    1,454
    
    
    $
    2,239
    
    
    $
    365
  Allowance for Loan Losses




---



##### 




    
    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;
    
    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 factors and business trends relative to
specific types of loans are assessed. Juniatas lending is concentrated within central
Pennsylvania and, accordingly, the loan portfolio quality is dependent upon localized
economic factors such as: unemployment rates, commercial real estate vacancy rates,
consumer delinquency trends and residential housing appreciation rates. Generally, the
local unemployment rate consistently slightly exceeds the national and state statistics.
Additionally, some of the larger employers in the local market area are experiencing some
financial stress that has resulted in loss of jobs in the last two years. Fuel cost
escalation has put profit pressure on trucking firms, and increased cost of
employer-provided medical insurance has added to the profit pressures of employers in
general; and
    
    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;
    
    Changes in loan volumes;
    
    Changes in experience, ability and depth of management; and
    
    External factors, such as legal and regulatory requirements.




---



##### 



Years Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Balance of allowance  beginning of period
    
    $
    2,322
    
    
    $
    2,572
    
    
    $
    2,763
    
    
    $
    2,989
    
    
    $
    2,820Loans charged off:Commercial, financial and agricultural
    
    
    43
    
    
    
    291
    
    
    
    159
    
    
    
    171
    
    
    
    43Real estate  commercial
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real estate  construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    Real estate  mortgage
    
    
    15
    
    
    
    66
    
    
    
    19
    
    
    
    3
    
    
    
    10Personal
    
    
    62
    
    
    
    61
    
    
    
    129
    
    
    
    75
    
    
    
    122Total charge-offs
    
    
    156
    
    
    
    418
    
    
    
    307
    
    
    
    279
    
    
    
    175Recoveries of loans previously charged off:Commercial, financial and agricultural
    
    
    5
    
    
    
    8
    
    
    
    5
    
    
    
    6
    
    
    
    1Real estate  commercial
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Real estate  construction
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5
    
    
    
    Real estate  mortgage
    
    
    5
    
    
    
    8
    
    
    
    
    
    
    
    
    
    
    
    2Personal
    
    
    13
    
    
    
    32
    
    
    
    25
    
    
    
    14
    
    
    
    15Total recoveries
    
    
    23
    
    
    
    48
    
    
    
    30
    
    
    
    25
    
    
    
    18Net charge-offs
    
    
    133
    
    
    
    370
    
    
    
    277
    
    
    
    254
    
    
    
    157Provision for loan losses
    
    
    421
    
    
    
    120
    
    
    
    54
    
    
    
    28
    
    
    
    326Branch acquisition loan loss reserve
    
    
    
    
    
    
    
    
    
    
    32
    
    
    
    
    
    
    
    Balance of allowance  end of period
    
    $
    2,610
    
    
    $
    2,322
    
    
    $
    2,572
    
    
    $
    2,763
    
    
    $
    2,989Ratio of net charge-offs during period toaverage loans outstanding
    
    
    0.04
    %
    
    
    0.12
    %
    
    
    0.09
    %
    
    
    0.09
    %
    
    
    0.06
    %
  Allocation of the Allowance for Loan Losses (in thousands)2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Commercial
    
    $
    707
    
    
    $
    660
    
    
    $
    864
    
    
    $
    956
    
    
    $
    1,087Real estate
    
    
    1,202
    
    
    
    933
    
    
    
    1,011
    
    
    
    1,112
    
    
    
    602Consumer
    
    
    701
    
    
    
    729
    
    
    
    697
    
    
    
    695
    
    
    
    1,002Unallocated
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    298Total allowance for loan losses
    
    $
    2,610
    
    
    $
    2,322
    
    
    $
    2,572
    
    
    $
    2,763
    
    
    $
    2,989




---



##### 



Percent of Loan Type to Total Loans2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004Commercial (non-real estate)
    
    
    14.6
    %
    
    
    11.9
    %
    
    
    9.3
    %
    
    
    8.9
    %
    
    
    9.9
    %Real estate
    
    
    81.0
    %
    
    
    83.0
    %
    
    
    84.6
    %
    
    
    84.9
    %
    
    
    83.8
    %Consumer
    
    
    4.4
    %
    
    
    5.1
    %
    
    
    6.1
    %
    
    
    6.2
    %
    
    
    6.3
    %100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %
 Investments
  2008
    
    
    2007
    
    
    2006Beginning balance
    
    $
    81,946
    
    
    $
    66,921
    
    
    $
    77,274Purchases of investment securities
    
    
    36,063
    
    
    
    63,295
    
    
    
    19,281Sales and maturities of investment securities
    
    
    (38,996
    )
    
    
    (55,357
    )
    
    
    (30,871
    )Impairment charge
    
    
    (554
    )
    
    
    (33
    )
    
    
    Adjustment in market value of AFS securities
    
    
    878
    
    
    
    372
    
    
    
    414Amortization/Accretion
    
    
    (126
    )
    
    
    (104
    )
    
    
    (133
    )Federal Home Loan Bank stock, net change
    
    
    1,102
    
    
    
    19
    
    
    
    (280
    )Federal funds sold, net change
    
    
    (7,500
    )
    
    
    6,300
    
    
    
    1,200Interest bearing deposits with others, net change
    
    
    (777
    )
    
    
    533
    
    
    
    36Net change
    
    
    (9,910
    )
    
    
    15,025
    
    
    
    (10,353
    )Ending balance
    
    $
    72,036
    
    
    $
    81,946
    
    
    $
    66,921




---



##### 



December 31, 2008WeightedSecurities
    
    Carrying
    
    
    AverageType and maturity
    
    Value
    
    
    YieldU.S. Treasury securities and obligations of U.S. 
Government agencies and corporationsWithin one year
    
    $
    21,851
    
    
    
    3.92
    %After one year but within five years
    
    
    3,117
    
    
    
    4.68
    %After five years but within ten years
    
    
    After ten years
    
    
    24,968
    
    
    
    4.01
    %Obligations of state and political subdivisionsWithin one year
    
    
    9,727
    
    
    
    4.98
    %After one year but within five years
    
    
    24,735
    
    
    
    4.72
    %After five years but within ten years
    
    
    1,053
    
    
    
    5.23
    %After ten years
    
    
    35,515
    
    
    
    4.81
    %Corporate Notes and OtherWithin one yearAfter one year but within five years
    
    
    957
    
    
    
    4.00
    %After five years but within ten yearsAfter ten years
    
    
    957
    
    
    
    4.00
    %Mortgage-backed securities
Within one year
    
    
    210
    
    
    
    4.58
    %After one year but within five years
    
    
    After five years but within ten years
    
    
    1,657
    
    
    
    5.48
    %After ten years
    
    
    1,867
    
    
    
    5.38
    %Equity securities
    
    
    1,014$
    64,321
 Bank Owned Life Insurance and Annuities
  2008
    
    
    2007
    
    
    2006Beginning balance
    
    $
    12,344
    
    
    $
    11,017
    
    
    $
    10,647Bank-owned life insurance
    
    
    282
    
    
    
    1,365
    
    
    
    446Annuities
    
    
    (44
    )
    
    
    (38
    )
    
    
    (76
    )Net change
    
    
    238
    
    
    
    1,327
    
    
    
    370Ending balance
    
    $
    12,582
    
    
    $
    12,344
    
    
    $
    11,017




---



##### 



Investment in Unconsolidated Subsidiary
  Goodwill and Intangible Assets
  Deferred Taxes
  Other Non-Interest Earning Assets




---



##### 



2008
    
    2007
    
    2006Beginning balance
    
    $
    24,771
    
    
    $
    29,375
    
    
    $
    27,581Cash and due from banks
    
    
    10
    
    
    
    (4,222
    )
    
    
    103Premises and equipment, net
    
    
    102
    
    
    
    730
    
    
    
    331Other real estate owned
    
    
    (6
    )
    
    
    154
    
    
    
    133Other receivables and prepaid expenses
    
    
    501
    
    
    
    (1,266
    )
    
    
    1,227Net change
    
    
    607
    
    
    
    (4,604
    )
    
    
    1,794Ending balance
    
    $
    25,378
    
    
    $
    24,771
    
    
    $
    29,375
 Deposits
  2008
    
    
    2007
    
    

    2006Beginning balance
    
    $
    359,457
    
    
    $
    355,169
    
    

    $343,467Acquired inOther
    
    branchchanges
    
    purchaseDemand deposits
    
    
    5,445
    
    
    
    5,926
    
    
    
    (4,457
    )
    
    
    1,245Interest bearing demand deposits
    
    
    (12,722
    )
    
    
    (365
    )
    
    
    3,469
    
    
    
    3,195Savings deposits
    
    
    3,237
    
    
    
    (2,340
    )
    
    
    (8,855
    )
    
    
    1,369Time deposits, $100,000 and greater
    
    
    2,751
    
    
    
    (1,724
    )
    
    
    (3,975
    )
    
    
    2,376Time deposits, other
    
    
    (1,137
    )
    
    
    2,791
    
    
    
    5,430
    
    
    
    11,905Net change
    
    
    (2,426
    )
    
    
    4,288
    
    
    
    (8,388
    )
    
    
    20,090Ending balance
    
    $
    357,031
    
    
    $
    359,457
    
    

    $355,169
  
 2008
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    2006Average
    
    
    Increase(Decrease)
    
    
    Average
    
    
    Increase(Decrease)
    
    
    AverageBalance
    
    
    Amount
    
    
    %
    
    
    Balance
    
    
    Amount
    
    
    %
    
    
    BalanceInterest bearing demand deposits
    
    $
    72,051
    
    
    $
    (10,826
    )
    
    
    (13.1
    )%
    
    $
    82,877
    
    
    $
    5,307
    
    
    
    6.8
    %
    
    $
    77,570Savings deposits
    
    
    37,248
    
    
    
    2,001
    
    
    
    5.7
    
    
    
    35,247
    
    
    
    (4,784
    )
    
    
    (12.0
    )
    
    
    40,031Demand deposits
    
    
    49,137
    
    
    
    3,704
    
    
    
    8.2
    
    
    
    45,433
    
    
    
    3,846
    
    
    
    9.2
    
    
    
    41,587Total core (transaction) accounts
    
    
    158,436
    
    
    
    (5,121
    )
    
    
    (3.1
    )
    
    
    163,557
    
    
    
    4,369
    
    
    
    2.7
    
    
    
    159,188Time deposits, $100,000 and greater
    
    
    38,530
    
    
    
    3,079
    
    
    
    8.7
    
    
    
    35,451
    
    
    
    2,475
    
    
    
    7.5
    
    
    
    32,976Time deposits, other
    
    
    166,279
    
    
    
    2,491
    
    
    
    1.5
    
    
    
    163,788
    
    
    
    9,481
    
    
    
    6.1
    
    
    
    154,307Total time deposits
    
    
    204,809
    
    
    
    5,570
    
    
    
    2.8
    
    
    
    199,239
    
    
    
    11,956
    
    
    
    6.4
    
    
    
    187,283Total deposits
    
    $
    363,245
    
    
    $
    449
    
    
    
    0.1
    %
    
    $
    362,796
    
    
    $
    16,325
    
    
    
    4.7
    %
    
    $
    346,471




---



##### 








---



##### 



Other Interest Bearing Liabilities
  
 2008
    
    
    
    
    
    
    
    
    
    
    2007
    
    
    
    
    
    
    
    
    
    
    2006Average
    
    
    Increase(Decrease)
    
    
    Average
    
    
    Increase(Decrease)
    
    
    AverageBalance
    
    
    Amount
    
    
    %
    
    
    Balance
    
    
    Amount
    
    
    %
    
    
    BalanceRepurchase agreements
    
    $
    5,368
    
    
    $
    (1,454
    )
    
    
    (21.3
    )%
    
    $
    6,822
    
    
    $
    1,294
    
    
    
    23.4
    %
    
    $
    5,528Short-term borrowings
    
    
    2,379
    
    
    
    2,364
    
    
    
    15,760.0
    
    
    
    15
    
    
    
    (5,389
    )
    
    
    (99.7
    )
    
    
    5,404Long-term debt
    
    
    1,448
    
    
    
    1,448
    
    
    
    
    
    
    
    
    
    
    
    (3,014
    )
    
    
    (100.0
    )
    
    
    3,014Other interest bearing liabilities
    
    
    1,058
    
    
    
    91
    
    
    
    9.4
    
    
    
    967
    
    
    
    91
    
    
    
    10.4
    
    
    
    876$
    10,253
    
    
    $
    2,449
    
    
    
    31.4
    %
    
    $
    7,804
    
    
    $
    (7,018
    )
    
    
    (47.3
    )%
    
    $
    14,822
 Pension Plans
  Stockholders Equity




---



##### 



2008
    
    2007
    
    2006Beginning balance
    
    $
    48,572
    
    
    $
    47,786
    
    
    $
    47,119Net income
    
    
    5,724
    
    
    
    5,434
    
    
    
    5,002Dividends
    
    
    (3,241
    )
    
    
    (4,210
    )
    
    
    (2,957
    )Stock-based compensation
    
    
    40
    
    
    
    43
    
    
    
    39Repurchase of stock, net of re-issuance
    
    
    (1,440
    )
    
    
    (1,022
    )
    
    
    (1,013
    )Net change in unrealized security gains (losses)
    
    
    563
    
    
    
    260
    
    
    
    274Cumulative
effect of change in accounting for pension and post-retirement benefits, net of tax
    
    
    
    
    
    
    
    
    
    
    (763
    )Net change in minimum pension liability, net of tax
    
    
    
    
    
    
    
    
    
    
    85Defined benefit retirement plan adjustments net of tax
    
    
    (1,253
    )
    
    
    281
    
    
    
    Effect of implementation of EITF 06-4
    
    
    (480
    )
    
    
    
    
    
    
    Net change
    
    
    (87
    )
    
    
    786
    
    
    
    667Ending balance
    
    $
    48,485
    
    
    $
    48,572
    
    
    $
    47,786
     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
    
    
    $
    203,618
    
    
    $
    108,592
    
    
    $
    76,509
    
    
    $
    18,517
    
    
    $
    Federal Funds borrowed and
security repurchase agreements
    
    
    12
    
    
    
    10,579
    
    
    
    10,579
    
    
    
    
    
    
    
    
    
    
    
    Long-term debt
    
    
    12
    
    
    
    5,000
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    Operating lease obligations
    
    
    13
    
    
    
    402
    
    
    
    102
    
    
    
    200
    
    
    
    78
    
    
    
    22Other long-term liabilities3rd party data processor contract
    
    
    22
    
    
    
    306
    
    
    
    204
    
    
    
    102
    
    
    
    
    
    
    
    Supplemental retirement and
deferred compensation
    
    
    18
    
    
    
    4,407
    
    
    
    457
    
    
    
    948
    
    
    
    738
    
    
    
    2,264$
    224,312
    
    
    $
    119,934
    
    
    $
    82,759
    
    
    $
    19,333
    
    
    $
    2,286




---



##### 



Capital Risk
  Market / Interest Rate Risk




---



##### 



Change in NetChange in
    
    Interest Income Due
    
    Change in Net
    
    Total Change inInterest Rates
    
    to Interest Rate
    
    Interest Income Due
    
    Net Interest(Basis Points)
    
    Risk (Static)
    
    to Imbedded Options
    
    Income300
    
    
    $
    (250
    )
    
    $
    237
    
    
    $
    (13
    )200
    
    
    
    (167
    )
    
    
    115
    
    
    
    (52
    )100
    
    
    
    (83
    )
    
    
    27
    
    
    
    (56
    )0
    
    
    
    
    
    
    
    
    
    
    
    




---



##### 



Table 5
MATURITY DISTRIBUTION
AS OF DECEMBER 31, 2008   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
    
    $
    193
    
    
    $
    
    
    
    $
    5,250
    
    
    $
    75
    
    
    $
    
    
    
    $
    5,518Federal funds sold
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Investment securities:U.S. Treasury securities and obligations of
U.S. Government agencies and corporations
    
    
    7,098
    
    
    
    11,675
    
    
    
    3,079
    
    
    
    3,117
    
    
    
    
    
    
    
    24,969Obligations of state and political subdivisions
    
    
    3,070
    
    
    
    1,412
    
    
    
    5,245
    
    
    
    24,734
    
    
    
    1,053
    
    
    
    35,514Corporate notes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    957
    
    
    
    
    
    
    
    957Mortgage-backed securities
    
    
    9
    
    
    
    
    
    
    
    200
    
    
    
    
    
    
    
    1,658
    
    
    
    1,867Stocks
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,014
    
    
    
    1,014Loans:Commercial, financial, and agricultural
    
    
    25,872
    
    
    
    245
    
    
    
    2,505
    
    
    
    7,076
    
    
    
    3,057
    
    
    
    38,755Real estate  commercial
    
    
    19,455
    
    
    
    
    
    
    
    
    
    
    
    3,921
    
    
    
    8,795
    
    
    
    32,171Real estate  construction
    
    
    22,144
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    22,144Real estate  mortgage
    
    
    329
    
    
    
    3,501
    
    
    
    5,602
    
    
    
    23,074
    
    
    
    107,510
    
    
    
    140,016Home equity (net of unearned discount)
    
    
    10,474
    
    
    
    50
    
    
    
    179
    
    
    
    9,729
    
    
    
    40,517
    
    
    
    60,949Personal
    
    
    383
    
    
    
    95
    
    
    
    422
    
    
    
    5,958
    
    
    
    7,062
    
    
    
    13,920Obligations of state and political subdivisions
    
    
    
    
    
    
    798
    
    
    
    2
    
    
    
    817
    
    
    
    5,560
    
    
    
    7,177Total Interest Earning Assets
    
    
    89,027
    
    
    
    17,776
    
    
    
    22,484
    
    
    
    79,458
    
    
    
    176,226
    
    
    
    384,971Interest Bearing LiabilitiesDemand deposits
    
    
    20,852
    
    
    
    621
    
    
    
    2,484
    
    
    
    8,694
    
    
    
    29,448
    
    
    
    62,099Savings deposits
    
    
    7,423
    
    
    
    371
    
    
    
    1,485
    
    
    
    5,196
    
    
    
    22,639
    
    
    
    37,114Certificates of deposit over $100,000
    
    
    5,671
    
    
    
    5,724
    
    
    
    6,299
    
    
    
    21,365
    
    
    
    
    
    
    
    39,059Time deposits
    
    
    30,987
    
    
    
    28,375
    
    
    
    31,536
    
    
    
    73,661
    
    
    
    
    
    
    
    164,559Securities sold under agreements to repurchase
    
    
    1,944
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,944Short-term borrowings
    
    
    8,635
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,635Long-term debt
    
    
    
    
    
    
    
    
    
    
    5,000
    
    
    
    
    
    
    
    
    
    
    
    5,000Other interest bearing liabilities
    
    
    1,096
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,096Total Interest Bearing Liabilities
    
    
    76,608
    
    
    
    35,091
    
    
    
    46,804
    
    
    
    108,916
    
    
    
    52,087
    
    
    
    319,506Gap
    
    $
    12,419
    
    
    $
    (17,315
    )
    
    $
    (24,320
    )
    
    $
    (29,458
    )
    
    $
    124,139
    
    
    $
    65,465Cumulative Gap
    
    $
    12,419
    
    
    $
    (4,896
    )
    
    $
    (29,216
    )
    
    $
    (58,674
    )
    
    $
    65,465Cumulative sensitivity ratio
    
    
    1.16
    
    
    
    0.96
    
    
    
    0.82
    
    
    
    0.78
    
    
    
    1.20Commercial, financial and agricultural
loans maturing after one year with:Fixed interest rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    7,076
    
    
    $
    3,057
    
    
    $
    10,133Variable interest rates
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    7,076
    
    
    $
    3,057
    
    
    $
    10,133
 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




---



##### 



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 31,2008
    
    
    2007ASSETSCash and due from banks
    
    $
    12,264
    
    
    $
    12,254Interest bearing deposits with banks
    
    
    193
    
    
    
    770Federal funds sold
    
    
    
    
    
    
    7,500Cash and cash equivalents
    
    
    12,457
    
    
    
    20,524Interest bearing time deposits with banks
    
    
    5,325
    
    
    
    5,525Securities available for sale
    
    
    64,321
    
    
    
    67,056Restricted investment in Federal Home Loan Bank (FHLB) stock
    
    
    2,197
    
    
    
    1,095Investment in unconsolidated subsidiary
    
    
    3,176
    
    
    
    2,972Total loans, net of unearned interest
    
    
    315,132
    
    
    
    298,000Less: Allowance for loan losses
    
    
    (2,610
    )
    
    
    (2,322
    )Total loans, net of allowance for loan losses
    
    
    312,522
    
    
    
    295,678Premises and equipment, net
    
    
    7,374
    
    
    
    7,272Bank owned life insurance and annuities
    
    
    12,582
    
    
    
    12,344Core deposit intangible
    
    
    344
    
    
    
    389Goodwill
    
    
    2,046
    
    
    
    2,046Accrued interest receivable and other assets
    
    
    5,740
    
    
    
    5,245Total assets
    
    $
    428,084
    
    
    $
    420,146LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Non-interest bearing
    
    $
    54,200
    
    
    $
    48,755Interest bearing
    
    
    302,831
    
    
    
    310,702Total deposits
    
    
    357,031
    
    
    
    359,457Securities sold under agreements to repurchase
    
    
    1,944
    
    
    
    5,431Short-term borrowings
    
    
    8,635
    
    
    
    Long-term debt
    
    
    5,000
    
    
    
    Other interest bearing liabilities
    
    
    1,096
    
    
    
    1,037Accrued interest payable and other liabilities
    
    
    5,893
    
    
    
    5,649Total liabilities
    
    
    379,599
    
    
    
    371,574Stockholders Equity:Preferred stock, no par value:Authorized - 500,000 shares, none issuedCommon stock, par value $1.00 per share:Authorized - 20,000,000 sharesIssued - 4,745,826 sharesOutstanding -4,341,055 shares at December 31, 2008;4,409,445 shares at December 31, 2007
    
    
    4,746
    
    
    
    4,746Surplus
    
    
    18,324
    
    
    
    18,297Retained earnings
    
    
    34,758
    
    
    
    32,755Accumulated other comprehensive loss
    
    
    (1,247
    )
    
    
    (557
    )Cost of common stock in Treasury:404,771 shares at December 31, 2008;336,381 shares at December 31, 2007
    
    
    (8,096
    )
    
    
    (6,669
    )Total stockholders equity
    
    
    48,485
    
    
    
    48,572Total liabilities and stockholders equity
    
    $
    428,084
    
    
    $
    420,146




---



##### 



Juniata Valley Financial Corp. and Subsidiary
 Years Ended December 31,2008
    
    
    2007
    
    
    2006Interest income:Loans, including fees
    
    $
    22,100
    
    
    $
    22,851
    
    
    $
    21,768Taxable securities
    
    
    1,666
    
    
    
    2,438
    
    
    
    1,975Tax-exempt securities
    
    
    1,082
    
    
    
    857
    
    
    
    659Other interest income
    
    
    382
    
    
    
    577
    
    
    
    261Total interest income
    
    
    25,230
    
    
    
    26,723
    
    
    
    24,663Interest expense:Deposits
    
    
    8,895
    
    
    
    10,744
    
    
    
    9,472Securities sold under agreements to repurchase
    
    
    69
    
    
    
    276
    
    
    
    246Short-term borrowings
    
    
    21
    
    
    
    1
    
    
    
    275Long-term debt
    
    
    41
    
    
    
    
    
    
    
    88Other interest bearing liabilities
    
    
    31
    
    
    
    39
    
    
    
    30Total interest expense
    
    
    9,057
    
    
    
    11,060
    
    
    
    10,111Net interest income
    
    
    16,173
    
    
    
    15,663
    
    
    
    14,552Provision for loan losses
    
    
    421
    
    
    
    120
    
    
    
    54Net interest income after provision for loan losses
    
    
    15,752
    
    
    
    15,543
    
    
    
    14,498Noninterest income:Trust fees
    
    
    389
    
    
    
    444
    
    
    
    435Customer service fees
    
    
    1,660
    
    
    
    1,656
    
    
    
    1,497Earnings on bank owned life insurance and annuities
    
    
    486
    
    
    
    440
    
    
    
    433Commissions from sales of non-deposit products
    
    
    704
    
    
    
    711
    
    
    
    513Income from unconsolidated subsidiary
    
    
    207
    
    
    
    192
    
    
    
    80Securities impairment charge
    
    
    (554
    )
    
    
    (33
    )
    
    
    Gain on sales of securities
    
    
    33
    
    
    
    14
    
    
    
    181Gain on sales of other assets
    
    
    58
    
    
    
    1
    
    
    
    10Gain on life insurance proceeds
    
    
    179
    
    
    
    
    
    
    
    Other noninterest income
    
    
    875
    
    
    
    774
    
    
    
    681Total noninterest income
    
    
    4,037
    
    
    
    4,199
    
    
    
    3,830Noninterest expense:Employee compensation expense
    
    
    5,078
    
    
    
    5,137
    
    
    
    4,593Employee benefits
    
    
    1,373
    
    
    
    1,455
    
    
    
    1,471Occupancy
    
    
    928
    
    
    
    892
    
    
    
    804Equipment
    
    
    710
    
    
    
    688
    
    
    
    620Data processing expense
    
    
    1,375
    
    
    
    1,332
    
    
    
    1,204Director compensation
    
    
    417
    
    
    
    455
    
    
    
    465Professional fees
    
    
    379
    
    
    
    437
    
    
    
    378Taxes, other than income
    
    
    500
    
    
    
    546
    
    
    
    505Intangible amortization
    
    
    45
    
    
    
    45
    
    
    
    15Other noninterest expense
    
    
    1,203
    
    
    
    1,222
    
    
    
    1,190Total noninterest expense
    
    
    12,008
    
    
    
    12,209
    
    
    
    11,245Income before income taxes
    
    
    7,781
    
    
    
    7,533
    
    
    
    7,083Provision for income taxes
    
    
    2,057
    
    
    
    2,099
    
    
    
    2,081Net income
    
    $
    5,724
    
    
    $
    5,434
    
    
    $
    5,002Earnings per shareBasic
    
    $
    1.31
    
    
    $
    1.23
    
    
    $
    1.12Diluted
    
    $
    1.31
    
    
    $
    1.22
    
    
    $
    1.11Cash dividends declared per share
    
    $
    0.74
    
    
    $
    0.95
    
    
    $
    0.66Weighted average basic shares outstanding
    
    
    4,376,077
    
    
    
    4,434,859
    
    
    
    4,480,245Weighted average diluted shares outstanding
    
    
    4,385,612
    
    
    
    4,444,466
    
    
    
    4,492,552




---



##### 



Juniata Valley Financial Corp. and Subsidiary
 Years Ended December 31, 2008, 2007 and 2006Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    TotalShares
    
    Common
    
    
    
    
    
    Retained
    
    Comprehensive
    
    Treasury
    
    StockholdersOutstanding
    
    Stock
    
    Surplus
    
    Earnings
    
    Loss
    
    Stock
    
    EquityBalance at December 31, 2005
    
    
    4,503,392
    
    
    $
    4,746
    
    
    $
    18,177
    
    
    $
    29,486
    
    
    $
    (694
    )
    
    $
    (4,596
    )
    
    $
    47,119Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,002
    
    
    
    
    
    
    
    
    
    
    
    5,002Change in unrealized losses on securities
available for sale, net of reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    274
    
    
    
    
    
    
    
    274Minimum pension liability, net of tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    85
    
    
    
    
    
    
    
    85Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,361Cumulative effect of change in accounting for
pension and other post-retirement
benefits, net of tax of $393
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (763
    )
    
    
    
    
    
    
    (763
    )Cash dividends at $0.66 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,957
    )
    
    
    
    
    
    
    
    
    
    
    (2,957
    )Stock-based compensation expense
    
    
    
    
    
    
    
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    39Purchase of treasury stock, at cost
    
    
    (58,082
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,302
    )
    
    
    (1,302
    )Treasury stock issued for dividend
reinvestment plan
    
    
    8,147
    
    
    
    
    
    
    
    37
    
    
    
    
    
    
    
    
    
    
    
    159
    
    
    
    196Treasury stock issued for stock option
and stock purchase plans
    
    
    4,477
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    87
    
    
    
    93Balance 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 losses 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 losses 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 EITF 06-4, Accounting
for Deferred Compensation and  Postretirement
Benefit Aspects of Endorsement Split-Dollar Life Insurance Arrangements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (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
    )
    
    $
    48,485




---



##### 



Juniata Valley Financial Corp. and Subsidiary
 Years Ended December 31,2008
    
    
    2007
    
    
    2006Operating activities:Net income
    
    $
    5,724
    
    
    $
    5,434
    
    
    $
    5,002Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    421
    
    
    
    120
    
    
    
    54Provision for depreciation
    
    
    691
    
    
    
    653
    
    
    
    594Net amortization of securities premiums
    
    
    126
    
    
    
    104
    
    
    
    133Net amortization of loan origination costs
    
    
    25
    
    
    
    
    
    
    
    Amortization of core deposit intangible
    
    
    45
    
    
    
    45
    
    
    
    15Security impairment charge
    
    
    554
    
    
    
    33
    
    
    
    Net realized gains on sales of securities
    
    
    (33
    )
    
    
    (14
    )
    
    
    (181
    )Net gains on sales of other assets
    
    
    (58
    )
    
    
    (1
    )
    
    
    (10
    )Earnings on bank owned life insurance and annuities
    
    
    (486
    )
    
    
    (440
    )
    
    
    (433
    )Bank owned life insurance proceeds in excess of cash surrender value
    
    
    (179
    )
    
    
    
    
    
    
    Deferred income tax expense
    
    
    609
    
    
    
    94
    
    
    
    40Equity in earnings of unconsolidated subsidiary, net of dividends of $0, $126 and $0
    
    
    (207
    )
    
    
    (66
    )
    
    
    (80
    )Stock-based compensation expense
    
    
    40
    
    
    
    43
    
    
    
    39Decrease (increase) in accrued interest receivable and other assets
    
    
    (962
    )
    
    
    901
    
    
    
    (80
    )Increase (decrease) in accrued interest payable and other liabilities
    
    
    (2,066
    )
    
    
    248
    
    
    
    258Net cash provided by operating activities
    
    
    4,244
    
    
    
    7,154
    
    
    
    5,351Investing activities:Purchases of:Securities available for sale
    
    
    (36,063
    )
    
    
    (59,340
    )
    
    
    (14,181
    )Securities held to maturity
    
    
    
    
    
    
    (3,955
    )
    
    
    (5,100
    )FHLB stock
    
    
    (1,419
    )
    
    
    (197
    )
    
    
    (827
    )Premises and equipment
    
    
    (838
    )
    
    
    (1,383
    )
    
    
    (786
    )Bank owned life insurance and annuities
    
    
    (94
    )
    
    
    (963
    )
    
    
    (106
    )Investment in unconsolidated subsidiary
    
    
    
    
    
    
    
    
    
    
    (2,812
    )Proceeds from:Sales of securities available for sale
    
    
    9
    
    
    
    585
    
    
    
    364Maturities of and principal repayments on:Securities available for sale
    
    
    38,987
    
    
    
    48,331
    
    
    
    24,588Securities held to maturity
    
    
    
    
    
    
    6,455
    
    
    
    5,100Redemption of FHLB stock
    
    
    317
    
    
    
    178
    
    
    
    1,107Bank owned life insurance and annuities
    
    
    511
    
    
    
    76
    
    
    
    169Sale of other real estate owned
    
    
    311
    
    
    
    244
    
    
    
    634Sale of property owned for investment
    
    
    322
    
    
    
    
    
    
    
    Net decrease in interest bearing time deposits
    
    
    200
    
    
    
    135
    
    
    
    Net cash received from branch acquisition
    
    
    
    
    
    
    
    
    
    
    13,801Net (increase) decrease in loans receivable
    
    
    (17,595
    )
    
    
    7,051
    
    
    
    (4,916
    )Net cash (used in) provided by investing activities
    
    
    (15,352
    )
    
    
    (2,783
    )
    
    
    17,035Financing activities:Net increase (decrease) in deposits
    
    
    (2,426
    )
    
    
    4,288
    
    
    
    (8,388
    )Net (decrease) increase in short-term borrowings and securities
sold under agreements to repurchase
    
    
    5,148
    
    
    
    (681
    )
    
    
    (3,689
    )Issuance (repayment) of long-term debt
    
    
    5,000
    
    
    
    
    
    
    
    (5,000
    )Cash dividends
    
    
    (3,241
    )
    
    
    (4,210
    )
    
    
    (2,957
    )Purchase of treasury stock
    
    
    (1,518
    )
    
    
    (1,069
    )
    
    
    (1,302
    )Treasury stock issued for dividend reinvestment
and employee stock purchase plans
    
    
    78
    
    
    
    47
    
    
    
    289Net cash provided by (used in) financing activities
    
    
    3,041
    
    
    
    (1,625
    )
    
    
    (21,047
    )Net (decrease) increase in cash and cash equivalents
    
    
    (8,067
    )
    
    
    2,746
    
    
    
    1,339Cash and cash equivalents at beginning of year
    
    
    20,524
    
    
    
    17,778
    
    
    
    16,439Cash and cash equivalents at end of year
    
    $
    12,457
    
    
    $
    20,524
    
    
    $
    17,778Supplemental information:Interest paid
    
    $
    9,255
    
    
    $
    11,060
    
    
    $
    9,858Income taxes paid
    
    
    2,100
    
    
    
    1,885
    
    
    
    1,930Supplemental schedule of noncash investing and financing activities:Transfer of loans to other real estate owned
    
    $
    305
    
    
    $
    397
    
    
    $
    757Transfer of fixed asset to other assets
    
    
    45
    
    
    
    
    
    
    
    




---



##### 



JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 2008, 2007 AND 2006
 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
   2008
    
    2007
    
    2006Expected life of options
    
    7 years
    
    7 years
    
    7 yearsRisk-free interest rate
    
    
    3.08
    %
    
    
    4.47
    %
    
    
    4.74
    %Expected volatility
    
    
    19.47
    %
    
    
    19.98
    %
    
    
    20.50
    %Expected dividend yield
    
    
    3.20
    %
    
    
    3.20
    %
    
    
    2.99
    %




---



##### 



Segment reporting
   2. Recent Accounting Pronouncements




---



##### 



"




---



##### 



3. Restrictions on Cash and Due From Banks




---



##### 



4. Securities
  December 31, 2008Securities Available for Sale
    
    
    
    
    
    
    
    
    
    Gross
    
    
    GrossAmortized
    
    
    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
    )
 December 31, 2007Securities Available for Sale
    
    
    
    
    
    
    
    
    
    Gross
    
    
    GrossAmortized
    
    
    Fair
    
    
    Unrealized
    
    
    UnrealizedType and maturity
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    LossesU.S. Treasury securities and obligations of U.S.
Government agencies and corporationsWithin one year
    
    $
    3,676
    
    
    $
    3,680
    
    
    $
    9
    
    
    $
    (5
    )After one year but within five years
    
    
    16,960
    
    
    
    17,115
    
    
    
    158
    
    
    
    (3
    )After five years but within ten years
    
    
    6,000
    
    
    
    6,021
    
    
    
    22
    
    
    
    (1
    )26,636
    
    
    
    26,816
    
    
    
    189
    
    
    
    (9
    )Obligations of state and political subdivisionsWithin one year
    
    
    11,620
    
    
    
    11,616
    
    
    
    1
    
    
    
    (5
    )After one year but within five years
    
    
    17,730
    
    
    
    17,903
    
    
    
    176
    
    
    
    (3
    )After five years but within ten years
    
    
    6,217
    
    
    
    6,288
    
    
    
    7135,567
    
    
    
    35,807
    
    
    
    248
    
    
    
    (8
    )Mortgage-backed securities
    
    
    2,918
    
    
    
    2,931
    
    
    
    33
    
    
    
    (20
    )Equity securities
    
    
    1,739
    
    
    
    1,502
    
    
    
    108
    
    
    
    (345
    )Total
    
    $
    66,860
    
    
    $
    67,056
    
    
    $
    578
    
    
    $
    (382
    )




---



##### 



Years Ended December 31,2008
    
    2007
    
    2006Gross proceeds from sales of securities
    
    $
    9
    
    
    $
    585
    
    
    $
    364Securities available for sale:Gross realized gains
    
    $
    
    
    
    $
    
    
    
    $
    172Gross realized losses
    
    
    (8
    )
    
    
    (9
    )
    
    
    Gross gains from business combinations
    
    
    41
    
    
    
    23
    
    
    
    9
  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
    )




---



##### 



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
    
    $
    1,998
    
    
    $
    (2
    )
    
    $
    1,568
    
    
    $
    (7
    )
    
    $
    3,566
    
    
    $
    (9
    )Obligations of state and political
subdivisions
    
    
    1,114
    
    
    
    (1
    )
    
    
    2,298
    
    
    
    (7
    )
    
    
    3,412
    
    
    
    (8
    )Mortgage-backed securities
    
    
    
    
    
    
    
    
    
    
    1,144
    
    
    
    (20
    )
    
    
    1,144
    
    
    
    (20
    )Debt securities
    
    
    3,112
    
    
    
    (3
    )
    
    
    5,010
    
    
    
    (34
    )
    
    
    8,122
    
    
    
    (37
    )Equity securities
    
    
    948
    
    
    
    (345
    )
    
    
    
    
    
    
    
    
    
    
    948
    
    
    
    (345
    )Total temporarily impaired securities
    
    $
    4,060
    
    
    $
    (348
    )
    
    $
    5,010
    
    
    $
    (34
    )
    
    $
    9,070
    
    
    $
    (382
    )
 5. LOANS
  December 31,2008
    
    
    2007Commercial, financial and agricultural
    
    $
    38,755
    
    
    $
    28,842Real estate  commercial
    
    
    32,171
    
    
    
    29,021Real estate  construction
    
    
    22,144
    
    
    
    27,223Real estate  mortgage
    
    
    140,016
    
    
    
    127,324Home equity
    
    
    61,094
    
    
    
    63,960Obligations of states and political subdivisions
    
    
    7,177
    
    
    
    6,593Personal
    
    
    13,920
    
    
    
    15,319Unearned interest
    
    
    (145
    )
    
    
    (282
    )Total
    
    $
    315,132
    
    
    $
    298,000
  December 31,2008
    
    
    2007Nonaccrual loans
    
    $
    1,255
    
    
    $
    Accruing loans past due 90 days or more
    
    
    664
    
    
    
    837Restructured loans
    
    
    
    
    
    
    Total non-performing loans
    
    $
    1,919
    
    
    $
    837
   Pledged Loans




---



##### 



6. Allowance For Loan Losses
   Years Ended December 31,2008
    
    
    2007
    
    
    2006Balance of allowance  beginning of period
    
    $
    2,322
    
    
    $
    2,572
    
    
    $
    2,763Loans charged off:Commercial, financial and agricultural
    
    
    43
    
    
    
    291
    
    
    
    159Real estate  commercial
    
    
    36
    
    
    
    
    
    
    
    Real estate  construction
    
    
    
    
    
    
    
    
    
    
    Real estate  mortgage
    
    
    15
    
    
    
    66
    
    
    
    19Personal
    
    
    62
    
    
    
    61
    
    
    
    129Total charge-offs
    
    
    156
    
    
    
    418
    
    
    
    307Recoveries of loans previously charged off:Commercial, financial and agricultural
    
    
    5
    
    
    
    8
    
    
    
    5Real estate  commercial
    
    
    
    
    
    
    
    
    
    
    Real estate  construction
    
    
    
    
    
    
    
    
    
    
    Real estate  mortgage
    
    
    5
    
    
    
    8
    
    
    
    Personal
    
    
    13
    
    
    
    32
    
    
    
    25Total recoveries
    
    
    23
    
    
    
    48
    
    
    
    30Net charge-offs
    
    
    133
    
    
    
    370
    
    
    
    277Provision for loan losses
    
    
    421
    
    
    
    120
    
    
    
    54Branch acquisition loan loss reserve
    
    
    
    
    
    
    
    
    
    
    32Balance of allowance  end of period
    
    $
    2,610
    
    
    $
    2,322
    
    
    $
    2,572Ratio of net charge-offs during period to
average loans outstanding
    
    
    0.04
    %
    
    
    0.12
    %
    
    
    0.09
    %




---



##### 



December 31,2008
    
    2007Impaired loans:Recorded investment at period end
    
    $
    1,933
    
    
    $
    88Impaired loan balance for which:There is a related allowance
    
    
    512
    
    
    
    There is no related allowance
    
    
    1,421
    
    
    
    88Related allowance on impaired loans
    
    
    142
    
    
    
    
 Years Ended December 31,2008
    
    2007
    
    2006Average recorded investment in impaired loans
    
    $
    1,640
    
    
    $
    846
    
    
    $
    1,628Interest income recognized (on a cash basis)
    
    
    82
    
    
    
    19
    
    
    
    45
 7. Bank Owned Life Insurance and Annuities
  Life Insurance
    
    
    Deferred Annuities
    
    
    Payout Annuities
    
    
    TotalBalance as of December 31, 2006
    
    $
    10,515
    
    
    $
    204
    
    
    $
    298
    
    
    $
    11,017Earnings
    
    
    416
    
    
    
    11
    
    
    
    13
    
    
    
    440Premiums on new policies
    
    
    853
    
    
    
    
    
    
    
    
    
    
    
    853Premiums on existing policies
    
    
    95
    
    
    
    15
    
    
    
    
    
    
    
    110Annuity payments received
    
    
    
    
    
    
    
    
    
    
    (76
    )
    
    
    (76
    )Balance as of December 31, 2007
    
    
    11,879
    
    
    
    230
    
    
    
    235
    
    
    
    12,344Earnings
    
    
    456
    
    
    
    10
    
    
    
    10
    
    
    
    476Premiums on new policies
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Premiums 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
    
    
    $
    12,582




---



##### 



8. Premises And Equipment
  December 31,2008
    
    
    2007Land
    
    $
    864
    
    
    $
    864Buildings and improvements
    
    
    8,425
    
    
    
    8,234Furniture, computer software
and equipment
    
    
    5,012
    
    
    
    4,68414,301
    
    
    
    13,782Less: accumulated depreciation
    
    
    (6,927
    )
    
    
    (6,510
    )$
    7,374
    
    
    $
    7,272
  9. Acquisition
    Assets:Cash
    
    $
    261Premises and equipment
    
    
    139Loans
    
    
    3,810Core deposit intangible
    
    
    449Goodwill
    
    
    2,046Other assets
    
    
    9Total assets
    
    
    6,714Liabilities:Deposits
    
    
    20,090Other liabilities
    
    
    164Total liabilities
    
    
    20,254Net liabilities assumed
    
    $
    13,540




---



##### 



10. Investment in Unconsolidated Subsidiary
  11. Deposits
  December 31,2008
    
    
    2007Demand, non-interest bearing
    
    $
    54,200
    
    
    $
    48,755NOW and Money Market
    
    
    62,099
    
    
    
    74,821Savings
    
    
    37,114
    
    
    
    33,877Time deposits, $100,000 or more
    
    
    39,059
    
    
    
    36,308Other time deposits
    
    
    164,559
    
    
    
    165,696$
    357,031
    
    
    $
    359,457
  Time Deposits$100,000 or more
    
    
    OtherMaturing in:2009
    
    $
    17,694
    
    
    $
    90,8982010
    
    
    14,261
    
    
    
    44,5592011
    
    
    3,683
    
    
    
    14,0062012
    
    
    1,900
    
    
    
    5,5152013
    
    
    1,521
    
    
    
    9,581$
    39,059
    
    
    $
    164,559
 12. Borrowings
  For the year 2008December 31, 2008
    
    
    December 31, 2007
    
    
    December 31, 2006
    
    
    
    
    
    
    AverageOutstanding
    
    
    
    
    
    Outstanding
    
    
    
    
    
    Outstanding
    
    
    
    
    
    Average
    
    
    WeightedBalance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    Rate
    
    
    Balance
    
    
    RateSecurities sold
under agreements to
repurchase
    
    $
    1,944
    
    
    
    0.10
    %
    
    $
    5,431
    
    
    
    3.01
    %
    
    $
    6,112
    
    
    
    4.54
    %
    
    $
    5,368
    
    
    
    1.29
    %Short-term
borrowings 
Federal Home Loan
Bank overnight
advances
    
    
    8,635
    
    
    
    0.59
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,379
    
    
    
    0.90
    %Long-term debt 
Note payable to
Federal Home Loan
Bank
    
    
    5,000
    
    
    
    2.75
    %
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,448
    
    
    
    2.75
    %$
    15,579
    
    
    
    1.22
    %
    
    $
    5,431
    
    
    
    3.01
    %
    
    $
    6,112
    
    
    
    4.54
    %
    
    $
    9,195
    
    
    
    1.42
    %




---



##### 



13. Operating Lease Obligations
   Years ending December 31,2009
    
    
    1022010
    
    
    1032011
    
    
    972012
    
    
    582013
    
    
    202014 and beyond
    
    
    22Total minimum payments required
    
    $
    402




---



##### 



14. Income Taxes
  2008
    
    
    2007
    
    
    2006Current tax expense
    
    $
    1,448
    
    
    $
    2,005
    
    
    $
    2,041Deferred tax expense
    
    
    609
    
    
    
    94
    
    
    
    40Total tax expense
    
    $
    2,057
    
    
    $
    2,099
    
    
    $
    2,081
   Years Ended December 31,2008
    
    
    2007
    
    
    2006Income before income taxes
    
    $
    7,781
    
    
    $
    7,533
    
    
    $
    7,083Effective tax rate
    
    
    34.0
    %
    
    
    34.0
    %
    
    
    34.0
    %Federal tax at statutory rate
    
    
    2,646
    
    
    
    2,561
    
    
    
    2,408Tax-exempt interest
    
    
    (398
    )
    
    
    (298
    )
    
    
    (233
    )Net earnings on BOLI
    
    
    (130
    )
    
    
    (141
    )
    
    
    (123
    )Life insurance proceeds
    
    
    (61
    )
    
    
    
    
    
    
    Dividend from unconsolidated subsidiary
    
    
    
    
    
    
    (34
    )
    
    
    Stock-based compensation
    
    
    14
    
    
    
    15
    
    
    
    13Other permanent differences
    
    
    (14
    )
    
    
    (4
    )
    
    
    16Total tax expense
    
    $
    2,057
    
    
    $
    2,099
    
    
    $
    2,081Effective tax rate
    
    
    26.4
    %
    
    
    27.9
    %
    
    
    29.4
    %
  December 31,2008
    
    
    2007Deferred Tax AssetsAllowance for loan losses
    
    $
    750
    
    
    $
    652Deferred directors compensation
    
    
    681
    
    
    
    705Employee and director benefits
    
    
    672
    
    
    
    720Qualified pension liability
    
    
    296
    
    
    
    319Unrealized loss from securities impairment
    
    
    167
    
    
    
    11Other
    
    
    68
    
    
    
    63Total deferred tax assets
    
    
    2,634
    
    
    
    2,470Deferred Tax LiabilitiesDepreciation
    
    
    (168
    )
    
    
    (209
    )Equity income from unconsolidated subsidiary
    
    
    (120
    )
    
    
    (50
    )Loan origination costs
    
    
    (94
    )
    
    
    Prepaid expense
    
    
    (46
    )
    
    
    (91
    )Unrealized gains on securities available for sale
    
    
    (369
    )
    
    
    (77
    )Annuity earnings
    
    
    (44
    )
    
    
    (46
    )Goodwill
    
    
    (108
    )
    
    
    (62
    )Total deferred tax liabilities
    
    
    (949
    )
    
    
    (535
    )Net deferred tax asset
included in other assets
    
    $
    1,685
    
    
    $
    1,935




---



##### 



15. Stockholders Equity and Regulatory Matters




---



##### 








---



##### 



Juniata Valley Financial Corp. (Consolidated)
 Minimum RequirementFor CapitalActual
    
    Adequacy PurposesAmount
    
    Ratio
    
    Amount
    
    RatioAs of December 31, 2008:Total Capital
(to Risk Weighted Assets)
    
    $
    49,959
    
    
    
    18.26
    %
    
    $
    21,888
    
    
    
    8.00
    %Tier 1 Capital
(to Risk Weighted Assets)
    
    
    47,349
    
    
    
    17.31
    %
    
    
    10,944
    
    
    
    4.00
    %Tier 1 Capital
(to Average Assets)
    
    
    47,349
    
    
    
    11.11
    %
    
    
    17,054
    
    
    
    4.00
    %As of December 31, 2007:Total Capital
(to Risk Weighted Assets)
    
    $
    49,080
    
    
    
    18.41
    %
    
    $
    21,328
    
    
    
    8.00
    %Tier 1 Capital
(to Risk Weighted Assets)
    
    
    46,721
    
    
    
    17.53
    %
    
    
    10,664
    
    
    
    4.00
    %Tier 1 Capital
(to Average Assets)
    
    
    46,721
    
    
    
    11.06
    %
    
    
    16,896
    
    
    
    4.00
    %
 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, 2008:Total Capital
(to Risk Weighted Assets)
    
    $
    44,191
    
    
    
    16.38
    %
    
    $
    21,589
    
    
    
    8.00
    %
    
    $
    26,987
    
    
    
    10.00
    %Tier 1 Capital
(to Risk Weighted Assets)
    
    
    41,581
    
    
    
    15.41
    %
    
    
    10,795
    
    
    
    4.00
    %
    
    
    16,192
    
    
    
    6.00
    %Tier 1 Capital
(to Average Assets)
    
    
    41,581
    
    
    
    9.78
    %
    
    
    17,006
    
    
    
    4.00
    %
    
    
    21,258
    
    
    
    5.00
    %As of December 31, 2007:Total Capital
(to Risk Weighted Assets)
    
    $
    41,032
    
    
    
    15.62
    %
    
    $
    21,015
    
    
    
    8.00
    %
    
    $
    26,269
    
    
    
    10.00
    %Tier 1 Capital
(to Risk Weighted Assets)
    
    
    38,673
    
    
    
    14.72
    %
    
    
    10,508
    
    
    
    4.00
    %
    
    
    15,761
    
    
    
    6.00
    %Tier 1 Capital
(to Average Assets)
    
    
    38,673
    
    
    
    9.25
    %
    
    
    16,730
    
    
    
    4.00
    %
    
    
    20,913
    
    
    
    5.00
    %




---



##### 



16. Calculation Of Earnings Per Share
  Years Ended December 31,2008
    
    
    2007
    
    
    2006(Amounts, except earnings per share, in thousands)Net income
    
    $
    5,724
    
    
    $
    5,434
    
    
    $
    5,002Weighted-average common shares outstanding
    
    
    4,376
    
    
    
    4,435
    
    
    
    4,480Basic earnings per share
    
    $
    1.31
    
    
    $
    1.23
    
    
    $
    1.12Weighted-average common shares outstanding
    
    
    4,376
    
    
    
    4,435
    
    
    
    4,480Common stock equivalents due to effect of stock options
    
    
    10
    
    
    
    9
    
    
    
    12Total weighted-average common shares and equivalents
    
    
    4,386
    
    
    
    4,444
    
    
    
    4,492Diluted earnings per share
    
    $
    1.31
    
    
    $
    1.22
    
    
    $
    1.11Anti-dilutive stock options outstanding
    
    
    33
    
    
    
    21
    
    
    
    10




---



##### 



17. Comprehensive Income
  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 income (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
 Year ended December 31, 2006Before
    
    
    Tax (Expense)Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    Benefit
    
    
    AmountNet income
    
    $
    7,083
    
    
    $
    (2,081
    )
    
    $
    5,002Other comprehensive income (loss):Unrealized gains on available for sale securities:Unrealized holding gains arising during
the period
    
    
    595
    
    
    
    (202
    )
    
    
    393Less reclassification adjustment for
gains included in net income
    
    
    (181
    )
    
    
    62
    
    
    
    (119
    )Minimum pension liability
    
    
    129
    
    
    
    (44
    )
    
    
    85Other comprehensive income
    
    
    543
    
    
    
    (184
    )
    
    
    359Total comprehensive income
    
    $
    7,626
    
    
    $
    (2,265
    )
    
    $
    5,361




---



##### 



12/31/2008
    
    12/31/2007
    
    12/31/2006Unrealized gains on available for sale securities
    
    $
    707
    
    
    $
    144
    
    
    $
    (116
    )Unrecognized expense for defined benefit pension
    
    
    (1,954
    )
    
    
    (701
    )
    
    
    (982
    )Accumulated other comprehensive loss
    
    $
    (1,247
    )
    
    $
    (557
    )
    
    $
    (1,098
    )
 18. Employee Benefit Plans
 Stock Compensation Plan
      2008
    
    
    2007
    
    
    2006Weighted Average
    
    
    
    
    
    
    Weighted Average
    
    
    
    
    
    
    Weighted AverageShares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise Price
    
    
    Shares
    
    
    Exercise PriceOutstanding at beginning of year
    
    
    79,512
    
    
    $
    18.31
    
    
    
    65,746
    
    
    $
    17.83
    
    
    
    57,983
    
    
    $
    17.25Granted
    
    
    13,317
    
    
    
    21.10
    
    
    
    15,513
    
    
    
    20.05
    
    
    
    10,880
    
    
    
    21.00Exercised
    
    
    (2,477
    )
    
    
    14.72
    
    
    
    (1,747
    )
    
    
    15.77
    
    
    
    (750
    )
    
    
    14.18Forfeited
    
    
    (4,367
    )
    
    
    20.59
    
    
    
    
    
    
    
    
    
    
    
    (2,367
    )
    
    
    19.40Outstanding at end of year
    
    
    85,985
    
    
    $
    18.73
    
    
    
    79,512
    
    
    $
    18.31
    
    
    
    65,746
    
    
    $
    17.83Options exercisable at year-end
    
    
    58,187
    
    
    $
    17.69
    
    
    
    49,035
    
    
    $
    16.79
    
    
    
    40,735
    
    
    $
    15.90Weighted-average fair value of
of options granted
during the year
    
    $
    3.37
    
    
    
    
    
    
    $
    3.92
    
    
    
    
    
    
    $
    4.50Intrinsic value of options
exercised during the year
    
    $
    15,598
    
    
    
    
    
    
    $
    9,058
    
    
    
    
    
    
    $
    5,159




---



##### 



Outstanding
    
    ExercisableContractual
    
    Average
    
    
    
    
    
    AverageExercise
    
    
    
    
    
    Average Life
    
    Exercise
    
    
    
    
    
    ExerciseGrant Date
    
    Price
    
    Shares
    
    (Years)
    
    Price
    
    Shares
    
    Price11/20/2001
    
    $
    14.10
    
    
    
    10,438
    
    
    
    2.50
    
    
    $
    14.10
    
    
    
    10,438
    
    
    $
    14.1011/19/2002
    
    
    14.25
    
    
    
    10,864
    
    
    
    3.45
    
    
    
    14.25
    
    
    
    10,864
    
    
    
    14.2511/18/2003
    
    
    15.13
    
    
    
    10,348
    
    
    
    4.45
    
    
    
    15.13
    
    
    
    10,348
    
    
    
    15.1311/15/2004
    
    
    20.25
    
    
    
    7,832
    
    
    
    4.64
    
    
    
    20.25
    
    
    
    7,485
    
    
    
    20.2510/18/2005
    
    
    24.00
    
    
    
    9,534
    
    
    
    5.64
    
    
    
    24.00
    
    
    
    7,909
    
    
    
    24.0010/17/2006
    
    
    21.00
    
    
    
    9,716
    
    
    
    6.68
    
    
    
    21.00
    
    
    
    6,096
    
    
    
    21.0010/16/2007
    
    
    20.05
    
    
    
    13,936
    
    
    
    8.05
    
    
    
    20.05
    
    
    
    5,047
    
    
    
    20.0510/21/2008
    
    
    21.10
    
    
    
    13,317
    
    
    
    9.81
    
    
    
    21.10
    
    
    
    
 Defined Benefit Retirement Plan
   Increase(Decrease)Accrued pension liability
    
    $
    1,156Deferred tax asset
    
    
    393Accumulated other comprehensive loss
    
    
    763




---



##### 



Years ended December 31,2008
    
    
    2007Change in projected benefit obligation (PBO)PBO at beginning of year
    
    $
    7,041
    
    
    $
    6,881Service cost
    
    
    179
    
    
    
    281Interest cost
    
    
    441
    
    
    
    387Actuarial loss (gain)
    
    
    221
    
    
    
    (248
    )Benefits paid
    
    
    (297
    )
    
    
    (260
    )PBO at end of year
    
    $
    7,585
    
    
    $
    7,041Change in plan assetsFair value of plan assets at beginning of year
    
    $
    6,102
    
    
    $
    5,543Actual return on plan assets, net of expenses
    
    
    (1,290
    )
    
    
    519Employer contribution
    
    
    2,200
    
    
    
    300Benefits paid
    
    
    (297
    )
    
    
    (260
    )Fair value of plan assets at end of year
    
    $
    6,715
    
    
    $
    6,102Reconciliation of funded status to net amount recognizedFunded status
    
    $
    (870
    )
    
    $
    (939
    )Accumulated benefit obligation
    
    $
    6,606
    
    
    $
    5,793
  2008
    
    
    2007
    
    
    2006Service cost during the year
    
    $
    179
    
    
    $
    281
    
    
    $
    296Interest cost on projected benefit obligation
    
    
    441
    
    
    
    387
    
    
    
    366Expected return on plan assets
    
    
    (425
    )
    
    
    (392
    )
    
    
    (359
    )Net amortization
    
    
    (2
    )
    
    
    (2
    )
    
    
    (2
    )Recognized net actuarial loss
    
    
    39
    
    
    
    54
    
    
    
    75Net periodic benefit cost
    
    $
    232
    
    
    $
    328
    
    
    $
    376
  2008
    
    2007
    
    2006Discount rate
    
    
    6.00
    %
    
    
    6.25
    %
    
    
    5.75
    %Rate of compensation increase
    
    
    4.00
    
    
    
    4.25
    
    
    
    3.75
  2008
    
    2007
    
    2006Discount rate
    
    
    6.00
    %
    
    
    5.75
    %
    
    
    5.75
    %Expected long-term return on plan assets
    
    
    7.00
    
    
    
    7.00
    
    
    
    7.00Rate of compensation increase
    
    
    4.00
    
    
    
    3.75
    
    
    
    3.75




---



##### 



2009
    
    2010
    
    2011
    
    2012
    
    2013
    
    2014-2018Estimated future benefit payments
    
    $
    357
    
    
    $
    367
    
    
    $
    389
    
    
    $
    401
    
    
    $
    405
    
    
    $
    2,466
 Defined Contribution Plan
  Employee Stock Purchase Plan
  Supplemental Retirement Plans
  Deferred Compensation Plans
  Salary Continuation Plans
  19. Fair Value Measurements




---



##### 



Securities Available for Sale




---



##### 



Impaired Loans
  Level 1 Inputs
    
    Level 2 Inputs
    
    Level 3 Inputs
    
    Total Fair ValueSecurities
available for sale
    
    
    
    
    
    $
    64,321
    
    
    
    
    
    
    $
    64,321
    Fair Value of Financial Instruments




---



##### 



Financial Instruments
 December 31, 2008
    
    December 31, 2007Carrying
    
    Fair
    
    Carrying
    
    FairValue
    
    Value
    
    Value
    
    ValueFinancial assets:Cash and due from banks
    
    $
    12,264
    
    
    $
    12,264
    
    
    $
    12,254
    
    
    $
    12,254Interest bearing deposits with banks
    
    
    193
    
    
    
    193
    
    
    
    770
    
    
    
    770Federal funds sold
    
    
    
    
    
    
    
    
    
    
    7,500
    
    
    
    7,500Interest bearing time deposits with banks
    
    
    5,325
    
    
    
    5,471
    
    
    
    5,525
    
    
    
    5,515Securities
    
    
    64,321
    
    
    
    64,321
    
    
    
    67,056
    
    
    
    67,056Restricted investment in FHLB stock
    
    
    2,197
    
    
    
    2,197
    
    
    
    1,095
    
    
    
    1,095Total loans, net of unearned interest
and allowance for loan loss reserve
    
    
    312,522
    
    
    
    323,289
    
    
    
    295,678
    
    
    
    299,835Accrued interest receivable
    
    
    2,315
    
    
    
    2,315
    
    
    
    2,247
    
    
    
    2,247Financial liabilities:Non-interest bearing deposits
    
    
    54,200
    
    
    
    54,200
    
    
    
    48,755
    
    
    
    48,755Interest bearing deposits
    
    
    302,831
    
    
    
    306,500
    
    
    
    310,702
    
    
    
    307,960Securities
sold under agreements to repurchase
    
    
    1,944
    
    
    
    1,944
    
    
    
    5,431
    
    
    
    5,431Short-term borrowings
    
    
    8,635
    
    
    
    8,635
    
    
    
    
    
    
    
    Long-term debt
    
    
    5,000
    
    
    
    5,021
    
    
    
    
    
    
    
    Other interest bearing liabilities
    
    
    1,096
    
    
    
    1,096
    
    
    
    1,037
    
    
    
    1,037Accrued interest payable
    
    
    801
    
    
    
    801
    
    
    
    999
    
    
    
    999Off-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
 Commitments
to extend credit and letters of credit
 20. Financial Instruments With Off-Balance Sheet Risk
    December 31,2008
    
    2007Commitments to grant loans
    
    $
    32,590
    
    
    $
    35,827Unfunded commitments under lines of credit
    
    
    15,148
    
    
    
    15,544Outstanding letters of credit
    
    
    639
    
    
    
    718




---



##### 



21. Related-Party Transactions
  22. Commitments And Contingent Liabilities
   23 . Subsequent Events




---



##### 



24. Juniata Valley Financial Corp. (Parent Company Only)
  CONDENSED BALANCE SHEETS
 December 31,2008
    
    
    2007ASSETS:Cash and cash equivalents
    
    $
    194
    
    
    $
    235Interest bearing deposits with banks
    
    
    155
    
    
    
    355Investment in bank subsidiary
    
    
    42,798
    
    
    
    40,725Investment in unconsolidated subsidiary
    
    
    3,176
    
    
    
    2,972Investment securities available for sale
    
    
    2,040
    
    
    
    4,053Other assets
    
    
    151
    
    
    
    275TOTAL ASSETS
    
    $
    48,514
    
    
    $
    48,615LIABILITIES:Income tax payable
    
    $
    29
    
    
    $
    9Accounts payable and other liabilities
    
    
    
    
    
    
    34STOCKHOLDERS EQUITY
    
    
    48,485
    
    
    
    48,572TOTAL LIABILITIES AND STOCKHOLDERS EQUITY
    
    $
    48,514
    
    
    $
    48,615
 CONDENSED STATEMENTS OF INCOME
 Years Ended December 31,2008
    
    
    2007
    
    
    2006INCOME:Interest on deposits with banks
    
    $
    10
    
    
    $
    17
    
    
    $
    18Interest and dividends on investment securities available for sale
    
    
    103
    
    
    
    168
    
    
    
    152Dividends from bank subsidiary
    
    
    2,611
    
    
    
    4,968
    
    
    
    7,031Income from unconsolidated subsidiary
    
    
    207
    
    
    
    192
    
    
    
    80Securities impairment charge
    
    
    (554
    )
    
    
    
    
    
    
    Gain on the sale of investment securities
    
    
    5
    
    
    
    
    
    
    
    77TOTAL INCOME
    
    
    2,382
    
    
    
    5,345
    
    
    
    7,358EXPENSE:Non-interest expense
    
    
    111
    
    
    
    153
    
    
    
    109TOTAL EXPENSE
    
    
    111
    
    
    
    153
    
    
    
    109INCOME BEFORE INCOME TAXES AND EQUITY
IN UNDISTRIBUTED NET INCOME OF SUBSIDIARY
    
    
    2,271
    
    
    
    5,192
    
    
    
    7,249Income tax expense (benefit)
    
    
    (131
    )
    
    
    32
    
    
    
    682,402
    
    
    
    5,160
    
    
    
    7,181Distributions in excess of (below) (undistributed) net income of
subsidiary
    
    
    3,322
    
    
    
    274
    
    
    
    (2,179
    )NET INCOME
    
    $
    5,724
    
    
    $
    5,434
    
    
    $
    5,002




---



##### 



CONDENSED
STATEMENTS OF CASH FLOWS
 Years Ended December 31,2008
    
    
    2007
    
    
    2006Cash flows from operating activities:Net income
    
    $
    5,724
    
    
    $
    5,434
    
    
    $
    5,002Adjustments to reconcile net income to net cash
provided by operating activities:Distributions in excess of (below) (undistributed) net income of subsidiary
    
    
    (3,322
    )
    
    
    (274
    )
    
    
    2,179Net amortization of securities premiums
    
    
    3
    
    
    
    
    
    
    
    Realized gains on sales of investment securities
    
    
    (5
    )
    
    
    
    
    
    
    (77
    )Securities impairment charges
    
    
    554
    
    
    
    
    
    
    
    Income from unconsolidated subsidiary, net of dividends of $0, $126 and $0
    
    
    (207
    )
    
    
    (66
    )
    
    
    (80
    )Decrease (increase) in interest and other assets
    
    
    73
    
    
    
    355
    
    
    
    (180
    )(Decrease) increase in taxes payable
    
    
    (9
    )
    
    
    (64
    )
    
    
    68Increase (decrease) in accounts payable and other liabilities
    
    
    (6
    )
    
    
    32
    
    
    
    2Net cash provided by operating activities
    
    
    2,805
    
    
    
    5,417
    
    
    
    6,914Cash flows from investing activities:Purchases of available for sale securities
    
    
    (720
    )
    
    
    (762
    )
    
    
    (134
    )Proceeds from the sale of available for sale securities
    
    
    5
    
    
    
    
    
    
    
    137Proceeds from the maturity of available for sale investment securities
    
    
    2,350
    
    
    
    340
    
    
    
    Proceeds from the maturity of interest bearing time deposits
    
    
    200
    
    
    
    135
    
    
    
    Investment in unconsolidated subsidiary
    
    
    
    
    
    
    
    
    
    
    (2,812
    )Net cash provided by (used in) investing activities
    
    
    1,835
    
    
    
    (287
    )
    
    
    (2,809
    )Cash flows from financing activities:Cash dividends
    
    
    (3,241
    )
    
    
    (4,210
    )
    
    
    (2,957
    )Purchase of treasury stock
    
    
    (1,518
    )
    
    
    (1,069
    )
    
    
    (1,302
    )Treasury stock issued for dividend reinvestment and
employee stock purchase plan
    
    
    78
    
    
    
    47
    
    
    
    289Net cash used in financing activities
    
    
    (4,681
    )
    
    
    (5,232
    )
    
    
    (3,970
    )Net (decrease) increase in cash and cash equivalents
    
    
    (41
    )
    
    
    (102
    )
    
    
    135Cash and cash equivalents at beginning of year
    
    
    235
    
    
    
    337
    
    
    
    202Cash and cash equivalents at end of year
    
    $
    194
    
    
    $
    235
    
    
    $
    337




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##### 



25. Quarterly Results Of Operations (Unaudited)
  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
 2007 Quarter endedMarch 31
    
    
    June 30
    
    
    September 30
    
    
    December 31Total interest income
    
    $
    6,447
    
    
    $
    6,704
    
    
    $
    6,798
    
    
    $
    6,774Total interest expense
    
    
    2,668
    
    
    
    2,776
    
    
    
    2,860
    
    
    
    2,756Net interest income
    
    
    3,779
    
    
    
    3,928
    
    
    
    3,938
    
    
    
    4,018Provision for loan losses
    
    
    67
    
    
    
    23
    
    
    
    
    
    
    
    30Securities impairment charge
    
    
    
    
    
    
    (33
    )
    
    
    
    
    
    
    Gains from the sale of assets
    
    
    12
    
    
    
    9
    
    
    
    45
    
    
    
    9Other income
    
    
    1,026
    
    
    
    1,005
    
    
    
    1,065
    
    
    
    1,061Other expense
    
    
    2,968
    
    
    
    3,072
    
    
    
    3,091
    
    
    
    3,078Income before income taxes
    
    
    1,782
    
    
    
    1,814
    
    
    
    1,957
    
    
    
    1,980Income tax expense
    
    
    503
    
    
    
    500
    
    
    
    538
    
    
    
    558Net income
    
    $
    1,279
    
    
    $
    1,314
    
    
    $
    1,419
    
    
    $
    1,422Per-share data:Basic earnings
    
    $
    .29
    
    
    $
    .30
    
    
    $
    .32
    
    
    $
    .32Diluted earnings
    
    
    .29
    
    
    
    .30
    
    
    
    .32
    
    
    
    .32Cash dividends
    
    
    .17
    
    
    
    .42
    
    
    
    .18
    
    
    
    .18




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##### 



Common Stock Market Prices and Dividends
   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
 2007DividendsQuarter Ended
    
    High
    
    Low
    
    DeclaredMarch 31
    
    $
    21.50
    
    
    $
    20.85
    
    
    $
    0.17June 30
    
    
    23.00
    
    
    
    20.00
    
    
    
    0.42September 30
    
    
    23.75
    
    
    
    20.05
    
    
    
    0.18December 31
    
    
    21.25
    
    
    
    20.00
    
    
    
    0.18
   Corporate Information
Corporate Headquarters
 Investor Information      JoAnn.McMinn@JVBonline.com




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##### 



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