##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934
 For the quarterly period ended September 30, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from  to
 Commission File Number 000-13232
 Juniata Valley Financial Corp.
  Pennsylvania
    
    23-2235254(State or other jurisdiction of
    
    (I.R.S. Employerincorporation or organization)
    
    Identification No.)Bridge and Main Streets, Mifflintown, Pennsylvania
    
    17059(Address of principal executive offices)
    
    (Zip Code)
 (Registrants telephone number, including area code)
 þ o
 o o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 o Yes þ No
  Class
    
    Outstanding as of November 9, 2009Common Stock ($1.00 par value)
    
    4,342,587 shares




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##### 



TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Statements of Financial Condition
as of September 30, 2009 and December 31, 2008 (Unaudited)
    
    
    3Consolidated Statements of Income for the Three and Nine
Months Ended September 30, 2009 and 2008 (Unaudited)
    
    
    4Consolidated Statements of Changes in Stockholders Equity
for the Nine Months Ended September 30, 2009 and 2008 (Unaudited)
    
    
    5Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 2009 and 2008 (Unaudited)
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis
of Financial Condition and Results of Operations
    
    
    18Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    26Item 4. Controls and Procedures
    
    
    28PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    28Item 1A. Risk Factors
    
    
    28Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    29Item 3. Defaults upon Senior Securities
    
    
    29Item 4. Submission of Matters to a Vote of Security Holders
    
    
    29Item 5. Other Information
    
    
    29Item 6. Exhibits
    
    
    29Signatures
    
    
    30Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1.
    
    Financial Statements
 Juniata Valley Financial Corp. and Subsidiary
 
 Consolidated Statements of Financial Condition
  September 30,
    
    
    December 31,2009
    
    
    2008ASSETSCash and due from banks
    
    $
    11,099
    
    
    $
    12,264Interest bearing deposits with banks
    
    
    117
    
    
    
    193Cash and cash equivalents
    
    
    11,216
    
    
    
    12,457Interest bearing time deposits with banks
    
    
    1,599
    
    
    
    5,325Securities available for sale
    
    
    81,678
    
    
    
    64,321Restricted investment in Federal Home Loan Bank (FHLB) stock
    
    
    2,197
    
    
    
    2,197Investment in unconsolidated subsidiary
    
    
    3,291
    
    
    
    3,176Total loans, net of unearned interest
    
    
    310,940
    
    
    
    315,132Less: Allowance for loan losses
    
    
    (2,605
    )
    
    
    (2,610
    )Total loans, net of allowance for loan losses
    
    
    308,335
    
    
    
    312,522Premises and equipment, net
    
    
    6,987
    
    
    
    7,374Bank owned life insurance and annuities
    
    
    12,964
    
    
    
    12,582Core deposit intangible
    
    
    310
    
    
    
    344Goodwill
    
    
    2,046
    
    
    
    2,046Accrued interest receivable and other assets
    
    
    5,496
    
    
    
    5,740Total assets
    
    $
    436,119
    
    
    $
    428,084LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Non-interest bearing
    
    $
    50,207
    
    
    $
    54,200Interest bearing
    
    
    321,826
    
    
    
    302,831Total deposits
    
    
    372,033
    
    
    
    357,031Securities sold under agreements to repurchase
    
    
    1,935
    
    
    
    1,944Short-term borrowings
    
    
    
    
    
    
    8,635Long-term debt
    
    
    5,000
    
    
    
    5,000Other interest bearing liabilities
    
    
    1,127
    
    
    
    1,096Accrued interest payable and other liabilities
    
    
    5,860
    
    
    
    5,893Total liabilities
    
    
    385,955
    
    
    
    379,599Stockholders Equity:Preferred stock, no par value:Authorized  500,000 shares, none issued
    
    
    
    
    
    
    Common stock, par value $1.00 per share:Authorized  20,000,000 sharesIssued  4,745,826 sharesOutstanding 4,342,587 shares at September 30, 2009;4,341,055 shares at December 31, 2008
    
    
    4,746
    
    
    
    4,746Surplus
    
    
    18,304
    
    
    
    18,324Retained earnings
    
    
    36,103
    
    
    
    34,758Accumulated other comprehensive loss
    
    
    (947
    )
    
    
    (1,247
    )Cost of common stock in Treasury:403,239 shares at September 30, 2009;404,771 shares at December 31, 2008
    
    
    (8,042
    )
    
    
    (8,096
    )Total stockholders equity
    
    
    50,164
    
    
    
    48,485Total liabilities and stockholders equity
    
    $
    436,119
    
    
    $
    428,084
   3




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##### Table of Contents



Juniata Valley Financial Corp. and Subsidiary
 
 Consolidated Statements of Income
   Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Interest income:Loans, including fees
    
    $
    5,126
    
    
    $
    5,559
    
    
    $
    15,671
    
    
    $
    16,582Taxable securities
    
    
    281
    
    
    
    437
    
    
    
    909
    
    
    
    1,277Tax-exempt securities
    
    
    305
    
    
    
    281
    
    
    
    864
    
    
    
    809Federal funds sold
    
    
    33
    
    
    
    9
    
    
    
    147
    
    
    
    123Other interest income
    
    
    2
    
    
    
    59
    
    
    
    7
    
    
    
    200Total interest income
    
    
    5,747
    
    
    
    6,345
    
    
    
    17,598
    
    
    
    18,991Interest expense:Deposits
    
    
    1,770
    
    
    
    2,183
    
    
    
    5,469
    
    
    
    6,923Securities sold under agreements to repurchase
    
    
    1
    
    
    
    22
    
    
    
    2
    
    
    
    66Short-term borrowings
    
    
    
    
    
    
    5
    
    
    
    1
    
    
    
    6Long-term debt
    
    
    36
    
    
    
    5
    
    
    
    105
    
    
    
    5Other interest bearing liabilities
    
    
    5
    
    
    
    8
    
    
    
    16
    
    
    
    24Total interest expense
    
    
    1,812
    
    
    
    2,223
    
    
    
    5,593
    
    
    
    7,024Net interest income
    
    
    3,935
    
    
    
    4,122
    
    
    
    12,005
    
    
    
    11,967Provision for loan losses
    
    
    165
    
    
    
    147
    
    
    
    377
    
    
    
    291Net interest income after provision for loan losses
    
    
    3,770
    
    
    
    3,975
    
    
    
    11,628
    
    
    
    11,676Noninterest income:Trust fees
    
    
    83
    
    
    
    95
    
    
    
    253
    
    
    
    312Customer service fees
    
    
    437
    
    
    
    433
    
    
    
    1,235
    
    
    
    1,239Earnings on bank-owned life insurance and annuities
    
    
    130
    
    
    
    146
    
    
    
    348
    
    
    
    382Commissions from sales of non-deposit products
    
    
    66
    
    
    
    158
    
    
    
    324
    
    
    
    541Income from unconsolidated subsidiary
    
    
    50
    
    
    
    59
    
    
    
    146
    
    
    
    152Securities impairment charge
    
    
    
    
    
    
    
    
    
    
    (226
    )
    
    
    (393
    )Gain (Loss) on sale of securities
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    33Gain (Loss) on sales of other assets
    
    
    (33
    )
    
    
    (1
    )
    
    
    
    
    
    
    52Gain from life insurance proceeds
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    179Prior period income from insurance sales
    
    
    
    
    
    
    
    
    
    
    323
    
    
    
    Other noninterest income
    
    
    219
    
    
    
    221
    
    
    
    700
    
    
    
    660Total noninterest income
    
    
    952
    
    
    
    1,103
    
    
    
    3,103
    
    
    
    3,157Noninterest expense:Employee compensation expense
    
    
    1,199
    
    
    
    1,297
    
    
    
    3,699
    
    
    
    3,854Employee benefits
    
    
    391
    
    
    
    362
    
    
    
    1,246
    
    
    
    1,054Occupancy
    
    
    218
    
    
    
    222
    
    
    
    693
    
    
    
    694Equipment
    
    
    149
    
    
    
    189
    
    
    
    473
    
    
    
    545Data processing expense
    
    
    324
    
    
    
    361
    
    
    
    994
    
    
    
    1,032Director compensation
    
    
    100
    
    
    
    113
    
    
    
    318
    
    
    
    340Professional fees
    
    
    90
    
    
    
    112
    
    
    
    301
    
    
    
    281Taxes, other than income
    
    
    125
    
    
    
    128
    
    
    
    380
    
    
    
    388FDIC Insurance premiums
    
    
    121
    
    
    
    14
    
    
    
    526
    
    
    
    35Amortization of intangibles
    
    
    11
    
    
    
    11
    
    
    
    34
    
    
    
    34Other noninterest expense
    
    
    276
    
    
    
    289
    
    
    
    846
    
    
    
    827Total noninterest expense
    
    
    3,004
    
    
    
    3,098
    
    
    
    9,510
    
    
    
    9,084Income before income taxes
    
    
    1,718
    
    
    
    1,980
    
    
    
    5,221
    
    
    
    5,749Provision for income taxes
    
    
    430
    
    
    
    529
    
    
    
    1,358
    
    
    
    1,499Net income
    
    $
    1,288
    
    
    $
    1,451
    
    
    $
    3,863
    
    
    $
    4,250Earnings per shareBasic
    
    $
    0.30
    
    
    $
    0.33
    
    
    $
    0.89
    
    
    $
    0.97Diluted
    
    $
    0.30
    
    
    $
    0.33
    
    
    $
    0.89
    
    
    $
    0.97Cash dividends declared per share
    
    $
    0.20
    
    
    $
    0.19
    
    
    $
    0.58
    
    
    $
    0.55Weighted average basic shares outstanding
    
    
    4,342,587
    
    
    
    4,369,736
    
    
    
    4,340,595
    
    
    
    4,387,836Weighted average diluted shares outstanding
    
    
    4,346,353
    
    
    
    4,377,457
    
    
    
    4,344,720
    
    
    
    4,395,331
   4




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##### Table of Contents



Juniata Valley Financial Corp. and Subsidiary
 
 Consolidated Statements of Changes in Stockholders Equity
   Nine Months Ended September 30, 2009Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at December 31, 2008
    
    
    4,341,055
    
    
    $
    4,746
    
    
    $
    18,324
    
    
    $
    34,758
    
    
    $
    (1,247
    )
    
    $
    (8,096
    )
    
    $
    48,485Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,863
    
    
    
    
    
    
    
    
    
    
    
    3,863Change in unrealized losses on securities
available for sale, net of reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    305
    
    
    
    
    
    
    
    305Defined benefit retirement plan
adjustments, net of tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,163Cash dividends at $0.58 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,518
    )
    
    
    
    
    
    
    
    
    
    
    (2,518
    )Stock-based compensation activity
    
    
    
    
    
    
    
    
    
    
    29
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    29Purchase of treasury stock, at cost
    
    
    (7,600
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (128
    )
    
    
    (128
    )Treasury stock issued for stock option
and stock purchase plans
    
    
    9,132
    
    
    
    
    
    
    
    (49
    )
    
    
    
    
    
    
    
    
    
    
    182
    
    
    
    133Balance at September 30, 2009
    
    
    4,342,587
    
    
    $
    4,746
    
    
    $
    18,304
    
    
    $
    36,103
    
    
    $
    (947
    )
    
    $
    (8,042
    )
    
    $
    50,164
 Nine Months Ended September 30, 2008Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at December 31, 2007
    
    
    4,409,445
    
    
    $
    4,746
    
    
    $
    18,297
    
    
    $
    32,755
    
    
    $
    (557
    )
    
    $
    (6,669
    )
    
    $
    48,572Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,250
    
    
    
    
    
    
    
    
    
    
    
    4,250Change in unrealized losses on securities
available for sale, net of reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3
    
    
    
    
    
    
    
    3Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,253Implementation of ASC Topic 715, Split-Dollar Life Insurance Arrangements
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (480
    )
    
    
    
    
    
    
    
    
    
    
    (480
    )Cash dividends at $0.55 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,416
    )
    
    
    
    
    
    
    
    
    
    
    (2,416
    )Stock-based compensation activity
    
    
    
    
    
    
    
    
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36Purchase 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 September 30, 2008
    
    
    4,341,055
    
    
    $
    4,746
    
    
    $
    18,320
    
    
    $
    34,109
    
    
    $
    (554
    )
    
    $
    (8,096
    )
    
    $
    48,525
   5




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##### Table of Contents



Juniata Valley Financial Corp. and Subsidiary
 
 Consolidated Statements of Cash Flows
   Nine Months EndedSeptember 30,2009
    
    
    2008Operating activities:Net income
    
    $
    3,863
    
    
    $
    4,250Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    377
    
    
    
    291Depreciation
    
    
    457
    
    
    
    532Net (accretion) amortization of securities premiums (discounts)
    
    
    156
    
    
    
    134Amortization of core deposit intangible
    
    
    34
    
    
    
    34Amortization of deferred net loan costs
    
    
    35
    
    
    
    15Deferral of net loan costs (fees)
    
    
    (3
    )
    
    
    1Securities impairment charge
    
    
    226
    
    
    
    393Net realized gains on sales of securities
    
    
    
    
    
    
    (33
    )Gains on sales of other assets
    
    
    
    
    
    
    (52
    )Earnings on bank owned life insurance and annuities
    
    
    (348
    )
    
    
    (382
    )Gain from life insurance proceeds
    
    
    
    
    
    
    (179
    )Deferred income tax benefit (expense)
    
    
    94
    
    
    
    (66
    )Equity in earnings of unconsolidated subsidiary, net of dividends of $34
and $0
    
    
    (112
    )
    
    
    (152
    )Stock-based compensation expense
    
    
    29
    
    
    
    36Decrease (increase) in accrued interest receivable and other assets
    
    
    78
    
    
    
    (1,682
    )Decrease in accrued interest payable and other liabilities
    
    
    (1
    )
    
    
    (46
    )Net cash provided by operating activities
    
    
    4,885
    
    
    
    3,094Investing activities:Purchases of:Securities available for sale
    
    
    (43,026
    )
    
    
    (35,217
    )FHLB stock
    
    
    
    
    
    
    (732
    )Premises and equipment
    
    
    (103
    )
    
    
    (682
    )Bank owned life insurance and annuities
    
    
    (94
    )
    
    
    (90
    )Proceeds from:Maturities of and principal repayments on
securities available for sale
    
    
    25,757
    
    
    
    29,733Bank owned life insurance and annuities
    
    
    52
    
    
    
    55Life insurance claims
    
    
    
    
    
    
    437Sale of fixed assets
    
    
    33
    
    
    
    Sale of other real estate owned
    
    
    435
    
    
    
    288Sale of other assets
    
    
    80
    
    
    
    322Net decrease in interest-bearing time deposits
    
    
    3,726
    
    
    
    200Net (increase) decrease in loans receivable
    
    
    3,169
    
    
    
    (19,181
    )Net cash used in investing activities
    
    
    (9,971
    )
    
    
    (24,867
    )Financing activities:Net increase in deposits
    
    
    15,002
    
    
    
    4,415Net increase (decrease) in short-term borrowings and securities
sold under agreements to repurchase
    
    
    (8,644
    )
    
    
    7,747Issuance of long-term debt
    
    
    
    
    
    
    5,000Cash dividends
    
    
    (2,518
    )
    
    
    (2,416
    )Purchase of treasury stock
    
    
    (128
    )
    
    
    (1,518
    )Treasury stock issued for employee stock plans
    
    
    133
    
    
    
    78Net cash provided by financing activities
    
    
    3,845
    
    
    
    13,306Net decrease in cash and cash equivalents
    
    
    (1,241
    )
    
    
    (8,467
    )Cash and cash equivalents at beginning of period
    
    
    12,457
    
    
    
    20,524Cash and cash equivalents at end of period
    
    $
    11,216
    
    
    $
    12,057Supplemental information:Interest paid
    
    $
    5,668
    
    
    $
    7,190Income taxes paid
    
    $
    910
    
    
    $
    1,625Supplemental schedule of noncash investing and financing activities:Transfer of loans to other real estate owned and repossessed assets
    
    $
    609
    
    
    $
    Transfer of fixed asset to other assets
    
    
    
    
    
    
    45
   6




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Juniata Valley Financial Corp. and Subsidiary
 
              7




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##### Table of Contents



Three Months Ended September 30, 2009
    
    
    Three Months Ended September 30, 2008Before
    
    
    Tax Expense
    
    
    
    
    
    
    Before
    
    
    Tax ExpenseTax
    
    
    or
    
    
    Net-of-Tax
    
    
    Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    (Benefit)
    
    
    Amount
    
    
    Amount
    
    
    (Benefit)
    
    
    AmountNet income
    
    $
    1,718
    
    
    $
    430
    
    
    $
    1,288
    
    
    $
    1,980
    
    
    $
    529
    
    
    $
    1,451Other comprehensive income:Unrealized gains on available for sale securities:Unrealized gains arising during the period
    
    
    506
    
    
    
    172
    
    
    
    334
    
    
    
    143
    
    
    
    49
    
    
    
    94Unrealized gains (losses) from unconsolidated subsidiary
    
    
    (12
    )
    
    
    
    
    
    
    (12
    )
    
    
    1
    
    
    
    
    
    
    
    1Less reclassification adjustment for:losses included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8
    
    
    
    3
    
    
    
    5Unrecognized pension net loss
    
    
    (7
    )
    
    
    (2
    )
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    Other comprehensive income
    
    
    487
    
    
    
    170
    
    
    
    317
    
    
    
    152
    
    
    
    52
    
    
    
    100Total comprehensive income
    
    $
    2,205
    
    
    $
    600
    
    
    $
    1,605
    
    
    $
    2,132
    
    
    $
    581
    
    
    $
    1,551
 Nine Months Ended September 30, 2009
    
    
    Nine Months Ended September 30, 2008Before
    
    
    Tax Expense
    
    
    
    
    
    
    Before
    
    
    Tax ExpenseTax
    
    
    or
    
    
    Net-of-Tax
    
    
    Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    (Benefit)
    
    
    Amount
    
    
    Amount
    
    
    (Benefit)
    
    
    AmountNet income
    
    $
    5,221
    
    
    $
    1,358
    
    
    $
    3,863
    
    
    $
    5,749
    
    
    $
    1,499
    
    
    $
    4,250Other comprehensive income:Unrealized gains (losses) on available for sale securities:Unrealized gains (losses) arising during the period
    
    
    243
    
    
    
    82
    
    
    
    161
    
    
    
    (354
    )
    
    
    (120
    )
    
    
    (234
    )Unrealized losses from unconsolidated subsidiary
    
    
    (5
    )
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    Less reclassification adjustment for:gains included in net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (33
    )
    
    
    (11
    )
    
    
    (22
    )securities impairment charge
    
    
    226
    
    
    
    77
    
    
    
    149
    
    
    
    393
    
    
    
    134
    
    
    
    259Unrecognized pension net loss
    
    
    (7
    )
    
    
    (2
    )
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    Other comprehensive income
    
    
    457
    
    
    
    157
    
    
    
    300
    
    
    
    6
    
    
    
    3
    
    
    
    3Total comprehensive income
    
    $
    5,678
    
    
    $
    1,515
    
    
    $
    4,163
    
    
    $
    5,755
    
    
    $
    1,502
    
    
    $
    4,253
  8




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##### Table of Contents



(Amounts, except earnings per share, in thousands)
 Three Months
    
    
    Three MonthsEnded
    
    
    EndedSeptember 30, 2009
    
    
    September 30, 2008Net income
    
    $
    1,288
    
    
    $
    1,451Weighted-average common shares outstanding
    
    
    4,342
    
    
    
    4,370Basic earnings per share
    
    $
    0.30
    
    
    $
    0.33Weighted-average common shares outstanding
    
    
    4,342
    
    
    
    4,370Common stock equivalents due to effect of stock options
    
    
    4
    
    
    
    8Total weighted-average common shares and equivalents
    
    
    4,346
    
    
    
    4,378Diluted earnings per share
    
    $
    0.30
    
    
    $
    0.33
 Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30, 2009
    
    
    September 30, 2008Net income
    
    $
    3,863
    
    
    $
    4,250Weighted-average common shares outstanding
    
    
    4,341
    
    
    
    4,388Basic earnings per share
    
    $
    0.89
    
    
    $
    0.97Weighted-average common shares outstanding
    
    
    4,341
    
    
    
    4,388Common stock equivalents due to effect of stock options
    
    
    4
    
    
    
    7Total weighted-average common shares and equivalents
    
    
    4,345
    
    
    
    4,395Diluted earnings per share
    
    $
    0.89
    
    
    $
    0.97
     9




---



##### Table of Contents



(Dollar amounts in thousands)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Components of net periodic pension costService cost
    
    $
    47
    
    
    $
    45
    
    
    $
    141
    
    
    $
    135Interest cost
    
    
    112
    
    
    
    110
    
    
    
    336
    
    
    
    330Expected return on plan assets
    
    
    (115
    )
    
    
    (106
    )
    
    
    (345
    )
    
    
    (318
    )Amortization of prior service cost
    
    
    (1
    )
    
    
    
    
    
    
    (1
    )
    
    
    Additional recognized amounts
    
    
    40
    
    
    
    9
    
    
    
    120
    
    
    
    27Net periodic pension cost
    
    $
    83
    
    
    $
    58
    
    
    $
    251
    
    
    $
    174
       10




---



##### Table of Contents



September 30, 2009Gross
    
    
    GrossSecurities Available for Sale
    
    Amortized
    
    
    Fair
    
    
    Unrealized
    
    
    UnrealizedType and maturity
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    LossesU.S. Treasury securities and obligations of U.S.Government agencies and corporationsWithin one year
    
    $
    2,000
    
    
    $
    2,008
    
    
    $
    8
    
    
    $
    After one year but within five years
    
    
    28,227
    
    
    
    28,501
    
    
    
    274
    
    
    
    After five years but within ten years
    
    
    940
    
    
    
    936
    
    
    
    
    
    
    
    (4
    )31,167
    
    
    
    31,445
    
    
    
    282
    
    
    
    (4
    )Obligations of state and political subdivisionsWithin one year
    
    
    10,978
    
    
    
    11,050
    
    
    
    72
    
    
    
    After one year but within five years
    
    
    32,743
    
    
    
    33,800
    
    
    
    1,063
    
    
    
    (6
    )After five years but within ten years
    
    
    1,739
    
    
    
    1,852
    
    
    
    113
    
    
    
    45,460
    
    
    
    46,702
    
    
    
    1,248
    
    
    
    (6
    )Corporate notesAfter one year but within five years
    
    
    1,000
    
    
    
    1,009
    
    
    
    9
    
    
    
    1,000
    
    
    
    1,009
    
    
    
    9
    
    
    
    Mortgage-backed securities
    
    
    1,557
    
    
    
    1,654
    
    
    
    97
    
    
    
    Equity securities
    
    
    984
    
    
    
    868
    
    
    
    58
    
    
    
    (174
    )Total
    
    $
    80,168
    
    
    $
    81,678
    
    
    $
    1,694
    
    
    $
    (184
    )
  11




---



##### Table of Contents



December 31, 2008Gross
    
    
    GrossSecurities Available for Sale
    
    Amortized
    
    
    Fair
    
    
    Unrealized
    
    
    UnrealizedType and maturity
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    LossesU.S. Treasury securities and obligations of U.S.Government agencies and corporationsWithin one year
    
    $
    4,627
    
    
    $
    4,732
    
    
    $
    105
    
    
    $
    After one year but within five years
    
    
    19,961
    
    
    
    20,236
    
    
    
    275
    
    
    
    24,588
    
    
    
    24,968
    
    
    
    380
    
    
    
    Obligations of state and political subdivisionsWithin one year
    
    
    3,571
    
    
    
    3,593
    
    
    
    22
    
    
    
    After one year but within five years
    
    
    27,622
    
    
    
    28,343
    
    
    
    727
    
    
    
    (6
    )After five years but within ten years
    
    
    3,485
    
    
    
    3,579
    
    
    
    95
    
    
    
    (1
    )34,678
    
    
    
    35,515
    
    
    
    844
    
    
    
    (7
    )Corporate notesAfter one year but within five years
    
    
    1,000
    
    
    
    957
    
    
    
    
    
    
    
    (43
    )1,000
    
    
    
    957
    
    
    
    
    
    
    
    (43
    )Mortgage-backed securities
    
    
    1,803
    
    
    
    1,867
    
    
    
    64
    
    
    
    Equity securities
    
    
    1,210
    
    
    
    1,014
    
    
    
    29
    
    
    
    (225
    )Total
    
    $
    63,279
    
    
    $
    64,321
    
    
    $
    1,317
    
    
    $
    (275
    )
  Unrealized Losses 09/30/2009Less 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
    
    $
    936
    
    
    $
    (4
    )
    
    $
    
    
    
    $
    
    
    
    $
    936
    
    
    $
    (4
    )Obligations of state and political subdivisions
    
    
    879
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    879
    
    
    
    (6
    )Debt securities
    
    
    1,815
    
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    1,815
    
    
    
    (10
    )Equity securities
    
    
    18
    
    
    
    (7
    )
    
    
    578
    
    
    
    (167
    )
    
    
    596
    
    
    
    (174
    )Total temporarily impaired securities
    
    $
    1,833
    
    
    $
    (17
    )
    
    $
    578
    
    
    $
    (167
    )
    
    $
    2,411
    
    
    $
    (184
    )
 Unrealized Losses 12/31/2008Less Than 12 Months
    
    
    12 Months or More
    
    
    TotalFair
    
    
    Unrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair
    
    
    UnrealizedValue
    
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    Value
    
    
    LossesObligations of state and political
subdivisions
    
    $
    1,016
    
    
    $
    (7
    )
    
    $
    
    
    
    $
    
    
    
    $
    1,016
    
    
    $
    (7
    )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
    )
  12




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##### Table of Contents



Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008Gross proceeds from sales of securities
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Securities available for sale:Gross realized gains
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Gross realized losses
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Gross losses from business combinations
    
    
    
    
    
    
    (8
    )
    
    
    
    
    
    
    (8
    )Gross gains from business combinations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    41
  Fair Value Measurements and Disclosures
   13




---



##### Table of Contents



Level 1 Inputs  Unadjusted quoted prices in active markets for identical assets or
liabilities that the reporting entity has the ability to access at the measurement date.Level 2 Inputs  Inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly or indirectly. These might include quoted prices for
similar assets or liabilities in active markets, quoted prices for identical or similar
assets or liabilities in markets that are not active, inputs other than quoted prices that
are observable for the asset or liability (such as interest rates, volatilities, prepayment
speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by
market data by correlation or other means.Level 3 Inputs  Unobservable inputs for determining the fair values of assets or
liabilities that reflect an entitys own assumptions about the assumptions that market
participants would use in pricing the assets or liabilities.
   14




---



##### Table of Contents



Securities Available for Sale.
 Impaired Loans
 Other Real Estate Owned.
  (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Quoted Prices in
    
    
    Significant
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Otherfor Identical
    
    
    Observable
    
    
    UnobservableSeptember 30, 2009
    
    
    Assets
    
    
    Inputs
    
    
    InputsMeasured at fair value on a recurring basis:Equity securities available-for-sale
    
    $
    868
    
    
    $
    868
    
    
    $
    
    
    
    $
    Debt securities available-for-sale
    
    
    80,810
    
    
    
    
    
    
    
    80,810
    
    
    
    Measured at fair value on a non-recurring basis:Impaired loans
    
    
    1,622
    
    
    
    
    
    
    
    
    
    
    
    1,622Other real estate owned
    
    
    439
    
    
    
    
    
    
    
    
    
    
    
    439
 (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)Quoted Prices in
    
    
    Significant
    
    
    SignificantActive Markets
    
    
    Other
    
    
    Otherfor Identical
    
    
    Observable
    
    
    UnobservableDecember 31, 2008
    
    
    Assets
    
    
    Inputs
    
    
    InputsMeasured at fair value on a recurring basis:Equity securities available-for-sale
    
    $
    1,014
    
    
    $
    1,014
    
    
    $
    
    
    
    $
    Debt securities available-for-sale
    
    
    63,307
    
    
    
    
    
    
    
    63,307
    
    
    
    Measured at fair value on a non-recurring basis:Impaired loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other real estate owned
    
    
    305
    
    
    
    
    
    
    
    
    
    
    
    305
   15




---



##### Table of Contents



Fair Value of Financial Instruments
 Financial Instruments
  Financial Instruments
 September 30, 2009
    
    
    December 31, 2008Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and due from banks
    
    $
    11,099
    
    
    $
    11,099
    
    
    $
    12,264
    
    
    $
    12,264Interest bearing deposits with banks
    
    
    117
    
    
    
    117
    
    
    
    193
    
    
    
    193Interest bearing time deposits with banks
    
    
    1,599
    
    
    
    1,638
    
    
    
    5,325
    
    
    
    5,471Securities
    
    
    81,678
    
    
    
    81,678
    
    
    
    64,321
    
    
    
    64,321Restricted investment in FHLB stock
    
    
    2,197
    
    
    
    2,197
    
    
    
    2,197
    
    
    
    2,197Total loans, net of unearned interest
    
    
    310,940
    
    
    
    323,140
    
    
    
    312,522
    
    
    
    323,289Accrued interest receivable
    
    
    2,497
    
    
    
    2,497
    
    
    
    2,315
    
    
    
    2,315Financial liabilities:Non-interest bearing deposits
    
    
    50,207
    
    
    
    50,207
    
    
    
    54,200
    
    
    
    54,200Interest bearing deposits
    
    
    321,826
    
    
    
    325,761
    
    
    
    302,831
    
    
    
    306,500Securities sold under agreements to
repurchase
    
    
    1,935
    
    
    
    1,935
    
    
    
    1,944
    
    
    
    1,944Short-term borrowings
    
    
    
    
    
    
    
    
    
    
    8,635
    
    
    
    8,635Long-term debt
    
    
    5,000
    
    
    
    5,066
    
    
    
    5,000
    
    
    
    5,021Other interest bearing liabilities
    
    
    1,127
    
    
    
    1,127
    
    
    
    1,096
    
    
    
    1,096Accrued interest payable
    
    
    725
    
    
    
    725
    
    
    
    801
    
    
    
    801Off-balance sheet financial instruments:Commitments to extend credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Letters of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
     16




---



##### Table of Contents



Interest bearing time deposits with banks
 Securities Available for Sale
 Loans
 Impaired Loans
 Fixed rate time deposits
 Long-term debt
 Commitments to extend credit and letters of credit
    17




---



##### Table of Contents



Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
            18




---



##### Table of Contents



September 30,
    
    
    December 31,
    
    
    Change2009
    
    
    2008
    
    
    $
    
    
    %Deposits:Demand, non-interest bearing
    
    $
    50,207
    
    
    $
    54,200
    
    
    $
    (3,993
    )
    
    
    (7.4
    %)NOW and money market
    
    
    69,162
    
    
    
    62,099
    
    
    
    7,063
    
    
    
    11.4
    %Savings
    
    
    41,274
    
    
    
    37,114
    
    
    
    4,160
    
    
    
    11.2
    %Time deposits, $100,000 and more
    
    
    41,452
    
    
    
    39,059
    
    
    
    2,393
    
    
    
    6.1
    %Other time deposits
    
    
    169,938
    
    
    
    164,559
    
    
    
    5,379
    
    
    
    3.3
    %Total deposits
    
    $
    372,033
    
    
    $
    357,031
    
    
    $
    15,002
    
    
    
    4.2
    %
  September 30,
    
    
    December 31,
    
    
    Change2009
    
    
    2008
    
    
    $
    
    
    %Loans:Commercial, financial and agricultural
    
    $
    33,864
    
    
    $
    38,755
    
    
    $
    (4,891
    )
    
    
    (12.6
    %)Real estate  commercial
    
    
    34,749
    
    
    
    32,171
    
    
    
    2,578
    
    
    
    8.0
    %Real estate  construction
    
    
    20,919
    
    
    
    22,144
    
    
    
    (1,225
    )
    
    
    (5.5
    %)Real estate  mortgage
    
    
    141,840
    
    
    
    140,016
    
    
    
    1,824
    
    
    
    1.3
    %Home equity
    
    
    54,627
    
    
    
    60,949
    
    
    
    (6,322
    )
    
    
    (10.4
    %)Obligations of states and political subdivisions
    
    
    12,522
    
    
    
    7,177
    
    
    
    5,345
    
    
    
    74.5
    %Personal
    
    
    12,419
    
    
    
    13,920
    
    
    
    (1,501
    )
    
    
    (10.8
    %)Total loans
    
    $
    310,940
    
    
    $
    315,132
    
    
    $
    (4,192
    )
    
    
    (1.3
    %)
  Periods Ended September 30,2009
    
    
    2008Balance of allowance  January 1
    
    $
    2,610
    
    
    $
    2,322Loans charged off
    
    
    (391
    )
    
    
    (92
    )Recoveries of loans previously charged off
    
    
    9
    
    
    
    20Net charge-offs
    
    
    (382
    )
    
    
    (72
    )Provision for loan losses
    
    
    377
    
    
    
    291Balance of allowance  end of period
    
    $
    2,605
    
    
    $
    2,541Ratio of net charge-offs during period to
average loans outstanding
    
    
    0.12
    %
    
    
    0.02
    %
  19




---



##### Table of Contents



(Dollar amounts in thousands)
 September 30, 2009
    
    
    December 31, 2008Non-performing loansNonaccrual loans
    
    $
    3,039
    
    
    $
    1,255Accruing loans past due 90 days or more
    
    
    463
    
    
    
    664Restructured loans
    
    
    
    
    
    
    Total
    
    $
    3,502
    
    
    $
    1,919Average loans outstanding
    
    $
    310,229
    
    
    $
    307,606Ratio of non-performing loans to average loans outstanding
    
    
    1.13
    %
    
    
    0.62
    %
      Comparison of the Three Months Ended September 30, 2009 and 2008
    20




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##### Table of Contents



Three Months EndedSeptember 30,2009
    
    
    2008Return on average assets (annualized)
    
    
    1.17
    %
    
    
    1.34
    %Return on average equity (annualized)
    
    
    10.39
    %
    
    
    11.89
    %Average equity to average assets
    
    
    11.24
    %
    
    
    11.25
    %Non-interest income, excluding securities losses, as a percentage
of average assets (annualized)
    
    
    0.86
    %
    
    
    1.02
    %Non-interest expense as a percentage of average assets (annualized)
    
    
    2.72
    %
    
    
    2.86
    %
             21




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##### Table of Contents



Comparison of the Nine Months Ended September 30, 2009 and 2008
    22




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##### Table of Contents



Nine Months EndedSeptember 30,2009
    
    
    2008Return on average assets (annualized)
    
    
    1.18
    %
    
    
    1.33
    %Return on average equity (annualized)
    
    
    10.48
    %
    
    
    11.63
    %Average equity to average assets
    
    
    11.30
    %
    
    
    11.40
    %Non-interest income, excluding securities gains and impairment
charges, as a percentage of average assets (annualized)
    
    
    1.02
    %
    
    
    1.10
    %Non-interest expense as a percentage of average assets (annualized)
    
    
    2.91
    %
    
    
    2.83
    %
            23




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##### Table of Contents



Year-to-date through September 30,Non-interest income (in thousands)
    
    2009
    
    
    2008Securities other-than-temporary impairment charge
    
    $
    (226
    )
    
    $
    (393
    )Gains on the sale of securities
    
    
    
    
    
    
    33Partial redemption of VISA shares
    
    
    
    
    
    
    38Gains on the sale of former branch locations
    
    
    14
    
    
    
    58Gains from life insurance proceeds
    
    
    
    
    
    
    179Refund of overcharged PA sales tax from years 2004-2006
    
    
    40
    
    
    
    Prior period income from credit-life insurance sales
    
    
    323
    
    
    
    Total positive (negative) impact on non-interest income
    
    $
    151
    
    
    $
    (85
    )
     24




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##### Table of Contents



Year-to-date through September 30,Non-interest expense (in thousands)
    
    2009
    
    
    2008Forfeiture of unvested employee benefits
    
    $
    
    
    
    $
    (106
    )FDIC Insurance special assessment
    
    
    194
    
    
    
    Total negative (positive) impact on non-interest expense
    
    $
    194
    
    
    $
    (106
    )
            25




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##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
      26




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##### Table of Contents



Change in Net
    
    
    Change in NetChange in
    
    Interest Income
    
    
    Interest Income
    
    
    Total Change inInterest Rates
    
    Due to Interest
    
    
    Due to Imbedded
    
    
    Net Interest(Basis Points)
    
    Rate Risk (Static)
    
    
    Options
    
    
    Income300
    
    $
    (198
    )
    
    $
    218
    
    
    $
    20200
    
    
    (132
    )
    
    
    105
    
    
    
    (27
    )100
    
    
    (66
    )
    
    
    26
    
    
    
    (40
    )0
    
    
    
    
    
    
    
    
    
    
    
    27




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##### Table of Contents



Item 4.
    
    Controls and Procedures
 Disclosure Controls and Procedures
    Changes in Internal Control Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1.
    
    LEGAL PROCEEDINGS
  
 Item 1A.
    
    RISK FACTORS
   28




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##### Table of Contents



Item 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  Total Number ofShares Purchased as
    
    
    Maximum Number ofTotal Number
    
    
    Average
    
    
    Part of Publicly
    
    
    Shares that May Yet Beof Shares
    
    
    Price Paid
    
    
    Announced Plans or
    
    
    Purchased Under thePeriod
    
    Purchased
    
    
    per Share
    
    
    Programs
    
    
    Plans or Programs (1)July 1-31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    210,936August 1-31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210,936September 1-30, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210,936Totals
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    210,936
 (1)
    
    On March 23, 2001, the Corporation announced plans to buy back 100,000
(200,000 on a post-split basis) shares of its common stock. There is no expiration
date to this buyback plan, but subsequent to the initial plan, the Board of
Directors authorized the repurchase of 400,000 additional shares in 2005 and then
authorized 200,000 additional shares in September of 2008. As of November 9, 2009,
the number of shares that may yet be purchased under the program was 210,936. No
repurchase plan or program expired during the period covered by the table. The
Corporation has no stock repurchase plan or program that it has determined to
terminate prior to expiration or under which it does not intend to make further
purchases. 
 Item 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 Item 4.
    
    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 Item 5.
    
    OTHER INFORMATION
  
 Item 6.
    
    EXHIBITS
 3.1
    
    
    
    
    Amended and Restated Articles of Incorporation (incorporated
by reference to Exhibit 4.1 to the Corporations Form S-3 Registration
Statement No. 333-129023 filed with the SEC on October 14, 2005)3.2
    
    
    
    
    Bylaws (incorporated by reference to Exhibit 3.2 to the
Corporations report on Form 8-K filed with the SEC on December 21, 2007)10.0
    
    
    
    
    2004 Executive Annual Incentive Plan
(incorporated by reference to Exhibit 10.15 to the
Corporations report on Form 10-K filed with the SEC
on March 16, 2005)*10.1
    
    
    
    
    Exhibits A-B to 2004 Executive Annual Incentive
Plan (incorporated by reference to Exhibit 10.1 to
the Corporations report on Form 10-Q filed with the
SEC on August 7, 2009)*31.1
    
    
    
    
    Rule 13a  14(a)/15d  14(a) Certification of President and
Chief Executive Officer31.2
    
    
    
    
    Rule 13a  14(a)/15d  14(a) Certification of Chief Financial
Officer32.1
    
    
    
    
    Section 1350 Certification of President and Chief Executive
Officer (furnished, not filed)32.2
    
    
    
    
    Section 1350 Certification of Chief Financial Officer
(furnished, not filed)
  29




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##### Table of Contents



Juniata Valley Financial Corp.
(Registrant)Date 11-09-2009
    By:
    /s/ Francis J. EvanitskyFrancis J. Evanitsky, President
and Chief Executive OfficerDate 11-09-2009
    By:
    /s/ JoAnn N. McMinnJoAnn N. McMinn, Chief Financial Officer,Principal Accounting
Officer and Principal Financial
Officer  30