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 endedSeptember 30, 2008
 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 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)Bridge and Main Streets, Mifflintown, Pennsylvania
    
    17059(Address of principal executive offices)
    
    (Zip Code)
 
  þ o
  Large accelerated
filer oAccelerated
filer þNon-accelerated filer o(Do not check if a smaller reporting company)Smaller reporting company o o þ
  Class
    
    Outstanding as of November 7, 2008Common Stock ($1.00 par value)
    
    4,341,055 shares




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##### 



TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1.
    
    Financial StatementsConsolidated Statements of Financial Condition
as of September 30, 2008 and December 31, 2007 (Unaudited)
    
    
    3Consolidated Statements of Income for the Three and Nine
Months Ended September 30, 2008 and 2007 (Unaudited)
    
    
    4Consolidated Statements of Changes in Stockholders Equity
for the Nine Months Ended September 30, 2008 and 2007 (Unaudited)
    
    
    5Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 2008 and 2007 (Unaudited)
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2.
    
    Managements Discussion and Analysis
of Financial Condition and Results of Operations
    
    
    14Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    21Item 4.
    
    Controls and Procedures
    
    
    23PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    
    24Item 1A.
    
    Risk Factors
    
    
    24Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3.
    
    Defaults upon Senior Securities
    
    
    27Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    27Item 5.
    
    Other Information
    
    
    27Item 6.
    
    Exhibits
    
    
    27Signatures
    
    
    27
 2




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##### 



PART I  FINANCIAL INFORMATION
 Item 1. Financial Statements
 Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Financial Condition
 September 30,
    
    
    December 31,2008
    
    
    2007ASSETSCash and due from banks
    
    $
    12,037
    
    
    $
    12,254Interest bearing deposits with banks
    
    
    20
    
    
    
    770Federal funds sold
    
    
    
    
    
    
    7,500Cash and cash equivalents
    
    
    12,057
    
    
    
    20,524Interest bearing time deposits with banks
    
    
    5,325
    
    
    
    5,525Securities available for sale
    
    
    72,050
    
    
    
    67,056Restricted investment in Federal Home Loan Bank (FHLB) stock
    
    
    1,827
    
    
    
    1,095Investment in unconsolidated subsidiary
    
    
    3,124
    
    
    
    2,972Total loans, net of unearned interest
    
    
    317,093
    
    
    
    298,000Less: Allowance for loan losses
    
    
    (2,541
    )
    
    
    (2,322
    )Total loans, net of allowance for loan losses
    
    
    314,552
    
    
    
    295,678Premises and equipment, net
    
    
    7,399
    
    
    
    7,272Bank owned life insurance and annuities
    
    
    12,499
    
    
    
    12,344Core deposit intangible
    
    
    355
    
    
    
    389Goodwill
    
    
    2,046
    
    
    
    2,046Accrued interest receivable and other assets
    
    
    6,479
    
    
    
    5,245Total assets
    
    $
    437,713
    
    
    $
    420,146LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Non-interest bearing
    
    $
    52,145
    
    
    $
    48,755Interest bearing
    
    
    311,727
    
    
    
    310,702Total deposits
    
    
    363,872
    
    
    
    359,457Securities sold under agreements to repurchase
    
    
    6,178
    
    
    
    5,431Short-term borrowings
    
    
    7,000
    
    
    
    Long-term debt
    
    
    5,000
    
    
    
    Other interest bearing liabilities
    
    
    1,075
    
    
    
    1,037Accrued interest payable and other liabilities
    
    
    6,063
    
    
    
    5,649Total liabilities
    
    
    389,188
    
    
    
    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 shares
Issued  4,745,826 sharesOutstanding 4,341,055 shares at September 30, 2008;
4,409,445 shares at December 31, 2007
    
    
    4,746
    
    
    
    4,746Surplus
    
    
    18,320
    
    
    
    18,297Retained earnings
    
    
    34,109
    
    
    
    32,755Accumulated other comprehensive loss
    
    
    (554
    )
    
    
    (557
    )Cost of common stock in Treasury:404,771 shares at September 30, 2008;
336,381 shares at December 31, 2007
    
    
    (8,096
    )
    
    
    (6,669
    )Total stockholders equity
    
    
    48,525
    
    
    
    48,572Total liabilities and stockholders equity
    
    $
    437,713
    
    
    $
    420,146
  3




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##### 



Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Income
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2008
    
    
    2007
    
    
    2008
    
    
    2007Interest income:Loans, including fees
    
    $
    5,559
    
    
    $
    5,756
    
    
    $
    16,582
    
    
    $
    17,109Taxable securities
    
    
    437
    
    
    
    671
    
    
    
    1,277
    
    
    
    1,784Tax-exempt securities
    
    
    281
    
    
    
    235
    
    
    
    809
    
    
    
    598Federal funds sold
    
    
    9
    
    
    
    72
    
    
    
    123
    
    
    
    268Other interest income
    
    
    59
    
    
    
    64
    
    
    
    200
    
    
    
    190Total interest income
    
    
    6,345
    
    
    
    6,798
    
    
    
    18,991
    
    
    
    19,949Interest expense:Deposits
    
    
    2,183
    
    
    
    2,770
    
    
    
    6,923
    
    
    
    8,061Securities sold under agreements to repurchase
    
    
    22
    
    
    
    80
    
    
    
    66
    
    
    
    214Short-term borrowings
    
    
    5
    
    
    
    
    
    
    
    6
    
    
    
    Long-term debt
    
    
    5
    
    
    
    
    
    
    
    5
    
    
    
    Other interest bearing liabilities
    
    
    8
    
    
    
    10
    
    
    
    24
    
    
    
    29Total interest expense
    
    
    2,223
    
    
    
    2,860
    
    
    
    7,024
    
    
    
    8,304Net interest income
    
    
    4,122
    
    
    
    3,938
    
    
    
    11,967
    
    
    
    11,645Provision for loan losses
    
    
    147
    
    
    
    
    
    
    
    291
    
    
    
    90Net interest income after provision for loan losses
    
    
    3,975
    
    
    
    3,938
    
    
    
    11,676
    
    
    
    11,555Noninterest income:Trust fees
    
    
    95
    
    
    
    130
    
    
    
    312
    
    
    
    353Customer service fees
    
    
    433
    
    
    
    408
    
    
    
    1,239
    
    
    
    1,216Earnings on bank-owned life insurance and annuities
    
    
    146
    
    
    
    113
    
    
    
    382
    
    
    
    334Commissions from sales of non-deposit products
    
    
    158
    
    
    
    180
    
    
    
    541
    
    
    
    550Income from unconsolidated subsidiary
    
    
    59
    
    
    
    52
    
    
    
    152
    
    
    
    136Securities impairment charge
    
    
    
    
    
    
    
    
    
    
    (393
    )
    
    
    (33
    )Gain (loss) on sale of securities
    
    
    (8
    )
    
    
    22
    
    
    
    33
    
    
    
    14Gain (loss) on sales of other assets
    
    
    (1
    )
    
    
    2
    
    
    
    52
    
    
    
    1Gain from life insurance proceeds
    
    
    
    
    
    
    
    
    
    
    179
    
    
    
    Other noninterest income
    
    
    221
    
    
    
    203
    
    
    
    660
    
    
    
    558Total noninterest income
    
    
    1,103
    
    
    
    1,110
    
    
    
    3,157
    
    
    
    3,129Noninterest expense:Employee compensation expense
    
    
    1,297
    
    
    
    1,351
    
    
    
    3,854
    
    
    
    3,841Employee benefits
    
    
    362
    
    
    
    353
    
    
    
    1,054
    
    
    
    1,105Occupancy
    
    
    222
    
    
    
    204
    
    
    
    694
    
    
    
    660Equipment
    
    
    189
    
    
    
    174
    
    
    
    545
    
    
    
    518Data processing expense
    
    
    361
    
    
    
    336
    
    
    
    1,032
    
    
    
    991Director compensation
    
    
    113
    
    
    
    118
    
    
    
    340
    
    
    
    353Professional fees
    
    
    112
    
    
    
    115
    
    
    
    281
    
    
    
    329Taxes, other than income
    
    
    128
    
    
    
    133
    
    
    
    388
    
    
    
    419Amortization of intangibles
    
    
    11
    
    
    
    11
    
    
    
    34
    
    
    
    34Other noninterest expense
    
    
    303
    
    
    
    296
    
    
    
    862
    
    
    
    881Total noninterest expense
    
    
    3,098
    
    
    
    3,091
    
    
    
    9,084
    
    
    
    9,131Income before income taxes
    
    
    1,980
    
    
    
    1,957
    
    
    
    5,749
    
    
    
    5,553Provision for income taxes
    
    
    529
    
    
    
    538
    
    
    
    1,499
    
    
    
    1,541Net income
    
    $
    1,451
    
    
    $
    1,419
    
    
    $
    4,250
    
    
    $
    4,012Earnings per shareBasic
    
    $
    0.33
    
    
    $
    0.32
    
    
    $
    0.97
    
    
    $
    0.90Diluted
    
    $
    0.33
    
    
    $
    0.32
    
    
    $
    0.97
    
    
    $
    0.90Cash dividends declared per share
    
    $
    0.19
    
    
    $
    0.18
    
    
    $
    0.55
    
    
    $
    0.77Weighted average basic shares outstanding
    
    
    4,369,736
    
    
    
    4,434,120
    
    
    
    4,387,836
    
    
    
    4,440,561Weighted average diluted shares outstanding
    
    
    4,377,457
    
    
    
    4,443,228
    
    
    
    4,395,331
    
    
    
    4,449,952
  4




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##### 



Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Changes in Stockholders Equity
 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 EITF 06-4, Accounting for
Deferred Compensation and Postretirement Benefit
Aspects of Endorsement Split-Dollar Life
Insurance Arrangements (Note B)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (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
 Nine Months Ended September 30, 2007Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at December 31, 2006
    
    
    4,457,934
    
    
    $
    4,746
    
    
    $
    18,259
    
    
    $
    31,531
    
    
    $
    (1,098
    )
    
    $
    (5,652
    )
    
    $
    47,786Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,012
    
    
    
    
    
    
    
    
    
    
    
    4,012Change in unrealized losses on
securities
available for sale, net of reclassification
adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    155
    
    
    
    
    
    
    
    155Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,167Cash dividends at $0.77 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,417
    )
    
    
    
    
    
    
    
    
    
    
    (3,417
    )Stock-based compensation activity
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30Purchase of treasury stock, at cost
    
    
    (26,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (557
    )
    
    
    (557
    )Treasury stock issued for stock option
and stock purchase plans
    
    
    2,686
    
    
    
    
    
    
    
    (5
    )
    
    
    
    
    
    
    
    
    
    
    52
    
    
    
    47Balance at September 30, 2007
    
    
    4,434,120
    
    
    $
    4,746
    
    
    $
    18,284
    
    
    $
    32,126
    
    
    $
    (943
    )
    
    $
    (6,157
    )
    
    $
    48,056
  5




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##### 



Juniata Valley Financial Corp. and Subsidiary
Consolidated Statements of Cash Flows
 Nine Months Ended September 30,2008
    
    
    2007Operating activities:Net income
    
    $
    4,250
    
    
    $
    4,012Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    291
    
    
    
    90Provision for depreciation
    
    
    532
    
    
    
    486Net amortization of securities premiums
    
    
    134
    
    
    
    90Amortization of core deposit intangible
    
    
    34
    
    
    
    34Amortization of deferred net loan costs
    
    
    15
    
    
    
    Securities impairment charge
    
    
    393
    
    
    
    33Net realized gains on sales of securities
    
    
    (33
    )
    
    
    (14
    )Gains on sales of other assets
    
    
    (52
    )
    
    
    (1
    )Earnings on bank owned life insurance and annuities
    
    
    (382
    )
    
    
    (334
    )Gain from life insurance proceeds
    
    
    (179
    )
    
    
    Deferred income tax expense (credit)
    
    
    (66
    )
    
    
    58Equity in earnings of unconsolidated subsidiary, net of dividends of $0 and $127
    
    
    (152
    )
    
    
    (9
    )Stock-based compensation expense
    
    
    36
    
    
    
    30Increase in accrued interest receivable and other assets
    
    
    (1,682
    )
    
    
    (1,321
    )(Decrease) increase in accrued interest payable and other liabilities
    
    
    (46
    )
    
    
    378Net cash provided by operating activities
    
    
    3,093
    
    
    
    3,532Investing activities:Purchases of:Securities available for sale
    
    
    (35,217
    )
    
    
    (44,034
    )Securities held to maturity
    
    
    
    
    
    
    (3,955
    )FHLB stock
    
    
    (732
    )
    
    
    (132
    )Premises and equipment
    
    
    (682
    )
    
    
    (200
    )Bank owned life insurance and annuities
    
    
    (90
    )
    
    
    (106
    )Proceeds from:Sales of securities available for sale
    
    
    
    
    
    
    591Maturities of and principal repayments on securities available for sale
    
    
    29,733
    
    
    
    19,396Maturities of securities held to maturity
    
    
    
    
    
    
    2,500Redemption of FHLB stock
    
    
    
    
    
    
    108Bank owned life insurance and annuities
    
    
    55
    
    
    
    57Life insurance claims
    
    
    437
    
    
    
    Sale of other real estate owned
    
    
    288
    
    
    
    243Sale of other assets
    
    
    322
    
    
    
    Net decrease in interest-bearing time deposits
    
    
    200
    
    
    
    135Net (increase) decrease in loans receivable
    
    
    (19,180
    )
    
    
    6,969Net cash used in investing activities
    
    
    (24,866
    )
    
    
    (18,428
    )Financing activities:Net increase in deposits
    
    
    4,415
    
    
    
    10,524Net increase in short-term borrowings and securities
sold under agreements to repurchase
    
    
    7,747
    
    
    
    1,798Issuance of long-term debt
    
    
    5,000
    
    
    
    Cash dividends
    
    
    (2,416
    )
    
    
    (3,417
    )Purchase of treasury stock
    
    
    (1,518
    )
    
    
    (557
    )Treasury stock issued for employee stock plans
    
    
    78
    
    
    
    47Net cash provided by financing activities
    
    
    13,306
    
    
    
    8,395Net decrease in cash and cash equivalents
    
    
    (8,467
    )
    
    
    (6,501
    )Cash and cash equivalents at beginning of period
    
    
    20,524
    
    
    
    17,778Cash and cash equivalents at end of period
    
    $
    12,057
    
    
    $
    11,277Supplemental information:Interest paid
    
    $
    7,190
    
    
    $
    8,255Income taxes paid
    
    $
    1,625
    
    
    $
    1,405Supplemental schedule of noncash investing and financing activities:Transfer of loans to other real estate owned
    
    $
    
    
    
    $
    153Transfer of fixed asset to other assets
    
    
    45
    
    
    
    
  6




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##### 



Juniata Valley Financial Corp. and Subsidiary
      Accounting for Post Retirement Benefit Obligations
    7




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##### 




   8




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##### 



Three Months Ended September 30, 2008
    
    
    Three Months Ended September 30, 2007Before
    
    
    Tax Expense
    
    
    
    
    
    
    Before
    
    
    Tax ExpenseTax
    
    
    or
    
    
    Net-of-Tax
    
    
    Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    (Benefit)
    
    
    Amount
    
    
    Amount
    
    
    (Benefit)
    
    
    AmountNet income
    
    $
    1,980
    
    
    $
    529
    
    
    $
    1,451
    
    
    $
    1,957
    
    
    $
    538
    
    
    $
    1,419Other comprehensive income:Unrealized gains on available for sale securities:Unrealized gains arising during the period
    
    
    143
    
    
    
    49
    
    
    
    94
    
    
    
    618
    
    
    
    210
    
    
    
    408Unrealized gains from unconsolidated subsidiary
    
    
    1
    
    
    
    
    
    
    
    1
    
    
    
    6
    
    
    
    
    
    
    
    6Less reclassification adjustment for:(gains) losses included in net income
    
    
    8
    
    
    
    3
    
    
    
    5
    
    
    
    (22
    )
    
    
    (7
    )
    
    
    (15
    )securities impairment charge
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other comprehensive income
    
    
    152
    
    
    
    52
    
    
    
    100
    
    
    
    602
    
    
    
    203
    
    
    
    399Total comprehensive income
    
    $
    2,132
    
    
    $
    581
    
    
    $
    1,551
    
    
    $
    2,559
    
    
    $
    741
    
    
    $
    1,818
 Nine Months Ended September 30, 2008
    
    
    Nine Months Ended September 30, 2007Before
    
    
    Tax Expense
    
    
    
    
    
    
    Before
    
    
    Tax ExpenseTax
    
    
    or
    
    
    Net-of-Tax
    
    
    Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    (Benefit)
    
    
    Amount
    
    
    Amount
    
    
    (Benefit)
    
    
    AmountNet income
    
    $
    5,749
    
    
    $
    1,499
    
    
    $
    4,250
    
    
    $
    5,553
    
    
    $
    1,541
    
    
    $
    4,012Other comprehensive income:Unrealized gains (losses) on available for sale
securities:Unrealized gains (losses) arising during the period
    
    
    (354
    )
    
    
    (120
    )
    
    
    (234
    )
    
    
    209
    
    
    
    71
    
    
    
    138Unrealized gains from unconsolidated subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    4Less reclassification adjustment for:gains included in net income
    
    
    (33
    )
    
    
    (11
    )
    
    
    (22
    )
    
    
    (14
    )
    
    
    (5
    )
    
    
    (9
    )securities impairment charge
    
    
    393
    
    
    
    134
    
    
    
    259
    
    
    
    33
    
    
    
    11
    
    
    
    22Other comprehensive income
    
    
    6
    
    
    
    3
    
    
    
    3
    
    
    
    232
    
    
    
    77
    
    
    
    155Total comprehensive income
    
    $
    5,755
    
    
    $
    1,502
    
    
    $
    4,253
    
    
    $
    5,785
    
    
    $
    1,618
    
    
    $
    4,167
 9




---



##### 



(Amounts, except earnings per share, in thousands)
 Three Months
    
    
    Three MonthsEnded
    
    
    EndedSeptember 30, 2008
    
    
    September 30, 2007Net income
    
    $
    1,451
    
    
    $
    1,419Weighted-average common shares outstanding
    
    
    4,370
    
    
    
    4,434Basic earnings per share
    
    $
    0.33
    
    
    $
    0.32Weighted-average common shares outstanding
    
    
    4,370
    
    
    
    4,434Common stock equivalents due to effect of stock options
    
    
    8
    
    
    
    9Total weighted-average common shares and equivalents
    
    
    4,378
    
    
    
    4,443Diluted earnings per share
    
    $
    0.33
    
    
    $
    0.32
 Nine Months
    
    
    Nine MonthsEnded
    
    
    EndedSeptember 30, 2008
    
    
    September 30, 2007Net income
    
    $
    4,250
    
    
    $
    4,012Weighted-average common shares outstanding
    
    
    4,388
    
    
    
    4,441Basic earnings per share
    
    $
    0.97
    
    
    $
    0.90Weighted-average common shares outstanding
    
    
    4,388
    
    
    
    4,441Common stock equivalents due to effect of stock options
    
    
    7
    
    
    
    9Total weighted-average common shares and equivalents
    
    
    4,395
    
    
    
    4,450Diluted earnings per share
    
    $
    0.97
    
    
    $
    0.90
    10




---



##### 



Three Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2008
    
    2007
    
    2008
    
    2007Components of net
periodic pension costService cost
    
    $
    45
    
    
    $
    69
    
    
    $
    135
    
    
    $
    212Interest cost
    
    
    110
    
    
    
    96
    
    
    
    330
    
    
    
    291Expected return on plan assets
    
    
    (106
    )
    
    
    (101
    )
    
    
    (318
    )
    
    
    (291
    )Additional recognized amounts
    
    
    9
    
    
    
    13
    
    
    
    27
    
    
    
    39Net periodic pension cost
    
    $
    58
    
    
    $
    77
    
    
    $
    174
    
    
    $
    251
       11




---



##### 



12




---



##### 



Securities Available for Sale.
 Impaired Loans
  Level 1 Inputs
    
    Level 2 Inputs
    
    Level 3 Inputs
    
    Total Fair ValueSecurities
available for sale
    
    
    
    
    
    $
    72,050
    
    
    
    
    
    
    $
    72,050
      13




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of
Operations
            14




---



##### 



September 30,
    
    December 31,
    
    Change2008
    
    2007
    
    $
    
    %Deposits:Demand, non-interest bearing
    
    $
    52,145
    
    
    $
    48,755
    
    
    $
    3,390
    
    
    
    7.0
    %NOW and money market
    
    
    68,854
    
    
    
    74,821
    
    
    
    (5,967
    )
    
    
    (8.0
    %)Savings
    
    
    39,133
    
    
    
    33,877
    
    
    
    5,256
    
    
    
    15.5
    %Time deposits, $100,000 and more
    
    
    38,342
    
    
    
    36,308
    
    
    
    2,034
    
    
    
    5.6
    %Other time deposits
    
    
    165,398
    
    
    
    165,696
    
    
    
    (298
    )
    
    
    (0.2
    %)Total deposits
    
    $
    363,872
    
    
    $
    359,457
    
    
    $
    4,415
    
    
    
    1.2
    %
  September 30,
    
    December 31,
    
    Change2008
    
    2007
    
    $
    
    %Loans:Commercial, financial and
agricultural
    
    $
    36,979
    
    
    $
    28,842
    
    
    $
    8,137
    
    
    
    28.2
    %Real estate  commercial
    
    
    31,648
    
    
    
    29,021
    
    
    
    2,627
    
    
    
    9.1
    %Real estate  construction
    
    
    22,611
    
    
    
    27,223
    
    
    
    (4,612
    )
    
    
    (16.9
    %)Real estate  mortgage
    
    
    139,621
    
    
    
    127,324
    
    
    
    12,297
    
    
    
    9.7
    %Home equity
    
    
    61,677
    
    
    
    63,678
    
    
    
    (2,001
    )
    
    
    (3.1
    %)Obligations of states and
political subdivisions
    
    
    9,340
    
    
    
    6,593
    
    
    
    2,747
    
    
    
    41.7
    %Personal
    
    
    15,217
    
    
    
    15,319
    
    
    
    (102
    )
    
    
    (0.7
    %)Total loans
    
    $
    317,093
    
    
    $
    298,000
    
    
    $
    19,093
    
    
    
    6.4
    %
  Periods Ended September 30,2008
    
    
    2007Balance of allowance  January 1
    
    $
    2,322
    
    
    $
    2,572Loans charged off
    
    
    (92
    )
    
    
    (346
    )Recoveries of loans previously charged
off
    
    
    20
    
    
    
    46Net charge-offs
    
    
    (72
    )
    
    
    (300
    )Provision for loan losses
    
    
    291
    
    
    
    90Balance of allowance  end of period
    
    $
    2,541
    
    
    $
    2,362Ratio of net charge-offs during period to
average loans outstanding
    
    
    0.02
    %
    
    
    0.10
    %
  15




---



##### 



(Dollar amounts in thousands)
 September 30, 2008
    
    December 31, 2007Non-performing loansNonaccrual loans
    
    $
    1,003
    
    
    $
    Accruing loans past due 90 days or more
    
    
    641
    
    
    
    837Restructured loans
    
    
    
    
    
    
    Total
    
    $
    1,644
    
    
    $
    837Average loans outstanding
    
    $
    304,451
    
    
    $
    300,607Ratio of non-performing loans to
average loans outstanding
    
    
    0.54
    %
    
    
    0.28
    %
      Comparison of the Three Months Ended September 30, 2008 and 2007
   16




---



##### 



Three Months EndedSeptember 30,2008
    
    2007Return on average assets (annualized)
    
    
    1.34
    %
    
    
    1.32
    %Return on average equity (annualized)
    
    
    11.89
    %
    
    
    11.99
    %Average equity to average assets
    
    
    11.25
    %
    
    
    11.03
    %Non-interest income, excluding securities gains
(losses), as a percentage of average assets
(annualized)
    
    
    1.02
    %
    
    
    1.01
    %Non-interest expense as a percentage of average
assets (annualized)
    
    
    2.86
    %
    
    
    2.88
    %
          17




---



##### 



Comparison of the Nine Months Ended September 30, 2008 and 2007
   18




---



##### 



Nine Months EndedSeptember 30,2008
    
    2007Return on average assets (annualized)
    
    
    1.33
    %
    
    
    1.26
    %Return on average equity (annualized)
    
    
    11.63
    %
    
    
    11.26
    %Average equity to average assets
    
    
    11.40
    %
    
    
    11.21
    %Non-interest income, excluding securities gains
(losses), as a percentage of average assets
(annualized)
    
    
    1.10
    %
    
    
    0.99
    %Non-interest expense as a percentage of average
assets (annualized)
    
    
    2.83
    %
    
    
    2.87
    %
          19




---



##### 



20




---



##### 



Item 3. Quantitative and Qualitative Disclosures About Market Risk
  21




---



##### 



22




---



##### 



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
    
    Income200
    
    $
    (357
    )
    
    $
    105
    
    
    $
    (252
    )100
    
    
    (178
    )
    
    
    31
    
    
    
    (147
    )0
    
    
    
    
    
    
    
    
    
    
    -100
    
    
    178
    
    
    
    (66
    )
    
    
    112-150
    
    
    267
    
    
    
    (29
    )
    
    
    238
   Item 4. Controls and Procedures
 Disclosure Controls and Procedures
    Changes in Internal Control over Financial Reporting
  23




---



##### 



PART II  OTHER INFORMATION
     Business Risks
 A Prolonged Economic Downturn, Especially One Affecting Our Geographic Market
Areas, Could Reduce Our Customer Base, Our Level of Deposits and Demand for
Financial Products, Such As Loans
  Capital Market Risks
 Difficult Conditions in the Capital Markets and the Economy Generally May
Materially Adversely Affect Our Business and Results of Operations and We Do Not
Expect These Conditions to Improve in the Near Future
   24




---



##### 



There Can be No Assurance that Actions of the U.S. Government, Federal
Reserve and Other Governmental and Regulatory Bodies For the Purpose of
Stabilizing the Financial Markets Will Achieve the Intended Effect
   Our Future Growth May Require Us To Raise Additional Capital In The Future, But
That Capital May Not Be Available When It Is Needed
   The Soundness of Other Financial Institutions Could Adversely Affect Us
  25




---



##### 



Regulatory Risk
 Recent Negative Developments In The Financial Industry And The Credit Markets May
Subject Us To Additional Regulation
  The FDIC deposit insurance assessments that we are required to pay may materially
increase in the future, which would have an adverse effect on our earnings
    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, 2008
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    64,336August 1-31, 2008
    
    
    34,800
    
    
    
    20.90
    
    
    
    34,800
    
    
    
    29,536September 1-30, 2008
    
    
    11,000
    
    
    
    20.46
    
    
    
    11,000
    
    
    
    218,536Totals
    
    
    45,800
    
    
    $
    20.80
    
    
    
    45,800
    
    
    
    218,536
 
 (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 7, 2008, the number of shares that may yet be purchased under the
program was 218,536. 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.
 26




---



##### 



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)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)
  Juniata Valley Financial Corp.      (Registrant)Date 11-07-2008
    By
    /s/ Francis J. EvanitskyFrancis J. Evanitsky, President andChief Executive OfficerDate 11-07-2008
    By
    /s/ JoAnn N. McMinnJoAnn N. McMinn, Chief Financial Officer 27