##### 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 March 31, 2011
 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 þ
  Class
    
    Outstanding as of May 9, 2011Common Stock ($1.00 par value)
    
    4,238,265 shares




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##### 



TABLE OF CONTENTS
 PART I  FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated Statements of Financial Condition as of March 31, 2011 and December 31, 2010 (Unaudited)
    
    
    3Consolidated Statements of Income for the Three Months Ended March 31, 2011 and 2010 (Unaudited)
    
    
    4Consolidated Statements of Changes in Stockholders Equity for the Three Months Ended March 31, 2011 and 2010 (Unaudited)
    
    
    5Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010 (Unaudited)
    
    
    6Notes to Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    24Item 3. Quantitative and Qualitative Disclosures about Market Risk
    
    
    29Item 4. Controls and Procedures
    
    
    31PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    31Item 1A. Risk Factors
    
    
    31Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    32Item 3. Defaults upon Senior Securities
    
    
    32Item 4. (Removed and Reserved)
    
    
    32Item 5. Other Information
    
    
    32Item 6. Exhibits
    
    
    32Signatures
    
    
    33Exhibit 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
  March 31,
    
    
    December 31,2011
    
    
    2010ASSETSCash and due from banks
    
    $
    8,481
    
    
    $
    12,758Interest bearing deposits with banks
    
    
    147
    
    
    
    218Federal funds sold
    
    
    4,900
    
    
    
    12,300Cash and cash equivalents
    
    
    13,528
    
    
    
    25,276Interest bearing time deposits with banks
    
    
    1,096
    
    
    
    1,345Securities available for sale
    
    
    100,982
    
    
    
    79,923Restricted investment in Federal Home Loan Bank (FHLB)
stock
    
    
    1,983
    
    
    
    2,088Investment in unconsolidated subsidiary
    
    
    3,607
    
    
    
    3,550Total loans, net of unearned interest
    
    
    297,450
    
    
    
    298,102Less: Allowance for loan losses
    
    
    (2,901
    )
    
    
    (2,824
    )Total loans, net of allowance for loan losses
    
    
    294,549
    
    
    
    295,278Premises and equipment, net
    
    
    6,943
    
    
    
    7,067Other real estate owned
    
    
    340
    
    
    
    412Bank owned life insurance and annuities
    
    
    13,693
    
    
    
    13,568Core deposit intangible
    
    
    243
    
    
    
    254Goodwill
    
    
    2,046
    
    
    
    2,046Accrued interest receivable and other assets
    
    
    5,730
    
    
    
    4,946Total assets
    
    $
    444,740
    
    
    $
    435,753LIABILITIES AND STOCKHOLDERS EQUITYLiabilities:Deposits:Non-interest bearing
    
    $
    62,219
    
    
    $
    60,696Interest bearing
    
    
    324,198
    
    
    
    316,094Total deposits
    
    
    386,417
    
    
    
    376,790Securities sold under agreements to repurchase
    
    
    2,631
    
    
    
    3,314Other interest bearing liabilities
    
    
    1,201
    
    
    
    1,200Accrued interest payable and other liabilities
    
    
    4,588
    
    
    
    4,473Total liabilities
    
    
    394,837
    
    
    
    385,777Stockholders 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 4,238,265 shares at March 31, 2011;4,257,765 shares at December 31, 2010
    
    
    4,746
    
    
    
    4,746Surplus
    
    
    18,360
    
    
    
    18,354Retained earnings
    
    
    38,213
    
    
    
    37,868Accumulated other comprehensive loss
    
    
    (1,558
    )
    
    
    (1,465
    )Cost of common stock in Treasury:507,561 shares at March 31, 2011;488,061 shares at December 31, 2010
    
    
    (9,858
    )
    
    
    (9,527
    )Total stockholders equity
    
    
    49,903
    
    
    
    49,976Total liabilities and stockholders equity
    
    $
    444,740
    
    
    $
    435,753
   3




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Juniata Valley Financial Corp. and Subsidiary
 
 Consolidated Statements of Income
   Three Months EndedMarch 31,2011
    
    
    2010Interest income:Loans, including fees
    
    $
    4,592
    
    
    $
    5,036Taxable securities
    
    
    253
    
    
    
    233Tax-exempt securities
    
    
    233
    
    
    
    275Federal funds sold
    
    
    2
    
    
    
    1Other interest income
    
    
    8
    
    
    
    9Total interest income
    
    
    5,088
    
    
    
    5,554Interest expense:Deposits
    
    
    1,175
    
    
    
    1,519Securities sold under agreements to repurchase
    
    
    1
    
    
    
    1Short-term borrowings
    
    
    
    
    
    
    1Long-term debt
    
    
    
    
    
    
    34Other interest bearing liabilities
    
    
    7
    
    
    
    3Total interest expense
    
    
    1,183
    
    
    
    1,558Net interest income
    
    
    3,905
    
    
    
    3,996Provision for loan losses
    
    
    88
    
    
    
    285Net interest income after provision for loan losses
    
    
    3,817
    
    
    
    3,711Noninterest income:Trust fees
    
    
    113
    
    
    
    120Customer service fees
    
    
    312
    
    
    
    382Earnings on bank-owned life insurance and
annuities
    
    
    119
    
    
    
    122Commissions from sales of non-deposit products
    
    
    103
    
    
    
    96Income from unconsolidated subsidiary
    
    
    65
    
    
    
    56Gain on sales or calls of securities
    
    
    5
    
    
    
    12Gain (Loss) on sales of other assets
    
    
    15
    
    
    
    (1
    )Other noninterest income
    
    
    292
    
    
    
    236Total noninterest income
    
    
    1,024
    
    
    
    1,023Noninterest expense:Employee compensation expense
    
    
    1,255
    
    
    
    1,286Employee benefits
    
    
    401
    
    
    
    416Occupancy
    
    
    243
    
    
    
    233Equipment
    
    
    155
    
    
    
    119Data processing expense
    
    
    322
    
    
    
    365Director compensation
    
    
    77
    
    
    
    87Professional fees
    
    
    139
    
    
    
    93Taxes, other than income
    
    
    127
    
    
    
    130FDIC Insurance premiums
    
    
    133
    
    
    
    147Amortization of intangibles
    
    
    11
    
    
    
    11Other noninterest expense
    
    
    315
    
    
    
    258Total noninterest expense
    
    
    3,178
    
    
    
    3,145Income before income taxes
    
    
    1,663
    
    
    
    1,589Provision for income taxes
    
    
    424
    
    
    
    401Net income
    
    $
    1,239
    
    
    $
    1,188Earnings per shareBasic
    
    $
    0.29
    
    
    $
    0.27Diluted
    
    $
    0.29
    
    
    $
    0.27Cash dividends declared per share
    
    $
    0.21
    
    
    $
    0.20Weighted average basic shares outstanding
    
    
    4,255,982
    
    
    
    4,330,136Weighted average diluted shares outstanding
    
    
    4,259,061
    
    
    
    4,334,000
   4




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Juniata Valley Financial Corp. and Subsidiary
 
 Consolidated Statements of Changes in Stockholders Equity
   Three Months Ended March 31, 2011
 Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Loss
    
    
    Stock
    
    
    EquityBalance at December 31, 2010
    
    
    4,257,765
    
    
    $
    4,746
    
    
    $
    18,354
    
    
    $
    37,868
    
    
    $
    (1,465
    )
    
    $
    (9,527
    )
    
    $
    49,976Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,239
    
    
    
    
    
    
    
    
    
    
    
    1,239Change in unrealized gains on securities
available for sale, net of reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (119
    )
    
    
    
    
    
    
    (119
    )Defined benefit retirement plan
adjustments, net of tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    26
    
    
    
    
    
    
    
    26Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,146Cash dividends at $0.21 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (894
    )
    
    
    
    
    
    
    
    
    
    
    (894
    )Stock-based compensation activity
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6Purchase of treasury stock
    
    
    (19,500
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (331
    )
    
    
    (331
    )Balance at March 31, 2011
    
    
    4,238,265
    
    
    $
    4,746
    
    
    $
    18,360
    
    
    $
    38,213
    
    
    $
    (1,558
    )
    
    $
    (9,858
    )
    
    $
    49,903
 Three Months Ended March 31, 2010
 Number
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Accumulatedof
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    
    
    
    
    TotalShares
    
    
    Common
    
    
    
    
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    StockholdersOutstanding
    
    
    Stock
    
    
    Surplus
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Stock
    
    
    EquityBalance at December 31, 2009
    
    
    4,337,587
    
    
    $
    4,746
    
    
    $
    18,315
    
    
    $
    36,478
    
    
    $
    (805
    )
    
    $
    (8,131
    )
    
    $
    50,603Comprehensive income:Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,188
    
    
    
    
    
    
    
    
    
    
    
    1,188Change in unrealized gains on securities
available for sale, net of reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    140
    
    
    
    
    
    
    
    140Defined benefit retirement plan
adjustments, net of tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21
    
    
    
    
    
    
    
    21Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,349Cash dividends at $0.21 per share
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (867
    )
    
    
    
    
    
    
    
    
    
    
    (867
    )Stock-based compensation activity
    
    
    
    
    
    
    
    
    
    
    12
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12Purchase of treasury stock
    
    
    (16,100
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (284
    )
    
    
    (284
    )Balance at March 31, 2010
    
    
    4,321,487
    
    
    $
    4,746
    
    
    $
    18,327
    
    
    $
    36,799
    
    
    $
    (644
    )
    
    $
    (8,415
    )
    
    $
    50,813
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Juniata Valley Financial Corp. and Subsidiary
 
 Consolidated Statements of Cash Flows
   Three Months Ended March 312011
    
    
    2010Operating activities:Net income
    
    $
    1,239
    
    
    $
    1,188Adjustments to reconcile net income to net cash provided by operating activities:Provision for loan losses
    
    
    88
    
    
    
    285Depreciation
    
    
    152
    
    
    
    127Net amortization of securities premiums
    
    
    77
    
    
    
    70Amortization of core deposit intangible
    
    
    11
    
    
    
    11Net amortization of loan origination costs
    
    
    14
    
    
    
    5Deferral of net loan costs
    
    
    15
    
    
    
    39Net realized gains on sales or calls of securities
    
    
    (5
    )
    
    
    (12
    )(Gains) losses on sales of other real estate owned
    
    
    (15
    )
    
    
    1Earnings on bank owned life insurance and annuities
    
    
    (119
    )
    
    
    (122
    )Deferred income tax expense
    
    
    30
    
    
    
    19Equity in earnings of unconsolidated subsidiary, net of dividends of $10
and $9
    
    
    (55
    )
    
    
    (47
    )Stock-based compensation expense
    
    
    6
    
    
    
    12Increase in accrued interest receivable and other assets
    
    
    (726
    )
    
    
    (432
    )Increase (decrease) in accrued interest payable and other liabilities
    
    
    122
    
    
    
    (114
    )Net cash provided by operating activities
    
    
    834
    
    
    
    1,030Investing activities:Purchases of:Securities available for sale
    
    
    (25,708
    )
    
    
    (10,226
    )Premises and equipment
    
    
    (28
    )
    
    
    (98
    )Bank owned life insurance and annuities
    
    
    (18
    )
    
    
    (30
    )Proceeds from:Maturities and calls of and principal repayments on
securities available for sale
    
    
    4,394
    
    
    
    12,754Redemption of FHLB stock
    
    
    105
    
    
    
    Bank owned life insurance and annuities
    
    
    6
    
    
    
    17Sale of other real estate owned
    
    
    166
    
    
    
    296Sale of other assets
    
    
    
    
    
    
    11Net decrease in interest-bearing time deposits
    
    
    249
    
    
    
    75Net decrease (increase) in loans receivable
    
    
    533
    
    
    
    (330
    )Net cash (used in) provided by investing activities
    
    
    (20,301
    )
    
    
    2,469Financing activities:Net increase (decrease) in deposits
    
    
    9,627
    
    
    
    (2,766
    )Net decrease in securities sold under agreements to repurchase
    
    
    (683
    )
    
    
    (655
    )Cash dividends
    
    
    (894
    )
    
    
    (867
    )Purchase of treasury stock
    
    
    (331
    )
    
    
    (284
    )Net cash provided by (used in) financing activities
    
    
    7,719
    
    
    
    (4,572
    )Net decrease in cash and cash equivalents
    
    
    (11,748
    )
    
    
    (1,073
    )Cash and cash equivalents at beginning of period
    
    
    25,276
    
    
    
    19,895Cash and cash equivalents at end of period
    
    $
    13,528
    
    
    $
    18,822Supplemental information:Interest paid
    
    $
    1,187
    
    
    $
    1,595Income taxes paid
    
    $
    75
    
    
    $
    200Supplemental schedule of noncash investing and financing activities:Transfer of loans to other real estate owned and repossessed assets
    
    $
    79
    
    
    $
    112
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Juniata Valley Financial Corp. and Subsidiary
 
       ASU 2011-02
 Receivables  Troubled Debt Restructurings by
Creditors
 Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit
Losses Deferral of the Effective Date of
Disclosures about Troubled Debt Restructurings
 ASU 2010-29
    7




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ASU 2010-28
      8




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##### Table of Contents



Three Months Ended March 31, 2011
    
    
    Three Months Ended March 31, 2010Before
    
    
    Tax Expense
    
    
    
    
    
    
    Before
    
    
    Tax ExpenseTax
    
    
    or
    
    
    Net-of-Tax
    
    
    Tax
    
    
    or
    
    
    Net-of-TaxAmount
    
    
    (Benefit)
    
    
    Amount
    
    
    Amount
    
    
    (Benefit)
    
    
    AmountNet income
    
    $
    1,663
    
    
    $
    424
    
    
    $
    1,239
    
    
    $
    1,589
    
    
    $
    401
    
    
    $
    1,188Other comprehensive income (loss):Unrealized gains (losses) on available for sale securities:Unrealized gains (losses) arising during the period
    
    
    (180
    )
    
    
    (62
    )
    
    
    (118
    )
    
    
    215
    
    
    
    73
    
    
    
    142Unrealized gains from unconsolidated subsidiary
    
    
    2
    
    
    
    
    
    
    
    2
    
    
    
    6
    
    
    
    
    
    
    
    6Less reclassification adjustment for:gains included in net income
    
    
    (5
    )
    
    
    (2
    )
    
    
    (3
    )
    
    
    (12
    )
    
    
    (4
    )
    
    
    (8
    )Change in pension liability
    
    
    40
    
    
    
    14
    
    
    
    26
    
    
    
    32
    
    
    
    11
    
    
    
    21Other comprehensive income (loss)
    
    
    (143
    )
    
    
    (50
    )
    
    
    (93
    )
    
    
    241
    
    
    
    80
    
    
    
    161Total comprehensive income
    
    $
    1,520
    
    
    $
    374
    
    
    $
    1,146
    
    
    $
    1,830
    
    
    $
    481
    
    
    $
    1,349
  3/31/2011
    
    
    12/31/2010Unrealized gains on available for sale securities
    
    $
    280
    
    
    $
    399Unrecognized expense for defined benefit pension
    
    
    (1,838
    )
    
    
    (1,864
    )Accumulated other comprehensive loss
    
    $
    (1,558
    )
    
    $
    (1,465
    )
   Three Months
    
    
    Three MonthsEnded
    
    
    Ended(Amounts, except earnings per share, in thousands)
    
    March 31, 2011
    
    
    March 31, 2010Net income
    
    $
    1,239
    
    
    $
    1,188Weighted-average common shares outstanding
    
    
    4,256
    
    
    
    4,330Basic earnings per share
    
    $
    0.29
    
    
    $
    0.27Weighted-average common shares outstanding
    
    
    4,256
    
    
    
    4,330Common stock equivalents due to effect of stock options
    
    
    3
    
    
    
    4Total weighted-average common shares and equivalents
    
    
    4,259
    
    
    
    4,334Diluted earnings per share
    
    $
    0.29
    
    
    $
    0.27
  9




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##### Table of Contents



Three Months EndedMarch 31,(Dollars in thousands)
    
    2011
    
    
    2010Components of net periodic pension costService cost
    
    $
    48
    
    
    $
    46Interest cost
    
    
    120
    
    
    
    118Expected return on plan assets
    
    
    (158
    )
    
    
    (142
    )Additional recognized amounts
    
    
    38
    
    
    
    31Net periodic pension cost
    
    $
    48
    
    
    $
    53
     10




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##### Table of Contents



Investments  Debt and Equity Securities
   Securities Available for Sale
    
    March 31, 2011Gross
    
    
    GrossAmortized
    
    
    Fair
    
    
    Unrealized
    
    
    UnrealizedType and maturity
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    LossesU.S. Treasury securities and obligations of U.S.
Government agencies and corporationsWithin one year
    
    $
    5,813
    
    
    $
    5,831
    
    
    $
    18
    
    
    $
    After one year but within five years
    
    $
    47,185
    
    
    $
    47,170
    
    
    $
    275
    
    
    $
    (290
    )After five years but within ten years
    
    
    1,000
    
    
    
    953
    
    
    
    
    
    
    
    (47
    )53,998
    
    
    
    53,954
    
    
    
    293
    
    
    
    (337
    )Obligations of state and political subdivisionsWithin one year
    
    
    13,689
    
    
    
    13,834
    
    
    
    146
    
    
    
    (1
    )After one year but within five years
    
    
    26,408
    
    
    
    26,756
    
    
    
    446
    
    
    
    (98
    )After five years but within ten years
    
    
    1,826
    
    
    
    1,648
    
    
    
    
    
    
    
    (178
    )41,923
    
    
    
    42,238
    
    
    
    592
    
    
    
    (277
    )Corporate notesAfter one year but within five years
    
    
    1,000
    
    
    
    1,027
    
    
    
    27
    
    
    
    1,000
    
    
    
    1,027
    
    
    
    27
    
    
    
    Mortgage-backed securities
    
    
    2,712
    
    
    
    2,779
    
    
    
    81
    
    
    
    (14
    )Equity securities
    
    
    935
    
    
    
    984
    
    
    
    127
    
    
    
    (78
    )Total
    
    $
    100,568
    
    
    $
    100,982
    
    
    $
    1,120
    
    
    $
    (706
    )
  11




---



##### Table of Contents



Securities Available for Sale
    
    December 31, 2010Gross
    
    
    GrossAmortized
    
    
    Fair
    
    
    Unrealized
    
    
    UnrealizedType and maturity
    
    Cost
    
    
    Value
    
    
    Gains
    
    
    LossesU.S. Treasury securities and obligations of U.S.Government agencies and corporationsAfter one year but within five years
    
    $
    34,607
    
    
    $
    34,783
    
    
    $
    348
    
    
    $
    (172
    )After five years but within ten years
    
    
    3,000
    
    
    
    2,913
    
    
    
    
    
    
    
    (87
    )37,607
    
    
    
    37,696
    
    
    
    348
    
    
    
    (259
    )Obligations of state and political subdivisionsWithin one year
    
    
    12,219
    
    
    
    12,390
    
    
    
    175
    
    
    
    (4
    )After one year but within five years
    
    
    24,493
    
    
    
    24,877
    
    
    
    488
    
    
    
    (104
    )After five years but within ten years
    
    
    1,826
    
    
    
    1,626
    
    
    
    
    
    
    
    (200
    )38,538
    
    
    
    38,893
    
    
    
    663
    
    
    
    (308
    )Corporate notesAfter one year but within five years
    
    
    1,000
    
    
    
    1,028
    
    
    
    28
    
    
    
    1,000
    
    
    
    1,028
    
    
    
    28
    
    
    
    Mortgage-backed securities
    
    
    1,246
    
    
    
    1,345
    
    
    
    99
    
    
    
    Equity securities
    
    
    935
    
    
    
    961
    
    
    
    106
    
    
    
    (80
    )Total
    
    $
    79,326
    
    
    $
    79,923
    
    
    $
    1,244
    
    
    $
    (647
    )
  Unrealized Losses at March 31, 2011Less 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
    
    $
    30,299
    
    
    $
    (337
    )
    
    $
    
    
    
    $
    
    
    
    $
    30,299
    
    
    $
    (337
    )Obligations of state and political
subdivisions
    
    
    10,676
    
    
    
    (257
    )
    
    
    2,555
    
    
    
    (20
    )
    
    
    13,231
    
    
    
    (277
    )Mortgage-backed securities
    
    
    1,498
    
    
    
    (14
    )
    
    
    
    
    
    
    
    
    
    
    1,498
    
    
    
    (14
    )Debt securities
    
    
    42,473
    
    
    
    (608
    )
    
    
    2,555
    
    
    
    (20
    )
    
    
    45,028
    
    
    
    (628
    )Equity securities
    
    
    27
    
    
    
    (1
    )
    
    
    268
    
    
    
    (77
    )
    
    
    295
    
    
    
    (78
    )Total temporarily impaired
securities
    
    $
    42,500
    
    
    $
    (609
    )
    
    $
    2,823
    
    
    $
    (97
    )
    
    $
    45,323
    
    
    $
    (706
    )
 Unrealized Losses at December 31, 2010Less 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
    
    $
    17,859
    
    
    $
    (259
    )
    
    $
    
    
    
    $
    
    
    
    $
    17,859
    
    
    $
    (259
    )Obligations of state and political
subdivisions
    
    
    9,719
    
    
    
    (304
    )
    
    
    881
    
    
    
    (4
    )
    
    
    10,600
    
    
    
    (308
    )Debt securities
    
    
    27,578
    
    
    
    (563
    )
    
    
    881
    
    
    
    (4
    )
    
    
    28,459
    
    
    
    (567
    )Equity securities
    
    
    389
    
    
    
    (5
    )
    
    
    270
    
    
    
    (75
    )
    
    
    659
    
    
    
    (80
    )Total temporarily impaired
securities
    
    $
    27,967
    
    
    $
    (568
    )
    
    $
    1,151
    
    
    $
    (79
    )
    
    $
    29,118
    
    
    $
    (647
    )
   12




---



##### Table of Contents



Three Months EndedMarch 31,2011
    
    
    2010Gross proceeds from sales of securities
    
    $
    
    
    
    $
    Securities available for sale:Gross realized gains from called securities
    
    $
    5
    
    
    $
    12Gross realized losses
    
    
    
    
    
    
    
     13




---



##### Table of Contents



(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.
     14




---



##### Table of Contents



1.
    
    National, regional and local economic and business conditions as well as the condition
of various market segments, including the underlying collateral for collateral dependent
loans;
 2.
    
    Nature and volume of the portfolio and terms of loans;
 3.
    
    Experience, ability and depth of lending and credit management and staff;
 4.
    
    Volume and severity of past due, classified and nonaccrual loans as well as other loan
modifications;
 5.
    
    Existence and effect of any concentrations of credit and changes in the level of such
concentrations; and
 6.
    
    Effect of external factors, including competition.
   15




---



##### Table of Contents



Commercial, Financial and Agricultural Lending
     Commercial Real Estate Lending
   Real Estate Construction Lending
     16




---



##### Table of Contents



Residential Mortgage Lending
    Home Equity Installment and Line of Credit Lending
     Obligations of States and Political Subdivisions
 Personal Lending
   17




---



##### Table of Contents



SpecialAs of March 31, 2011
    
    Pass
    
    
    Mention
    
    
    Substandard
    
    
    Doubtful
    
    
    TotalCommercial financial and agricultural
    
    $
    34,612
    
    
    $
    2,160
    
    
    $
    583
    
    
    $
    305
    
    
    $
    37,660Real estate  commercial
    
    
    31,121
    
    
    
    10,392
    
    
    
    2,097
    
    
    
    
    
    
    
    43,610Real estate  construction
    
    
    8,948
    
    
    
    2,298
    
    
    
    250
    
    
    
    600
    
    
    
    12,096Real estate  mortgage
    
    
    126,634
    
    
    
    7,072
    
    
    
    4,162
    
    
    
    1,414
    
    
    
    139,282Home equity
    
    
    43,524
    
    
    
    342
    
    
    
    
    
    
    
    
    
    
    
    43,866Obligations of states and political subdivisions
    
    
    12,692
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,692Personal
    
    
    8,143
    
    
    
    99
    
    
    
    2
    
    
    
    
    
    
    
    8,244Total
    
    $
    265,674
    
    
    $
    22,363
    
    
    $
    7,094
    
    
    $
    2,319
    
    
    $
    297,450
 SpecialAs of December 31, 2010
    
    Pass
    
    
    Mention
    
    
    Substandard
    
    
    Doubtful
    
    
    TotalCommercial financial and agricultural
    
    $
    24,594
    
    
    $
    6,387
    
    
    $
    1,554
    
    
    $
    306
    
    
    $
    32,841Real estate  commercial
    
    
    33,437
    
    
    
    6,059
    
    
    
    4,089
    
    
    
    600
    
    
    
    44,185Real estate  construction
    
    
    11,028
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    11,028Real estate  mortgage
    
    
    127,944
    
    
    
    8,069
    
    
    
    5,180
    
    
    
    1,415
    
    
    
    142,608Home equity
    
    
    45,228
    
    
    
    431
    
    
    
    666
    
    
    
    
    
    
    
    46,325Obligations of states and political subdivisions
    
    
    10,960
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    10,960Personal
    
    
    10,034
    
    
    
    117
    
    
    
    4
    
    
    
    
    
    
    
    10,155Total
    
    $
    263,225
    
    
    $
    21,063
    
    
    $
    11,493
    
    
    $
    2,321
    
    
    $
    298,102
  Unpaid
    
    
    
    
    
    
    AverageAs of March 31, 2011
    
    Recorded
    
    
    Principal
    
    
    Related
    
    
    Recorded
    
    
    Interest IncomeImpaired loans
    
    Investment
    
    
    Balance
    
    
    Allowance
    
    
    Investment
    
    
    Recognized(1)With no related allowance recorded:Commercial financial and agricultural
    
    $
    288
    
    
    $
    288
    
    
    $
    
    
    
    $
    288
    
    
    $
    5Real estate  commercial
    
    
    4,425
    
    
    
    4,425
    
    
    
    
    
    
    
    4,728
    
    
    
    53With an allowance recorded:Real estate  commercial
    
    
    2,136
    
    
    
    2,136
    
    
    
    570
    
    
    
    2,137
    
    
    
    3Total:Commercial financial and agricultural
    
    
    288
    
    
    
    288
    
    
    
    
    
    
    
    288
    
    
    
    5Real estate  commercial
    
    
    6,561
    
    
    
    6,561
    
    
    
    570
    
    
    
    6,865
    
    
    
    56$
    6,849
    
    
    $
    6,849
    
    
    $
    570
    
    
    $
    7,153
    
    
    $
    61
 
 (1)
    
    Represents interest income recognized for the three months ended March 31, 2011  18




---



##### Table of Contents



Unpaid
    
    
    
    
    
    
    AverageAs of December 31, 2010
    
    Recorded
    
    
    Principal
    
    
    Related
    
    
    Recorded
    
    
    Interest IncomeImpaired loans
    
    Investment
    
    
    Balance
    
    
    Allowance
    
    
    Investment
    
    
    Recognized (2)With no related allowance
recorded:Real estate  commercial
    
    $
    5,606
    
    
    $
    5,606
    
    
    $
    
    
    
    $
    6,203
    
    
    $
    260With an allowance recorded:Real estate  commercial
    
    
    2,137
    
    
    
    2,137
    
    
    
    570
    
    
    
    1,791
    
    
    
    16Total:Real estate  commercial
    
    $
    7,743
    
    
    $
    7,743
    
    
    $
    570
    
    
    $
    7,994
    
    
    $
    276
 
 (2)
    
    Represents interest income recognized for the year ended December 31, 2010  March 31, 2011
    
    
    December 31, 2010Nonaccrual loans:Commercial financial and agricultural
    
    $
    600
    
    
    $
    784Real estate  commercial
    
    
    240
    
    
    
    240Real estate  construction
    
    
    913
    
    
    
    850Real estate  mortgage
    
    
    3,655
    
    
    
    3,564Home equity
    
    
    472
    
    
    
    524Obligations of states and political
subdivisions
    
    
    
    
    
    
    Personal
    
    
    6
    
    
    
    2Total
    
    $
    5,886
    
    
    $
    5,964
  Loans PastDue greater30-59 Days
    
    
    60-89 Days
    
    
    Greater than
    
    
    Total Past
    
    
    
    
    
    
    
    
    
    
    than 90 DaysAs of March 31, 2011
    
    Past Due
    
    
    Past Due
    
    
    90 Days
    
    
    Due
    
    
    Current
    
    
    Total Loans
    
    
    and AccruingCommercial financial and agricultural
    
    $
    72
    
    
    $
    172
    
    
    $
    600
    
    
    $
    844
    
    
    $
    36,816
    
    
    $
    37,660
    
    
    $
    Real estate  commercial
    
    
    436
    
    
    
    1,284
    
    
    
    240
    
    
    
    1,960
    
    
    
    41,650
    
    
    
    43,610
    
    
    
    Real estate  construction
    
    
    
    
    
    
    
    
    
    
    913
    
    
    
    913
    
    
    
    11,183
    
    
    
    12,096
    
    
    
    Real estate  mortgage
    
    
    3,017
    
    
    
    914
    
    
    
    3,520
    
    
    
    7,451
    
    
    
    131,831
    
    
    
    139,282
    
    
    
    255Home equity
    
    
    733
    
    
    
    46
    
    
    
    469
    
    
    
    1,248
    
    
    
    42,618
    
    
    
    43,866
    
    
    
    158Obligations of states and political subdivisions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,692
    
    
    
    12,692
    
    
    
    Personal
    
    
    89
    
    
    
    33
    
    
    
    11
    
    
    
    133
    
    
    
    8,111
    
    
    
    8,244
    
    
    
    5Total
    
    $
    4,347
    
    
    $
    2,449
    
    
    $
    5,753
    
    
    $
    12,549
    
    
    $
    284,901
    
    
    $
    297,450
    
    
    $
    418
 Loans PastDue greater30-59 Days
    
    
    60-89 Days
    
    
    Greater than
    
    
    Total Past
    
    
    
    
    
    
    
    
    
    
    than 90 DaysAs of December 31, 2010
    
    Past Due
    
    
    Past Due
    
    
    90 Days
    
    
    Due
    
    
    Current
    
    
    Total Loans
    
    
    and AccruingCommercial financial and agricultural
    
    $
    159
    
    
    $
    352
    
    
    $
    878
    
    
    $
    1,389
    
    
    $
    31,452
    
    
    $
    32,841
    
    
    $
    113Real estate  commercial
    
    
    1,106
    
    
    
    547
    
    
    
    404
    
    
    
    2,057
    
    
    
    42,128
    
    
    
    44,185
    
    
    
    164Real estate  construction
    
    
    
    
    
    
    270
    
    
    
    850
    
    
    
    1,120
    
    
    
    9,908
    
    
    
    11,028
    
    
    
    Real estate  mortgage
    
    
    260
    
    
    
    4,769
    
    
    
    3,431
    
    
    
    8,460
    
    
    
    134,148
    
    
    
    142,608
    
    
    
    555Home equity
    
    
    737
    
    
    
    318
    
    
    
    466
    
    
    
    1,521
    
    
    
    44,804
    
    
    
    46,325
    
    
    
    167Obligations of states and political subdivisions
    
    
    243
    
    
    
    
    
    
    
    
    
    
    
    243
    
    
    
    10,717
    
    
    
    10,960
    
    
    
    Personal
    
    
    110
    
    
    
    15
    
    
    
    10
    
    
    
    135
    
    
    
    10,020
    
    
    
    10,155
    
    
    
    8Total
    
    $
    2,615
    
    
    $
    6,271
    
    
    $
    6,039
    
    
    $
    14,925
    
    
    $
    283,177
    
    
    $
    298,102
    
    
    $
    1,007
  19




---



##### Table of Contents



Obligations ofCommercial,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    states andfinancial and
    
    
    Real estate -
    
    
    Real estate -
    
    
    Real estate -
    
    
    
    
    
    
    politicalAs of March 31, 2011
    
    agricultural
    
    
    commercial
    
    
    construction
    
    
    mortgage
    
    
    Home equity
    
    
    subdivisions
    
    
    Personal
    
    
    TotalAllowance for loan losses:Beginning Balance, January 1, 2011
    
    $
    283
    
    
    $
    875
    
    
    $
    93
    
    
    $
    1,098
    
    
    $
    391
    
    
    $
    
    
    
    $
    84
    
    
    $
    2,824Charge-offs
    
    
    (4
    )
    
    
    
    
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )Recoveries
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9
    
    
    
    9Provisions
    
    
    70
    
    
    
    26
    
    
    
    17
    
    
    
    13
    
    
    
    (19
    )
    
    
    
    
    
    
    (19
    )
    
    
    88Ending balance
    
    $
    349
    
    
    $
    901
    
    
    $
    110
    
    
    $
    1,095
    
    
    $
    372
    
    
    $
    
    
    
    $
    74
    
    
    $
    2,901Ending balance: individually evaluated for
impairment
    
    $
    
    
    
    $
    570
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    570Ending balance: collectively evaluted for
impairment
    
    $
    349
    
    
    $
    331
    
    
    $
    110
    
    
    $
    1,095
    
    
    $
    372
    
    
    $
    
    
    
    $
    74
    
    
    $
    2,331Loans, net of unearned interest:Ending balance
    
    $
    37,660
    
    
    $
    43,610
    
    
    $
    12,096
    
    
    $
    139,282
    
    
    $
    43,866
    
    
    $
    12,692
    
    
    $
    8,244
    
    
    $
    297,450Ending balance: individually evaluted for
impairment
    
    $
    288
    
    
    $
    6,561
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    6,849Ending balance: collectively evaluated for
impairment
    
    $
    37,372
    
    
    $
    37,049
    
    
    $
    12,096
    
    
    $
    139,282
    
    
    $
    43,866
    
    
    $
    12,692
    
    
    $
    8,244
    
    
    $
    290,601Obligations ofCommercial,
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    states andfinancial and
    
    
    Real estate -
    
    
    Real estate -
    
    
    Real estate -
    
    
    
    
    
    
    politicalAs of December 31, 2010
    
    agricultural
    
    
    commercial
    
    
    construction
    
    
    mortgage
    
    
    Home equity
    
    
    subdivisions
    
    
    Personal
    
    
    TotalAllowance for loan losses:Ending balance
    
    $
    283
    
    
    $
    875
    
    
    $
    93
    
    
    $
    1,098
    
    
    $
    391
    
    
    $
    
    
    
    $
    84
    
    
    $
    2,824Ending balance: individually evaluated for
impairment
    
    $
    
    
    
    $
    570
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    570Ending balance: collectively evaluted for
impairment
    
    $
    283
    
    
    $
    305
    
    
    $
    93
    
    
    $
    1,098
    
    
    $
    391
    
    
    $
    
    
    
    $
    84
    
    
    $
    2,254Loans, net of unearned interest:Ending balance
    
    $
    32,841
    
    
    $
    44,185
    
    
    $
    11,028
    
    
    $
    142,608
    
    
    $
    46,325
    
    
    $
    10,960
    
    
    $
    10,155
    
    
    $
    298,102Ending balance: individually evaluted for
impairment
    
    $
    
    
    
    $
    7,743
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    7,743Ending balance: collectively evaluated for
impairment
    
    $
    32,841
    
    
    $
    36,442
    
    
    $
    11,028
    
    
    $
    142,608
    
    
    $
    46,325
    
    
    $
    10,960
    
    
    $
    10,155
    
    
    $
    290,359
      20




---



##### 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.
    21




---



##### Table of Contents



Securities Available for Sale.
 Impaired Loans
  (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)SignificantQuoted Prices in
    
    
    Other
    
    
    Significant OtherMarch 31,
    
    
    Active Markets for
    
    
    Observable
    
    
    Unobservable2011
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsMeasured at fair value on a recurring basis:Debt securities available-for-sale:U.S. Treasury securities and obligations of U.S.Government agencies and corporations
    
    $
    53,954
    
    
    $
    
    
    
    $
    53,954
    
    
    $
    Obligations of state and political subdivisions
    
    
    42,238
    
    
    
    
    
    
    
    42,238
    
    
    
    Corporate notes
    
    
    1,027
    
    
    
    
    
    
    
    1,027
    
    
    
    Mortgage-backed securities
    
    
    2,779
    
    
    
    
    
    
    
    2,779
    
    
    
    Equity securities available-for-sale
    
    
    984
    
    
    
    984
    
    
    
    
    
    
    
    Measured at fair value on a non-recurring basis:Impaired loans
    
    
    1,566
    
    
    
    
    
    
    
    
    
    
    
    1,566
 (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)SignificantQuoted Prices in
    
    
    Other
    
    
    Significant OtherDecember 31,
    
    
    Active Markets for
    
    
    Observable
    
    
    Unobservable2010
    
    
    Identical Assets
    
    
    Inputs
    
    
    InputsMeasured at fair value on a recurring basis:Debt securities available-for-sale:U.S. Treasury securities and obligations of U.S.Government agencies and corporations
    
    $
    37,696
    
    
    $
    
    
    
    $
    37,696
    
    
    $
    Obligations of state and political subdivisions
    
    
    38,893
    
    
    
    
    
    
    
    38,893
    
    
    
    Corporate notes
    
    
    1,028
    
    
    
    
    
    
    
    1,028
    
    
    
    Mortgage-backed securities
    
    
    1,345
    
    
    
    
    
    
    
    1,345
    
    
    
    Equity securities available-for-sale
    
    
    961
    
    
    
    961
    
    
    
    
    
    
    
    Measured at fair value on a non-recurring basis:Impaired loans
    
    
    1,567
    
    
    
    
    
    
    
    
    
    
    
    1,567
 Fair Value of Financial Instruments
 Financial Instruments
  22




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##### Table of Contents



Financial Instruments
 March 31, 2011
    
    
    December 31, 2010Carrying
    
    
    Fair
    
    
    Carrying
    
    
    FairValue
    
    
    Value
    
    
    Value
    
    
    ValueFinancial assets:Cash and due from banks
    
    $
    8,481
    
    
    $
    8,481
    
    
    $
    12,758
    
    
    $
    12,758Interest bearing deposits with banks
    
    
    147
    
    
    
    147
    
    
    
    218
    
    
    
    218Federal funds sold
    
    
    4,900
    
    
    
    4,900
    
    
    
    12,300
    
    
    
    12,300Interest bearing time deposits with banks
    
    
    1,096
    
    
    
    1,119
    
    
    
    1,345
    
    
    
    1,360Securities
    
    
    100,982
    
    
    
    100,982
    
    
    
    79,923
    
    
    
    79,923Restricted investment in FHLB stock
    
    
    1,983
    
    
    
    1,983
    
    
    
    2,088
    
    
    
    2,088Total loans, net of unearned interest
    
    
    297,450
    
    
    
    310,495
    
    
    
    298,102
    
    
    
    312,621Accrued interest receivable
    
    
    1,845
    
    
    
    1,845
    
    
    
    1,763
    
    
    
    1,763Financial liabilities:Non-interest bearing deposits
    
    
    62,219
    
    
    
    62,219
    
    
    
    60,696
    
    
    
    60,696Interest bearing deposits
    
    
    324,198
    
    
    
    330,779
    
    
    
    316,094
    
    
    
    323,003Securities sold under agreements to repurchase
    
    
    2,631
    
    
    
    2,631
    
    
    
    3,314
    
    
    
    3,314Other interest bearing liabilities
    
    
    1,201
    
    
    
    1,208
    
    
    
    1,200
    
    
    
    1,202Accrued interest payable
    
    
    495
    
    
    
    495
    
    
    
    499
    
    
    
    499Off-balance sheet financial instruments:Commitments to extend credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Letters of credit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
     Interest bearing time deposits with banks
 Securities Available for Sale
  23




---



##### Table of Contents



Loans
 Fixed rate time deposits
 Other interest bearing liabilities
 Commitments to extend credit and letters of credit
 
 Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
          24




---



##### Table of Contents



March 31,
    
    
    December 31,
    
    
    Change2011
    
    
    2010
    
    
    $
    
    
    %Deposits:Demand, non-interest bearing
    
    $
    62,219
    
    
    $
    60,696
    
    
    $
    1,523
    
    
    
    2.5
    %NOW and money market
    
    
    88,761
    
    
    
    81,378
    
    
    
    7,383
    
    
    
    9.1
    %Savings
    
    
    49,161
    
    
    
    47,112
    
    
    
    2,049
    
    
    
    4.3
    %Time deposits, $100,000 and more
    
    
    35,669
    
    
    
    34,099
    
    
    
    1,570
    
    
    
    4.6
    %Other time deposits
    
    
    150,607
    
    
    
    153,505
    
    
    
    (2,898
    )
    
    
    (1.9
    %)Total deposits
    
    $
    386,417
    
    
    $
    376,790
    
    
    $
    9,627
    
    
    
    2.6
    %
  March 31,
    
    
    December 31,
    
    
    Change2011
    
    
    2010
    
    
    $
    
    
    %Loans:Commercial, financial and agricultural
    
    $
    37,660
    
    
    $
    32,841
    
    
    $
    4,819
    
    
    
    14.7
    %Real estate  commercial
    
    
    43,610
    
    
    
    44,185
    
    
    
    (575
    )
    
    
    (1.3
    %)Real estate  construction
    
    
    12,096
    
    
    
    11,028
    
    
    
    1,068
    
    
    
    9.7
    %Real estate  mortgage
    
    
    139,282
    
    
    
    142,608
    
    
    
    (3,326
    )
    
    
    (2.3
    %)Home equity
    
    
    43,866
    
    
    
    46,325
    
    
    
    (2,459
    )
    
    
    (5.3
    %)Obligations of states and politicalsubdivisions
    
    
    12,692
    
    
    
    10,960
    
    
    
    1,732
    
    
    
    15.8
    %Personal
    
    
    8,244
    
    
    
    10,155
    
    
    
    (1,911
    )
    
    
    (18.8
    %)Total loans
    
    $
    297,450
    
    
    $
    298,102
    
    
    $
    (652
    )
    
    
    (0.2
    %)
  Periods Ended March 31,2011
    
    
    2010Balance of allowance  January 1
    
    $
    2,824
    
    
    $
    2,719Loans charged off
    
    
    (20
    )
    
    
    (145
    )Recoveries of loans previously charged off
    
    
    9
    
    
    
    4Net charge-offs
    
    
    (11
    )
    
    
    (141
    )Provision for loan losses
    
    
    88
    
    
    
    285Balance of allowance  end of period
    
    $
    2,901
    
    
    $
    2,863Ratio of net charge-offs during period to average loans outstanding
    
    
    0.004
    %
    
    
    0.045
    %
  25




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##### Table of Contents



(Dollar amounts in thousands)
    
    March 31, 2011
    
    
    December 31, 2010Non-performing loansNonaccrual loans
    
    $
    5,886
    
    
    $
    5,964Accruing loans past due 90 days or more
    
    
    418
    
    
    
    1,007Restructured loans
    
    
    
    
    
    
    Total
    
    $
    6,304
    
    
    $
    6,971Average loans outstanding
    
    $
    296,257
    
    
    $
    307,228Ratio of non-performing loans to
average loans outstanding
    
    
    2.13
    %
    
    
    2.27
    %
     Comparison of the Three Months Ended March 31, 2011 and 2010
    26




---



##### Table of Contents



Three Months EndedMarch 312011
    
    
    2010Return on average assets (annualized)
    
    
    1.13
    %
    
    
    1.09
    %Return on average equity (annualized)
    
    
    9.96
    %
    
    
    9.32
    %Average equity to average assets
    
    
    11.39
    %
    
    
    11.68
    %Non-interest income, excluding securities
gains, as a percentage of average assets
(annualized)
    
    
    0.93
    %
    
    
    0.93
    %Non-interest expense as a percentage of
average assets (annualized)
    
    
    2.91
    %
    
    
    2.88
    %
             27




---



##### Table of Contents



28




---



##### Table of Contents



Item 3.
    
    Quantitative and Qualitative Disclosures About Market Risk
     29




---



##### 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
    
    
    Income400
    
    $
    (1,404
    )
    
    $
    498
    
    
    $
    (906
    )300
    
    
    (1,053
    )
    
    
    197
    
    
    
    (856
    )200
    
    
    (702
    )
    
    
    677
    
    
    
    (25
    )100
    
    
    (351
    )
    
    
    324
    
    
    
    (27
    )0
    
    
    
    
    
    
    
    
    
    
    -25
    
    
    87
    
    
    
    (47
    )
    
    
    40
    30




---



##### 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
 In the opinion of management of the Corporation, there are no legal proceedings
pending to which the Corporation or its subsidiary is a party or to which its
property is subject, which, if determined adversely to the Corporation or its
subsidiary, would be material in relation to the Corporations or its subsidiarys
financial condition. There are no proceedings pending other than ordinary routine
litigation incident to the business of the Corporation or its subsidiary. In
addition, no material proceedings are pending or are known to be threatened or
contemplated against the Corporation or its subsidiary by government authorities.
 
 Item 1A.
    
    RISK FACTORS
 There have been no material changes to the risk factors that were disclosed in the
Corporations Annual Report on Form 10-K for the year ended December 31, 2010.
  31




---



##### Table of Contents



Item 2.
    
    UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 The following table provides information on repurchases by the Corporation of its
common stock in each month of the quarter ended March 31, 2011:
 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)January 1-31, 2011
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    122,036February 1-28, 2011
    
    
    3,000
    
    
    
    16.95
    
    
    
    3,000
    
    
    
    119,036March 1-31, 2011
    
    
    16,500
    
    
    
    16.95
    
    
    
    16,500
    
    
    
    102,536Totals
    
    
    19,500
    
    
    
    
    
    
    
    19,500
    
    
    
    102,536
 
 (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 May 9, 2011, the
number of shares that may yet be purchased under the program was 102,536. 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. 
 Item 3.
    
    DEFAULTS UPON SENIOR SECURITIES
  
 Item 4.
    
    (Removed and Reserved)
 
 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)10.1
    
    
    
    
    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)
10.2  Exhibits A-B to 2004 Executive Annual
Incentive Plan (incorporated by reference to Exhibit
10.1 to the Corporations report on Form 8-K filed
with the SEC on March 9, 2011)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
Officer32.2
    
    
    
    
    Section 1350 Certification of Chief Financial Officer
  32




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##### Table of Contents



Juniata Valley Financial Corp.
(Registrant)Date 05-09-2011
    By
    /s/ Marcie A. BarberMarcie A. Barber, President andChief Executive Officer
(Principal Executive Officer)Date 05-09-2011
    By
    /s/ JoAnn N. McMinnJoAnn N. McMinn, Chief FinancialOfficer (Principal Accounting
Officer and Principal Financial
Officer )  33