-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NKqFAZml68ZJCAliEHRagjyGtAP72n3oaNeATMSyQelOH/l/SRU7FEzyHBSv2XDh IP/RAXWmNE+HwvHffDxgpg== 0000714712-97-000010.txt : 19971107 0000714712-97-000010.hdr.sgml : 19971107 ACCESSION NUMBER: 0000714712-97-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971106 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: JUNIATA VALLEY FINANCIAL CORP CENTRAL INDEX KEY: 0000714712 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 232235254 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-13232 FILM NUMBER: 97709277 BUSINESS ADDRESS: STREET 1: BRIDGE & MAIN ST STREET 2: P O BOX 66 CITY: MIFFLINTOWN STATE: PA ZIP: 17059-0066 BUSINESS PHONE: 7174368211 MAIL ADDRESS: STREET 1: BRIDGE AND MAIN STREETS STREET 2: P O BOX 66 CITY: MIFFLINTOWN STATE: PA ZIP: 17059-0066 10-Q 1 2. JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY --------------------------------------------- CONSOLIDATED BALANCE SHEETS --------------------------- September 30, December 31, 1997 1996 ------------ ----------- (In thousands) (Unaudited) ASSETS: Cash and due from banks $ 6,275 $ 5,857 Interest-bearing deposits with banks 52 65 Federal funds sold 425 3,100 --------- ---------- Total cash and cash equivalents 6,752 9,022 Securities available for sale 26,664 30,215 Securities held to maturity, fair value of $45,097 and $40,309, respectively 44,918 40,284 Loans, receivable net of unearned discount of $4,671 and $4,279, respectively 135,424 128,146 Less: Allowance for loan losses 1,798 1,707 --------- ---------- Net Loans receivable 133,626 126,439 Bank premises and equipment, net 1,742 1,766 Accrued interest receivable and other assets 6,311 4,538 --------- ---------- TOTAL ASSETS $ 220,013 $ 212,264 ========= ========== LIABILITIES AND STOCKHOLDERS' EQUITY: Non-interest bearing deposits $ 22,838 $ 21,873 Interest bearing deposits 165,038 160,582 --------- ---------- Total deposits 187,876 182,455 Accrued interest and other liabilities 3,338 3,046 --------- ---------- Total liabilities 191,214 185,501 --------- ---------- Stockholders' Equity: Preferred stock, no par value, authorized 500,000 shares, no shares issued or outstanding - - Common stock, par value $1.00, per share; authorized 5,000,000 shares; issued and outstanding 1,400,389 and 1,117,088 shares respectively 1,401 1,117 Capital surplus 14,709 14,879 Retained earnings 12,286 10,549 Net unrealized appreciation on securities available for sale, net of taxes 403 218 --------- ---------- Total stockholders' equity 28,799 26,763 --------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $ 220,013 $ 212,264 ========= ========== 3. JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the Quarter Ended For Nine Months Ended ---------------------- -------------------- Sept 30, Sept 30, Sept 30, Sept 30, 1997 1996 1997 1996 ---------- --------- --------- --------- (In thousands, except per share amount) INTEREST INCOME: Loans receivable $ 3,156 $ 2,900 $ 9,165 $ 8,611 Taxable securities 699 691 2,058 2,088 Tax-exempt securities 297 324 927 911 Other 37 48 117 170 ---------- ---------- ---------- --------- Total interest income 4,189 3,963 12,267 11,780 INTEREST EXPENSE ON DEPOSITS 1,968 1,922 5,799 5,661 ---------- ---------- ---------- --------- Net interest income 2,221 2,041 6,468 6,119 PROVISION FOR LOAN LOSSES 45 45 135 135 ---------- ---------- ---------- --------- Net interest income, after provision for loan losses 2,176 1,996 6,333 5,984 ---------- ---------- ---------- --------- OTHER INCOME: Trust department 45 58 130 161 Customer service fees 66 60 191 173 Net realized gains on sales of securities - - 65 - Other 54 39 218 100 ---------- ---------- ---------- --------- Total other income 165 157 604 434 ---------- ---------- ---------- --------- OTHER EXPENSES: Salaries and wages 574 548 1,707 1,647 Employee benefits 141 153 442 468 Occupancy 90 76 237 236 Equipment 88 80 243 249 Federal deposit insurance 6 1 17 2 Director compensation 65 94 195 271 Taxes, other than income 64 61 190 177 Other 333 279 1,024 810 ---------- ---------- ---------- --------- Total other expenses 1,361 1,292 4,055 3,860 ---------- ---------- ---------- --------- INCOME BEFORE INCOME TAXES 980 861 2,882 2,558 FEDERAL INCOME TAXES 242 201 678 613 ---------- ---------- ---------- --------- Net income $ 738 $ 660 $ 2,204 $ 1,945 ========== ========== ========== ========== PER SHARE DATA: Net income $ .53 $ .47 $ 1.58 $ 1.39 ========== ========== ========== ========== Weighted average number of shares outstanding 1,400,389 1,395,242 1,398,201 1,395,242 ========= ========= ========= ========= 4. JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 (Unaudited) Net unrealized Appreciation (Depreciation) on Securities Common Capital Retained Available Stock Surplus Earnings For Sale Total ---------- ----------- ----------- ------------ ----------- (In thousands) BALANCE, DECEMBER 31, 1996 $ 1,117 $ 14,879 $ 10,549 $ 218 $ 26,763 Net income for the nine months ended Sept 30, 1997 - - 2,204 - 2,204 Cash dividend, $.32 per share - - (447) - (447) Stock issued, Employee stock purchase plan 4 110 - - 114 5-for-4 stock split in the form of a 25% stock dividend 280 (280) (20) - (20) Net unrealized depreciation on securities available for sale, net of taxes - - - 185 185 -------- -------- -------- --------- -------- Balance September 30, 1997 $ 1,401 $ 14,709 $ 12,286 $ 403 $ 28,799 ======== ======== ======== ========= ======== 5. JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Increase (Decrease) in Cash and Cash Equivalents For the Nine Months Ended ------------------------- Sept 30, Sept 30, 1997 1996 ------------------------- (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 2,204 $ 1,945 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 135 135 Provision for depreciation 139 145 Net amortization on premiums of securities 113 182 Deferred directors' fees and supplemental retirement plan expense 120 169 Payment of deferred compensation (108) (110) Net realized gain on sale of securities (65) - Deferred income taxes (47) (62) Increase in accrued interest receivable and other assets (1,661) (851) Increase in interest payable and other liabilities 189 108 ------------ ----------- Net cash provided by operating activities 1,019 1,661 ------------ ----------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of available for sale securities (1,258) (8,275) Proceeds from sales of available for sale securities 93 - Proceeds from maturities of and principal repayments on available for sale securities 5,042 3,592 Purchases of held to maturity securities (13,356) (7,532) Proceeds from maturities of and principal repayments on held to maturity securities 8,628 6,856 Net increase in loans receivable (7,391) (3,008) Purchases of bank premises and equipment (115) (171) ------------ ----------- Net cash used in investing activities (8,357) (8,538) ------------ ----------- CASH FLOWS FROM FINANCING ACTIVITIES Net increase in deposits 5,421 4,249 Cash dividends (467) (412) Dividend reinvestment plan - 91 Employee stock purchase plan 114 - ------------ ----------- Net cash provided by financing activies 5,068 3,928 ------------ ----------- Increase (decrease) in cash and cash equivalents (2,270) (2,949) CASH AND CASH EQUIVALENTS Beginning 9,022 11,673 ------------ ----------- Ending $ 6,752 $ 8,724 ============= =========== CASH PAYMENTS FOR Interest $ 5,784 $ 5,631 ============ =========== Income Taxes $ 695 $ 693 ============ =========== 6. NOTE A - Basis of Presentation The financial information includes the accounts of the Juniata Valley Financial Corp. and its wholly owned subsidiary, The Juniata Valley Bank. All significant intercompany accounts and transactions have been eliminated. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for fair presentation have been included. Operating results for the nine-month period ended September 30, 1997, are not necessarily indicative of the results that may be expected for the year ended December 31, 1997. For further information, refer to the consolidated financial statements and footnotes thereto included in Juniata Valley Financial Corp. annual report on Form 10-K for the year ended December 31, 1996. NOTE B - Summary of Significant Accounting Policies Stock repurchase program: On October 21, 1997, the Board of Directors of the Corporation authorized the repurchase of up to 140,000 shares of the Corporation's outstanding common stock. Pursuant to the authorization, appropriate senior officers of the Corporation may direct the repurchases at times and in amounts determined by them to be prudent. Repurchases will be made from time to time on the open market or in privately negotiated transactions. The shares purchased are to be held as treasury stock for various corporate programs, including the funding of existing employee benefit plans and such other benefit plans as may be herein after adopted by the Corporation. Per share data: Net income and dividends per share are based on the weighted average number of shares outstanding adjusted for stock dividends. The net income per share data and weighted average number of shares outstanding have been adjusted to reflect a 5-for-4 stock split declared on July 15, 1997. 7. MANAGEMENT'S DISCUSSION AND ANALYSIS Financial Condition: Total assets of Juniata Valley Financial Corp. reached $220,013,000 as of September 30, an increase of $7,749,000 or 3.65% from December 31, 1996. The cash provided by financing activities of $5,068,000 was a result of the net increase in deposits of $5,421,000. In addition, the cash provided by operating activities of $1,019,000 and the decrease in cash and cash equivalents of $2,270,000 for the period ended September 30, 1997, were used for loan growth of $7,391,000. The remaining cash was used to purchase securities which exceeded proceeds by $851,000 and to purchase bank premise and equipment of $115,000. There are no material loans classified for regulatory purposes as loss, doubtful, substandard or special mention which management expects to significantly impact future operating results, liquidity or capital resources. Additionally, management is not aware of any information which would give serious doubt as to the ability of its borrowers to substantially comply with their loan repayment terms. The Corporation's problem loans (i.e., 90 days past due and restructured loans) were not material for all periods presented. Management is not aware of any current recommendations of the regulatory authorities which, if implemented, would have a material effect on the Corporation's liquidity, capital resources or operations. A dividend reinvestment plan for stockholders was instituted on January 1, 1996. The Corporation pays dividends semi-annually on June 1 and December 1 of every year. Under the plan additional shares of Juniata Valley Financial Corp may be purchased at market value with reinvested dividends and voluntary cash payments. The Corporation has reserved 100,000 shares of common stock for this plan. In 1996, 4,087 shares were issued and 95,913 remain unissued. For the June 1, 1997 dividend pay date all shares to satisfy the dividend reinvestment plan were purchased on the open market. An employee stock purchase plan was approved by stockholders on April 16, 1996. The first plan year began on July 1, 1996, and ended June 30, 1997. There were 58 out of 87 eligible employees that participated in the first plan year. On June 15, 1997, 3,600 shares were issued. The corporation has reserved 100,000 shares of common stock for this plan. After the issuance on June 15, 1997, there are 96,400 shares remaining to be issued. Results of operations: Interest income increased $487,000 or 4.13% for the first nine months of 1997 compared to 1996 and $226,000 or 5.70% for the quarter. Interest expense increased $138,000 or 2.44% for the first nine months of 1997 and $46,000 or 2.39% for the quarter comparing 1997 to 1996. These increases in interest income and expense for the first nine months ended September 30, 1997, versus 1996, are reflective of an increase of both interest earning assets and interest bearing liabilities and overall higher rates offered and paid in 1997 versus 1996. This resulted in an increase in net interest income of $349,000 or 5.70% for the nine months ended September 30, 1997 and $180,000 or 8.82% for the quarter ended. Other income has increased $170,000 or 39.71% for the first nine months of 1997 and $8,000 for 5.10% for the quarter. This was due to the gains on sales of securities for $65,000. There was also an increase of $118,000 in the other 8. Results of operations continued: category for the first nine months. $51,000 was received in life insurance proceeds due to the death of a former director; a fixed asset owned by the Bank was sold which resulted in a $14,000 gain and a $42,000 increase in insurance fees earned on consumer loans compared to the same period last year. There was an increase of $18,000 in customer service fees. This was as a result of an increase in the volume in accounts as opposed to an increase in fees. The decrease of $31,000 in trust department fees was due to the settlement of three estates in 1996 over 1997. Other expenses for the first nine months increased $195,000 or 5.05% and $69,000 or 5.34% for the quarter comparing 1997 to 1996. The $60,000 increase in salary and wages for the nine months ended September 30, 1997, compared to 1996, can be attributed to annual merit increases and promotions of employees. The $26,000 decrease in employee benefits is a result of lower benefit costs as opposed to less benefits being provided. The $15,000 increase in federal deposit insurance reflects the increased FICO debt service assessments. The $76,000 decrease in directors compensation is due to fully funded retirement plans. The $214,000 increase in the other category is due to $15,000 increase in the Pennsylvania Bank Shares tax; $11,000 increase in branch advisory board fees and $157,000 increase in repossession and loan collection expenses. All of these factors combined have contributed to an increase in net income of $259,000 or 13.32% for the nine months and $78,000 or 11.82% for the quarter ended September 30, 1997. Liquidity: The objective of liquidity management is to ensure that sufficient funding is available, at a reasonable cost, to meet the ongoing operational cash needs of the Corporation and to take advantage of income producing opportunities as they arise. While the desired level of liquidity will vary depending upon a variety of factors, it is the primary goal of the Corporation to maintain a high level of liquidity in all economic environments. Principal sources of asset liquidity are provided by securities maturing in one year or less, other short-term investments such as Federal Funds sold and cash and due from banks. Liability liquidity, which is more difficult to measure, can be met by attracting deposits and maintaining the core deposit base. The Corporation joined the Federal Home Loan Bank of Pittsburgh in August of 1993 for the purpose of providing short term liquidity when other sources are unable to fill these needs. In view of the primary and secondary sources previously mentioned, Management believes that the Corporation's liquidity is capable of providing the funds needed to meet loan demand. Interest rate sensitivity: Interest rate sensitivity management is the responsibility of the Asset/Liability Management Committee. This process involves the development and implementation of strategies to maximize net interest margin, while minimizing the earnings risk associated with changing interest rates. The traditional gap analysis identifies the maturity and repricing terms of all assets and liabilities. 9. As of September 30, 1997, the Corporation had a six-month negative gap of $12,863,000. Generally a liability sensitive position indicates that more liabilities than assets are expected to re-price within the time period and that falling interest rates could positively affect net interest income while rising interest rates could negatively affect net interest income. However, the traditional analysis does not accurately reflect the Bank's interest rate sensitivity since the rates on core deposits generally do not change as quickly as market rates. Historically net interest income has, in fact, not been subject to the degree of sensitivity indicated by the traditional analysis at The Juniata Valley Bank. Capital Adequacy: The Bank's regulatory capital ratios for the periods presented are as follows: Risk Weighted Assets Ratio: Actual Required ------ -------- September 30, December 31, September 30, December 31, 1997 1996 1997 1996 ------------- ------------ ------------- ------------ TIER I 18.90% 18.73% 4.0% 4.0% TIER I & II 20.10% 19.94% 8.0% 8.0% Total Assets Leverage Ratio: TIER I 13.13% 12.66% 4.0% 4.0% At September 30, 1997, the Corporation exceeds the regulatory requirements to be considered a "well capitalized" financial institution. 10. Part II. Other Information Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities Not applicable Item 4. Submission of Matters to a Vote of Security Holders Not applicable Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (27) Financial Data Schedule Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Juniata Valley Financial Corp. (Registrant) Date_______________________________ By_______________________________ A. Jerome Cook, President Date_______________________________ By_______________________________ Linda L. Engle, Treasurer EX-27 2
9 1,000 9-MOS DEC-31-1997 SEP-30-1997 6,275 52 425 0 26,664 44,918 45,097 135,424 1,798 220,013 187,876 0 3,338 0 0 0 1,401 27,398 218,708 9,165 2,985 117 12,267 5,799 5,799 6,468 135 65 4,055 2,882 2,882 0 0 2,204 1.58 1.58 7.97 116 158 0 753 1,707 80 36 1,798 0 0 0
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