10-Q 1 jvfc-10q_54955.txt JUNIATA VALLEY 10Q EDGAR FILING UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT 1934 For the quarterly period ended March 31, 2003 -------------- [ ] 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 2-81699 --------------------------------------------------------- Juniata Valley Financial Corp. ------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Pennsylvania 23-2235254 ------------------------------------------------------------------------------- (State or other jurisdiction of (I.R.S.Employer incorporation or organization) Identification No.) Bridge and Main Streets, Mifflintown, Pennsylvania 17059 ------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (717) 436-8211 ------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Class Outstanding as of April 30, 2003 -------------------------------- ---------------------------------- Common Stock ($1.00 par value) 2,287,230 shares 2. Item 1 - FINANCIAL STATEMENTS JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY --------------------------------------------- CONSOLIDATED BALANCE SHEETS --------------------------- ASSETS ------ March 31, December 31, 2003 2002 --------- ------------ (In thousands) (Unaudited) Cash and due from banks $ 12,226 $ 11,111 Interest bearing deposits with banks 295 90 Federal funds sold 9,000 3,700 --------- --------- Cash and cash equivalents 21,521 14,901 Interest bearing time deposits with banks 5,390 5,390 Securities available for sale 73,179 70,495 Securities held to maturity, fair value $26,497 and $30,698, respectively 25,871 29,907 Federal home loan bank stock 895 639 Loans receivable net of allowance for loan losses $2,749 and $2,731, respectively 233,892 235,497 Bank premises and equipment, net 5,933 5,767 Bank-owned life insurance 7,238 7,151 Accrued interest receivable and other assets 6,968 5,988 --------- --------- TOTAL ASSETS $ 380,887 $ 375,735 ========= ========= LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Liabilities: Deposits: Non-interest bearing $ 42,204 $ 38,892 Interest bearing 284,388 283,727 --------- --------- Total deposits 326,592 322,619 Accrued interest payable and other liabilities 5,243 4,789 --------- --------- Total liabilities 331,835 327,408 --------- --------- Stockholders' Equity: Preferred stock, no par value; 500,000 shares authorized; no shares issued or outstanding -- -- Common stock, par value $1.00 per share; authorized 20,000,000 shares; issued 2,372,930 shares 2,373 2,373 Surplus 20,212 20,212 Retained earnings 26,990 25,652 Accumulated other comprehensive income 1,749 1,795 Treasury stock, at cost 2003 78,457 shares; 2002 59,445 shares (2,272) (1,705) --------- --------- Total stockholders' equity 49,052 48,327 --------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 380,887 $ 375,735 ========= ========= 3. JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY --------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME --------------------------------- (Unaudited) For the Quarter Ended March 31, March 31, 2003 2002 --------- --------- (In thousands, except per share amount) INTEREST INCOME: Loans receivable $ 4,574 $ 4,697 Taxable securities 712 724 Tax-exempt securities 321 386 Other 66 43 ---------- ---------- Total interest income 5,673 5,850 INTEREST EXPENSE - Deposits 2,016 2,424 ---------- ---------- Net interest income 3,657 3,426 PROVISION FOR LOAN LOSSES 75 75 ---------- ---------- Net interest income, after provision for loan losses 3,582 3,351 ---------- ---------- OTHER INCOME: Trust department 90 118 Customer service fees 164 154 Other 253 233 ---------- ---------- Total other income 507 505 ---------- ---------- OTHER EXPENSES: Salaries and wages 960 903 Employee benefits 331 316 Occupancy 195 157 Equipment 321 296 Director compensation 105 86 Taxes, other than income 133 127 Other 347 304 ---------- ---------- Total other expenses 2,392 2,189 ---------- ---------- INCOME BEFORE INCOME TAXES 1,697 1,667 FEDERAL INCOME TAXES 359 332 ---------- ---------- Net income $ 1,338 $ 1,335 ========== ========== Basic and diluted earnings per share $ .58 $ .57 ========== ========== Weighted average number of shares outstanding 2,309,423 2,346,396 ========== ========== 4.
JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY --------------------------------------------- CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY ---------------------------------------------- FOR THE THREE MONTHS ENDED MARCH 31, 2003 ----------------------------------------- (Unaudited) Accumulated Other Common Retained Comprehensive Treasury Stock Surplus Earnings Income Stock Total -------- ------- -------- ------------- -------- ----- (In thousands) BALANCE, December 31, 2002 $ 2,373 $ 20,212 $ 25,652 $ 1,795 $ (1,705) $ 48,327 -------- Comprehensive Income Net income for the three months ended March 31, 2003 -- -- 1,338 -- -- 1,338 Change in unrealized gains (losses) on securities available for sale, net of reclassification adjustment and tax effects -- -- -- (46) -- (46) -------- Total Comprehensive Income 1,292 -------- Treasury stock acquired -- -- -- -- (567) (567) -------- -------- -------- -------- -------- -------- Balance March 31, 2003 $ 2,373 $ 20,212 $ 26,990 $ 1,749 $ (2,272) $ 49,052 ======== ======== ======== ======== ======== ========
5.
JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY --------------------------------------------- CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY ---------------------------------------------- FOR THE THREE MONTHS ENDED MARCH 31, 2002 ----------------------------------------- (Unaudited) Accumulated Other Common Retained Comprehensive Treasury Stock Surplus Earnings Income Stock Total -------- ------- -------- ------------- -------- ----- (In thousands) BALANCE, December 31, 2001 $ 2,373 $ 20,221 $ 22,679 $ 676 $ (623) $ 45,326 -------- Comprehensive Income Net income for the three months ended March 31, 2002 -- -- 1,335 -- -- 1,335 Change in unrealized gains (losses) on securities available for sale, net of reclassification adjustment and tax effects -- -- -- (260) -- (260) -------- Total Comprehensive Income 1,075 -------- Treasury stock acquired -- -- -- -- (240) (240) -------- -------- -------- -------- -------- -------- Balance March 31, 2002 $ 2,373 $ 20,221 $ 24,014 $ 416 $ (863) $ 46,161 ======== ======== ======== ======== ======== ========
6.
JUNIATA VALLEY FINANCIAL CORP. AND SUBSIDIARY --------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS ------------------------------------- (Unaudited) Increase (Decrease) in Cash and Cash Equivalents For the Three Months Ended -------------------------- March 31, March 31, 2003 2002 --------- --------- (In thousands) CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 1,338 $ 1,335 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses 75 75 Provision for depreciation 108 112 Net amortization securities of premiums 57 34 Deferred compensation expense 118 151 Payment of deferred compensation (68) (67) Deferred income taxes (52) (43) Increase in accrued interest receivable and other assets (905) (758) Increase in accrued interest payable and other liabilities 404 385 Earnings on investment life insurance (87) (87) -------- -------- Net cash provided by operating activities 988 1,137 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of available for sale securities (7,186) (7,590) Purchase of FHLB stock (256) -- Proceeds from maturities of and principal repayments on available for sale securities 4,396 8,212 Purchase of held to maturity securities (999) -- Proceeds from maturities of and principal repayments on held to maturity securities 5,016 1,986 Net decrease in loans receivable 1,529 833 Net purchases of bank premises and equipment (274) (18) -------- -------- Net cash used in investing activities 2,226 3,423 -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Net increase in deposits 3,973 1,423 Net decrease in short-term borrowings -- (1,275) Purchase of treasury stock (567) (240) -------- -------- Net cash used in financing activities 3,406 (92) -------- -------- Increase (decrease) in cash and cash equivalents 6,620 4,468 CASH AND CASH EQUIVALENTS: Beginning 14,901 11,658 -------- -------- Ending $ 21,521 $ 16,126 ======== ======== CASH PAYMENTS FOR: Interest $ 2,094 $ 2,570 ======== ========
7. NOTE A - Basis of Presentation The financial information includes the accounts of 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 three-month period ended March 31, 2003, are not necessarily indicative of the results that may be expected for the year ended December 31, 2003. 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, 2002. NOTE B - New Accounting Standards In November 2002, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 45 (FIN 45), "Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others." This Interpretation expands the disclosures to be made by a guarantor in its financial statements about its obligations under certain guarantees and requires the guarantor to recognize a liability for the fair value of an obligation assumed under certain specified guarantees. FIN 45 clarifies the requirements of FASB Statement No. 5, "Accounting for Contingencies." In general, FIN 45 applies to contracts or indemnification agreements that contingently require the guarantor to make payments to the guaranteed party based on changes in an underlying that is related to an asset, liability or equity security of the guaranteed party, which would include performance letters of credit. Certain guarantee contracts are excluded from both the disclosure and recognition requirements of this Interpretation, including, among others, guarantees related to commercial letters of credit and loan commitments. The disclosure requirements of FIN 45 require disclosure of the nature of the guarantee, the maximum potential amount of future payments that the guarantor could be required to make under the guarantee and the current amount of the liability, if any, for the guarantor's obligations under the guarantee. The accounting recognition requirements of FIN 45 are to be applied prospectively to guarantees issued or modified after December 31, 2002. Adoption of FIN 45 did not have a significant impact on the Company's financial condition or results of operations. Outstanding letters of credit written are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. The Company's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for performance letters of credit is represented by the contractual amount of those instruments. The Company had $1,050,000 of performance letters of credit as of March 31, 2003. The Bank uses the same credit policies in making conditional obligations as it does for on-balance sheet instruments. The majority of these performance letters of credit expire within the next twelve months. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending other loan commitments. The Company requires collateral and personal guarantees supporting these letters of credit as deemed necessary. Management believes that the proceeds obtained through a liquidation of such collateral and the enforcement of personal guarantees would be sufficient to cover the maximum potential amount of future payments required under the corresponding guarantees. The current amount of the liability as of March 31, 2003 for guarantees under performance letters of credit issued after December 31, 2002 is not material. 8. In April 2003, the Financial Accounting Standards Board issued Statement No. 149, "Amendment of Statement No. 133, Accounting for Derivatives Instruments and Hedging Activities". This statement clarifies the definition of a derivative and incorporates certain decisions made by the Board as part of the Derivatives Implementation Group process. This statement is effective for contracts entered into or modified , and for hedging relationships designated after June 30, 2003 and should be applied prospectively. The provisions of the Statement that relate to implementation issues addressed by the Derivatives Implementation Group that have been effective should continue to be applied in accordance with their respective effective dates. Adoption of this standard is not expected to have a significant impact on the Corporation's financial condition or results of operations. NOTE C - Accumulated Other Comprehensive Income Accounting principles generally require that recognized revenue, expenses, gains, and losses be included in net income. Although certain changes in assets and liabilities, such as unrealized gains and losses on available for sale securities, are reported as a separate component of the equity section of the balance sheet, such items, along with net income, are components of comprehensive income. The components of other comprehensive income and related tax affects are as follows: Three Months Ended March 31, 2003 2002 ---- ---- (In thousands) Unrealized holding gains (losses) on available for sale securities $ (69) $ (394) Less classification adjustment for gains realized in income -- -- ------ ------ Net unrealized gains (losses) (69) (394) Tax effect (23) (134) ------ ------ Net of tax amount $ (46) $ (260) ====== ====== 9. NOTE D - Stock Option Plan The Corporation accounts for the stock option plan under the recognition and measurement principles of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and related interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Corporation had applied the fair value recognition provisions of FASB Statement No. 123, "Accounting for Stock-Based Compensation," to stock-based compensation for quarters ended March 31, 2003 and 2002: 2003 2002 ---- ---- (In Thousands) Net income, as reported $ 1,338 $ 1,335 Total stock-based employee compensation expense determined under fair value based method for all awards (5) (3) ------- ------- Pro forma net income $ 1,333 $ 1,332 ======= ======= Basic and diluted earnings per share: As reported $ .58 $ .57 Pro forma $ .58 $ .57 10. Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS Forward Looking Statements: The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words "believes," "anticipates," "contemplates," "expects," and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. Those risks and uncertainties include changes in interest rates, risks associated with the effect of opening a new branch, the ability to control costs and expenses, and general economic conditions. The Corporation undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Financial Condition: Total assets of Juniata Valley Financial Corp. totaled $380,887,000 as of March 31, 2003, an increase of $5,152,000 or 1.37% from December 31, 2002. This increase is a result of the increase in deposits of $3,973,000. The increase in deposits was created by the uncertainty in the capital markets; customers do not know where to place their money until the markets improve. The uncertainty in the economy has affected loan demand also. Loans decreased by $1,529,000 in the first three months of 2003. Suitable investment securities have also been difficult to find. The excess of called and matured investment securities over purchases amounted to $971,000. All of these factors combined to increase cash and cash equivalents by $6,620,000. 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. 11. Results of Operations: Interest income decreased $177,000 or 3.03% for the first three months of 2003 over 2002. The decrease in interest income on loans for the quarter of $123,000 is because of a decline in rates and volume. The decrease in interest income for taxable securities of $12,000 is due to declining rates and the decrease in tax exempt securities interest income of $65,000 is due to declining rates and volume. The increase in interest income other of $23,000 is an increase in federal funds sold of $10,000 and interest bearing time deposits in banks of $13,000. Since November 2001 management has made an effort to keep federal funds to a minimum by purchasing time certificate of deposits in other banks. Interest expense decreased by $408,000 or 16.83% for the first three months of 2003 over 2002. Interest income and expense for the first three months ended March 31, 2003, versus 2002, reflect the declining interest rate environment for both interest earning assets and interest bearing liabilities. This resulted in an increase in net interest income of $231,000 or 6.74% for the three months ended March 31, 2003. The increase in the allowance for loan losses is based upon quarterly loan portfolio reviews by management and a committee of the Board. The purpose of the review is to assess loan quality, identify impaired loans, analyze delinquencies, ascertain loan growth, evaluate potential charge-offs and recoveries and assess general economic conditions in the market served. Net charge-offs at March 31, 2003 were $57,000 compared to $24,000 at March 31, 2002. Past due and nonaccrual loans at March 31, 2003 were $2,204,000. At March 31, 2002, this amount for past due and nonaccrual loans was $3,617,000. Depending upon the state of the economy and the impact thereon to these borrowers, as well as future events, these loans and others not currently so identified could be classified as non-performing assets in the future. Other income has remained virtually unchanged for the first three months of 2003 over 2002; however the amounts within the categories have changed. Trust department income has decreased $28,000, customer service fees have increased $10,000, and other income has increased $20,000. The decrease in trust department income is a result of estate settlements in 2002 over 2003. The increase in customer service fees is a result of higher transaction volume as opposed to an increase in fees. The other category increase can be attributed to a bank owned life insurance. Other expenses increased $203,000 or 9.27% for the three months ended March 31, 2003 over 2002. The $57,000 increase in salary and wages for the three months ended March 31, 2003, compared to 2002, can be attributed to an increase of 2 full-time equivalents. The $15,000 increase in employee benefits is reflective of increases in the costs as opposed to additional benefits. The $38,000 increase in occupancy is a result of increased costs for snow removal and heating costs in 2003 not experienced in the first three months of 2002. The increase of $25,000 in equipment cost is from increased usage of the internet banking and telephone banking products. The $19,000 increase in director's fees is from a retirement plan put in place in 2001. The $6,000 increase in taxes, other than income is an increase in Pennsylvania Bank Shares Tax. The $43,000 increase in other expenses can be attributed to $17,000 consulting service fees, an $18,000 increase in postage and $10,000 of legal fees for loan collection. The increase in federal income taxes is due to increased income. All of these factors combined have contributed to an increase in net income of $3,000 or .22% for the first three months ended March 31, 2003 over 2002. 12. 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. As of March 31, 2003, the Corporation had a six-month negative gap of $15,174,000. Generally a liability sensitive position indicates that more liabilities than assets are expected to reprice 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. 13. Capital Adequacy: The Bank's regulatory capital ratios for the periods presented are as follows: Risk Weighted Assets Ratio: Actual Required ------ -------- March 31, December 31, March 31, December 31, 2003 2002 2003 2002 --------- ------------ --------- ------------ TIER I 19.02% 18.76% 4.0% 4.0% TIER I & II 20.19% 19.93% 8.0% 8.0% Total Assets Leveraged Ratio: TIER I 11.89% 12.04% 4.0% 4.0% At March 31, the Corporation and the Bank exceed the regulatory requirements to be considered a "well capitalized" financial institution. Item 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK From January 1, 2001 to December 31, 2002, the Federal Reserve has lowered the federal funds rate twelve times by 475 basis points. We are currently in the lowest interest rate environment in 40 years. Net interest margin for the Bank was 3.92% at March 31, 2002, and increased to 4.17% at March 31, 2003. Because of the extent to which rates have declined, the Bank has become more sensitive to future rate declines and expects added compression of the net interest margin. Currently, the Bank has 29.39% of its deposits in NOW, money market and savings accounts, which it considers core deposits. These type of interest bearing deposit accounts carry lower rates relative to other types of deposits. Because of this, these accounts have contributed significantly to the net interest margin. However, there is an ultimate floor to which the rates on these accounts can fall. Under current conditions, the inability to further decrease these deposits rates while loan and other earning assets continue to drop and re-price at lower rates will result in further compression of the net interest margin. The added risk in this interest rate environment is that as the rates on the core deposits bottom-out, investors could migrate to other types of accounts paying higher rates. The last financial simulation performed by the Bank as of December 31, 2002, showed a possible decline in net interest income of $34,000 in a -200 basis point rate shock over a one year period. This reflected a change in the assumptions that the rates on NOW and savings account would remain constant in a +/-200 basis point rate shock. The net interest income at risk position remains within the guidelines established by the Bank's asset/liability policy. The Bank continues to monitor and manage its rate sensitivity during these unusual times. No material change has been noted in the Bank's equity value at risk. Please refer to the Annual Report on Form 10-K as of December 31, 2002, for further discussion of this matter. 14. Item 4 - CONTROLS AND PROCEDURES The Company maintains disclosure controls and procedures, as defined in Rule 13a-14 promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"), that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms and that such information is accumulated and communicated to the Company's management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Within 90 days prior to the date of this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on the evaluation of these disclosure controls and procedures, the Chief Executive Officer and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective. There were no significant changes in the Company's internal controls or in other factors that could significantly affect the internal controls subsequent to the date that the Company completed its evaluation. 15. 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 Holder None Item 5. Other information None Item 6. Exhibits Exhibit 99.1 Certification of Chief Executive Officer Exhibit 99.2 Certification of Chief Financial Officer Form 8-K Form 8-K was filed on February 6, 2003 concerning a press release reporting year end financial results 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 ------------------------------ -------------------------------------- Francis J. Evanitsky, President & CEO Date By ------------------------------ -------------------------------------- Linda L. Engle, Executive VP & CFO 16. CERTIFICATION OF CHIEF EXECUTIVE OFFICER ---------------------------------------- I, Francis J. Evanitsky, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Juniata Valley Financial Corp.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. -------------------------------------- Francis J. Evanitsky, President & CEO 17. CERTIFICATION OF CHIEF FINANCIAL OFFICER ---------------------------------------- I, Linda L. Engle, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Juniata Valley Financial Corp.; 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report; 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. ----------------------------------- Linda L. Engle, Executive VP & CFO